UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Rule 14a-12
ANACOMP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Lloyd I Miller, III
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transactions 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
- --------------------------------------------------------------------------------
[ ] 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:
- --------------------------------------------------------------------------------
LLOYD I. MILLER, III
4550 Gordon Drive
Naples, Florida 34102
Telephone: (239) 262-8577
Telecopier: (239) 262-8025
November 18, 2003
Dear Fellow Shareholder:
As a significant shareholder of Anacomp, I have initiated a proxy
contest to increase the pressure on the Company and the Board of Directors to
improve its governance, independence and financial expertise. I call your
attention to the following points:
o Since my initial proxy letter was filed, we note that Anacomp has
reacted in a surprising manner by RESTRUCTURING ITS BOARD OF
DIRECTORS. I call your attention to the UNEXPECTED RESIGNATIONS of the
chairman of the compensation committee and the chairman of the audit
committee, who were also the only independent directors on last year's
"ad hoc" nominating committee. Why were the most important "watch dog"
positions filled by two directors who are now leaving the Board? We
await the filing of the Company's proxy statement to FULLY DISCLOSE
ANY SPECIAL ARRANGEMENTS related to these resignations.
o I believe that Anacomp MISSED AN OPPORTUNITY to approach its lenders
for consent to buy back Anacomp shares while the stock price was low.
A stock buyback would have resulted in increased cash flow per share
for all Anacomp shareholders. The Board's failure to pursue lender
consents illustrates a LACK OF INITIATIVE within the Company and the
existing Board of Directors. We are opposed to any significant
issuance of common stock under present circumstances, as we feel it
would be DILUTIVE under current market conditions.
o I believe that one of Anacomp's nominees for director, Mr. Holdsworth,
is particularly unsuited to represent the interests of all the
shareholders because of his existing business associations with Mr.
Tennenbaum, a current director and an affiliate of the Company's
largest shareholder. If I am elected, I will act as an advocate for
all shareholders, and would seek to BALANCE THE INFLUENCE among
shareholders that are currently represented on the Board.
o I believe that Mr. Smoot, the current chairman of the Board, has
contributed positively to the restructuring of Anacomp and previously
served as chief executive officer. However, I believe that Mr. Smoot
DOES NOT HAVE THE NECESSARY EXPERIENCE ON PUBLIC BOARDS OF DIRECTORS
that would enable him to serve effectively as an independent chairman
of the Board of Directors of Anacomp.
o I am concerned that Mr. Smoot joined the Board of Directors of
Read-Rite Corporation only two months before Read-Rite filed for
Chapter 7 liquidation. At the time of Mr. Smoot's board service with
Read-Rite, affiliates of Mr. Tennenbaum were the largest secured
creditors of Read-Rite. Affiliates of Mr. Tennenbaum are also the
largest stockholders of Anacomp and hold 28% of Anacomp's common stock
under a special exception from Anacomp's poison pill limits. Although
such INTERLINKED BUSINESS RELATIONSHIPS are permitted by law, best
practices suggest that Anacomp would be BETTER SERVED BY A MORE
INDEPENDENT CHAIRMAN OF THE BOARD.
o As a director of Anacomp, I fought to raise the threshold for the
"poison pill" from 15% to its current level of 20%. Affiliates of Mr.
Tennenbaum currently hold 28% of the outstanding shares, under a
special exception to the poison pill limits. I believe that that the
threshold should now be raised to 28%, and the new threshold should
apply equally to all shareholders, thereby EQUALIZING THE TREATMENT of
shareholders who would like to increase their investment in the
Company's future.
o I call your attention to my TRACK RECORD IN IMPROVING SHAREHOLDER
VALUE. I believe that Anacomp is a PROMISING COMPANY WITH THE
POTENTIAL TO IMPROVE its financial performance if the board takes
decisive action to improve shareholder value.
o After I joined the board of Stamps.com in April of 2002, the
board of directors authorized a SERIES OF SHARE BUYBACKS,
resulting in added value for shareholders.
o As a member of the board of directors of Aldila, Inc., I have
supported initiatives that reduced Aldila's cost structure. I
also supported the recent implementation of Aldila's SHARE
BUYBACK.
o On the board of directors of American Banknote, I meet the
qualifications of serving as an audit committee financial expert
and have supported the BUYBACK OF THE COMPANY'S DEBT at below
par.
