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SCHEDULE 14A INFORMATION
CONSENT STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by registrant / /
Filed by a party other than the registrant /x/ / / Confidential,
for Use of the
Commission Only
Check the appropriate box: (as permitted by
/ / Preliminary consent statement Rule 14a-6(e)(2))
/ / Definitive consent statement
/X/ Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
RJR NABISCO HOLDINGS CORP.
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(Name of Registrant as Specified in its Charter)
BROOKE GROUP LTD.
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(Name of Person(s) Filing Consent Statement)
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Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $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.
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/ / 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
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Brooke Letterhead [Paste Up]
December 29, 1995
ACT NOW TO SPIN OFF NABISCO
To Our Fellow RJR Nabisco Stockholders:
Your investment in RJR Nabisco stock is languishing. Lackluster prospects
for the combined company, in our view, will continue to drag down its market
value. THE MARKET VALUE OF YOUR INVESTMENT, HOWEVER, CAN BE INCREASED BY AS MUCH
AS 50%, WE BELIEVE, AS A RESULT OF A SPINOFF OF NABISCO.* Freed from the R.J.
Reynolds tobacco business, Nabisco will be able to shed all the negative effects
of that association, and R.J. Reynolds will thereafter be free to aggressively
compete and address the spectrum of legal and political issues that confront the
tobacco industry. Experts tell us that the prospect of enhanced performance and
the separation of the tobacco and food businesses will translate into
substantial improvement in stock value. One important analyst computed a value
of $41 per share, based on a modest dividend increase to $1.65. Another
calculated a value of $40.40, without a dividend increase. In a break-up
scenario, another estimated a value of $60.50.
MEANWHILE, THE RJR NABISCO STOCK IS THE WORST PERFORMING OF ANY OF THE
CIGARETTE COMPANY STOCKS. The stock had a negative return for the four years
from the date of the initial public offering on February 1, 1991 to August 28,
1995 (the date of the announcement of our intent to accumulate stock and propose
a spinoff). Indeed, the stock had a 12% decline in the year preceding this
announcement. To correct this acknowledged problem, the Company has engaged in
excessive financial tinkering, selling off 20% of Nabisco, and promising better
stock performance. The tinkering has not worked. The Board has also tried
changes in management. The new management has recast dreary projected future
performance by claiming some sort of improvement next year. These latest
promises have not injected any new life into the moribund stock performance.
AN IMMEDIATE SPINOFF OF NABISCO IS NECESSARY TO REVITALIZE THE COMPANY.
Steven F. Goldstone, the newly appointed Chief Executive Officer of the Company,
assures all of us that "the steps necessary to position Nabisco for a spinoff
have been taken." Why then are he and the Board waiting? They are, we are told,
risk averse; to us, the aversion is another name for management paralysis. Mr.
Goldstone explains that "litigation is at an unprecedented high level" with
"untested" cases. He "expects" that the litigation environment will "improve" in
the future and there may be a spinoff in 1998. Mr. Goldstone and the Board are
on record to the effect that there is no substantial likelihood of tobacco
liability or material impairment to the Company's financial position as a result
of the tobacco liability cases. Accordingly, there is no basis on which a
spinoff could be or would be stopped. YET, WITH 40 YEARS OF SUCCESSFUL TOBACCO
LITIGATION BEHIND RJR NABISCO, MR. GOLDSTONE WANTS TO ADD TWO OR THREE MORE
YEARS. The future is bound to bring more "untested" cases and uncertainty, and
more reason to delay. WITH SUCCESS EXPECTED THERE IS NO NEED TO HESITATE. Mr.
Goldstone and the Board ignore the wisdom of the ages expressed by the great
English poet Matthew Arnold:
". . . hesitate and falter life away,
and lose tomorrow the ground won today."
Is there any other reason to hesitate? Mr. Goldstone has warned that an
immediate spinoff would "break commitments" to credit rating agencies and
"implicitly" to purchasers of the Company's bonds since the beginning of 1995.
In conversations with us last summer, Mr. Goldstone personally acknowledged that
these commitments are not binding and could be changed by the incumbent Board.
We believe that adoption of a stockholder resolution for an immediate spinoff is
reason enough to effect a change in policy. Unfortunately, at the last annual
meeting, an immediate spinoff proposal was defeated in the face of the Board's
unfulfilled promises that the initiatives it was then implementing would bring
better stock performance. UNTIL WE VOTE FOR AN IMMEDIATE SPINOFF, MR. GOLDSTONE
AND THE BOARD WILL NOT ACT. You must make the most of this opportunity. WE
BELIEVE THAT MR. GOLDSTONE AND THE BOARD ARE WAITING FOR STOCKHOLDERS TO TELL
THEM TO SPIN OFF NABISCO IMMEDIATELY.
Indeed, the appointment of Mr. Goldstone as the new Chief Executive Officer
bodes well for an immediate spinoff. Mr. Goldstone has no previous managerial or
industry experience and has spent his entire career as an attorney at a major
New York law firm specializing in corporate restructurings and litigation. HIS
LEGAL EXPERIENCE MAKES HIM EMINENTLY QUALIFIED, IN OUR VIEW, TO ACT AS A
"CARETAKER," OVERSEEING THE SPINOFF AND ANY ONGOING TOBACCO LITIGATION.
Mr.Goldstone claims that his first priority is to enhance the value of the
Company's stock. Accordingly, we believe that Mr. Goldstone and the Board will
act responsively when stockholders vote to advise the Board to immediately spin
off Nabisco.
The Board has also changed some by-laws making it more difficult for
stockholders to express themselves and encourage implementation of their
instructions to the Board. We ask that you act to restore your rights and "roll
back" the restrictive by-law amendments.
No matter how many shares you own, your support is important. The
accompanying consent material contains important information and we ask that you
review it. Do not delay in responding to this call for action. Now is the time
to act. SIGN AND MAIL THE ENCLOSED BLUE CONSENT CARD.VOTE TO PROTECT YOUR
POCKETBOOK. TELL THE BOARD TO SET NABISCO FREE.
Very truly yours,
Bennett S. LeBow
Chairman of the Board, President
and Chief Executive Officer
P.S. If you have any questions or comments about our solicitation, please call
Georgeson & Company Inc. at 1-800-223-2064. If you are interested in
gaining access to information about our solicitation on the World Wide Web,
use HTTP://WWW.GEORGESON.COM.
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* Of course estimates of this kind are, by their nature, highly subjective
and influenced heavily by the assumptions used.
In addition, with respect to the other factual matters discussed in this
letter, see the accompanying Solicitation Statement for more detailed
information.
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