CONTROL SHARE MEETING
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
COMMERCIAL INTERTECH CORP.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(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:
/(R)/[LOGO] Commercial Intertech
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To Our Shareholders:
A Special Meeting of Shareholders will be held on August 30, 1996, in
Youngstown, Ohio. At the Special Meeting, we will consider and vote on the
question of whether or not to authorize, in accordance with Section 1701.831
of the Ohio Revised Code, the acquisition by United Dominion Industries
Limited, a Canadian corporation ("United Dominion"), and Opus Acquisition
Corporation, a Delaware corporation ("OAC") and an indirect wholly owned
subsidiary of United Dominion (or one or more subsidiaries of United
Dominion), of common shares, par value $1.00 per share (the "Common Shares"),
of the Company that, when added to all other shares of the Company in respect
of which United Dominion and OAC may exercise or direct the exercise of voting
power in the election of the Company's directors, would entitle United
Dominion and OAC to exercise at least a majority of such voting power. The
acquisition, if so authorized by the shareholders, would be carried out by
means of a tender offer made by OAC to purchase all outstanding Common Shares,
$1.00 par value per share, of the Company and associated preferred share
rights (the "Rights"; the Rights and the Common Shares are referred to,
collectively, as the "Shares") at a price of $30.00 per Share, net to the
seller in cash, without interest thereon (the "Offer").
The Board of Directors has unanimously concluded that the Offer is
inadequate and not in the best interests of the Company, its shareholders,
employees, customers, suppliers, labor organizations, the communities in which
the Company does business and its other constituencies, and does not
adequately reflect the long-term value or prospects of the Company.
ACCORDINGLY, THE MATTER TO BE CONSIDERED AT THE SPECIAL MEETING IS OF CRITICAL
IMPORTANCE TO THE COMPANY'S FUTURE, AND WE URGE YOU TO ATTEND THE MEETING AND
VOTE AGAINST THE "CONTROL SHARE ACQUISITION" PROPOSED BY OAC AND UNITED
DOMINION. This matter is described in more detail in the attached Proxy
Statement, which we urge you to read carefully.
The enclosed Proxy Statement contains information relative to the meeting.
Please be sure to sign and return the enclosed LIGHT-GREEN proxy card,
whether or not you plan to attend the meeting, so that your shares will be
voted. If you own Common Shares or Preferred Shares through the Commercial
Intertech Employee Stock Ownership Plan or certain other benefit plans (as
discussed on page 12 of the attached Proxy Statement), please be sure to date,
sign and return the enclosed card ("Trustee Instruction Card") providing
instructions to the trustee of the applicable plan so that your Common Shares
and Preferred Shares will be voted. PLEASE NOTE THAT THERE IS A CERTIFICATION
SET FORTH ON THE LIGHT-GREEN PROXY CARD AND THE TRUSTEE INSTRUCTION CARD THAT
WILL BE USED TO ASSIST IN DETERMINING WHETHER THE PROPOSED "CONTROL SHARE
ACQUISITION" IS AUTHORIZED BY SHAREHOLDERS; EACH SHAREHOLDER WHO IS ELIGIBLE
TO DO SO (AS EXPLAINED IN THE ATTACHED PROXY STATEMENT) SHOULD COMPLETE AND
SIGN THIS CERTIFICATION. FAILURE TO COMPLETE THE CERTIFICATION WILL RESULT IN
THE COMMON SHARES AND PREFERRED SHARES REPRESENTED BY THE PROXY CARD BEING
PRESUMED TO BE INTERESTED SHARES (AS DEFINED IN THE ATTACHED PROXY STATEMENT)
THAT ARE INELIGIBLE TO VOTE IN
CONNECTION WITH THE SECOND MAJORITY AUTHORIZATION AS DESCRIBED BEGINNING ON
PAGE 11 OF THE ATTACHED PROXY STATEMENT. If you do attend the meeting, and the
Board of Directors joins me in hoping that you will, there will be an
opportunity to vote in person if you prefer.
Sincerely yours,
/s/ Paul J. Powers
Paul J. Powers
Chairman of the Board, President and
Chief Executive Officer
August 2, 1996
/(R)/[LOGO] Commercial Intertech
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AUGUST , 1996
To the Shareholders:
A special meeting of shareholders of Commercial Intertech Corp. (the
"Company"), called pursuant to the requirements of Section 1701.831 of the
Ohio Revised Code (the "831 Special Meeting"), will be held on August 30, 1996
at [ ] a.m. at [ ], Youngstown, Ohio, solely for the following
purposes:
1. To consider and vote upon whether or not to authorize, in accordance
with Section 1701.831 of the Ohio Revised Code, the acquisition by United
Dominion Industries Limited, a Canadian corporation ("United Dominion") and
Opus Acquisition Corporation, a Delaware corporation ("OAC") and an
indirect wholly owned subsidiary of United Dominion (or one or more
subsidiaries of United Dominion), of common shares, par value $1.00 per
share (the "Common Shares"), of the Company that, when added to all other
shares of the Company in respect of which United Dominion and OAC may
exercise or direct the exercise of voting power in the election of the
Company's directors, would entitle United Dominion and OAC to exercise at
least a majority of such voting power.
2. To consider and vote upon such procedural matters as may properly come
before the 831 Special Meeting.
Shareholders of record at the close of business August 7, 1996 will be
entitled to vote at the 831 Special Meeting and at any adjournment thereof.
The Proxy Statement accompanies this notice.
By Order of the Board of Directors.
/s/Shirley M. Shields
Shirley M. Shields
Secretary
VOTING YOUR PROXY IS IMPORTANT
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Your prompt dating, signing and returning of the enclosed LIGHT-GREEN proxy
card (or, if applicable, the enclosed card providing voting instructions to
the trustee of certain of the Company's plans) in the enclosed envelope would
be appreciated. Those who are eligible to do so (as explained in the attached
Proxy Statement) should also complete the certification set forth therein. If
you attend the 831 Special Meeting, you may nevertheless vote in person should
you desire. The return of proxies is important, regardless of the number of
shares owned.
/(R)/[LOGO] Commercial Intertech
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PROXY STATEMENT
OF
COMMERCIAL INTERTECH CORP.
FOR THE SPECIAL MEETING OF SHAREHOLDERS UNDER SECTION 1701.831 OF THE OHIO
REVISED CODE TO BE HELD ON AUGUST 30, 1996
This Proxy Statement is being mailed on or about August 2, 1996 to the
shareholders of Commercial Intertech Corp., an Ohio corporation (the
"Company"), in connection with the solicitation by the Board of Directors of
the enclosed form of proxy (the LIGHT-GREEN proxy card) for the Special
Meeting of Shareholders (the "831 Special Meeting") under Section 1701.831
(the "Ohio Control Share Acquisition Law" or "Section 831") of the Ohio
Revised Code to be held August 30, 1996, and at any and all adjournments of
the 831 Special Meeting. Pursuant to the Ohio General Corporation Law, a
shareholder may revoke a written proxy at any time prior to the vote either by
giving notice to the Company in writing or in open meeting. The cost of
soliciting the LIGHT-GREEN proxy cards will be borne by the Company.
The 831 Special Meeting will be held on August 30, 1996, in Youngstown,
Ohio. The Board of Directors has fixed the close of business on August 7, 1996
as the record date for determining shareholders entitled to notice of the
meeting and to vote thereat (the "Record Date").
Holders of voting power of "interested shares" as such term is defined in
Section 1701.01(CC) of the Ohio General Corporation Law are not eligible to
vote such Interested Shares (as defined on page 10 of this Proxy Statement) in
connection with the Second Majority (as defined on page 10 of this Proxy
Statement). The Board of Directors has authorized, and the Company, after
consultation with the Presiding Inspector of Election and the Inspector of
Election described below, has instituted procedures to implement the Ohio
legislative mandate to exclude the voting power of Interested Shares,
including a requirement that each shareholder certify to the Company the
number of Common Shares and Preferred Shares (as each term is defined below)
being voted that are eligible to vote in respect of the Second Majority. UNDER
THE PROCEDURES FOR THE 831 SPECIAL MEETING ADOPTED BY THE COMPANY, WITH THE
CONCURRENCE OF THE PRESIDING INSPECTOR OF ELECTION AND THE INSPECTOR OF
ELECTION, ALL COMMON SHARES AND PREFERRED SHARES THAT ARE VOTED WITHOUT SUCH A
CERTIFICATION SHALL BE PRESUMED TO BE INELIGIBLE TO VOTE IN RESPECT OF THE
SECOND MAJORITY. See "Vote of Two Separate Majorities Required; Certain Voting
Procedures At 831 Special Meeting" and "Shares Outstanding and Eligible to Be
Voted in First Majority and Second Majority" in this Proxy Statement and the
additional information set forth in Exhibit B to this Proxy Statement.
PURPOSE OF SPECIAL MEETING
The sole purpose of the 831 Special Meeting is for the shareholders of the
Company to consider and vote upon whether to authorize, in accordance with the
Ohio Control Share Acquisition Law, the acquisition by United Dominion
Industries Limited, a Canadian corporation ("United Dominion"), and Opus
Acquisition
Corporation, a Delaware corporation ("OAC") and an indirect wholly owned
subsidiary of United Dominion (or one or more subsidiaries of United
Dominion), of Shares (as defined below) that, when added to all other shares
of the Company in respect of which United Dominion and OAC may exercise or
direct the exercise of voting power in the election of the Company's
directors, would entitle United Dominion and OAC to exercise at least a
majority of such voting power (such acquisition hereinafter referred to as the
"Control Share Acquisition"). Section 831 requires that, prior to any person
acquiring any interest in common or preferred shares that would entitle such
person directly or indirectly to control 20% or more of the voting power of an
Ohio corporation in the election of its directors, such person obtain the
authorization of the shareholders of the corporation. THE COMPANY'S BOARD OF
DIRECTORS (THE "BOARD OF DIRECTORS") HAS DETERMINED THAT THE REVISED OFFER (AS
DEFINED BELOW) IS INADEQUATE AND NOT IN THE BEST INTERESTS OF THE COMPANY, ITS
SHAREHOLDERS, EMPLOYEES, CUSTOMERS, SUPPLIERS, LABOR ORGANIZATIONS, THE
COMMUNITIES IN WHICH THE COMPANY DOES BUSINESS AND ITS OTHER CONSTITUENCIES,
AND DOES NOT ADEQUATELY REFLECT THE LONG-TERM VALUE OR PROSPECTS OF THE
COMPANY. ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS REJECT THE REVISED OFFER AND UNANIMOUSLY RECOMMENDS A VOTE
AGAINST THE AUTHORIZATION OF THE CONTROL SHARE ACQUISITION.
To authorize the Control Share Acquisition, Section 831 requires (i) the
presence of a quorum at the 831 Special Meeting, (ii) the affirmative vote of
the majority of the voting power of the Company (entitled to vote in the
election of the directors), represented in person or by proxy at the 831
Special Meeting and (iii) the affirmative vote of the majority of such voting
power excluding the voting power of Interested Shares (as described below).
Section 831 provides that a quorum shall be deemed to be present at the 831
Special Meeting if a majority of the voting power, and a majority of the
voting power including only "disinterested" Shares, are represented at the 831
Special Meeting.
On August 2, 1996, there were 13,671,332 common shares, $1.00 par value (the
"Common Shares"), and 1,039,657 shares of ESOP Convertible Preferred Stock--
Series B (the "Preferred Shares") outstanding. The Common Shares and Preferred
Shares vote together as a single class. Subject to limitations imposed by the
Ohio Control Share Acquisition Law (as described below), each Common Share and
each Preferred Share is entitled to one vote on the matter to be presented at
the 831 Special Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST AUTHORIZATION OF THE
CONTROL SHARE ACQUISITION PURSUANT TO UNITED DOMINION AND OAC'S INADEQUATE
REVISED OFFER. Please promptly date, sign and return the accompanying LIGHT-
GREEN proxy card. To be sure your Common Shares and Preferred Shares are voted
AGAINST the authorization, we recommend that you discard, and do not return,
United Dominion and OAC's BLUE-STRIPED proxy card. With respect to Common
Shares and Preferred Shares held for you in ESOPs or Plans (as defined below),
promptly date, sign and return the enclosed card (the "Trustee Instruction
Card") providing the ESOP Trustee and the Plan Trustee (as both terms are
defined below) with voting instructions.
The three persons named in the enclosed LIGHT-GREEN proxy card have been
selected by the Board of Directors and will vote shares represented by valid
Proxies solicited on behalf of the Board of Directors. Unless otherwise
specified in the proxy card, they intend to vote AGAINST the authorization of
the Control Share Acquisition.
If you have any questions or need assistance in voting, please contact
Morrow & Co., Inc. at 1-800-566-9061 (Toll-Free).
BACKGROUND; THE OFFER
On January 23, 1996, at a meeting of the Executive Committee of the Board of
Directors, the Executive Committee discussed a number of strategic initiatives
with respect to the Company, including the possibility of spinning off the
Company's Cuno Incorporated fluid filtration and purification subsidiary
("Cuno") or its Astron metal buildings division.
2
On March 5, 1996, Paul J. Powers, Chairman and Chief Executive Officer of
the Company, telephoned Tom Walker of Goldman, Sachs & Co. ("Goldman Sachs")
to brief Goldman Sachs on strategic initiatives being considered by the
Company, and requested that Goldman Sachs meet with senior management of the
Company on March 22, 1996, to discuss possible actions to enhance shareholder
value.
On March 22, 1996, senior executives of the Company met with Goldman Sachs
to discuss possible actions that would enhance shareholder value. The
discussion focused upon the value of the higher growth, higher multiple
business of Cuno, the fact that Cuno had not previously received appropriate
market recognition because of the Company's mix of lower multiple industrial
businesses, Cuno's difficulties in attracting and retaining qualified
personnel in light of the Company's existing compensation schemes, and the
impact on Cuno of not having an appropriate equity currency for acquisitions
of other technology companies. On April 17, 1996, representatives of Goldman
Sachs met again with senior executives of the Company. At the April 17
meeting, Goldman Sachs discussed a broad range of strategic alternatives which
could enhance shareholder value, including a 100% spin-off of certain
subsidiaries, an initial public offering of certain subsidiaries, and
divestitures.
On April 26, 1996, the Company telephoned its legal counsel, Katten Muchin &
Zavis ("Katten Muchin"), and instructed Katten Muchin to assemble a
transaction team to prepare for a proposed spin-off of Cuno.
On May 6, 1996, representatives from Goldman Sachs again met with senior
executives of the Company. This meeting focused on the alternative of a 100%
spin-off of Cuno. Goldman Sachs explained the mechanics of a spin-off and the
market perception of such a transaction. Cuno's ability to make acquisitions
using its stock after the spin-off was discussed.
On May 10, 1996, at the request of William R. Holland, the Chief Executive
Officer of United Dominion, Mr. Holland met with Paul J. Powers, the Chairman
and Chief Executive Officer of the Company, in Youngstown, Ohio. During this
meeting, Mr. Holland expressed the view that a combination of the Company with
United Dominion would be attractive and suggested a price of $27.00 per share.
Mr. Powers indicated that the Company has a policy of independence, and that
he believed the Company's prospects on a stand-alone basis were strong.
By May 16, 1996, the Company was focused upon unlocking shareholder value
through a transaction involving Cuno. Representatives from Goldman Sachs and
Katten Muchin met with Company officials on that date. At that time, Goldman
Sachs outlined a series of options with respect to Cuno, including: a 100%
spin-off; an up to 20% initial public offering to be followed by a spin-off; a
sale for cash; a sale for stock; and a leveraged buyout.
On May 21, 1996, the Finance Committee of the Board of Directors met with
Goldman Sachs and Katten Muchin to discuss strategic alternatives for Cuno.
Goldman Sachs made a presentation on three alternatives at that meeting: an up
to 20% initial public offering and a subsequent spin-off, a 100% spin-off and
a sale. The discussions focused upon either an up to 20% public offering to be
followed by a spin-off or 100% spin-off.
At a June 18, 1996 Board of Directors meeting, the Board of Directors
determined to pursue an up to 20% initial public offering of Cuno, to be
followed by a spin-off. The Board of Directors concluded that an up to 20%
public offering of Cuno had certain potential advantages over an immediate
100% spin-off, which included: establishing an initial trading market for Cuno
to enable the company to begin developing market recognition; permitting Cuno
to develop a following among analysts in the fluid filtration industry; and
generating immediate cash for the Company. The Board of Directors recognized,
however, that the value inherent in Cuno, the ability to attract and retain
qualified personnel and the ability to use Cuno stock as acquisition currency
could only be realized by a complete separation of Cuno and the Company in the
near future. The officers of the Company contacted Katten Muchin and Goldman
Sachs to pursue this strategy and prepare a registration statement. Meetings
were scheduled with advisers and potential underwriters.
