sec document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN CONSENT STATEMENT
SCHEDULE 14A INFORMATION
CONSENT STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary Consent Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Consent Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
BAIRNCO CORPORATION
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(Name of Registrant as Specified in Its Charter)
STEEL PARTNERS II, L.P.
STEEL PARTNERS, L.L.C.
BZ ACQUISITION CORP.
WARREN G. LICHTENSTEIN
HUGH F. CULVERHOUSE
JOHN J. QUICKE
ANTHONY BERGAMO
HOWARD M. LEITNER
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(Name of Persons(s) Filing Consent Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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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 previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(6) Amount previously paid:
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(7) Form, Schedule or Registration Statement No.:
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(8) Filing Party:
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(9) Date Filed:
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED JANUARY 10, 2007
STEEL PARTNERS II, L.P.
590 Madison Avenue, 32nd Floor
New York, New York 10022
January __, 2007
To the Stockholders of Bairnco Corporation:
On June 22, 2006, BZ Acquisition Corp. ("BZA"), a wholly owned
subsidiary of Steel Partners II, L.P. ("Steel Partners II" or "we"), commenced a
tender offer to purchase all the issued and outstanding shares of common stock,
par value $0.01 per share (the "Shares"), of Bairnco Corporation ("Bairnco" or
the "Company"), for $12.00 net per Share in cash, upon the terms and subject to
the conditions set forth in the offer to purchase, dated June 22, 2006, as
subsequently amended (together with any amendments or supplements thereto, the
"Offer to Purchase") and in the related letter of transmittal (which, together
with the Offer to Purchase, collectively constitute the "Offer"). The purpose of
the Offer is for us to acquire control of, and the entire equity interest in,
Bairnco. We currently intend, as soon as practicable following consummation of
the Offer, to seek to have Bairnco consummate a merger or other similar business
combination with BZA or another affiliate of Steel Partners II (the "Proposed
Merger").
We are sending you the attached Consent Statement and the accompanying
GOLD consent card because we are soliciting consents from Bairnco stockholders
to remove without cause each current member of Bairnco's Board of Directors (the
"Bairnco Board") and replace them with our five nominees, and to take certain
other actions described in the attached Consent Statement. The Bairnco Board is
currently comprised of a single class of five members. Each of our nominees, if
elected, would serve in a single class and would hold office until the next
annual meeting of stockholders and until such person's successor has been
elected or until such person's death, resignation, retirement or removal.
We are seeking your support for the removal of each current director of
Bairnco and the election of our five nominees, Warren G. Lichtenstein, Hugh F.
Culverhouse, John J. Quicke, Anthony Bergamo and Howard M. Leitner, because we
believe that the current directors of Bairnco are not acting, and will not act,
in your best interests with respect to the Offer. On July 6, 2006, the Bairnco
Board announced that after careful consideration it had unanimously determined
that the Offer is inadequate and not in the best interests of the Company's
stockholders. The announcement was made without first making any effort to
seriously discuss the Offer with us. The Bairnco Board rejected our Offer
despite the fact that the $12.00 per Share cash price proposed to be paid in the
Offer represents a premium of 21% to the last reported sales price per Share on
June 15, 2006, the day we informed Bairnco of our proposal to acquire all the
outstanding Shares. On July 28, 2006, Bairnco announced that it had hired a
financial advisor to explore a variety of possible strategic alternatives,
including the possible sale of the Company. However, less than three months
later, the Bairnco Board announced that it had determined that it would be in
the best interests of Bairnco's stockholders that the Company remain independent
and continue to implement its strategic plan, which it believed would provide
the best opportunity to enhance stockholder value over the long term.
Accordingly, the Bairnco Board has refused to take the steps necessary to permit
Steel Partners II to consummate the Offer and to allow the stockholders to
receive the consideration to be paid pursuant to the Offer, including opting out
of Section 203 of the Delaware General Corporation Law (the "DGCL") and
redeeming the "poison pill" rights plan that Bairnco implemented in response to
our Offer. If our five nominees are elected, they will, subject to their
fiduciary duties, remove the obstacles to the consummation of the Offer,
including redeeming the Company's "poison pill" rights plan and opting out of
Section 203 of the DGCL. This would allow the Company's stockholders to have the
ability to decide for themselves whether they want to accept the Offer, the
Proposed Merger or any other third-party acquisition proposal. Due to Mr.