o WHEN NECESSARY, I HAVE SOUGHT BOARD PARTICIPATION BY PROXY CONTEST,
with successful results. Although I have shown the ability to effect
significant changes at other companies, my objectives with Anacomp are
to improve Board performance and governance rather than to change
fundamental corporate strategy.
o In May of 2003, through the efforts of a shareholder protective
committee's proxy contest, I successfully gained appointment to
the board of Celeritek with the objective of implementing COST
CUTTING MEASURES AND INCREASING SHAREHOLDER VALUE.
o Additionally, as a shareholder of Dynabazaar, Inc. (formerly
FairMarket, Inc.), I initiated a proxy contest, which resulted in
a settlement agreement nominating me to the board of FairMarket,
Inc. Fairmarket's shareholders recently approved of
the sale of all of the assets of Fairmarket to eBay Inc., and
CASH HAS BEEN DISTRIBUTED TO SHAREHOLDERS.
As a REGISTERED INVESTMENT ADVISOR with extensive experience on boards
of directors and audit committees of numerous public companies, I believe that I
bring strong financial qualifications that should be represented on the Board of
Anacomp. I have been acknowledged for my FINANCIAL EXPERTISE on three of the
Boards on which I serve.
As a prior member of the Anacomp Board, I believe that a CRITICAL MASS
OF NEW DIRECTORS are needed to enhance independent debate on the Board and to
improve governance. I have nominated three directors, not with the intention of
taking control of the Board, but rather to BALANCE SHAREHOLDER REPRESENTATION
and increase shareholder value. With this objective in mind, I have nominated
the following three directors:
LLOYD I. MILLER, III is a registered investment advisor and is a member
of the Chicago Board of Trade and Chicago Stock Exchange. Mr. Miller is
currently a director of Stamps.com, American BankNote Corporation, Celeritek,
Inc., Dynabazaar, Inc. (formerly FairMarket, Inc.) and Aldila, Inc. Mr. Miller
previously served on the board of directors of Anacomp, Denny's Corporation,
Vulcan International and American Controlled Industries.
RAYMOND L. STEELE serves as a director of American BankNote
Corporation, Newcastle Holdings, Inc. and DualStar Technologies Corporation. Mr.
Steele has previously served as a director of I.C.H. Corporation, Video Services
Corp., Orion Pictures Corporation, Emerson Radio Corp. and Pharmhouse Corp.
Prior to his retirement, Mr. Steele held various senior positions such as
Executive Vice President of Pacholder Associates, Inc., Executive Advisor at the
Nickert Group and Vice President and Chief Investment Officer of The Provident
Bank.
FRANK A. BELLIS, JR. is currently the President of Provinceline
Associates, LLC, a company dedicated to providing a broad range of advice to
emerging organizations in financial transition. Previously, Mr. Bellis was the
Chief Executive Officer of Claridge Casino Hotel. Mr. Bellis currently serves as
a director of Synergy Brands, Inc. and Caring, Inc. Mr. Bellis has previously
served as a director of Claridge Casino Hotel and the Atlantic City Special
Improvement District.
Yours sincerely,
/s/ Lloyd I. Miller, III
-----------------------------------
Lloyd I. Miller, III
The nominations for election to the Board of Directors are not intended to be in
opposition to the nomination or election of Jeffrey R. Cramer.
The information with respect to each of the nominees listed above (the
"Nominees") that is required to be disclosed under Regulation 14A under the
Securities Exchange Act of 1934, as amended, is set forth on Annex A. The
proposal is for the shareholders to vote FOR Mr. Lloyd I. Miller, III, FOR Mr.
Frank A. Bellis Jr. and FOR Mr. Raymond L. Steele for election as directors at
the Annual Meeting. Such director nominations are being proposed in an attempt
to provide Anacomp with directors who are advocates of shareholder value and who
are interested in seeking ways to maximize shareholder value.
The undersigned has an interest in this proposal because the
undersigned is currently the beneficial owner of 16.31% of Anacomp's common
stock. A description of all of the common stock owned by affiliates of the
undersigned is set forth on Annex B, and a description of all the common stock
beneficially owned by the undersigned is set forth on Annex C. The undersigned
has no knowledge of any other shareholders who support this proposal, other than
the beneficial shareholders named in the Schedule 13D filed by the undersigned
on February 21, 2002, as amended on September 16, 2003.