On June 27, 1996, Mr. Holland faxed to Mr. Powers a letter, which was
released to the news media on the same day, containing an unsolicited proposal
to acquire the Company pursuant to a transaction in which the Company's
shareholders would receive $27.00 in cash for their Common Shares.
3
On June 28, 1996, the Company retained Goldman Sachs as its financial
advisor with respect to United Dominion's proposal.
At a meeting on June 29, 1996, the Board of Directors of the Company
discussed United Dominion's June 27 letter. On June 30, 1996, the Company
issued a press release which stated that the Board of Directors of the
Company, at its meeting on June 29, 1996, reaffirmed the Company's long-
standing objective of creating shareholder value through the Company's core
businesses and indicated that the Board of Directors would review the United
Dominion proposal in consultation with its legal and investment advisers. In
addition, the Company announced that, as part of its ongoing strategic plans,
the Company was preparing a public offering of up to 20% of the stock of Cuno.
The Company continued to prepare for the public offering of Cuno until the
first week of July 1996. At that time, however, the Board of Directors
recognized that, if United Dominion's proposal were rejected, and United
Dominion continued to pursue its proposal, shareholders of the Company would
not, under that proposal, be able to realize the true value of the Company's
investment in Cuno. In addition, the Board of Directors believed, after
consultation with its financial advisor, that it would not be practicable to
pursue the public offering given the uncertainties created by United
Dominion's proposal. Accordingly, at their meetings on July 8 and July 11,
1996, the Board of Directors again focused on alternatives for unlocking the
value of Cuno, and concluded that such value could more readily be realized
through an immediate spin-off.
On July 11, 1996, United Dominion and OAC announced an unsolicited tender
offer to purchase all of the Company's outstanding Common Shares and the
associated preferred share purchase rights (the "Rights") issued pursuant to
the Shareholder Rights Agreement, dated as of November 29, 1989 (the "Rights
Agreement") between the Company and the Mahoning National Bank of Youngstown,
as Rights Agent (the Common Shares, together with the Rights, are hereinafter
referred to as the "Shares") for a purchase price of $27.00 per Share, net to
the seller in cash, without interest thereon (the "Original Offer"). On the
same date, the Board of Directors unanimously determined that the Original
Offer was inadequate, and not in the best interests of the Company, its
shareholders, employees, customers, suppliers, labor organizations, the
communities in which the Company does business and its other constituencies,
and did not adequately reflect the long-term value or prospects of the
Company. At that meeting, the Board of Directors unanimously determined not to
proceed with a public offering of up to 20% of the stock of Cuno, but instead
to proceed with a spin-off of 100% of the stock of Cuno to the Company's
shareholders (the "Spin-Off"), subject to customary conditions, including the
receipt of an opinion of counsel with respect to the tax-free nature of the
Spin-Off. The Board of Directors also unanimously approved a program to
repurchase up to 2,500,000 Common Shares in open market and privately
negotiated transactions (the "Repurchase Program"). On July 12, 1996, United
Dominion and OAC filed with the Company an Acquiring Person Statement under
the Ohio Control Share Acquisition Law in order to cause the Company to call
the 831 Special Meeting. OAC and United Dominion's Acquiring Person Statement,
dated July 12, 1996 is included herein without attachments as Exhibit A to
this Proxy Statement.
On July 15, 1996, the purchase price of the Original Offer was increased to
$30.00 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Revised Offer to
Purchase, dated July 16, 1996 (the "Revised Offer"). The stated purpose of the
Revised Offer is to acquire control of, and the entire equity interest in, the
Company. According to the Revised Offer to Purchase, dated July 16, 1996 (the
"Revised Offer to Purchase"), United Dominion intends, following completion of
the Revised Offer, to seek to have the Company consummate a merger or similar
business combination with OAC or another subsidiary of United Dominion at the
same price per Common Share to be paid in the Revised Offer (the "Proposed
Merger"), subject to the terms and conditions described in the Revised Offer
to Purchase.
According to the Revised Offer to Purchase, the Revised Offer is conditioned
upon, among other things, the following significant matters:
(1) The Minimum Condition: There must be validly tendered and not
properly withdrawn prior to expiration of the Revised Offer a number of
Common Shares which, when added to the Common Shares beneficially owned by
OAC and its affiliates, constitutes at least two-thirds of the total voting
power of all Common Shares outstanding on a fully diluted basis on the date
of purchase.
4
(2) The Control Share Condition: The approval of the Control Share
Acquisition shall have been obtained from the Company's shareholders or OAC
shall be satisfied, in its sole discretion, that the Ohio Control Share
Acquisition Law is invalid or inapplicable to the acquisition of Common
Shares pursuant to the Revised Offer.
(3) The Business Combination Condition: OAC must be satisfied, in its
sole discretion, that the restrictions contained in Chapter 1704 (the "Ohio
Business Combination Law") of the Ohio Revised Code will not apply to the
acquisition of Common Shares pursuant to the Revised Offer or to the
Proposed Merger.
The Ohio Business Combination Law prohibits certain combinations and
other transactions (each, a "Chapter 1704 Transaction"), such as the
Proposed Merger, between an issuing public corporation (such as the
Company) and any "Interested Shareholder" (defined generally as any person
that, directly or indirectly, is entitled to exercise or direct the
exercise of 10% or more of the outstanding voting power of a corporation in
the election of directors) for a period of three years after the date the
person becomes an Interested Shareholder. After such three year period, a
Chapter 1704 Transaction between an issuing public corporation and such
Interested Shareholder is prohibited unless either certain "fair price"
provisions are complied with or the Chapter 1704 Transaction is approved by
certain supermajority shareholder votes. The Ohio Business Combination Law
restrictions do not apply to a Chapter 1704 Transaction with an Interested
Shareholder if either the acquisition of the corporation's shares that
would cause the Interested Shareholder to become an Interested Shareholder,
or the Chapter 1704 Transaction, is approved by a resolution of the board
of directors of the corporation adopted prior to the date on which the
Interested Shareholder became an Interested Shareholder. For a description
of certain litigation relating to the Ohio Business Combination Law, see
"Certain Litigation."
(4) The Rights Condition: The Rights shall have been redeemed by the
Company or OAC shall be satisfied, in its sole discretion, that the Rights
have been invalidated or are otherwise inapplicable to the Revised Offer
and the Proposed Merger.
(5) The Articles Amendment Condition: Article SIXTH of the Company's
Amended Articles of Incorporation (the "Articles") (which requires a 95%
vote to approve a business combination which does not meet certain "fair
price" and procedural criteria), shall have been repealed or otherwise
amended with the effect that, or OAC shall be otherwise satisfied, in its
sole discretion, that, the provisions of such Article will not apply to the
Proposed Merger.
On July 17, 1996, the Board of Directors unanimously concluded that the
Revised Offer is inadequate, and not in the best interests of the Company, its
shareholders, employees, customers, suppliers, labor organizations, the
communities in which the Company does business and its other constituencies,
and does not adequately reflect the long-term value or prospects of the
Company. At that meeting, the Board of Directors unanimously reaffirmed the
Company's prior determination to proceed with the Spin-Off. The Board of
Directors also unanimously reaffirmed the Repurchase Program.
CERTAIN LITIGATION
On July 11, 1996, United Dominion and OAC commenced litigation (the
"District Court Litigation") in the Federal District Court for the Southern
District of Ohio, Eastern Division (the "Court"), against the Company, the
Board of Directors, the acting Commissioner of Securities of the Ohio Division
of Securities, the Ohio Director of Commerce and the State of Ohio. Plaintiffs
are seeking declarations that, among other things, (i) Section 1701.01(CC)(2)
of Ohio's Control Share Acquisition Law is unconstitutional because it is
claimed to conflict with the United States Constitution, and (ii) the Rights
Agreement and the Rights are invalid, unlawful, null and void. Plaintiffs also
sought, among other things, to enjoin (i) the enforcement of Sections
1701.01(CC)(2) and 1701.831(E) of Ohio's Control Share Acquisition Law, (ii)
the Company's directors from taking any action to enforce or amend the Rights
Agreement (other than to redeem the Rights or to amend certain provisions that
limit the ability of the Company to redeem the Rights), and (iii) the Company
from commencing or prosecuting in any court other than the court in which the
action was filed, any action or proceeding relating to the plaintiffs' tender
offer. Further, the plaintiffs sought an order to compel the Company to redeem
the Rights
5
and to amend certain provisions of the Rights Agreement that limit the ability
of the Company to redeem the Rights. On July 15, 1996, the Court scheduled a
hearing for July 29, 1996 with respect to United Dominion and OAC's motion to
enjoin preliminarily the enforcement of Sections 1701.01(CC)(2) and
1701.831(E) of the Ohio Control Share Acquisition Law and the parties are
commencing discovery with respect thereto. For a description of Sections
1701.01(CC)(2) and 1701.831(E) of the Ohio Control Share Acquisition Law, see
page 9 of this Proxy Statement.
On July 15, 1996, United Dominion and OAC filed an amended complaint
asserting as additional claims that the directors of the Company had violated
their fiduciary duties to the Company's shareholders by determining to
undertake the Repurchase Program, undertaking to effect the Spin-Off and
refusing to negotiate with United Dominion and OAC; that the Company's
Schedule 14D-9 contained false and misleading statements in violation of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"); and that
the Company's repurchase of shares in the Repurchase Program violated the
Exchange Act. The plaintiffs sought to enjoin preliminarily and permanently:
(1) the Board of Directors from refusing to negotiate with United Dominion and
OAC; (2) the Repurchase Program; and (3) the Company from refusing to amend
its Schedule 14D-9 with respect to the Repurchase Program and the Spin-Off.
On July 18, 1996, the Company filed its answer to the amended complaint of
United Dominion and OAC denying all substantive allegations and raising, as
counterclaims, that there were disclosure violations in the state and federal
filings by United Dominion and OAC associated with the Revised Offer. The
Company also sought a declaratory judgment that, if United Dominion and OAC
obtain proxies representing more than 10% of the voting power of the Company's
Common Shares in the election of directors, United Dominion and OAC would be
"interested shareholders" within the meaning of the Ohio Business Combination
Law and thus be prohibited from engaging in certain transactions with the
Company, including completing their Proposed Merger, for a minimum of three
years and thereafter, unless they comply with the Ohio Business Combination
Law.
On July 19, 1996, United Dominion and OAC moved for leave to file a second
amended complaint and for a preliminary injunction, based on their claim that
the Spin-Off would violate the claimed rights of the Company's shareholders to
vote at the 831 Special Meeting and another special meeting that United
Dominion and OAC intended to call. The Court set a briefing schedule to rule
upon the right of United Dominion and OAC to raise such claims and their right
to discovery and also set a tentative hearing on their motion for preliminary
injunction for August 14, 1996.
On July 24, 1996, United Dominion and OAC filed their reply memorandum in
support of their motion for leave to file a Second Amended Complaint. The
Court had indicated in a hearing on July 19, 1996, that the Court would
endeavor to rule on that motion by the close of business on July 25, 1996, but
to date no ruling has been issued.
On July 25, 1996, the Company filed a motion seeking a temporary restraining
order to prevent United Dominion and OAC from distributing proxy solicitation
materials seeking Agent Designations for the purpose of calling a Special
Meeting. This same issue had been raised in the Company's July 23, 1996 motion
for a preliminary injunction, but the Company determined that more expeditious
action was warranted in light of United Dominion's and OAC's indications that
they intended to begin sending the solicitations of Agent Designations from
the Company's shareholders on July 25, 1996. At a hearing held on July 25,
1996, the Court denied the Company's motion.
On July 31, 1996, the Court said that it would deny United Dominion's motion
for a preliminary injunction to declare unconstitutional certain provisions of
Ohio's takeover legislation. The Court stated it would enter written opinion
and order in a few days. At the 831 Special Meeting, United Dominion's
purchase of shares must be approved by two separate votes: (1) a majority of
all Common Shares and Preferred Shares represented at the Special Meeting and
(2) a majority of all such Common Shares and Preferred Shares that are not
"interested shares." The result of the denial of United Dominion's injunction
motion is that "interested shares" will include Shares acquired after June 27,
1996 by any persons who paid over $250,000 for such Shares.
6
RECOMMENDATION BY THE COMPANY'S BOARD OF DIRECTORS
At a meeting of the Board of Directors held on July 11, 1996, the Board of
Directors of the Company met with its financial and legal advisers and
reviewed the Original Offer of $27.00 per Share. At that meeting, the Board of
Directors unanimously concluded that the Original Offer was inadequate and not
in the best interests of the Company, its shareholders, employees, customers,
suppliers, labor organizations, the communities in which the Company does
business and its other constituencies, and did not adequately reflect the
long-term value or prospects of the Company. In connection with its
determination, the Board of Directors considered numerous factors, including
but not limited to the factors described in clauses (i) through (ix) of the
third succeeding paragraph. At that meeting, the Board of Directors
unanimously determined to proceed with the Spin-Off. The Board also
unanimously approved the Repurchase Program.
On July 15, 1996, United Dominion and OAC issued a press release announcing
the Revised Offer.
On July 17, 1996, the Board of Directors of the Company met to review the
Revised Offer with its financial and legal advisors. The Board of Directors
unanimously concluded that the Revised Offer is inadequate and not in the best
interests of the Company, its shareholders, employees, customers, suppliers,
labor organizations, the communities in which the Company does business and
its other constituencies, and does not adequately reflect the long-term value
or prospects of the Company. At that meeting, the Board of Directors
unanimously reaffirmed the Company's prior determination to proceed with the
Spin-Off. The Board also unanimously reaffirmed the Repurchase Program.
In reaching its conclusions referred to above, the Board of Directors
considered numerous factors, including but not limited to:
(i) the Board of Directors' familiarity with the business, financial
condition, prospects and current business strategy of the Company, the
nature of the businesses in which the Company operates and the Board of
Directors' belief that the Revised Offer does not reflect the long-term
values inherent in the Company;
(ii) the Company's financial performance in recent years, including its
record results for its 1995 fiscal year and three consecutive years of
improving operating results, including strong improvements in operating
performance and profitability by Cuno;
(iii) the Company's long-term strategic plan to build value for its
shareholders by growing its core businesses (the strategic plan includes,
with respect to the Company, the launch of new products, reductions in
corporate and operating unit overhead, continued improvement in the
Company's German businesses, and increased penetration by the Building
Systems division in Central and Eastern European markets and, with respect
to Cuno, the development of new products from Cuno's core technologies,
decreasing product development cycles, increased customer focus, improved
distribution, improved operating efficiencies, and growth though selective
acquisitions);
(iv) the Company's plan to proceed with the Spin-Off, in light of the
belief of the Board of Directors and management that:
--the Spin-Off should enhance the abilities of the managements of the
Company and Cuno to focus more closely on the objectives of their
respective businesses, enhance the two companies' ability to create
incentives that align the interests of their management and employees
with the performance of their respective companies, and permit Cuno to
use its publicly traded stock as a currency for expansion through
acquisitions; and
--the Spin-Off should enable shareholders of the Company to benefit
in the near term from the value of a high-growth, high-multiple
business, which has not previously received appropriate market
recognition because of the Company's mix of industrial businesses,
which typically trade at lower multiples. The Board of Directors took
into consideration that there is some risk that the tax-free nature of
the Spin-Off could be impacted, with attendant adverse tax consequences
to the Company and certain of its shareholders, in the event of an
acquisition of the Company by certain third parties (including United
Dominion) following a spin-off;
7
(v) the Board of Directors' belief that the Repurchase Program will
provide investors who desire to obtain liquidity for their investment in
the Company with an opportunity to sell all, or a portion of, their
investment in the Company; these shareholders may be more likely to support
actions that would make it more difficult for the Company to resist an
inadequate bid, which in the view of the Board of Directors would not be in
the best interests of the Company, its shareholders and its other
constituencies; accordingly, the Repurchase Program may stabilize the
Company's base of long-term shareholders and may give long-term
shareholders who desire to participate in the benefits of the Spin-Off and
the future growth of the Company and Cuno a greater opportunity to do so;
the Board of Directors also considered the fact that the Repurchase Program
is expected to be accretive to the Company's earnings per Common Share
(assuming the repurchase of 2,500,000 Common Shares at an average price of
$29.00 per Common Share and the incurrence by the Company of additional
debt of $72.5 million bearing interest at 9% per annum, the Repurchase
Program would add an estimated $0.06 to fiscal 1996 earnings per Common
Share and an estimated $0.14 to fiscal 1997 earnings per Common Share);
(vi) the Board of Directors' belief, in light of the Company's strategic
plan and its plan to proceed with the Spin-Off, that this is not the
appropriate time to sell the Company (the Board of Directors' belief was
based upon its view that the Spin-Off would unlock the value of a high-
growth, high-multiple business which had not received appropriate market
recognition because of the Company's mix of industrial businesses, which
typically trade at lower multiples, and its view that the Company's
strategic plan, including the Spin-Off, would result in greater value to
the Company and its shareholders over the long-term);
(vii) the Board of Directors' belief, based upon its review of the
Company's strategic plan described in clause (iii) above, the benefits of
the Spin-Off described in clause (iv) above, and the benefits of the
Repurchase Program described in clause (v) above, that the interests of the
Company, its shareholders and other constituencies would best be served by
the Company continuing as an independent entity, proceeding with its plans
to effect the Spin-Off, and effecting the Repurchase Program;
(viii) the oral opinion of Goldman Sachs, the Company's financial
advisor, after reviewing with the Board of Directors many of the factors
referred to above and other financial criteria used in assessing an offer,
that the Revised Offer is inadequate; and
(ix) the disruptive effect consummation of the Revised Offer would have
on the Company's employees, suppliers, customers and the communities where
the Company operates.