Lichtenstein's and Mr. Quicke's affiliation with BZA and Steel Partners II, they
may be deemed to have an interest in any transaction between the Company and BZA
or other affiliate of Steel Partners II. Accordingly, if our five nominees are
elected, Messrs. Lichtenstein and Quicke would abstain from any vote of the
directors to approve such transaction.
WE URGE YOU TO CAREFULLY CONSIDER THE INFORMATION CONTAINED IN THE
ATTACHED CONSENT STATEMENT AND THEN SUPPORT OUR EFFORTS BY SIGNING, DATING AND
RETURNING THE ENCLOSED GOLD CONSENT CARD TODAY. THE ATTACHED CONSENT STATEMENT
AND THE ENCLOSED GOLD CONSENT CARD ARE FIRST BEING FURNISHED TO THE STOCKHOLDERS
ON OR ABOUT JANUARY __, 2007.
WE URGE YOU NOT TO SIGN ANY REVOCATION OF CONSENT CARD THAT MAY BE SENT
TO YOU BY BAIRNCO. IF YOU HAVE DONE SO, YOU MAY REVOKE THAT REVOCATION OF
CONSENT BY DELIVERING A LATER DATED GOLD CONSENT CARD TO STEEL PARTNERS II, IN
CARE OF MACKENZIE PARTNERS, INC., WHICH IS ASSISTING US, AT THEIR ADDRESS LISTED
ON THE FOLLOWING PAGE, OR TO THE PRINCIPAL EXECUTIVE OFFICES OF BAIRNCO.
IF YOU HAVE ANY QUESTIONS OR REQUIRE ANY ASSISTANCE WITH YOUR VOTE,
PLEASE CONTACT MACKENZIE PARTNERS, INC. AT THEIR ADDRESS AND TOLL-FREE NUMBER
LISTED ON THE FOLLOWING PAGE.
Thank you for your support,
/s/ Warren G. Lichtenstein
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Warren G. Lichtenstein
Steel Partners II, L.P.
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IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR
GOLD CONSENT CARD, OR NEED ADDITIONAL COPIES OF STEEL PARTNERS II'S
CONSENT SOLICITATION MATERIALS, PLEASE CALL
MACKENZIE PARTNERS, INC. AT THE PHONE NUMBERS LISTED BELOW.
MacKenzie
Partners, Inc.
105 Madison Avenue
New York, NY 10016
bairnco@mackenziepartners.com
(212) 929-5500 (Call Collect)
or
TOLL-FREE (800) 322-2885
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BAIRNCO CORPORATION
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CONSENT SOLICITATION STATEMENT
OF
STEEL PARTNERS II, L.P.
STEEL PARTNERS, L.L.C.
BZ ACQUISITION CORP.
WARREN G. LICHTENSTEIN
HUGH F. CULVERHOUSE
JOHN J. QUICKE
ANTHONY BERGAMO
HOWARD M. LEITNER
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This Consent Statement and GOLD consent card are furnished by Steel
Partners II, L.P. ("Steel Partners II"), a Delaware limited partnership, in
connection with its solicitation of written consents from you, the holders of
shares of common stock, par value $.01 per share (the "Shares"), of Bairnco
Corporation, a Delaware corporation ("Bairnco" or the "Company"), to take the
following actions (the "Proposals") without a stockholders' meeting, as
authorized by the Delaware General Corporation Law (the "DGCL"):
Proposal 1 - Remove each member of Bairnco's Board of Directors (the
"Bairnco Board") and any person (other than those elected by this consent
solicitation) elected or appointed to the Bairnco Board by such directors to
fill any vacancy on the Bairnco Board or any newly-created directorships;
Proposal 2 - Amend Section 2 of Article III of the Amended and Restated
Bylaws of Bairnco (the "Bylaws"), as set forth on Schedule I to this Consent
Statement, to fix the number of directors serving on the Bairnco Board at five
(5);
Proposal 3 - Amend Section 2 of Article III of the Bylaws, as set forth
on Schedule I to this Consent Statement, to provide that any vacancies on the
Bairnco Board resulting from the removal of directors by the stockholders of
Bairnco may not be filled by the directors and shall only be filled by the
stockholders of Bairnco; and
Proposal 4 - Elect the nominees of Steel Partners II - Warren G.