The undersigned has held, for at least one year, more than $2,000 in
market value, or 1%, of Anacomp's securities entitled to be voted on the
nominations and proposal at the Annual Meeting and intends to appear in person
or by proxy at the Annual Meeting to nominate the Nominees. Furthermore, the
undersigned intends to continue to hold such shares of common stock through the
date of the Annual Meeting. Enclosed is a copy of the Schedule 13D filed by the
undersigned on February 21, 2002 and as amended on September 16, 2003.
The undersigned intends to retain a proxy solicitor to solicit proxies
in connection with the Annual Meeting. Proxies may be solicited by mail,
telephone, telefax, telegraph, the Internet, e-mail, newspapers and other
publications of general distribution and in person by the proxy solicitor and
the Nominees. His proxy solicitor and the Nominees may solicit proxies from
individuals, banks, brokers, custodians, nominees, other institutional holders
and other fiduciaries. The undersigned has agreed to reimburse his proxy
solicitor for its reasonable expenses, to indemnify it against certain losses,
costs and expenses and to pay it fees in connection with the proxy solicitation.
In addition to the costs related to the engagement of my proxy
solicitor, costs related to this solicitation of proxies include expenditures
for printing, postage, legal services and other related items. The undersigned
is bearing the entire expense of this proxy solicitation.
If permitted by the rules of the Securities and Exchange Commission
then in effect, the undersigned proposes to include the Nominees in Anacomp's
proxy statement and form of proxy for the Annual Meeting.
SHAREHOLDERS SHOULD READ THE DEFINITIVE PROXY STATEMENT, ANY SUPPLEMENTAL
MATERIALS AND ANY OTHER RELEVANT MATERIALS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION (the "SEC") WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN
OR WILL CONTAIN IMPORTANT INFORMATION. ONCE AVAILABLE, COPIES OF THE DEFINITIVE
PROXY STATEMENT AND ANY SUPPLEMENTAL PROXY MATERIALS MAY BE OBTAINED
AT NO COST FROM THE UNDERSIGNED'S SOLICITATION AGENT OR FROM THE SEC, AT THEIR
WEBSITE, WWW.SEC.GOV.
You may also obtain a copy of Anacomp's Annual Report at the SEC's
website, www.sec.gov.
Lloyd I. Miller, III
ANNEX A
Lloyd I. Miller, III (age 48) is a registered investment
advisor and has been a member of the Chicago Board of Trade since 1978 and a
member of the Chicago Stock Exchange since 1996. Mr. Miller graduated from Brown
University in 1977 with a Bachelor's Degree. Mr. Miller is currently a director
of Stamps.com, American BankNote Corporation, Celeritek, Inc., Dynabazaar, Inc.
(formerly FairMarket, Inc.), and Aldila, Inc. Mr. Miller previously served on
the board of directors of several other companies, including Anacomp and Denny's
Corporation. Mr. Miller's principal occupation is investing assets held by Mr.
Miller on his own behalf and on behalf of his family. Mr. Miller's business
address is: Lloyd I. Miller, 4550 Gordon Drive, Naples, Florida 34102.
Raymond L. Steele (age 69) has been a retired businessman for
over nine years. Mr. Steele has served as a director of American BankNote
Corporation since March 2001, Newcastle Holdings, Inc. since 1991, and DualStar
Technologies Corporation since 1998. Mr. Steele has previously served as a
director of I.C.H. Corporation, Video Services Corp., Orion Pictures Corporation
and Emerson Radio Corp. Prior to his retirement, Mr. Steele held various senior
positions such as Executive Vice President of Pacholder Associates, Inc. (from
August 1990 until September 1993) and Executive Advisor at the Nickert Group
(from 1989 through 1990). Mr. Steele's business address is: Raymond L. Steele,
4150 Las Palmas Way, Sarasota, Florida 32438.
Frank A. Bellis Jr. (age 50) is currently the President of
Provinceline Associates, LLC, a company dedicated to providing a broad range of
advice to emerging organizations in financial transition. Previously, from 1992
to December of 2002, Mr. Bellis was the Chief Executive Officer of Claridge
Casino Hotel. Mr. Bellis graduated Brown University in 1975 with a Bachelor's
Degree and from Seton Hall University School of Law in 1982. Mr. Bellis
currently serves as a director of Synergy Brands, Inc. and Caring, Inc. Mr.