On July 29, 1996, the Board of Directors declared a dividend to the
Company's shareholders of 100% of the common stock of Cuno (the "Cuno Common
Stock"). The Cuno Common Stock will be distributed on the basis of one share
of Cuno Common Stock for each outstanding Common Share, payable to holders of
record of Common Shares as of the close of business on August 9, 1996. The
distribution of the Cuno Common Stock to the Company's shareholders is
expected to take place on the later of either August 19, 1996 or the earliest
practicable date after approval of the Cuno Common Stock for trading on the
Nasdaq National Market and the commencement of trading. The Spin-Off is also
subject to there not being in effect on the distribution date any injunction,
order or decree of any court or governmental authority which prohibits or
makes illegal the Spin-Off.
In connection with the Spin-Off, the Company received opinions from Katten
Muchin and Fried, Frank, Harris, Shriver & Jacobson to the effect that the
Spin-Off should qualify as tax-free under Section 355 of the Internal Revenue
Code of 1986 (the "Code"). Such opinions specifically assume, however, that
the Revised Offer will not be accepted by shareholders of the Company and
neither the Company nor Cuno is acquired in a transaction after the Spin-Off
which was initiated prior to the Spin-Off or that could reasonably be
anticipated to occur as of the date of the Spin-Off. If that assumption proves
inaccurate, there is a significant risk that the Spin-Off will not qualify as
a tax-free distribution under Section 355 of the Code. If the Spin-Off does
not qualify under Section 355 of the Code, then the Company will be treated as
if it sold the stock of Cuno in a taxable transaction, resulting in a
substantial tax liability to the Company. In addition, the shareholders who
receive the Cuno Common Stock in the Spin-Off will be treated as if they have
received a taxable dividend (to the extent of Cuno's accumulated and current
earnings and profits) in the amount of the full fair market value of the Cuno
8
Common Stock received. In addition, legislation proposed by the Clinton
Administration would render the Spin-Off taxable to the Company if within two
years following the Spin-Off there is a more than 50% change in control
transaction involving either the Company or Cuno which is related to the Spin-
Off. The explanation to the proposed legislation indicates that a hostile
acquisition commenced before the Spin-Off occurs may be related. The Clinton
Administration proposed that this legislation apply to all transactions
occurring after March 19, 1996, although Congressional leaders have indicated
that it would not be effective until after appropriate Congressional action.
Stockholders who acquire Cuno Common Stock after the Spin-Off will not have
any individual federal tax obligation with respect to this potential
liability. However, such new stockholders will be impacted by the effect, if
any, on Cuno's earnings, financial condition and results of operations from
such tax liabilities.
The certificate of incorporation and the bylaws of Cuno contain provisions
that (i) limit a stockholder's ability to act by written consent, (ii) provide
for a staggered board of directors, (iii) require an affirmative vote of 80%
of the stockholders entitled to vote to remove directors (who can only be
removed for cause), to amend certain provisions of the certificate of
incorporation or to repeal or amend the bylaws, and (iv) allow the Board of
Directors of Cuno, without obtaining stockholder approval, to issue shares of
preferred stock having rights that could adversely affect the voting power and
economic rights of holders of the Cuno Common Stock. Cuno has also adopted a
stockholder rights agreement. Also, Section 203 of the Delaware General
Corporation Law restricts certain business combinations with any "interested
stockholder" as defined by such statute. Any of the foregoing factors may
delay, defer or prevent a change in control of Cuno.
In connection with the Spin-Off, the Company has entered into a new $190
million credit facility with a group of banks led by Mellon Bank, N.A., which
will provide funds for Cuno and, among other purposes, completion of the
Repurchase Program. Also, on July 29, 1996, the Board of Directors declared a
regular quarterly cash dividend on the Common Shares of $0.135 per share,
payable September 13, 1996 to shareholders of record on August 30, 1996.
On July 30, 1996, the Company filed a Registration Statement on Form 10 (the
"Form 10") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") relating to the registration of the Cuno Common Stock under
the Exchange Act.
The Company recognizes that a vote to authorize the Revised Offer is not the
same as a decision to tender your Shares. HOWEVER, IN LIGHT OF THE BOARD OF
DIRECTORS' CONCLUSIONS THAT THE REVISED OFFER IS INADEQUATE, IS NOT IN THE
BEST INTERESTS OF THE COMPANY, ITS SHAREHOLDERS AND OTHER CONSTITUENCIES, AND
DOES NOT ADEQUATELY REFLECT THE LONG-TERM VALUE OR PROSPECTS OF THE COMPANY,
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE CONTROL
SHARE ACQUISITION. Please promptly date, sign and return the accompanying
LIGHT-GREEN proxy card. To be sure your Common Shares and Preferred Shares are
voted AGAINST the authorization, we recommend you discard, and do not return,
United Dominion and OAC's BLUE-STRIPED proxy card. With respect to Common
Shares and Preferred Shares you hold through the Company's ESOPs or Plans (as
both terms are defined below), please promptly date, sign and return the
enclosed Trustee Instruction Card to have the trustee vote your Common Shares
and Preferred Shares AGAINST the Control Share Acquisition.
OHIO CONTROL SHARE ACQUISITION LAW
Section 831 provides, among other things, that, unless the articles of
incorporation or the regulations of an issuing public corporation provide
otherwise, any control share acquisition of such corporation shall be made
only with the prior authorization of its shareholders. An "issuing public
corporation" is defined as a corporation, organized for profit under the laws
of Ohio, with fifty or more shareholders, that has its principal place of
business, principal executive offices or substantial assets within Ohio, and
as to which no valid close corporation agreement is in existence. The Company
is an "issuing public corporation."
9
A "control share acquisition" is defined as the acquisition, directly or
indirectly, by any person of shares of an issuing public corporation that,
when added to all other shares of the issuing public corporation in respect of
which such person may exercise or direct the exercise of voting power, would
entitle such person, immediately after such acquisition, directly or
indirectly, alone or with others, to exercise or direct the exercise of the
voting power of such issuing public corporation in the election of directors
of the following ranges of such voting power: (a) one-fifth or more but less
than one-third of such voting power; (b) one-third or more but less than a
majority of such voting power; or (c) a majority or more of such voting power.
Section 831 provides that any person who proposes to make a control share
acquisition shall deliver an "acquiring person statement" to the issuing
public corporation. Such acquiring person statement shall include (i) the
identity of the acquiring person; (ii) a statement that the acquiring person
statement is given pursuant to Section 831; (iii) the number of shares of the
issuing public corporation owned, directly or indirectly, by the acquiring
person; (iv) the range of voting power in the election of directors under
which the proposed control share acquisition would, if consummated, fail; (v)
a description in reasonable detail of the terms of the proposed acquisition;
and (vi) representations of the acquiring person (together with a statement in
reasonable detail of the facts upon which the representations are based) that
the proposed control share acquisition, if consummated, will not be contrary
to law, and that the acquiring person has the financial capacity to make the
proposed control share acquisition.
Within ten days of receipt of an acquiring person statement that complies
with Section 831, the directors of the issuing public corporation must call a
special meeting of shareholders of the issuing public corporation to vote on
the proposed control share acquisition. Such special meeting must be held
within fifty days of receipt of the acquiring person statement unless the
acquiring person agrees otherwise. If the acquiring person requests in writing
at the time of delivery of the acquiring person statement, such special
meeting shall be held no sooner than 30 days after receipt by the issuing
public corporation of the acquiring person statement.
The issuing public corporation is required to send a notice of the special
meeting to all shareholders of record as of the record date set for the
meeting, together with a copy of the acquiring person statement and a
statement by the issuing public corporation, authorized by its directors, of
its position or recommendation with respect to the proposed control share
acquisition.
Pursuant to Ohio Revised Code Section 1701.831(E)(1), the acquiring person
may make the proposed control share acquisition only if (a)(i) a quorum is
present at the special meeting, (ii) the acquisition is authorized by an
affirmative vote of a majority of the voting power entitled to vote in the
election of directors and represented in person or by proxy at such meeting
("First Majority"), and (iii) by a majority of the portion of such voting
power excluding the voting power of "interested shares" ("Second Majority"),
as defined below, and (b) such control share acquisition is consummated, in
accordance with the terms so authorized, no later than 360 days following such
shareholder authorization of the control share acquisition.
Ohio Revised Code Section 1701.01(CC)(1) defines "interested shares" as the
shares of an issuing public corporation as to which any of the following
persons may exercise (or direct the exercise of) voting power of the
corporation in the election of directors: (i) the acquiring person; (ii) an
officer of the issuing public corporation elected or appointed by its
directors; or (iii) any employee of the issuing public corporation who is also
a director of such corporation. Ohio Revised Code Section 1701.01(CC)(2) also
defines "interested shares" (the shares defined under either Section
1701.01(CC)(1) and (2) hereinafter referred to as "Interested Shares") to mean
shares of the issuing public corporation acquired, directly or indirectly, by
any person for valuable consideration during the period beginning with the
date of the first public disclosure of a proposed control share acquisition of
the issuing public corporation or any proposed merger, consolidation or other
transaction which would result in a change in control of the corporation or
all or substantially all of its assets, and ending on the date of any special
meeting of the corporation's shareholders held thereafter pursuant to Section
831 for the purpose of voting on a control share acquisition proposed by an
acquiring person, if either (i) the aggregate consideration paid or otherwise
given by the person who acquired the shares, and any other persons acting in
concert with such person, exceeds $250,000 or (ii) the number of shares
acquired by the person who acquired the shares, and any other
10
persons acting in concert with such person, exceeds one-half of 1% of the
outstanding shares of the corporation entitled to vote in the election of
directors.
In earlier cases, Luxottica Group S.p.A. v. United States Shoe Corp., C.A.
No. C2-95-244 (S.D. Ohio, Mar. 16, 1995) and Danaher Corporation v. Acme-
Cleveland Corporation, C. No. C2-96-0247 (S.D. Ohio 1996), brought with
respect to the constitutionality of Section 1701.01(CC)(2), the Court
interpreted Section 1701.01(CC)(2) as requiring the determination of the
status of shares as Interested Shares to be made as of the date of the special
meeting held pursuant to Section 1701.831, taking into account all purchases
of shares between the date of the first public disclosure of a proposed
control share acquisition up to the time of such special meeting. Although the
Company has reserved its right to contest this interpretation on appeal, the
Company has adopted procedures for the 831 Special Meeting that the Company
believes are consistent with the Court's interpretation.
June 27, 1996 is the date on which United Dominion first publicly disclosed
the proposed control share acquisition that is the subject of the 831 Special
Meeting. Accordingly, pursuant to the Court's interpretation of Section
1701.01(CC)(2), should the aggregate consideration paid or otherwise given by
a person who acquires Common Shares or Preferred Shares, and by any other
persons acting in concert with such person, during the period that commenced
on June 27, 1996 and ends on the date of the 831 Special Meeting (or of any
reconvening of such meeting pursuant to proper adjournment thereof) exceed
$250,000 in the aggregate, such shares will constitute "Interested Shares."
Persons who both purchase and sell shares during the period should meet the
aggregate consideration they paid and the aggregate consideration they
received for purposes of determining their status on the date of the 831
Special Meeting.
THE AUTHORIZATION BY THE SHAREHOLDERS OF THE CONTROL SHARE ACQUISITION IS
INDEPENDENT OF ANY DECISION BY SHAREHOLDERS WHETHER OR NOT TO TENDER THEIR
SHARES PURSUANT TO THE REVISED OFFER. Consummation of the transactions
described in the Revised Offer, however, is conditioned, among other things,
upon shareholder authorization of the Control Share Acquisition pursuant to
Section 831.
The foregoing summary does not purport to be a complete statement of the
provisions of Section 831 and the related provisions of the Ohio Revised Code.
The foregoing summary is qualified in its entirety by reference to Section 831
and the Ohio Revised Code.
VOTE OF TWO SEPARATE MAJORITIES REQUIRED; CERTAIN VOTING PROCEDURES AT 831
SPECIAL MEETING
As discussed earlier, for the Control Share Acquisition to be authorized
under the Ohio Control Share Acquisition Law, two separately determined
majorities of the Common Shares and Preferred Shares (voting together as a
single class) voted at the 831 Special Meeting (the First Majority and Second
Majority) for each such authorization must authorize the Control Share
Acquisition, and a separately determined quorum must be present at the 831
Special Meeting.
The First Majority authorization is that of a majority of the voting power
of all of the Common Shares and Preferred Shares present or represented at the
831 Special Meeting; all of the outstanding Common Shares and Preferred Shares
of the Company as of the Record Date are eligible to vote in determining the
approval of this First Majority. The quorum required for this authorization is
a majority of the voting power of all the outstanding Common Shares and
Preferred Shares.
The Second Majority authorization required is that of a majority of the
Common Shares and Preferred Shares present or represented at the 831 Special
Meeting, excluding the voting power of Common Shares and Preferred Shares that
are Interested Shares; Interested Shares are ineligible to vote in determining
the authorization of this Second Majority. The quorum required for the Second
Majority authorization is a majority of the voting power of outstanding Common
Shares and Preferred Shares excluding the voting power of Interested Shares.
11
Holders of the voting power of Interested Shares are not eligible to vote
such Interested Shares in connection with the Second Majority. The Board of
Directors has authorized, and the Company (after consultation with the
Presiding Inspector of Election and the Inspector of Election described below)
has instituted, procedures to implement the Ohio legislative mandate to
exclude the voting power of Interested Shares, including a requirement that
each shareholder certify to the Company the number of Common Shares and
Preferred Shares being voted that are eligible to vote in respect of the
Second Majority. UNDER PROCEDURES FOR THE 831 SPECIAL MEETING ADOPTED BY THE
COMPANY, WITH THE CONCURRENCE OF THE PRESIDING INSPECTOR OF ELECTION AND THE
INSPECTOR OF ELECTION, ALL COMMON SHARES AND PREFERRED SHARES THAT ARE VOTED
WITHOUT SUCH A CERTIFICATION SHALL BE PRESUMED TO BE INELIGIBLE TO VOTE IN
RESPECT OF THE SECOND MAJORITY. See "Shares Outstanding and Eligible to Be
Voted in First Majority and Second Majority" in this Proxy Statement and the
additional information set forth in Exhibit B to this Proxy Statement.
In the event that a quorum is not present at the 831 Special Meeting for one
or both of the votes to be taken on the Control Share Acquisition, that vote
could not be taken under the Ohio Control Share Acquisition Law, and the
Control Share Acquisition would not be authorized. The holders of a majority
of Common Shares and Preferred Shares represented at the 831 Special Meeting,
whether or not a quorum is present, could vote to adjourn the 831 Special
Meeting to not later than the close of business on August 31, 1996, at which
time another determination would be made as to whether the required quorum was
present.
If the Control Share Acquisition is not authorized by both of the majority
votes required, United Dominion and OAC may not proceed further with the
Control Share Acquisition unless the Ohio Control Share Acquisition Law is
declared unconstitutional. If the Control Share Acquisition is authorized by
both the required majorities, United Dominion and OAC would not be prohibited
by the Ohio Control Share Acquisition Law from completing the Revised Offer
and the Control Share Acquisition. However, authorization of the Control Share
Acquisition for purposes of the Ohio Control Share Acquisition Law would not
require any shareholder to accept the Revised Offer or to tender shares to
OAC. Moreover, in the event that the shareholders of the Company do authorize
the Control Share Acquisition, there can be no assurance that the Revised
Offer will be consummated. As previously described under "The Revised Offer,"
the Revised Offer is subject to numerous conditions. For a description of
certain litigation relating to these conditions, see "The Revised Offer." The
Board of Directors of the Company believes there is substantial uncertainty as
to whether the conditions to the Revised Offer will be satisfied, and there
may be significant delay before the Revised Offer can be consummated, even if
all of the conditions to the Revised Offer can be satisfied.