Lichtenstein, Hugh F. Culverhouse, John J. Quicke, Anthony Bergamo and Howard M.
Leitner - described in this Consent Statement to serve as directors of Bairnco
(or, if any such nominee is unable or unwilling to serve as a director of
Bairnco, any other person designated as a nominee by the remaining nominee or
nominees) (the "Steel Nominees").
ALL OF THE ABOVE PROPOSALS ARE DESIGNED TO EXPEDITE THE PROMPT
CONSUMMATION OF THE OFFER TO ACQUIRE ALL THE ISSUED AND OUTSTANDING SHARES BY BZ
ACQUISITION CORP. ("BZA"), A WHOLLY OWNED SUBSIDIARY OF STEEL PARTNERS II, WHICH
IS DESCRIBED BELOW. THE EFFECTIVENESS OF EACH OF THE ABOVE PROPOSALS IS
CONDITIONED UPON THE EFFECTIVENESS OF THE OTHER PROPOSALS.
Steel Partners II, Steel Partners, L.L.C. ("Partners LLC"), BZA and the
Steel Nominees are members of a group (the "Group") formed in connection with
this consent solicitation and are deemed participants in this consent
solicitation. See "Other Participant Information." This Consent Statement and
the enclosed GOLD consent card are first being sent or given to Bairnco's
stockholders on or about January __, 2007.
Bairnco has set the record date for determining stockholders entitled
to give their written consent to the Proposals described herein as January __,
2007 (the "Record Date"). Stockholders of record as of the close of business on
the Record Date will be entitled to one vote for each Share. Based on publicly
available information filed by Bairnco with the Securities and Exchange
Commission (the "Commission"), as of October 30, 2006, there were 7,291,853
Shares issued and outstanding. As of October 30, 2006, Steel Partners II was the
beneficial owner of an aggregate of 1,110,200 Shares, which represents
approximately 15.2% of the Shares outstanding. Steel Partners II intends to vote
such Shares in favor of the Proposals described herein. No other participant in
this solicitation owns any securities of Bairnco. The mailing address of the
principal executive offices of Bairnco is 300 Primera Boulevard, Suite 432, Lake
Mary, Florida 32746.
THE COMMITTEE URGES YOU TO SIGN, DATE AND RETURN THE GOLD CONSENT CARD IN FAVOR
OF THE PROPOSALS DESCRIBED HEREIN.
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BACKGROUND TO SOLICITATION
o Steel Partners II commenced investing in the Shares in July 1996. On
February 18, 2003, Steel Partners II filed a Schedule 13D with the
Commission indicating it owned 572,600 Shares as of February 13, 2003,
representing approximately 7.8% of Bairnco's then outstanding Shares.
Steel Partners II subsequently filed amendments to the Schedule 13D on
each of September 8, 2004, September 17, 2004, October 28, 2004 and
July 6, 2005 reporting increases in Steel Partners II's ownership
position to 661,700, 861,700, 940,400 and 1,057,300 Shares,
respectively.
o From time to time after Bairnco's announcement of its quarterly
earnings, representatives of Steel Partners II and the Company
discussed generally the operations of the Company and its financial
performance. During one telephone call, representatives of Steel
Partners II spoke with Luke E. Fichthorn III, the Chairman of the Board
and Chief Executive Officer of Bairnco, regarding a potential strategic
transaction involving the Company and Steel Partners II (or one of its
affiliates).
o In December 2005, representatives of Steel Partners II had a telephone
conversation with Mr. Fichthorn to discuss Bairnco's 2005 third quarter
earnings release. The call included a more in-depth discussion of
Bairnco's business and operations, including issues at the Company's
recently opened Arlon Coated Materials San Antonio facility, as well as
suggestions to maximize stockholder value. During this call, Steel
Partners II's representatives requested to visit some of Bairnco's
facilities. Steel Partners II continued to evaluate its investment in
Bairnco subsequent to this call.