Bellis has previously served as a director of Claridge Casino Hotels and
Atlantic City Special Improvement District. Mr. Bellis's business address is:
Frank A. Bellis Jr., Provinceline Assoc. LLC, 10 Hanover Court, Jamestown, New
Jersey 08562.
None of the nominees holds any position or office with
Anacomp, and no arrangements or understandings exist between any of the nominees
and any other person with respect to any future employment by Anacomp or its
affiliates or any future transactions to which Anacomp or its affiliates will or
may be a party. No arrangements or understandings exist pursuant to which any of
such nominees is to be elected as a director. None of the nominees has any
family relationship with any director or executive officer of Anacomp. None of
the nominees is or has been involved in any legal proceedings in the past ten
years relating to bankruptcy, criminal proceedings, violations of the securities
laws, violations of the Federal commodities laws, or injunctions from engaging
in certain business activities. None of the nominees is or has been convicted in
a criminal proceeding during the past ten years. Additionally, none of the
nominees nor any associate of any of the nominees is a party adverse to Anacomp
in a material proceeding or otherwise has a material interest adverse to
Anacomp.
None of the nominees nor any company that any of the nominees
is associated with has any business relationship with Anacomp. None of the
nominees nor any family member of any of the nominees is or has been in the last
year indebted to Anacomp for an amount exceeding $60,000 or have any interest in
any transactions, involving an amount exceeding $60,000, to which Anacomp is a
party. Please note that Mr. Miller previously served as a director of Anacomp,
and additional information regarding Mr. Miller has been publicly disclosed in
the company's proxy statements and Mr. Miller's filings under the Securities
Exchange Act.
Annex A - Page 1
Mr. Miller was not late filing any reports required by Section
16(a) nor has he failed to file a required form, other than an amendment of the
initial Form 3 which corrected an accounting error. Mr. Miller does not
beneficially own, directly or indirectly, any securities of Anacomp's parent or
subsidiaries. Neither Mr. Steele nor Mr. Bellis beneficially owns, directly or
indirectly, any securities of Anacomp, its parent or its subsidiaries.
Mr. Miller may be deemed to beneficially own 657,993 shares of
common stock of Anacomp. Mr. Miller is the record holder of 44,447 of these
shares.
Attached as Annex B is a list of all securities of Anacomp
purchased or sold by Mr. Miller within the past two years, the dates on which
they were purchased or sold and the amount purchased or sold. Attached as Annex
C is information regarding Mr. Miller's security ownership in Anacomp.
Trust A-4, Trust C, MILGRAT I(A), Milfam I, L.P. and Milfam
II, L.P. may be deemed to be associates of Mr. Miller under Regulation 14A. Set
forth on Annexes B and C are (i) a list of all shares of common stock owned
beneficially, directly and indirectly, by each associate and (ii) the address of
each associate.
Annex A - Page 2
ANNEX B
ANACOMP, INC.
----------------------------------------------------------------------------
SEE LEGEND BELOW FOR EXPLANATION OF ENTITIES
----------------------------------------------------------------------------
ENTITY DATE BUY/(SELL)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
A4 7/6/2000 123,097
----------------------------------------------------------------------------
M-1 7/6/2000 126,347
----------------------------------------------------------------------------
M-2 7/6/2000 100,932
----------------------------------------------------------------------------
Lloyd 7/6/2000 44,447
----------------------------------------------------------------------------
Milgrat I(A) 11/5/2001 73,047
----------------------------------------------------------------------------
Milgrat I(A) 11/4/2002 (20,417)*
----------------------------------------------------------------------------
C 11/4/2002 20,417*
----------------------------------------------------------------------------
A4 5/23/2003 123
----------------------------------------------------------------------------
M-2 9/4/2003 50,000
----------------------------------------------------------------------------
A-4 9/4/2003 50,000
----------------------------------------------------------------------------
M-2 9/9/2003 45,000
----------------------------------------------------------------------------
A-4 9/9/2003 45,000
----------------------------------------------------------------------------
* - On November 4, 2002 Milgrat I(A) transferred 20,417 shares of common stock
to Trust C as an annuity payment.
The above transactions were made on the open market at market prices.