If a shareholder abstains from voting on the Control Share Acquisition
(marking "abstain" on the form of proxy), those Common Shares and Preferred
Shares will be considered as present at the 831 Special Meeting for quorum
purposes, but the abstention will have the practical effect of a "no" vote. If
a broker indicates on the form of proxy that it does not have discretionary
authority as to certain Common Shares and Preferred Shares to vote on the
Control Share Acquisition, those Common Shares and Preferred Shares will be
considered as present at the 831 Special Meeting for quorum purposes but not
entitled to vote with respect to the 831 Special Meeting and thus will also
have the practical effect of a "no" vote. If the Company's proxy is properly
signed and returned without specifying a choice, the Common Shares and
Preferred Shares represented thereby will be voted AGAINST the Control Share
Acquisition.
Certain Common Shares and Preferred Shares are held of record by LaSalle
National Trust, N.A. (which succeeded Mellon Bank, N.A. as trustee on July 26,
1996) as trustee (the "ESOP Trustee") for the Commercial Intertech Employee
Stock Ownership Plan and Commercial Intertech Retirement Stock Ownership and
Savings Plan (the "ESOPs"). The trust for these plans (the "ESOP Trust")
contain pass-through voting provisions for the participants of the ESOPs, with
Common Shares and Preferred Shares that are allocated to a participant's
account voted by the ESOP Trustee as instructed by the participant and Common
Shares and Preferred Shares that either are not allocated to any participant's
account or are allocated but for which no instruction from the participant has
been received by the ESOP Trustee voted by the ESOP Trustee proportionately as
the allocated shares for which instructions were received are voted.
PARTICIPANTS IN THE ESOPS CAN ONLY VOTE
12
COMMON SHARES AND PREFERRED SHARES HELD IN THE ESOPS ON THEIR BEHALF BY
INSTRUCTING THE ESOP TRUSTEE ON THE TRUSTEE INSTRUCTION CARD PROVIDED TO
PARTICIPANTS FOR THAT PURPOSE. According to proxy materials filed with the
Securities and Exchange Commission by United Dominion and OAC, United Dominion
and OAC believe that, notwithstanding the express terms of the trust document,
the ESOP Trustee has a fiduciary duty under the Employee Retirement Income
Security Act of 1974 ("ERISA") to exercise its discretion with respect to
voting Common Shares or Preferred Shares held in the ESOPs which are allocated
to any participant's account but for which no instructions are received by it
and for all Common Shares or Preferred Shares held in ESOPs which are not
allocated to any participant's account. United Dominion and OAC also believe,
according to such proxy materials, that the indemnification provisions in
favor of the ESOP Trustee contained in the trust documents, which provide full
indemnification for the ESOP Trustee only for actions taken upon the written
direction of the participants and in accordance with the terms of the ESOP,
violate ERISA. According to such proxy materials, United Dominion and OAC
believe that the Department of Labor has successfully advanced similar
positions in a federal district court case, Reich v. NationsBank of Georgia,
N.A., and Martin v. NationsBank of Georgia, N.A., an earlier opinion in the
same proceeding.
In addition, Common Shares are held of record by National City Bank, N.E.,
as trustee (the "Plan Trustee") for the Commercial Intertech Non-Qualified
Stock Purchase Plan and the Commercial Intertech Employee Savings and Stock
Purchase Plan (the "Plans"). The trusts for these plans (the "Plan Trusts")
contain pass- through voting provisions for the participants of the Plans,
with Common Shares that are allocated to a participant's account voted by the
Plan Trustee as instructed by the participant and Common Shares for which no
instruction from the participant has been received by the Plan Trustee voted
by the Plan Trustee, in its sole discretion. PARTICIPANTS IN THE PLANS CAN
ONLY VOTE COMMON SHARES HELD IN THE PLANS ON THEIR BEHALF BY INSTRUCTING THE
PLAN TRUSTEE ON THE TRUSTEE INSTRUCTION CARD PROVIDED TO PARTICIPANTS FOR THAT
PURPOSE.
Proxies representing Common Shares held of record will include Common Shares
allocated to participants under the Automatic Dividend Reinvestment Plan (the
"Dividend Reinvestment Plan") for shareholders of the Company. The form of
Proxy accompanying this Proxy Statement can be used to vote such Common Shares
held under the Automatic Dividend Reinvestment Plan.
Prior to the Repurchase Program, the Preferred Shares represented
approximately 6.2% of the voting power of the Company's outstanding voting
securities. In addition, Common Shares held in employee benefit plans
represented approximately 4.9% of the voting power of the Company's
outstanding voting securities. Assuming the repurchase of 2,500,000 shares
pursuant to the Repurchase Program, the Preferred Shares would represent
approximately 7.3%, and such Common Shares would represent approximately 5.8%,
of the voting power of the Company's outstanding voting securities. If the
Preferred Shares were converted to Common Shares and assuming completion of
the repurchase, a total of 1,301,082 Common Shares would be issued,
representing approximately 9.2% of the voting power of the Company's then
outstanding voting securities.
In connection with the Spin-Off, the ESOP Trustee would have to make a
determination, in its discretion, whether to continue to hold the Preferred
Shares or to convert prior to the Spin-Off record date into Common Shares and
receive Cuno Common Stock in the Spin-Off. If the ESOP Trustee were to convert
prior to the record date, based on the number of Common Shares which would be
held by the ESOPs, it could continue to hold the Cuno shares following the
Spin-Off. If the ESOP Trustee did not convert, however, under the anti-
dilution provisions of the Preferred Shares, the Preferred Shares would be
entitled to an adjustment in the conversion ratio equal to the result obtained
by multiplying the conversion price by a fraction, the numerator of which
would be the trading value of the Common Shares prior to the Spin-Off less the
fair market value of the Cuno Common Stock, and the denominator of which would
be trading value of the Common Shares prior to the Spin-Off.
SHARES OUTSTANDING AND ELIGIBLE TO BE VOTED IN FIRST MAJORITY AND SECOND
MAJORITY
As discussed above, Common Shares and Preferred Shares are the only shares
entitled to be voted at the 831 Special Meeting. The Common Shares and
Preferred Shares are each entitled to one vote and vote together
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as a single class. On August 2, 1996, there were 13,671,332 Common Shares and
1,039,657 Preferred Shares outstanding, all of which are eligible to be voted
in determining whether the Control Share Acquisition has been approved by the
First Majority required under the Ohio Control Share Acquisition Law.
The number of Common Shares and Preferred Shares eligible to be voted in
determining whether the Control Share Acquisition has been approved by the
Second Majority required under the Ohio Control Share Acquisition Law,
consisting of the voting power of all the outstanding Common Shares and
Preferred Shares excluding the voting power of Interested Shares, will be
determined as of the time of the 831 Special Meeting in the manner described
in this Proxy Statement. The categories of Interested Shares that will not be
eligible to be voted in determining the Second Majority are as follows:
a. Shares owned by the acquiring person (United Dominion and OAC).
According to the Schedule 14D-1 filed by United Dominion and OAC on July
12, 1996, United Dominion and OAC, and their respective affiliates own in
the aggregate 1,000 Common Shares, which are, for this purpose, Interested
Shares.
b. Shares owned by officers of the Company elected or appointed by its
Board of Directors (16 individuals) and by any employee of the Company who
is also a director of the Company (Paul J. Powers and William W. Cushwa).
These individuals own, in the aggregate, 643,662 Common Shares and
Preferred Shares, which are, for this purpose, Interested Shares. As such,
these Common Shares will not be eligible to be voted in determining the
Second Majority. To the best of the Company's knowledge, these individuals
intend to vote their Common Shares and Preferred Shares against the Control
Share Acquisition in determining the First Majority.
c. The Ohio Control Share Acquisition Law also excludes from the vote in
determining approval of the Control Share Acquisition by the Second
Majority the voting power of "any shares . . . acquired, directly or
indirectly, by any person from the holder or holders thereof for a valuable
consideration during any period beginning with the date of the first public
disclosure of a proposed control share acquisition . . . and ending on the
date of the [831 Special Meeting], for the purpose of voting on a control
share acquisition . . . if . . . the following [applies]: (a) the aggregate
consideration paid or given by the person who acquired the shares, and any
other persons acting in concert with him, for all such shares exceeds two
hundred fifty thousand dollars. . . ." Such Shares are Interested Shares
for this purpose. Pursuant to Section 1701.01 (CC)(2) of the Ohio Revised
Code, any Common Shares or Preferred Shares acquired (directly or
indirectly) during the period beginning on June 27, 1996, the date United
Dominion first publicly disclosed its unsolicited proposal to purchase all
of the Company's Common Shares, through the date of the 831 Special Meeting
and that are held on the date of the 831 Special Meeting are Interested
Shares if the aggregate consideration paid or given by a holder of such
shares (or any person acting in concert with such holder) exceeds $250,000.
Persons who both purchase and sell shares during the period should meet the
aggregate consideration they paid and the aggregate consideration they
received for purposes of determining their status on the date of the 831
Special Meeting.
Under the Ohio Control Share Acquisition Law, Common Shares and Preferred
Shares owned by directors who are not employees of the Company, and who do not
fall into any other category described in subparagraph (a), (b) or (c)
immediately above, would not be Interested Shares. The Company's directors
(excluding director/officers) owned an aggregate of 390,567 Common Shares and
Preferred Shares as of June 30, 1996, and, to the best of Company's knowledge,
none of these Common Shares and Preferred Shares is an Interested Share. To
the best of Company's knowledge, these directors intend to vote their Common
Shares and Preferred Shares against approval of the Control Share Acquisition
in determining the First and the Second Majorities.
The Board of Directors has authorized, and the Company has instituted, after
consultation with the Presiding Inspector of Election and the Inspector of
Election described below, procedures to determine, as of the time of the 831
Special Meeting, how many and which of the outstanding Common Shares and
Preferred Shares of the Company will be Interested Shares under the definition
quoted in subparagraph (c) immediately above. Under these procedures:
14
1(a) All proxy cards solicited for ballots voted at the 831 Special
Meeting must set forth or be accompanied by a certification for signature
by the shareholder to the effect that all, or an indicated number of, the
Common Shares and Preferred Shares owned by that shareholder are eligible
to vote in determining the Second Majority (namely, in determining whether
the Control Share Acquisition is authorized by the Second Majority required
under the Ohio Control Share Acquisition Law) because such Common Shares
and Preferred Shares are not Interested Shares. See Exhibit B to this Proxy
Statement for specific information as to the circumstances under which a
shareholder may, or may not, sign the certification. Banks, brokerage
houses, other institutions, nominees, and fiduciaries holding shares
beneficially owned by other parties will be requested to include this
certification on all materials distributed to such beneficial owners
seeking instructions from the beneficial owners as to how to vote such
Common Shares and Preferred Shares. The Company will also supply
shareholders with a separate certification form that shareholders using the
BLUE-STRIPED proxy card circulated by United Dominion and OAC may use to
certify their eligibility (if the BLUE-STRIPED proxy card does not provide
a certification of eligibility conforming to the certification on the
LIGHT-GREEN proxy card circulated by the Company). The Company has
requested that United Dominion and OAC include a conforming certification
of eligibility in the BLUE-STRIPED proxy card, but to date United Dominion
and OAC have not advised the Company that they will do so.
(b) Each proxy card and ballot also sets forth or must be accompanied by
a statement to the effect that, if the certification of eligibility is
signed by the shareholder, the shareholder submitting the proxy card or the
ballot undertakes to advise the Company of any changes in the status of the
Common Shares and Preferred Shares represented by the proxy card or ballot,
between the date the certification is originally signed and the time of the
831 Special Meeting, known to such shareholder to have caused such Common
Shares and Preferred Shares to have become Interested Shares or of any
other change in the eligibility of such shares to vote. Each shareholder is
being provided with a second postage paid envelope and a duplicate proxy
card addressed to the Company or the shareholder's nominee for the purpose
of providing such additional information, if necessary. If the
certification is signed by the shareholder and no such additional
information is received, the Common Shares and Preferred Shares subject to
the certification of eligibility on the proxy card or ballot will be
presumed not to be Interested Shares and, therefore, will be eligible to be
voted in determining whether the Control Share Acquisition has been
approved by the Second Majority.
2(a) The Company will submit, and United Dominion may also submit, to the
Presiding Inspector of Election:
(i) information from publicly available sources, such as filings with
the Securities and Exchange Commission;
(ii) information made available to the Company by its transfer agent,
its proxy soliciting firm, The Depository Trust Company, and similar
sources or information available to;
(iii) information that becomes available to the Company in the course
of the litigation initiated by United Dominion and OAC; and
(iv) any other information that may assist in identifying which
Common Shares and Preferred Shares are Interested Shares for purposes
of challenging any certification of eligibility or lack thereof made on
a proxy card or ballot that the Company or United Dominion, on the
basis of such information, may believe to be incorrect. Under
procedures approved by the Company's Board of Directors, such
challenges are to be made as soon as possible, and in no event more
than seven days after the date of the 831 Special Meeting.
(b) All such challenges will be resolved by the Presiding Inspector of
Election pursuant to an agreement among the Company and the Inspectors
specifying the procedures and regulations for challenges and other
activities of the Inspectors. Each ruling by the Presiding Inspector is to
be made on the basis of the information presented to the Inspectors in a
challenge, or in a rebuttal to a challenge, as the Presiding Inspector
shall find, in his sole judgment, to be probative on a basis consistent
with the language and purpose of the Ohio Control Share Acquisition Law and
the efficient and fair administration of the 831 Special Meeting
thereunder.
15
All Common Shares and Preferred Shares as to which a signed certification of
eligibility, as described above, has been provided on the proxy card or ballot
relating to such Common Shares and Preferred Shares will be presumed by the
Presiding Inspector to be eligible to be voted in determining whether the
Control Share Acquisition is approved by the Second Majority; this presumption
may be rebutted if a shareholder signing the proxy card or ballot provides
subsequent information indicating that some or all of the Common Shares and
Preferred Shares represented by the original proxy card or ballot have become,
or lost their status as, Interested Shares or a successful challenge is made
to such certification on the basis of information available to the challenging
party. It is the Company's position that Common Shares and Preferred Shares
subject to a proxy card or ballot without a certification of eligibility
completed by the shareholder shall be presumed to be Interested Shares and,
therefore, not eligible to be voted in determining whether the Control Share
Acquisition has been approved by the Second Majority.
IT IS ALSO THE COMPANY'S POSITION THAT ALL COMMON SHARES AND PREFERRED
SHARES SUBJECT TO ONE OF THE BLUE-STRIPED PROXY CARDS PREVIOUSLY DISTRIBUTED
BY UNITED DOMINION AND OAC, WHICH CONTAIN NO CERTIFICATION OF ELIGIBILITY, AS
DESCRIBED ABOVE, SHALL ALSO BE PRESUMED TO BE INTERESTED SHARES, UNLESS THE
SHAREHOLDER SIGNING THE PROXY CARD SIGNS AND PRESENTS EITHER (1) A PROXY CARD
BEARING A LATER DATE WITH A SIGNED CERTIFICATION OF ELIGIBILITY OR (2) A
SEPARATE CERTIFICATION OF ELIGIBILITY IN THE FORM PROVIDED TO SHAREHOLDERS BY
THE COMPANY. The Company's proxy soliciting firm, Morrow & Co., Inc., will
upon request in writing or by telephone furnish shareholders with LIGHT-GREEN
proxy cards or Trustee Instruction Cards, as applicable, that contain a
certification of eligibility or, if requested, the separate certification of
eligibility for use with a BLUE-STRIPED proxy card. The address and telephone
number to be used in requesting such proxy cards or separate certifications of
eligibility are as follows: Commercial Intertech Corp., c/o Morrow & Co.,
Inc., 909 3rd Avenue, 20th Floor, New York, New York 10022-4799 (telephone for
holders in street name: 1-800-662-5200; telephone for all others: 1-800-566-
9061).
INSPECTORS OF ELECTION
The Company has retained Samuel H. Porter to serve as Presiding Inspector of
Election at the 831 Special Meeting. Mr. Porter is a partner at the law firm
of Porter, Wright, Morris & Arthur of Columbus, Ohio. As Presiding Inspector
of Election, Mr. Porter will have, among other responsibilities, authority to
determine the validity of any challenges to the certifications of eligibility
described above. The Company has agreed to pay Mr. Porter at his usual hourly
rate for his services, plus reasonable out-of-pocket costs and expenses
(including legal fees and expenses for assistance provided by his law firm at
its usual rates).