o On January 9, 2006, Steel Partners II, which then owned approximately
14.9% of the outstanding Shares, sent a letter to the Bairnco Board
requesting the Bairnco Board to (i) adopt a resolution exempting Steel
Partners II from the limitations of Section 203 of the DGCL and (ii)
recommend a proposal for stockholder approval at the next annual
meeting of stockholders to amend the Company's charter to elect not to
be governed by Section 203. In its letter, Steel Partners II wrote,
"While [Section 203] was intended to limit abusive takeover tactics and
encourage full and fair offers, it could also be used as a device by
the Board of Directors to insulate itself from accountability to
stockholders. We therefore believe that if the Board is now truly
willing to be held accountable to the stockholders and is committed to
maximizing stockholder value, it will take all necessary steps to opt
out of the restrictions of [Section 203]." In his response dated
January 31, 2006, Mr. Fichthorn, on behalf of the Bairnco Board, denied
Steel Partners II's request, claiming that the Bairnco Board believed
that a waiver of Section 203 was "not in the best interest of all the
stockholders."
o In response to Steel Partners II's request in December 2005,
representatives of Steel Partners II and Bairnco arranged for
representatives of Steel Partners II to visit certain Company
facilities. In April 2006, representatives of Steel Partners II toured
Bairnco's Arlon Electronic Materials facility located in Rancho
Cucamonga, CA and its Arlon Coated Materials facility located in Santa
Ana, CA. Following this visit, Steel Partners II conducted further
review of Bairnco's business and financial performance, and ultimately
determined to pursue the Offer in order to maximize the value of the
Shares.
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o On June 15, 2006, Steel Partners II sent a letter to Mr. Fichthorn
informing him of Steel Partners II's intention to commence the Offer
and requesting a meeting with Mr. Fichthorn and the Bairnco Board to
negotiate a definitive merger agreement. The letter stated that, after
the Bairnco Board had denied Steel Partners II's request to take the
necessary steps to opt out of Section 203 of the DGCL, Steel Partners
II, having evaluated all of its options, determined that commencing the
Offer "would be in the best interest of all shareholders and would
provide shareholders with immediate liquidity at a significant premium
to market." Steel Partners II also issued a press release on that day
announcing its intention to commence the Offer. The letter and press
release were preceded by a telephone call from a representative of
Steel Partners II to Mr. Fichthorn informing him of Steel Partners II's
intention to commence the Offer.
o On June 16, 2006, Bairnco issued a press release stating that the
Bairnco Board would make a recommendation to the Company's stockholders
with respect to the Offer in a timely manner.
o On June 22, 2006, Steel Partners II and BZA commenced the Offer.
o Also on June 22, 2006, Bairnco issued a press release announcing its
adoption of a "poison pill" rights plan and its retention of Lazard
Freres & Co. LLC ("Lazard") as its financial advisor and Debevoise &
Plimpton LLP as its legal counsel in connection with the Offer.
o On June 26, 2006, Steel Partners II issued a press release stating that
it was "extremely disappointed to learn that the Bairnco board of
directors has chosen to adopt a 'poison pill' in reaction to our tender
offer, rather than respond to our request to negotiate a merger
agreement." The press release further stated Steel Partners II's belief
that Bairnco's adoption of a "poison pill" rights plan was not in the
best interests of the Company's stockholders.
o On June 28, 2006, Bairnco filed a Current Report on Form 8-K with the
Commission announcing that it had entered into change in control
agreements with certain senior executives of the Company, including
Kenneth L. Bayne, Larry C. Maingot, Larry D. Smith, Daniel T.