Annex B - Page 1
- --------------------------------------------------------------------------------------------------------------------------
LEGEND
- --------------------------------------------------------------------------------------------------------------------------
Trust A-4 ("A4") Lloyd I. Miller, III ("Miller") is the advisor to
Trust A-4 and Trust C (the "Trusts"). Trust A-4 was
Alan Goldman, VP created pursuant to a Declaratory Judgment, signed by
PNC Bank, N.A. the Honorable Wayne F. Wilke for the Court of Common
500 PNC Center Pleas, Probate Division, Hamilton County, Ohio, on
201 East Fifth Street October 17, 1992, pursuant to which Trust A was split
Cincinnati, OH 45202 into four separate trusts. The Trusts were created
pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated September 20,1983.
Trust C ("C") Miller was named as advisor to PNC Bank, Ohio, N.A.
(formerly The Central Trust Company, N.A., Cincinnati
Alan Goldman, VP Ohio), the trustee named in the Trust Agreement. Such
PNC Bank, N.A. appointment became effective on April 22, 1990, the
500 PNC Center date of death of Lloyd I. Miller, the grantor of the
201 East Fifth Street Trusts. All of the shares purchased by Miller as
Cincinnati, OH 45202 advisor to the Trusts were purchased by funds
generated and held by the Trusts.
- --------------------------------------------------------------------------------------------------------------------------
Milgrat I(A) ("MILGRAT I (A)") Pursuant to an Irrevocable Trust Agreement, dated
Steve Hendrickson November 5, 2001, all of the shares purchased in Trust
Northern Trust Company C were transferred into a grantor retained annuity 50
South Lasalle Street trust ("MILGRAT I(A)"). On November 4, 2002, 20,417
Chicago, IL 60675 of the shares were transferred back to Trust C from
Milgrat I(A) as an annuity distribution pursuant to the
Irrevocable Trust Agreement. Miller is named as the trustee
to MILGRAT I(A).
- --------------------------------------------------------------------------------------------------------------------------
Annex B - Page 2
- ------------------------------------------------------------------------------------------------------------------
Milfam I, L.P. ("M-1") Miller is the manager of Milfam LLC, an Ohio limited
liability company established pursuant to the
Alan Goldman, VP Operating Agreement of Milfam LLC, dated as of
PNC Bank, N.A. December 10, 1996. Milfam LLC is the managing general
500 PNC Center partner of (i) Milfam I, L.P., a Georgia limited
201 East Fifth Street partnership established pursuant to the Partnership
Cincinnati, OH 45202 Agreement for Milfam I, L.P., dated December 11, 1996,
and (ii) Milfam II, L.P. a Georgia limited partnership
Milfam II, L.P. ("M-2") established, pursuant to the Partnership Agreement for
Milfam II, L.P., dated December 11, 1996. All of the
Steve Hendrickson shares Miller may be deemed to beneficially own as the
Northern Trust Company manager of the managing general partner of Milfam II,
50 South Lasalle Street L.P. were purchased with money contributed to Milfam
Chicago, IL 60675 II, L.P. by its partners, or money generated and held
by Milfam II, L.P.
- ------------------------------------------------------------------------------------------------------------------
Lloyd I. Miller, III ("Lloyd") Lloyd I. Miller is a registered investment advisor.
4550 Gordon Drive
Naples, FL 34102
- ------------------------------------------------------------------------------------------------------------------
Except as shown in the table above, the address for each person or entity is as
follows:
Gradison McDonald
580 Walnut Street
Cincinnati, OH 45202
Annex B - Page 3
ANNEX C
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS
- ------------------------------- ----------------------------- --------------------------- ----------------------------
(3) Amount and
(1) Title of (2) Name and address nature of beneficial
class of beneficial owner ownership (4) Percent of class
- ------------------------------- ----------------------------- --------------------------- ----------------------------
Common Stock Lloyd I. Miller, III 657,993(1) 16.31%
4550 Gordon Drive
Naples, Florida 34102
- ------------------------------- ----------------------------- --------------------------- ----------------------------
- -----------------------------
(1) As of September 22, 2003, 218,220 of such shares are beneficially
owned by Trust A-4; 20,417 of such shares are beneficially owned by Trust C;
52,630 of such shares are beneficially owned by MILGRAT I(A); 126,347 of such
shares are beneficially owned by Milfam I, L.P.; 195,932 of such shares are
beneficially owned by Milfam II, L.P.; and 44,447 of such shares are owned of
record by Miller directly. This information shall not be deemed an admission
that Lloyd I. Miller, III is the beneficial owner of any equity securities
mentioned above, other than the shares he holds of record.
Annex C - Page 1