The Company has also retained CT Corporation System, Inc. to act as an
Inspector of Election under the direction of Mr. Porter and to assist in the
tabulation of votes and determination of quorums at the 831 Special Meeting.
The Company has agreed to pay CT Corporation System, Inc. its standard fees
for its services plus reasonable out-of-pocket costs and expenses.
Neither Mr. Porter nor CT Corporation System, Inc. is subject to any
disability known to the Company by reason of any conflict of interest with the
Company, United Dominion, OAC, or any of their respective affiliates or
advisors. The Company is indemnifying the Inspectors of Election against
certain liabilities in connection with possible litigation.
VOTING, SOLICITATION AND REVOCATION OF PROXIES
LIGHT-GREEN proxy cards solicited by the Board of Directors of the Company
accompany this Proxy Statement. A shareholder may use that proxy card if he or
she is unable to attend the 831 Special Meeting in person. The proxy may be
revoked in writing by the person giving it at any time before it is exercised
by notice of such revocation to the Secretary of the Company, 1775 Logan
Avenue, Youngstown, Ohio 44501, or by submitting a proxy card having a later
date, or by such person appearing at the 831 Special Meeting and electing
16
to vote in person. A shareholder may revoke a BLUE-STRIPED proxy card with a
date later than the date of the proxy card submitted to United Dominion and
OAC or by appearing at the 831 Special Meeting and electing to vote in person.
All proxies validly submitted and not revoked will be voted in the manner
specified therein in determining whether the Control Share Acquisition has
been approved by the First Majority. All proxy cards validly submitted will be
voted as to Common Shares and Preferred Shares the eligibility of which has
been certified in the manner specified therein in determining whether the
Control Share Acquisition has been approved by the Second Majority, except to
the extent that the presumption that the Common Shares and Preferred Shares
represented by the proxies are eligible to be voted in the Second Majority is
rebutted. See "Shares Outstanding and Eligible to be Voted in First Majority
and Second Majority." If no specification is made on a LIGHT-GREEN proxy card,
the Common Shares and Preferred Shares represented by a LIGHT-GREEN proxy card
will be voted AGAINST approval of the Control Share Acquisition. Neither
abstentions nor broker non-votes will be counted as voting in favor of the
Control Share Acquisition. As a consequence, abstentions and broker non-votes
will have the same effect as votes against approval of the Control Share
Acquisition. PARTICIPANTS IN THE ESOPS AND THE PLANS CAN VOTE COMMON AND
PREFERRED SHARES, AS APPLICABLE, HELD IN THE ESOPS AND THE PLANS ON THEIR
BEHALVES BY USING THE ENCLOSED FORM OF TRUSTEE INSTRUCTION CARD, WHICH WILL
SERVE AS VOTING INSTRUCTION TO THE TRUSTEE FROM SUCH PARTICIPANTS.
The costs of solicitation will be borne by the Company. In addition to
solicitation by mail, directors, officers and regular employees of the Company
may solicit proxies in person, by telephone, by personal interview, e-mail, or
by telecopier, none of whom will receive additional compensation for such
solicitations. The Company has requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward its solicitation materials to
the beneficial owners of the Common Shares and Preferred Shares they hold of
record and obtain authorization for, and appropriate certification in
connection with, the execution of proxy cards. The Company will reimburse
these record holders for customary mailing expenses incurred by them in
forwarding these materials. The Company also has retained Morrow & Co., Inc.
to assist the Company in connection with communications with shareholders and
to provide other services in connection with the solicitation of proxies or
consents and the Revised Offer. The fee of Morrow & Co. is estimated to be
$400,000 plus reasonable out-of-pocket costs and expenses.
Except as described above, neither the Company nor, to the best of the
Company's knowledge, any person acting on its behalf has retained any other
person to make solicitations or recommendations to security holders on its
behalf in connection with the transactions contemplated by the Revised Offer.
OTHER FEES
Pursuant to a letter agreement dated June 28, 1996 (the "Letter Agreement"),
the Company has retained Goldman Sachs as financial advisor with respect to
the Revised Offer and certain other possible transactions. In addition,
Goldman Sachs will act as exclusive financial advisor with respect to any
proxy or consent solicitation (including this solicitation) involving United
Dominion and OAC. Pursuant to the Letter Agreement, the Company has agreed to
pay to Goldman Sachs:
(a) a fee of $250,000 payable on the date of the Letter Agreement;
(b) an additional fee of $250,000 in the event of the commencement by
United Dominion or any affiliate or other party of a tender offer, payable
upon the commencement of the tender offer;
(c) if 15% or more of the outstanding Shares of the Company are acquired
by United Dominion or any other person or group (including the Company), in
one or a series of transactions 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, an additional fee equal to
0.85% of the aggregate value of all such transactions (in the event at
least 50% of the outstanding Shares of the Company are acquired by United
17
Dominion or any other person or group, including the Company, such
aggregate value shall be determined as if such acquisition were of 100% of
the Shares of the Company);
(d) 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 effects certain recapitalization transactions not
covered by subparagraph (c), a fee (to be negotiated) equal to between
0.85% and 1.0% of the aggregate value of such transaction;
(e) in the event that the Company acquires the securities or assets of
another company or sells, distributes or liquidates all or a 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 to Goldman Sachs with
respect to such transaction pursuant to subparagraphs (c) and (d) above,
additional fees customary to such transactions based on the aggregate value
of the transaction; and
(f) subject to certain conditions, in the event no transaction of the
type described in subparagraphs (c) and (d) has been consummated by January
1, 1997, a fee of $500,000 on each such date as of which no transaction has
been consummated: January 1, 1997, April 1, 1997, July 1, 1997, October 1,
1997, January 1, 1998 and April 1, 1998 less any amounts paid under
subparagraphs (a) and (b) above.
Any fees paid pursuant to subparagraphs (a), (b) and (f) above shall be
credited against any fees payable pursuant to subparagraphs (d) and (e) above.
The Company has also agreed to reimburse Goldman Sachs periodically for its
reasonable out-of-pocket expenses, including the fees and disbursements of its
attorneys, plus any sales, use or similar taxes (including additions to such
taxes, if any) arising in connection with any matter referred to in the Letter
Agreement. In addition, the Company has agreed to indemnify Goldman Sachs
against certain liabilities, including liabilities under federal securities
laws.
Cuno has entered into a financial advisory agreement with each of Cleary
Gull Reiland & McDevitt Inc. and Robert W. Baird & Co. Incorporated (each, an
"Advisor"). Each Advisor has agreed to provide assistance in preparing the
Form 10 and perform over-the-counter market making and research activities for
Cuno following the Spin-Off. Cuno has agreed to pay each Advisor $250,000 for
such services plus reimbursement for reasonable expenses. Each agreement
contains customary indemnification provisions.
OTHER MATTERS
No matter other than the Control Share Acquisition is to be considered at
the 831 Special Meeting. However, if any procedural matter properly comes
before the 831 Special Meeting, the proxies also confer authority to the
persons named in the accompanying proxy to vote the Common Shares and
Preferred Shares to which the proxy relates on such matter at their
discretion.
The Acquiring Person Statement delivered to the Company by United Dominion
and OAC, Exhibit A to this Proxy Statement, and the Revised Offer to Purchase
contain important information and should be read by shareholders before any
decision is made with respect to voting on the Control Share Acquisition.
Only holders of record of the Common Shares and Preferred Shares as of the
close of business on the Record Date will be entitled to vote at the 831
Special Meeting or any adjournment thereof. Shareholders of record on the
Record Date will retain their voting rights for the 831 Special Meeting even
if such Common Shares and Preferred Shares are sold after the Record Date or
are tendered pursuant to the Revised Offer, whether before or after the Record
Date. The tender of Shares pursuant to the Revised Offer does not constitute
the grant to United Dominion or OAC of a proxy or any voting rights with
respect to the tendered Shares until such time as such Shares are accepted for
payment by OAC.
18
Proxies representing any Common Shares and Preferred Shares held in the
names of a brokerage firm, bank, bank nominee or other institution on the
Record Date can only be executed upon receipt of specific instructions by such
brokerage firm, bank, bank nominee or other institution. Accordingly, please
contact the person responsible for your account and instruct that person to
execute the LIGHT-GREEN proxy card with respect to Common Shares and Preferred
Shares you own beneficially.
Participants in the ESOPs can only vote Common Shares and Preferred Shares
held in the ESOPs on their behalf by instructing the ESOP Trustee on the
Trustee Instruction Card provided to participants for that purpose.
Similarly, participants in the Plans can only vote Common Shares held in the
Plans on their behalves by instructing the Plan Trustee on the Trustee
Instruction Card provided to participants for that purpose.
PLEASE SIGN, DATE AND MAIL THE ACCOMPANYING WHITE PROXY CARD PROMPTLY. BY
DATING, SIGNING AND MAILING THE ACCOMPANYING LIGHT-GREEN PROXY CARD, ANY PROXY
PREVIOUSLY SIGNED BY YOU WITH RESPECT TO THE CONTROL SHARE ACQUISITION WILL BE
AUTOMATICALLY REVOKED.
INTERESTS OF CERTAIN PERSONS
The Stock Option and Award Plans; Form of Option Agreement:
The Company's Stock Option and Award Plans allow for the grant of a variety
of stock incentive instruments, including nonqualified (i.e., not tax-
preferred) and incentive stock options, stock appreciation rights, restricted
stock and performance shares. For many years, the Company has granted stock
options to its key executives to create a direct link between shareholder and
executive interests. In the past the Company has also periodically granted
time-lapse restricted stock to its key executives.
The performance share program, first initiated in fiscal 1993, is a longer-
term incentive program designed to motivate key executives whose efforts
result in the achievement of sustained financial results leading to increased
shareholder value. Designed to replace substantially the restricted stock
grants previously made to key executives, the Management Evaluation and
Compensation Committee of the Board of Directors (the "Committee") believes
performance shares better align executive and shareholder financial interests.
The Committee selected 63 executives throughout the Company for participation
in the performance share program.
Depending on responsibilities within the Company, performance shares are
earned based on average corporate and/or group Return On Equity (ROE),
divisional operating income and, for certain executives, individual specific
objectives over a three-year performance period. In future years, the
Committee may consider other measures of shareholder value and performance
periods, as appropriate, in light of the Company's strategic objectives.
Threshold levels of ROE and, in certain cases, operating income must be
achieved before any distributions are made.
Historically the Company has granted stock options on an annual basis while
performance shares are granted every other year. In determining stock option
awards, the Committee considers such factors as median competitive award
levels, the size of previous stock option awards and Company and individual
performance.
The Company has modified its practice of awarding restricted stock to key
executives. Restricted stock is now used only in special circumstances, such
as to attract new key executives for employment with the Company and in other
comparable non-recurring circumstances.
Pursuant to the terms of the Company's Stock Option and Award Plan of 1989,
the Stock Option and Award Plan of 1993 and the Stock Option and Award Plan of
1995 (collectively, the "Stock Option and Award Plans"), the Committee may
provide, upon a change of control (as defined in the Stock Option and Award
Plans and which would include the consummation of the Revised Offer), that (i)
any and all stock appreciation rights outstanding on the date that such change
of control is determined to have occurred and any and all stock options
19
awarded under the Stock Option and Award Plans not previously exercisable and
vested shall become fully exercisable and vested and (ii) restrictions
applicable to any and all restricted stock and performance share awards shall
lapse and such shares and awards shall be fully vested.
Similarly, pursuant to the terms of the Company's form of Option Agreement,
the options granted thereunder and not yet exercisable shall become
exercisable and vested upon a change of control or a potential change of
control (as both terms are defined in the Option Agreement and which would
include the consummation of the Revised Offer).
Employment Agreements:
On July 27, 1994, the Company entered into an Employment Agreement with Paul
J. Powers. Mr. Powers' Employment Agreement expires on February 28, 2000. The
Employment Agreement provides for the payment of a base salary which can be
increased at the discretion of the Company. Mr. Powers' annual base salary for
1995 was $481,667. Additionally, Mr. Powers shall be eligible to (1) receive
cash bonuses as part of the Company's Salaried Employee Incentive Plan
("SEIP"); and (2) participate in other incentive, stock option, profit sharing
and similar plans maintained by the Company for the benefit of its executives.
In addition, the employment agreement with Mr. Powers provides that in the
event of his termination without cause (as defined in his employment
agreement), Mr. Powers shall receive a lump sum payment equal to two and one-
half times his most recent annual cash compensation. Finally, Mr. Powers will
be included in all other employee benefit plans to the extent that he is
eligible. Such plans include, but are not limited to, group life insurance
plans, hospitalization and medical plans and long-term disability plans.
On May 18, 1992, the Company entered into an Employment Agreement with Bruce
C. Wheatley and on December 3, 1993, the Company entered into an Employment
Agreement with Mark G. Kachur. Mr. Wheatley's Employment Agreement is for a
term of three years and Mr. Kachur's Employment Agreement is for a term of
three years. The Employment Agreement with Mr. Wheatley provides for a base
salary of $200,000 and Mr. Kachur's Employment Agreement provides for a base
salary of $240,000. Both employment agreements provide for participation in
the Company's SEIP as well as other Company benefit programs, including group
life insurance, hospitalization and medical plans. These Employment Agreements
also provide for the grant of stock options under certain stock option plans,
subject to vesting requirements, and also provide for participation in a
supplemental deferred compensation arrangement. In the event of a change in
control of the Company, these Employment Agreements provide for a lump sum
severance payment in the amount of two years' cash compensation as well as
continued participation in Company benefit programs for two years following
termination.
Termination Benefits:
On February 15, 1988, the Company entered into a Severance Compensation and
Consulting Agreement with Paul J. Powers. On September 28, 1989, the Company
entered into separate Severance Compensation Agreements with each of Gilbert
M. Manchester, William W. Cushwa, Steven J. Hewitt, Edward J. Barnard, Patrick
C. Reardon, Kenneth W. Marcum and Robert A. Calcagni. On June 25, 1992, the
Company entered into a Severance Compensation Agreement with John Gilchrist,
on July 20, 1992 with Bruce C. Wheatley, on March 25, 1995 with Mark G. Kachur
and, on February 29, 1996, with Hubert Jacobs van Merlen. The Severance
Compensation and Consulting Agreement and the Severance Compensation
Agreements are referred to collectively as the "Agreements." The Agreements
were the result of a determination by the Board of Directors that it is
appropriate and in the best interest of the Company and its shareholders that,
in the event of a possible change in control of the Company, the stability and
continuity of management would be maintained, free of the distractions
incident to any change in control.
For purposes of the Agreements, a "change in control" shall be deemed to
have occurred if (i) there shall be consummated (a) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's Common Stock would be
converted into
20
cash, securities or other property, other than a merger of the Company in
which the holders of the Company's Common Stock immediately prior to the
merger have substantially the same proportionate ownership of common stock of
the surviving corporation immediately after the merger, or (b) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company, or
(ii) the shareholders of the Company shall approve any plan or proposal for
the liquidation or dissolution of the Company, or (iii) any person (as such
term is used in Section 13(d) and 14(d)(2) of the Exchange Act), other than
the Company or a subsidiary or any employee benefit plan sponsored by the
Company or a subsidiary, shall become the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act) of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or an exchange offer, open market purchases, privately
negotiated purchases or otherwise, or (iv) at any time during a period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company shall cease for any reason to constitute
at least the majority thereof, unless the election or the nomination for
election by the Company's shareholders of each new director during such two-
year period is approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such two-year period.
Benefits are payable under the Agreements only if a change in control has
occurred and within two years after such change in control the officer's
employment is terminated involuntarily without cause or voluntarily by the
officer for specified reasons, such as demotion, reduction in base salary,
relocation, loss of benefits or other changes. The principal benefits to be
provided to Mr. Powers under his Agreement are (i) a lump sum payment equal to
two times his annual cash compensation (base salary and incentive
compensation), (ii) continued participation in the Company's employee benefit
programs for three years following termination, and (iii) a consulting fee
equal to his annual cash compensation in consideration for consulting services
over a one-year period after termination. The principal benefits to be
provided to Messrs. Manchester, Cushwa, Hewitt, Barnard, Reardon, Marcum,
Jacobs van Merlen, Calcagni, Kachur, Wheatley, and Gilchrist under the
Agreements are (i) a lump sum payment equal to two times the officer's annual
cash compensation (base salary and incentive compensation) and (ii) continued
participation in the Company's employee benefit programs for two years
following termination. If the officer's termination occurs after age 62,
separation payments are reduced by a factor based upon the number of months
remaining until the officer reaches age 65. The Agreements are not employment
agreements, and do not impair the right of the Company to terminate the
employment of the executive with or without cause prior to a change in
control, or the right of the executive to voluntarily terminate his
employment. Each Agreement generally terminates on the earlier of the date on
which the officer reaches age 65 or five years from the date of the Agreement,
provided that the term of the Agreement will be automatically extended for
additional one-year periods until the officer reaches age 65 or the Company or
the officer determines not to extend the Agreement.
21
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of June 30, 1996 (unless a
different date is specified in the notes to the table) with respect to (a)
each current director of the Company, (b) each of the Named Executive Officers
(as defined in Item 402(a) (3) of Regulation S-K of the Exchange Act) and (c)
all directors and executive officers of the Company as a group.
AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL ALL VOTING
NAME OF BENEFICIAL OWNER OWNERSHIP SHARES**
- ------------------------ ----------------- ----------
William J. Bresnahan............... 300 *
Charles B. Cushwa III.............. 220,380(1)(4)(5) 1.50%
(8)(12)(16)
William W. Cushwa.................. 238,925(1)(2)(3)(4)(6)(7) 1.62%
(8)(13)(14)(16)(17)
John M. Galvin..................... 5,750(8) *
John Gilchrist..................... 32,032(8)(10)(14) *
Richard J. Hill.................... 10,397(8)(9) *
Neil D. Humphrey................... 6,635(8)(9) *
Hubert Jacobs van Merlen........... 13,103 *
Mark G. Kachur..................... 32,086(8) *
William E. Kassling................ 5,000 *
Gerald C. McDonough................ 4,500(8) *
C. Edward Midgley.................. 10,000 *
Paul J. Powers..................... 329,041(2)(8)(10)(14) 2.24%
George M. Smart.................... 2,750(8) *
Don E. Tucker...................... 136,855(1)(2)(8)(11) *
Bruce E. Wheatley.................. 34,714(8)(15) *
All Directors and Executive Offi-
cers as a Group (19 people)....... 1,198,805 8.15%
- --------
* less than 1%.
** Percent of All Voting Shares based on total outstanding Common Shares and
Preferred Shares as of August 2, 1996.
(1) Does not include Common Shares owned by the members of the above-
mentioned directors' families who share their homes, as follows: of Mr.
Charles Cushwa--947 shares; of Mr. William Cushwa--26,278 shares; and of
Mr. Tucker--1,146 shares. Beneficial ownership thereof is disclaimed by
the respective directors.
(2) Includes the beneficial interest in Common Shares (fractional shares not
shown) credited to the accounts of the above-mentioned beneficial owners
by the Trustee acting under the provisions of the Employee Savings and
Stock Purchase Plan of Commercial Intertech Corp., as follows: Mr.
William Cushwa--4,347 shares; Mr. Powers--1,630 shares; and Mr. Tucker--
9,446 shares.
(3) Includes Common Shares held by the directors as custodians for their
minor children as follows: minor children of Mr. William Cushwa--4,011
shares.
(4) Charles B. Cushwa III and William W. Cushwa are two of three
beneficiaries of a trust, of which they are not trustees, which consists
of 294,000 Common Shares the income from which will be paid to the
beneficiaries equally during their lives. These shares are not included
in the amounts shown in the table.
(5) Includes 44,000 Common Shares held in trust, in which the children of
Charles B. Cushwa III have a remainder interest, and of which National
City Bank, N.E. and Charles B. Cushwa III are co-trustees. Beneficial
ownership thereof is disclaimed by Mr. Charles B. Cushwa III.
(6) Does not include 11,250 Common Shares held in trust, of which William W.
Cushwa is not a trustee, for the benefit of his child and of which
beneficial ownership is disclaimed by Mr. William W. Cushwa.
(7) Includes 44,000 Common Shares held in trust, in which the children of
William W. Cushwa have a remainder interest, and of which National City
Bank, N.E. and William W. Cushwa are co-trustees. Beneficial ownership
thereof is disclaimed by Mr. William W. Cushwa.
22
(8) Includes Common Shares acquirable within 60 days of June 30, 1996 upon
exercise of options issued under the Company's Stock Option and Award
Plans as follows: Mr. Charles Cushwa--2,250 shares; Mr. William Cushwa--
1,875 shares; Mr. Galvin--2,250 shares; Mr. Gilchrist--11,250 shares;
Mr. Hill--2,250 shares; Mr. Humphrey--1,500 shares; Mr. McDonough--2,250
shares; Mr. Powers--137,250 shares; Mr. Wheatley--11,250 shares; Mr.
Kachur--7,500 shares; Mr. Smart--750 shares; and Mr. Tucker--750 shares.
(9) Includes Common Shares (fractional shares not shown) credited to the
accounts of the above-mentioned beneficial owners by the administrator
of the Company's Automatic Dividend Reinvestment Plan, as follows: Mr.
Hill--3,147 shares; and Mr. Humphrey--1,485 shares.
(10) Includes in each case 317 Preferred Shares (fractional shares not shown)
and the following number of Common Shares (fractional shares not shown)
credited to the accounts of the above-mentioned beneficial owners by the
Trustee acting under the provisions of the Commercial Intertech 401(k)
plan: Mr. Gilchrist--441 shares; and Mr. Powers--5,011 shares.
(11) Includes 206 Preferred Shares (fractional shares not shown) and 5,036
Common Shares (fractional shares not shown) credited by the Trustee
acting under the provisions of the Company's 401(k) plan.
(12) Includes 38,396 Common Shares held in trust, in which the children of
Charles B. Cushwa III have a remainder interest, and of which National
City Bank, N.E. and Charles B. Cushwa III are co-trustees. Beneficial
ownership thereof is disclaimed by Mr. Charles B. Cushwa III.
(13) Includes 61,000 Common Shares held in trust, in which the children of
William W. Cushwa have a remainder interest, and of which National City
Bank, N.E. and William W. Cushwa are co-trustees. Beneficial ownership
thereof is disclaimed by Mr. William W. Cushwa.
(14) Includes in each case two Common Shares (fractional shares not shown) as
a result of participation in the Commercial Intertech Employee Stock
Ownership Plan and the following number of Preferred Shares (fractional
shares not shown) as a result of participation in the Company's Employee
Stock Ownership Plan: Mr. William Cushwa--324 shares; Mr. Gilchrist--398
shares; and Mr. Powers--719 shares.
(15) Includes 96 Preferred Shares (fractional shares not shown) and 1,890
Common Shares (fractional shares not shown) held under the provisions of
the Company's 401(k) plan. Includes 110 Preferred Shares (fractional
shares not shown) as a result of participation in the Commercial
Intertech Employee Stock Ownership Plan.
(16) Charles B. Cushwa III and William W. Cushwa are two of three
beneficiaries of a trust, of which they are not trustees, containing
75,000 shares distribution of which is dependent upon the resolution of
certain probate estate matters. The shares are not included in the
amounts shown in the table.
(17) Includes 300 Preferred Shares (fractional shares not shown) and 903
Common Shares (fractional shares not shown) credited by the trustee
acting under the provisions of the Commercial Intertech 401(k) plan.
The information set forth above concerning the security holdings of the
beneficial owners is based on information received from the persons named.
None of such beneficial owners, directly or indirectly, owns beneficially any
equity securities of any subsidiary of the Company.
23
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The name of any person or "group" (as that term is used in the Exchange Act)
known by the Company to be the beneficial owner of more than five percent (5%)
of any class of the Company's voting securities as of June 30, 1996 is set
forth below:
AMOUNT AND NATURE PERCENT PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OF ALL VOTING
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP CLASS** SHARES**
- -------------- ---------------------------- ----------------- ------- ----------
Common.................. National City Bank N.E. 989,707(1) 7.24% 6.73%
P.O. Box 450
Youngstown, OH 44501
Series B Preferred...... LaSalle National Trust, N.A. 1,039,657(2) 100.00% 7.07%
P.O. Box 444
Pittsburgh, PA 15230
- --------
** Percent of All Voting Shares and Percent of Class based on total
outstanding Common Shares and Preferred Shares as of August 2, 1996.
(1) This figure includes 172,409 Common Shares held in trust by National City
Bank, N.E. (trustee) for the benefit of participants in the Employee
Savings and Stock Purchase Plan of Commercial Intertech Corp. This figure
also includes 1,597 Common Shares held in trust by National City Bank,
N.E. (trustee) for the benefit of participants in the Company's Non-
Qualified Stock Purchase Plan of Commercial Intertech.
National City Bank has sole voting power over 644,032 shares, shared voting
power over 170,806 shares and no voting power over 174,869 shares. National
City Bank has sole investment power over 277,613 shares and shared
investment power over 712,094 shares.
(2) This figure represents all of the outstanding Preferred Shares held of
record by LaSalle National Trust, N.A. (trustee) for the benefit of
participants in the ESOPs. The trust for these plans contains provisions
for pass-through voting rights to the employee participants in the plans.
LaSalle National Trust, N.A. has shared voting power and shared investment
power over all Preferred Shares.
NO DISSENTERS RIGHTS
Dissenters rights are not available to the shareholders of an "issuing
public corporation" in connection with the authorization of a "control share
acquisition" under the Ohio Control Share Acquisition Law.
SHAREHOLDER PROPOSALS
Proposals of security holders to be presented at the 1997 Annual Meeting of
shareholders of the Company must be in proper form and received by the Company
by October 1, 1996.
By Order of the Board of Directors,
/s/Shirley M. Shields
Shirley M. Shields,
Secretary
Youngstown, Ohio
August 2, 1996
24
EXHIBIT A
ACQUIRING PERSON STATEMENT
PURSUANT TO SECTION 1701.831 OF
THE OHIO REVISED CODE*
COMMERCIAL INTERTECH CORP.
(NAME OF ISSUING PUBLIC CORPORATION)
1775 LOGAN AVENUE,
YOUNGSTOWN, OHIO 44510
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
OPUS ACQUISITION CORPORATION
AND
UNITED DOMINION INDUSTRIES LIMITED
(ACQUIRING PERSONS)
This Acquiring Person Statement is being delivered to Commercial Intertech
Corp., an Ohio corporation (the "Company"), pursuant to Section 1701.831 of
the Ohio Revised Code by United Dominion Industries Limited, a Canadian
company ("Parent"), and Opus Acquisition Corporation, a Delaware corporation
and an indirect wholly owned subsidiary of Parent (the "Purchaser"), and
relates to the transactions contemplated by the tender offer by the Purchaser
to purchase all outstanding Common Shares, par value $1.00 per share
(including the associated preferred share purchase rights), of the Company
("Common Shares") (including Common Shares issuable upon conversion of shares
of ESOP Convertible Preferred Stock Series B, without par value, of the
Company ("Preferred Shares")), upon the terms and subject to the conditions
set forth in the Offer to Purchase dated July 12, 1996 (as the same may
hereafter be amended from time to time, the "Offer to Purchase"), a copy of
which is attached hereto as Exhibit A and incorporated herein by reference.
ITEM 1. IDENTITY OF THE ACQUIRING PERSON.
The acquiring persons are United Dominion Industries Limited ("Parent") and
Opus Acquisition Corporation (the "Purchaser"). The address of the principal
executive offices of the Purchaser and Parent are 2300 One First Union Center,
Charlotte, North Carolina 28202-6039.
The information set forth in the Introduction and in the section entitled
"Certain Information Concerning Parent and the Purchaser" of the Offer to
Purchase is incorporated herein by reference.
ITEM 2. DELIVERY OF ACQUIRING PERSON STATEMENT.
This Acquiring Person Statement is given pursuant to Section 1701.831 of the
Ohio Revised Code.
The Purchaser and Parent hereby request that a special meeting of the
shareholders of the Company, which is required to be called by the directors
of the Company pursuant to division (C) of Section 1701.831 of the Ohio
Revised Code as a result of the delivery of this Acquiring Person Statement,
be held no sooner than thirty (30) days after the Company's receipt of this
Acquiring Person Statement.
- --------
* Notwithstanding the making and delivery of this Statement, all rights are
reserved (i) to challenge the constitutionality, validity and/or legality of
all or any part of Section 1701.831 and related provisions of the Ohio
Revised Code and their application to the Offer to Purchase and/or (ii) to
seek an amendment to the Code of Regulations of the Company to provide that
Section 1701.831 and related provisions of the Ohio Revised Code do not
apply to control share acquisitions of Common Shares, including pursuant to
the Offer to Purchase.
A-1
ITEM 3. OWNERSHIP OF SHARES BY ACQUIRING PERSON.
On the date of this Acquiring Person Statement, the Purchaser owns 500
Common Shares and no Preferred Shares, and Parent owns 1,000 Common Shares
(500 directly and 500 indirectly through the Purchaser) and no Preferred
Shares.
ITEM 4. RANGE OF VOTING POWER.
The Purchaser and Parent propose to acquire all of the outstanding Common
Shares in accordance with and as contemplated by the terms of the Offer to
Purchase. The proposed control share acquisition, if consummated, would result
in the acquisition of a majority or more of the voting power as described in
subparagraph (c) of paragraph (Z)(1) of Section 1701.01 of the Ohio Revised
Code.
ITEM 5. TERMS OF THE PROPOSED CONTROL SHARE ACQUISITION.
The offer price is $27 per Common Share (and associated Right), net to the
seller in cash without interest thereon, subject to change as described in the
section entitled "Terms of the Offer" of the Offer to Purchase incorporated
herein by reference. Other information as set forth in the Offer to Purchase
is incorporated herein by reference. For a description of the terms of the
proposed control share acquisition, reference is made in particular to the
information set forth in the Introduction, and in the sections entitled "Terms
of the Offer", "Procedures for Tendering Shares", "Withdrawal Rights",
"Acceptance for Payment and Payment", "Source and Amount of Funds", "Purpose
of the Offer; Plans for the Company", "Dividends and Distributions", "Certain
Conditions of the Offer" and "Certain Legal Matters" of the Offer to Purchase.
ITEM 6. REPRESENTATIONS OF LEGALITY; FINANCIAL CAPACITY.
The Purchaser and Parent represent that the proposed control share
acquisition will not be contrary to law and that they have the financial
capacity to make such proposed control share acquisition. The facts upon which
these representations are based are set forth in reasonable detail in the
sections entitled "Certain Information Concerning Parent and the Purchaser",
"Certain Legal Matters" and "Source and Amount of Funds" of the Offer to
Purchase and such information is incorporated herein by reference.
Opus Acquisition Corporation
/s/ B. Bernard Burns, Jr.
Dated: July 12, 1996 By __________________________________
Name: B. Bernard Burns, Jr.
Title:Vice President and Secretary
United Dominion Industries Limited
Dated: July 12, 1996 /s/ B. Bernard Burns, Jr.
By __________________________________
Name: B. Bernard Burns, Jr.
Title: Senior Vice President,
General Counsel and
Secretary
A-2
EXHIBIT B
PROXY CARD/TRUSTEE INSTRUCTION CARD
CERTIFICATION OF ELIGIBILITY
IT IS THE COMPANY'S POSITION THAT A SHAREHOLDER MUST SIGN AND COMPLETE THE
CERTIFICATION OF ELIGIBILITY ON THE PROXY CARD OR TRUSTEE INSTRUCTION CARD OR
THE SEPARATE CERTIFICATION OF ELIGIBILITY IN THE FORM PROVIDED TO SHAREHOLDERS
BY THE COMPANY IN ORDER TO BE ELIGIBLE TO VOTE IN DETERMINING WHETHER THE
CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY THE SECOND MAJORITY (AS DEFINED
IN THE PROXY STATEMENT). IT IS ALSO THE COMPANY'S POSITION THAT COMMON SHARES
AND PREFERRED SHARES REPRESENTED BY A PROXY CARD OR TRUSTEE INSTRUCTION CARD
WITHOUT A COMPLETED AND SIGNED CERTIFICATION SHALL BE PRESUMED TO BE
INTERESTED SHARES (AS DEFINED IN THE ATTACHED PROXY STATEMENT) THAT ARE
INELIGIBLE TO VOTE IN CONNECTION WITH THE SECOND MAJORITY AUTHORIZATION AS
DESCRIBED ON PAGE 8 OF THE ATTACHED PROXY STATEMENT. If either of the
following circumstances apply to Common Shares and Preferred Shares owned by a
shareholder, the shareholder is entitled to sign the certification as to those
Common Shares and Preferred Shares:
a. The Common Shares and Preferred Shares were owned by the shareholder
before June 27, 1996, and the shareholder is not United Dominion, OAC, an
officer of the Company elected or appointed by its Board of Directors, or
an employee of the Company who is also a director of the Company; or
b. The Common Shares and Preferred Shares were purchased by the
shareholder on or after June 27, 1996, and the aggregate purchase price of
all Common Shares and Preferred Shares, together with any Common Shares and
Preferred Shares purchased by any person acting in concert with the
shareholder, on or after June 27, 1996, and that will be held as of the
date of the 831 Special Meeting, is $250,000 or less. Persons who both buy
and sell shares should net the aggregate consideration they paid with the
aggregate consideration they received for purposes of determining their
status on the date of the 831 Special Meeting.
If, however, any of the following circumstances apply to any of the Common
Shares and Preferred Shares represented by the proxy card, the shareholder is
not entitled to, and must not, sign the certification as to such Common Shares
and Preferred Shares:
1. The shareholder is United Dominion, OAC, an officer of the Company
elected or appointed by its Board of Directors, or an employee of the
Company who is also a Director of the Company; or
2. The Common Shares and Preferred Shares were purchased by the
shareholder on or after June 27, 1996, and the aggregate purchase price of
all Common Shares and Preferred Shares, together with any Common Shares and
Preferred Shares purchased by any person acting in concert with the
shareholder, on or after June 27, 1996, and that will be held as of the
date of the 831 Special Meeting is more than $250,000. Persons who both buy
and sell shares should net the aggregate consideration they paid with the
aggregate consideration they received for purposes of determining their
status on the date of the 831 Special Meeting.
In addition, a shareholder is not entitled to sign the certification with
respect to Common Shares and Preferred Shares that were sold after August 7,
1996 to a third person (the "Buyer") known to the shareholder to meet the test
of Paragraph (1) or (2) above. If the shareholder cannot determine the status
of the Buyer, the shareholder is entitled to presume that the Buyer does not
meet the test of Paragraph (1) or (2) above.
IF THE SHAREHOLDER SIGNS THE CERTIFICATION OF ELIGIBILITY BUT LATER LEARNS
THAT THE CIRCUMSTANCES IN EITHER (1) OR (2) ABOVE APPLY TO THE COMMON SHARES
AND PREFERRED SHARES, OR THE SHAREHOLDER LATER TRANSFERS COMMON SHARES AND
PREFERRED SHARES TO ANOTHER PERSON WHO THE SHAREHOLDER LEARNS IS NOT, OR AFTER
GIVING EFFECT TO THE TRANSFER WILL NOT BE, ELIGIBLE TO SIGN THE CERTIFICATION,
OR THE SHAREHOLDER LATER LEARNS OTHER FACTS THAT CHANGE THE ELIGIBILITY OF THE
COMMON SHARES OR THE PREFERRED SHARES TO VOTE IN DETERMINING WHETHER THE
CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY THE SECOND MAJORITY, THE
SHAREHOLDER SHOULD (AND BY SIGNING THE CERTIFICATION UNDERTAKES TO) SO NOTIFY
THE COMPANY IF YOU ARE VOTING THROUGH A BROKER OR NOMINEE, THEN NOTIFY SUCH
BROKER OR NOMINEE OF SUCH CHANGES BY USE OF THE DUPLICATE PROXY CARD AND THE
ADDITIONAL ENVELOPE PROVIDED.
B-1
[FORM OF PROXY FOR COMMON SHARES NOT IN ESOPS OR PLANS]
[FRONT]
COMMERCIAL INTERTECH CORP.
THIS PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 30, 1996 IS SOLICITED BY THE BOARD OF
DIRECTORS
At the Special Meeting of Shareholders of COMMERCIAL INTERTECH CORP. to be held
on August 30, 1996, and at any adjournment thereof, Paul J. Powers, Bruce C.
Wheatley, and Hubert Jacobs van Merten, and each of them, with several powers of
substitution and resubstitution, are hereby authorized to represent me and vote
my shares upon the proposal to authorize as required by Section 1701.831 of the
Ohio Revised Code the proposed control share acquisition by Opus Acquisition
Corporation, as more fully described in the Company's proxy statement dated
August __, 1996 (the "Proxy Statement"):
1. Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
2. Proposed Adjournment of Meeting to FOR AGAINST ABSTAIN
Solicit Additional Votes, if Necessary, [ ] [ ] [ ]
to Authorize Control Share Acquisition
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "AGAINST"
THE PROPOSALS
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Proxy Card
EITHER
[ ] All of the Common Shares represented by this Proxy Card are eligible to be
voted in determining whether the proposed control share acquisition has
been approved by the "Second Majority" (as defined in the Proxy
Statement).
Instruction: check the above box if all of the Common Shares represented
by this proxy meet the eligibility criteria stated in Exhibit B of the
Proxy Statement.
OR
[ ] _________ of the Common Shares represented by this Proxy Card are eligible
to be voted in determining whether the proposed control share acquisition
has been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common
Shares represented by this proxy meet the eligibility criteria stated in
Exhibit B of the Proxy Statement and fill in the blank with the number of
Common Shares that are eligible.
THE COMMON SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED AS DIRECTED, OR
IF NO DIRECTION IS SPECIFIED, WILL BE VOTED AGAINST THE PROPOSALS.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
REPRESENTED BY THIS PROXY CARD IS ELIGIBLE TO BE VOTED IN DETERMINING WHETHER
THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY THE SECOND MAJORITY.
PARTICIPANTS IN THE ESOPS CAN ONLY VOTE COMMON SHARES AND PREFERRED SHARES HELD
IN THE ESOPS ON THEIR BEHALF BY INSTRUCTING THE ESOP TRUSTEE ON THE TRUSTEE
INSTRUCTION CARD PROVIDED TO PARTICIPANTS FOR THAT PURPOSE.
SIMILARLY, PARTICIPANTS IN THE PLANS CAN ONLY VOTE SHARES HELD IN THE PLANS ON
THEIR BEHALF BY INSTRUCTING THE PLAN TRUSTEE ON THE TRUSTEE INSTRUCTION CARD
PROVIDED TO PARTICIPANTS FOR THAT PURPOSE.
By signing below, you (a) instruct that this Proxy Card be voted as marked; (b)
certify the eligibility of your Common Shares to be voted as indicated above;
and (c) UNDERTAKE TO NOTIFY THE COMPANY (OR, IF YOU VOTE THROUGH A BROKER OR
NOMINEE, THEN NOTIFY SUCH BROKER OR NOMINEE OF SUCH CHANGES) IF, AT ANY TIME ON
OR AFTER THE DATE YOU SIGN THIS PROXY CARD AND ON OR BEFORE THE DATE OF THE
SPECIAL MEETING OF SHAREHOLDERS (THE "831 SPECIAL MEETING"), any of the
following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and the net aggregate consideration paid or given by you, and
any other persons acting in concert with you, for all Common Shares
acquired, indirectly or directly, by you, and any persons acting in concert
with you, on or after June 27, 1996 exceeds $250,000;
(2) you sell Common Shares to another person who, to your knowledge, is not, or
after giving effect to the sale will not be, eligible to sign the
certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares to which this
Certificate of Eligibility relates otherwise changes.
SIGNATURE(S) DATE
______________________________ _________________________
SIGNATURE(S) DATE
______________________________ _________________________
NOTE: Please sign your name exactly as it appears in print and, in case of
multiple or joint ownership, all should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
[FORM OF TRUSTEE INSTRUCTION CARD FOR COMMON SHARES IN
PLANS -- NON-QUALIFIED STOCK PURCHASE PLAN]
[FRONT]
CONFIDENTIAL VOTING INSTRUCTIONS
TO: NATIONAL CITY BANK, N.E.
AS TRUSTEE ON BEHALF OF THE
NON-QUALIFIED STOCK PURCHASE PLAN
OF COMMERCIAL INTERTECH CORP.
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF SHAREHOLDERS
UNDER SECTION 1701.831 OF THE OHIO REVISED
CODE TO BE HELD ON AUGUST 30, 1996
The undersigned hereby directs the Trustee to vote all Common Shares of
Commercial Intertech Corp. allocated to the undersigned's account under the plan
on the record date for the Special Meeting of Shareholders of Commercial
Intertech Corp., to be held in Youngstown, Ohio on Friday, August 30, 1996, or
at any adjournments or postponements thereof, upon the matter as set forth in
the Notice of Special Meeting and Proxy Statement ("Proxy Statement"), receipt
of which is hereby acknowledged.
The Trustee is directed to vote as specified below, or if no specification is
made, AGAINST the proposed Control Share Acquisition by Opus Acquisition
Corporation. To vote in accordance with the Board of Directors'
recommendations, just sign below without checking any boxes. If you fail to
sign and return these instructions, the Trustee will vote, in its sole
discretion, any shares held under the plan which are not voted. The Trustee
makes no recommendation as to this matter.
PLEASE SIGN, DATE AND RETURN THIS CONFIDENTIAL VOTING SHEET PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. THESE CONFIDENTIAL VOTING INSTRUCTIONS WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL APPOINTED BY THE TRUSTEE.
1. Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
2. Proposed Adjournment of Meeting to FOR AGAINST ABSTAIN
Solicit Additional Votes, if Necessary, [ ] [ ] [ ]
to Authorize Control Share Acquisition
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "AGAINST"
THE PROPOSALS
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Trustee
Instruction Card
EITHER
[ ] All of the Common Shares represented by this Trustee Instruction Card are
eligible to be voted in determining whether the proposed control share
acquisition has been approved by the "Second Majority" (as defined in the
Proxy Statement).
Instruction: check the above box if all of the Common Shares represented
by this Trustee Instruction Card meet the eligibility criteria stated in
Exhibit B of the Proxy Statement.
OR
[ ] _________ of the Common Shares represented by this Trustee Instruction Card
are eligible to be voted in determining whether the proposed control share
acquisition has been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common Shares
represented by this Trustee Instruction Card meet the eligibility criteria
stated in Exhibit B of the Proxy Statement and fill in the blank with the
number of Common Shares that are eligible.
THE COMMON SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD WILL BE VOTED AS
DIRECTED, OR IF NO DIRECTION IS SPECIFIED, WILL BE VOTED AGAINST THE PROPOSALS.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD IS ELIGIBLE TO BE VOTED IN
DETERMINING WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY
THE SECOND MAJORITY.
By signing below, you (a) instruct that this Trustee Instruction Card be voted
as marked; (b) certify the eligibility of your Common Shares to be voted as
indicated above; and (c) UNDERTAKE TO NOTIFY THE COMPANY AND THE TRUSTEE IF, AT
ANY TIME ON OR AFTER THE DATE YOU SIGN THIS TRUSTEE INSTRUCTION CARD AND ON OR
BEFORE THE DATE OF THE SPECIAL MEETING OF SHAREHOLDERS (THE "831 SPECIAL
MEETING"), any of the following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and the net aggregate consideration paid or given by you, and
any other persons acting in concert with you, for all Common Shares
acquired, indirectly or directly, by you, and any persons acting in concert
with you, on or after June 27, 1996 exceeds $250,000;
(2) you sell Common Shares to another person who, to your knowledge, is not, or
after giving effect to the sale will not be, eligible to sign the
certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares to which this
Certificate of Eligibility relates otherwise changes.
Dated: ____________, 1996 __________________________________
Signature of Participant
__________________________________
Social Security Number
[FORM OF TRUSTEE INSTRUCTION CARD FOR COMMON SHARES IN
PLANS -- EMPLOYEE SAVINGS AND STOCK PURCHASE PLAN]
[FRONT]
CONFIDENTIAL VOTING INSTRUCTIONS
TO: NATIONAL CITY BANK, N.E.
AS TRUSTEE ON BEHALF OF THE
EMPLOYEE SAVINGS AND STOCK PURCHASE PLAN
OF COMMERCIAL INTERTECH CORP.
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF SHAREHOLDERS
UNDER SECTION 1701.831 OF THE OHIO REVISED
CODE TO BE HELD ON AUGUST 30, 1996
The undersigned hereby directs the Trustee to vote all Common Shares of
Commercial Intertech Corp. allocated to the undersigned's account under the plan
on the record date for the Special Meeting of Shareholders of Commercial
Intertech Corp., to be held in Youngstown, Ohio on Friday, August 30, 1996, or
at any adjournments or postponements thereof, upon the matter as set forth in
the Notice of Special Meeting and Proxy Statement ("Proxy Statement"), receipt
of which is hereby acknowledged.
The Trustee is directed to vote as specified below, or if no specification is
made, AGAINST the proposed Control Share Acquisition by Opus Acquisition
Corporation. To vote in accordance with the Board of Directors'
recommendations, just sign below without checking any boxes. If you fail to
sign and return these instructions, the Trustee will vote, in its sole
discretion, any shares held under the plan which are not voted. The Trustee
makes no recommendation as to this matter.
PLEASE SIGN, DATE AND RETURN THIS CONFIDENTIAL VOTING SHEET PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. THESE CONFIDENTIAL VOTING INSTRUCTIONS WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL APPOINTED BY THE TRUSTEE.
1. Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
2. Proposed Adjournment of Meeting to FOR AGAINST ABSTAIN
Solicit Additional Votes, if Necessary, [ ] [ ] [ ]
to Authorize Control Share Acquisition
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "AGAINST"
THE PROPOSALS
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Trustee
Instruction Card
EITHER
[ ] All of the Common Shares represented by this Trustee Instruction Card are
eligible to be voted in determining whether the proposed control share
acquisition has been approved by the "Second Majority" (as defined in the
Proxy Statement).
Instruction: check the above box if all of the Common Shares represented
by this Trustee Instruction Card meet the eligibility criteria stated in
Exhibit B of the Proxy Statement.
OR
[ ] _________ of the Common Shares represented by this Trustee Instruction
Card are eligible to be voted in determining whether the proposed control
share acquisition has been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common
Shares represented by this Trustee Instruction Card meet the eligibility
criteria stated in Exhibit B of the Proxy Statement and fill in the blank
with the number of Common Shares that are eligible.
THE COMMON SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD WILL BE VOTED AS
DIRECTED, OR IF NO DIRECTION IS SPECIFIED, WILL BE VOTED AGAINST THE PROPOSALS.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD IS ELIGIBLE TO BE VOTED IN
DETERMINING WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY
THE SECOND MAJORITY.
By signing below, you (a) instruct that this Trustee Instruction Card be voted
as marked; (b) certify the eligibility of your Common Shares to be voted as
indicated above; and (c) UNDERTAKE TO NOTIFY THE COMPANY AND THE TRUSTEE IF, AT
ANY TIME ON OR AFTER THE DATE YOU SIGN THIS TRUSTEE INSTRUCTION CARD AND ON OR
BEFORE THE DATE OF THE SPECIAL MEETING OF SHAREHOLDERS (THE "831 SPECIAL
MEETING"), any of the following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and the net aggregate consideration paid or given by you, and
any other persons acting in concert with you, for all Common Shares
acquired, indirectly or directly, by you, and any persons acting in concert
with you, on or after June 27, 1996 exceeds $250,000;
(2) you sell Common Shares to another person who, to your knowledge, is not, or
after giving effect to the sale will not be, eligible to sign the
certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares to which this
Certificate of Eligibility relates otherwise changes.
Dated: ____________, 1996 __________________________________
Signature of Participant
__________________________________
Social Security Number
[FORM OF TRUSTEE INSTRUCTION CARD
FOR COMMON SHARES
AND PREFERRED SHARES IN ESOPS --
EMPLOYEE STOCK OWNERSHIP PLAN]
[FRONT]
CONFIDENTIAL VOTING INSTRUCTIONS TO:
LASALLE NATIONAL BANK, N.A.
AS TRUSTEE ON BEHALF OF THE COMMERCIAL INTERTECH
EMPLOYEE STOCK OWNERSHIP PLAN
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
SPECIAL MEETING OF SHAREHOLDERS UNDER SECTION 1701.831
OF THE OHIO REVISED CODE TO BE HELD ON AUGUST 30, 1996
ESOP
The undersigned hereby directs the Trustee to vote all Common Shares or
Preferred Shares of Commercial Intertech Corp. deemed credited to the
undersigned's account under the plan on the record date for the Special Meeting
of Shareholders of Commercial Intertech Corp., to be held in Youngstown, Ohio on
Friday, August 30, 1996, or at any adjournments or postponements thereof, upon
the matter as set forth in the Notice of Special Meeting and Proxy Statement
("Proxy Statement"), receipt of which is hereby acknowledged.
The Trustee is directed to vote as specified below, or if no specification is
made, AGAINST the proposed Control Share Acquisition by Opus Acquisition
Corporation. To vote in accordance with the Board of Directors'
recommendations, just sign below without checking any boxes. If you fail to
sign and return these instructions, the Trustee will vote all shares deemed
credited to your account in the same proportion as the shares deemed credited to
the accounts of participants who have directed it. The Trustee makes no
recommendation as to this matter.
PLEASE SIGN, DATE AND RETURN THIS CONFIDENTIAL VOTING CARD PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. THESE CONFIDENTIAL VOTING INSTRUCTIONS WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL APPOINTED BY THE TRUSTEE. ADDITIONAL
INFORMATION CONCERNING THE VOTING OF SHARES HELD UNDER THE PLAN APPEARS IN THE
PROXY STATEMENT.
1. Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
2. Proposed Adjournment of Meeting to FOR AGAINST ABSTAIN
Solicit Additional Votes, if Necessary, [ ] [ ] [ ]
to Authorize Control Share Acquisition
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "AGAINST"
THE PROPOSALS
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Trustee
Instruction Card
EITHER
[ ] All of the Common Shares and Preferred Shares represented by this Trustee
Instruction Card are eligible to be voted in determining whether the
proposed control share acquisition has been approved by the "Second
Majority" (as defined in the Proxy Statement).
Instruction: check the above box if all of the Common Shares and Preferred
Shares represented by this Trustee Instruction Card meet the eligibility
criteria stated in Exhibit B of the Proxy Statement.
OR
[ ] _________ of the Common Shares and ___________________ of the Preferred
Shares represented by this Trustee Instruction Card are eligible to be
voted in determining whether the proposed control share acquisition has
been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common
Shares and Preferred Shares represented by this Trustee Instruction Card
meet the eligibility criteria stated in Exhibit B of the Proxy Statement
and fill in the blank with the number of Common Shares and Preferred
Shares that are eligible.
THE COMMON SHARES AND PREFERRED SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION
CARD WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS SPECIFIED, WILL BE VOTED
AGAINST THE PROPOSALS.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
AND PREFERRED SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD IS ELIGIBLE TO
BE VOTED IN DETERMINING WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN
APPROVED BY THE SECOND MAJORITY.
By signing below, you (a) instruct that this Trustee Instruction Card be voted
as marked; (b) certify the eligibility of your Common Shares and Preferred
Shares to be voted as indicated above; and (c) UNDERTAKE TO NOTIFY THE COMPANY
AND THE TRUSTEE IF, AT ANY TIME ON OR AFTER THE DATE YOU SIGN THIS TRUSTEE
INSTRUCTION CARD AND ON OR BEFORE THE DATE OF THE SPECIAL MEETING OF
SHAREHOLDERS (THE "831 SPECIAL MEETING"), any of the following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and Preferred Shares and the net aggregate consideration paid
or given by you, and any other persons acting in concert with you, for all
Common Shares and Preferred Shares acquired, indirectly or directly, by you,
and any persons acting in concert with you, on or after June 27, 1996
exceeds $250,000;
(2) you sell Common Shares and Preferred Shares to another person who, to
your knowledge, is not, or after giving effect to the sale will not be,
eligible to sign the certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares and Preferred
Shares to which this Certificate of Eligibility relates otherwise changes.
Dated: ____________, 1996 __________________________________
Signature of Participant
__________________________________
Social Security Number
[FORM OF TRUSTEE INSTRUCTION CARD
FOR COMMON SHARES
AND PREFERRED SHARES IN ESOPS --
RETIREMENT STOCK OWNERSHIP AND SAVINGS PLAN]
[FRONT]
CONFIDENTIAL VOTING INSTRUCTIONS TO:
LASALLE NATIONAL BANK, N.A.
AS TRUSTEE ON BEHALF OF THE COMMERCIAL INTERTECH
RETIREMENT STOCK OWNERSHIP AND SAVINGS PLAN
("TRUSTEE")
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
SPECIAL MEETING OF SHAREHOLDERS UNDER
SECTION 1701.831 OF THE OHIO REVISED
CODE TO BE HELD ON AUGUST 30, 1996
401(K)
The undersigned hereby directs the Trustee to vote all Common Shares or
Preferred Shares of Commercial Intertech Corp. deemed credited to the
undersigned's account under the plan on the record date for the Special Meeting
of Shareholders of Commercial Intertech Corp., to be held in Youngstown, Ohio on
Friday, August 30, 1996, or at any adjournments or postponements thereof, upon
the matter as set forth in the Notice of Special Meeting and Proxy Statement
("Proxy Statement"), receipt of which is hereby acknowledged.
The Trustee is directed to vote as specified below, or if no specification is
made, AGAINST the proposed Control Share Acquisition by Opus Acquisition
Corporation. To vote in accordance with the Board of Directors'
recommendations, just sign below without checking any boxes. If you fail to
sign and return these instructions, the Trustee will vote all shares deemed
credited to your account in the same proportion as the shares deemed credited to
the accounts of participants who have directed it. The Trustee makes no
recommendation as to this matter.
PLEASE SIGN, DATE AND RETURN THIS CONFIDENTIAL VOTING CARD PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. THESE CONFIDENTIAL VOTING INSTRUCTIONS WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL APPOINTED BY THE TRUSTEE. ADDITIONAL
INFORMATION CONCERNING THE VOTING OF SHARES HELD UNDER THE PLAN APPEARS IN THE
PROXY STATEMENT.
1. Proposed Control Share Acquisition by FOR AGAINST ABSTAIN
Opus Acquisition Corporation [ ] [ ] [ ]
2. Proposed Adjournment of Meeting to FOR AGAINST ABSTAIN
Solicit Additional Votes, if Necessary, [ ] [ ] [ ]
to Authorize Control Share Acquisition
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "AGAINST"
THE PROPOSALS
[REVERSE]
[CERTIFICATION OF ELIGIBILITY TO VOTE]
As of the date upon which the undersigned signs and delivers this Trustee
Instruction Card
EITHER
[ ] All of the Common Shares and Preferred Shares represented by this Trustee
Instruction Card are eligible to be voted in determining whether the
proposed control share acquisition has been approved by the "Second
Majority" (as defined in the Proxy Statement).
Instruction: check the above box if all of the Common Shares and Preferred
Shares represented by this Trustee Instruction Card meet the eligibility
criteria stated in Exhibit B of the Proxy Statement.
OR
[ ] _________ of the Common Shares and ___________________ of the Preferred
Shares represented by this Trustee Instruction Card are eligible to be
voted in determining whether the proposed control share acquisition has
been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common
Shares and Preferred Shares represented by this Trustee Instruction Card
meet the eligibility criteria stated in Exhibit B of the Proxy Statement
and fill in the blank with the number of Common Shares and Preferred
Shares that are eligible.
THE COMMON SHARES AND PREFERRED SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION
CARD WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS SPECIFIED, WILL BE VOTED
AGAINST THE PROPOSALS.
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
AND PREFERRED SHARES REPRESENTED BY THIS TRUSTEE INSTRUCTION CARD IS ELIGIBLE TO
BE VOTED IN DETERMINING WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN
APPROVED BY THE SECOND MAJORITY.
By signing below, you (a) instruct that this Trustee Instruction Card be voted
as marked; (b) certify the eligibility of your Common Shares and Preferred
Shares to be voted as indicated above; and (c) UNDERTAKE TO NOTIFY THE COMPANY
AND THE TRUSTEE IF, AT ANY TIME ON OR AFTER THE DATE YOU SIGN THIS TRUSTEE
INSTRUCTION CARD AND ON OR BEFORE THE DATE OF THE SPECIAL MEETING OF
SHAREHOLDERS (THE "831 SPECIAL MEETING"), any of the following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and Preferred Shares and the net aggregate consideration paid
or given by you, and any other persons acting in concert with you, for all
Common Shares and Preferred Shares acquired, indirectly or directly, by you,
and any persons acting in concert with you, on or after June 27, 1996
exceeds $250,000;
(2) you sell Common Shares and Preferred Shares to another person who, to
your knowledge, is not, or after giving effect to the sale will not be,
eligible to sign the certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares and Preferred
Shares to which this Certificate of Eligibility relates otherwise changes.
Dated: ____________, 1996 __________________________________
Signature of Participant
__________________________________
Social Security Number
SPECIAL MEETING VOTING INSTRUCTIONS
COMMERCIAL INTERTECH CORP.
Voting Procedures for Beneficial Owners of
Common Shares and Preferred Shares of Commercial Intertech Corp.
TO ALL BANKS, BROKERS AND NOMINEES:
Commercial Intertech Corp. (the "Company") shareholders who were holders of
record on August 7, 1996 AND who certify their eligibility under the criteria
set forth in Exhibit B (the "Eligibility Criteria") to the Company's Proxy
statement dated August __, 1996 (the "Proxy Statement") for the Special Meeting
of Shareholders to be held on August 30, 1996 (the "Special Meeting") will be
eligible to have their Common Shares and Preferred Shares voted in determining
whether the "Control Share Acquisition" (as defined in the Proxy Statement) by
Opus Acquisition Corporation ("OAC") and United Dominion Industries Limited
("United Dominion") has been approved by the "Second Majority" (as defined in
the Proxy Statement) as required by Section 1701.831 of the Ohio Revised Code.
To enable the Inspectors of Election to tabulate the voting by beneficial owners
of Common Shares and Preferred Shares held in your name, a special proxy and
related certification of eligibility has been devised for you in tabulating the
number of shares that are eligible to be voted in determining whether the
Control Share Acquisition has been approved by the Second Majority. On this
card, the beneficial owner must certify the eligibility of his Common Shares and
Preferred Shares to be voted and, by the same signature, give instructions as to
the voting of the shares he beneficially owns and give undertakings to advise
the Company of certain specified subsequent changes in circumstances that would
change the eligibility of the beneficially owned shares to participate in
determining the Second Majority. You will also receive from the Company a
separate certification form that beneficial owners using the BLUE-STRIPED proxy
card circulated by OAC and United Dominion may use to certify eligibility (if
the BLUE-STRIPED proxy card does not provide a certification of eligibility
conforming to the certificate on the proxy card circulated by the Company).
IT IS THE COMPANY'S POSITION THAT ALL COMMON SHARES AND PREFERRED SHARES THE
ELIGIBILITY OF WHICH IS NOT CERTIFIED BY THE BENEFICIAL OWNER WILL BE PRESUMED
TO BE INELIGIBLE TO BE VOTED IN DETERMINING WHETHER THE CONTROL SHARE
ACQUISITION HAS BEEN APPROVED BY THE SECOND MAJORITY. IT IS THE COMPANY'S
POSITION THAT ALL COMMON SHARES AND PREFERRED SHARES SUBJECT TO ONE OF THE BLUE-
STRIPED CARDS PREVIOUSLY CIRCULATED BY OAC
AND UNITED DOMINION, WHICH CONTAIN NO CERTIFICATION OF ELIGIBILITY, AS DESCRIBED
ABOVE, SHALL BE PRESUMED TO BE INELIGIBLE UNLESS THE BENEFICIAL OWNER SIGNS AND
PRESENTS TO THE COMPANY (OR THE NOMINEE TO WHICH YOU RETURNED YOUR PROXY CARD)
EITHER (1) A PROXY CARD BEARING A LATER DATE WITH A SIGNED CERTIFICATION OF
ELIGIBILITY CONFORMING TO THE CERTIFICATE ON THE WHITE PROXY CARD CIRCULATED BY
THE COMPANY OR (2) A SEPARATE CERTIFICATION OF ELIGIBILITY.
IF YOU ARE A BROKER, DO NOT CERTIFY THE ELIGIBILITY OF COMMON SHARES AND
PREFERRED SHARES. Only the beneficial owner can certify the eligibility of
Common Shares and Preferred Shares represented by the Proxy Card.
IF YOU ARE A BANK, YOU MAY WISH TO FOLLOW YOUR USUAL PROCEDURES AND FURNISH THE
PROXY CARD TO THE BENEFICIAL OWNER. The beneficial owner will vote his
beneficial ownership including completion of the certification of eligibility.
The beneficial owner may return the Proxy Card either to you or to Commercial
Intertech Corp. c/o Morrow & Co., Inc., 909 3rd Avenue, 20th Floor, New York,
New York 10022-4799.
August 2, 1996
[FORM OF BROKER'S AND NOMINEE'S PROXY CARD]
COMMERCIAL INTERTECH CORP.
BROKER'S AND NOMINEE'S PROXY
THIS PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 30, 1996 IS SOLICITED BY THE BOARD OF DIRECTORS
At the Special Meeting of Shareholders of COMMERCIAL INTERTECH CORP. to be held
on August 30, 1996, and at any adjournment thereof, Paul J. Powers, Bruce C.
Wheatley, and Hubert Jacobs van Merlen, and each of them, with several powers of
substitution and resubstitution, are hereby authorized to represent me and vote
my shares upon the proposal to authorize as required by Section 1701.831 of the
Ohio Revised Code the proposed control share acquisition by Opus Acquisition
Corporation, as more fully described in the Company's Proxy Statement dated
August 2, 1996 (the "Proxy Statement"):
Common Shares and Preferred Shares eligible to be voted in determining Second
Majority
_______ FOR _______ AGAINST _______ ABSTAIN
Common Shares and Preferred Shares not eligible to be voted in determining
Second Majority
_______ FOR _______ AGAINST _______ ABSTAIN
THE COMMON SHARES AND PREFERRED SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
AS DIRECTED OR, IF NO DIRECTION IS SPECIFIED, WILL BE VOTED AGAINST THE PROPOSAL
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE PROPOSAL
The undersigned confirms that the Common Shares and Preferred Shares reflected
in the above tabulation are based upon actual votes of beneficial holders.
SIGNATURE(S) DATE
______________________________ _________________________
SIGNATURE(S) DATE
______________________________ _________________________
[COMMERCIAL INTERTECH CORP. LOGO AND LETTERHEAD]
CERTIFICATION OF ELIGIBILITY TO VOTE
AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 30,
1996
THIS CERTIFICATION OF ELIGIBILITY TO VOTE IS NOT A PROXY CARD. TO HAVE YOUR
COMMON SHARES AND PREFERRED SHARES VOTED AT THE SPECIAL MEETING IN DETERMINING
THE SECOND MAJORITY, YOU MUST EITHER SIGN AND RETURN A PROXY CARD IN ADDITION TO
SIGNING AND RETURNING THIS CERTIFICATION OF ELIGIBILITY OR SIGN AND RETURN A
PROXY CARD THAT INCLUDES A CONFORMING CERTIFICATION OF ELIGIBILITY
As of the date upon which the undersigned signs and delivers this certification
card
EITHER
[ ] All of the Common Shares to which this certification relates are eligible
to be voted in determining whether the proposed control share acquisition
has been approved by the "Second Majority" (as defined in the Company's
Proxy Statement dated August 2, 1996 (the "Proxy Statement")).
Instruction: check the above box if all of the Common Shares to which this
certification relates meet the eligibility criteria stated in Exhibit B of
the Proxy Statement.
OR
[ ] _______ of the Common Shares to which this certification relates are
eligible to be voted in determining whether the proposed control share
acquisition has been approved by the Second Majority.
Instruction: check the above box if some, but not all, of the Common Shares
to which this certification relates meet the eligibility criteria stated in
Exhibit B of the Proxy Statement and fill in the blank with the number of
Common Shares that are eligible.
CERTIFICATION OF ELIGIBILITY TO VOTE
IF NO CERTIFICATION IS MADE, IT WILL BE PRESUMED THAT NONE OF THE COMMON SHARES
TO WHICH THIS CERTIFICATION RELATES IS ELIGIBLE TO BE VOTED IN DETERMINING
WHETHER THE PROPOSED CONTROL SHARE ACQUISITION HAS BEEN APPROVED BY THE SECOND
MAJORITY.
By signing below, you (a) certify the eligibility of your Common Shares to be
voted as indicated above; and (b) UNDERTAKE TO NOTIFY THE COMPANY (OR, IF YOU
VOTE THROUGH A BROKER OR NOMINEE, THEN NOTIFY SUCH BROKER OR NOMINEE OF SUCH
CHANGES) IF, AT ANY TIME ON OR AFTER THE DATE YOU SIGN THIS CERTIFICATE OF
ELIGIBILITY AND ON OR BEFORE THE DATE OF THE SPECIAL MEETING OF SHAREHOLDERS
(THE "831 SPECIAL MEETING"), any of the following should occur:
(1) you, or any other persons acting in concert with you, acquire additional
Common Shares and the net aggregate consideration paid or given by you, and
any other persons acting in concert with you, for all Common Shares
acquired, indirectly or directly, by you, and any persons acting in concert
with you, on or after June 27, 1996 exceeds $250,000;
(2) you sell Common Shares to another person who, to your knowledge, is not,
or after giving effect to the sale will not be, eligible to sign the
certification of eligibility; or
(3) to your knowledge, the eligibility of any of the Common Shares to which this
Certificate of Eligibility relates otherwise changes.
SIGNATURE(S) DATE
______________________________ _________________________
SIGNATURE(S) DATE
______________________________ _________________________
NOTE: Please sign your name exactly as it appears in print and, in case of
multiple or joint ownership, all should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.