Holverson, Elmer G. Pruim, Robert M. Carini, Brian E. Turner and Morgan
Ebin. The change in control agreements entitle the executives to
severance benefits, in excess of $2 million, in cases where their
employment with Bairnco is terminated within 24 months of a change in
control of the Company.
o On July 6, 2006, Steel Partners II's outside legal counsel received a
letter from Bairnco setting forth a list of 19,300 stock options and
16,000 shares of restricted stock that the Bairnco Board had granted to
various employees of the Company on June 22, 2006.
o Also on July 6, 2006, Bairnco filed a solicitation/recommendation
statement with the Commission on Schedule 14D-9 announcing that the
Bairnco Board had determined that the Offer is inadequate and not in
the best interests of the Company's stockholders (other than Steel
Partners II and its affiliates) and recommended that the Company's
stockholders reject the Offer and not tender their Shares. In the
afternoon on that day, Steel Partners II received a letter from Bairnco
attaching the Company's press release relating to the Offer.
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o On July 28, 2006, Bairnco issued a press release announcing its
intention to explore possible strategic alternatives, including the
possible sale of the Company.
o On July 31, 2006, a representative of Lazard sent to a representative
of Steel Partners II a proposed form of confidentiality agreement that
Bairnco was requiring Steel Partners II to sign in order to receive
information concerning the business operations of the Company. Steel
Partners II determined that it was not advisable for it to sign the
confidentiality agreement at that time, as Bairnco's provision of any
material non-public information to Steel Partners II under the terms of
the confidentiality agreement could have precluded Steel Partners II
from consummating the Offer.
o On October 11, 2006, Bairnco issued a press release announcing that the
Company had completed its review of strategic alternatives and
determined to continue to implement its strategic plan. The press
release also announced that Bairnco, through its wholly-owned
subsidiary, Kasco Corporation, had purchased certain assets and assumed
certain liabilities of Atlanta SharpTech for approximately $14 million
(subject to purchase price adjustments), using borrowings under the
Company's credit facility, which it had just expanded. The press
release further stated that Atlanta SharpTech's revenues were
approximately $18.5 million for its fiscal year ended June 2006.
o In mid-October 2006, counsel for Steel Partners II and counsel for
Bairnco had limited discussions on the terms of the confidentiality
agreement but did not reach any understanding related thereto.
o Between October 20 and October 26, 2006, Warren G. Lichtenstein, the
managing member of the general partner of Steel Partners II, and Mr.
Fichthorn engaged in several conversations regarding a possible sale of
the Company to Steel Partners II and the proposed purchase price. Mr.
Fichthorn suggested that the Bairnco Board might be receptive to a
transaction at a price significantly higher than $12.00 per Share and
orally disclosed to Mr. Lichtenstein that, for the Company's 2007
fiscal year, the Company's operating income was expected to be
approximately $15 million and its EBITDA was expected to be in the
range of $23-24 million. Mr. Lichtenstein informed Mr. Fichthorn that,
because Steel Partners II had not had the opportunity to perform a due
diligence investigation of the Company and was concerned about the
Company's ability to meet its projected financial results, Steel
Partners II would be willing to pay $12.00 per Share in cash plus $1.50
per Share in the form of a contingent promissory note, payment of which
would depend on the Company's future financial performance. Mr.
Fichthorn rejected the structuring of the transaction in this manner.
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o On October 26, 2006, Mr. Lichtenstein indicated that Steel Partners II
would be willing to pay $12.50 per Share in cash in a negotiated
transaction. Mr. Fichthorn rejected this proposal. During these
conversations, Mr. Lichtenstein requested on repeated occasions that
Mr. Fichthorn ask the Bairnco Board to redeem the Company's "poison
pill" and opt out of Section 203 of the DGCL so that the Company's
stockholders could have the unfettered ability to decide whether they
wanted to accept Steel Partners II's Offer. Mr. Fichthorn refused this
request.
o On October 31, 2006, in an effort to reach agreement on an appropriate
valuation for Bairnco, Steel Partners II and the Company entered into a
confidentiality agreement. The confidentiality agreement provided for
the ability of Steel Partners II to conduct a due diligence review of
the Company over a 30-day period, which was subsequently extended to
December 15, 2006. The terms of the confidentiality agreement also
enabled Steel Partners II, in the event the parties were unable to
reach agreement, to publicly disclose any material non-public
information provided to it by the Company that was necessary to allow
Steel Partners II to consummate the Offer.
o On November 13, 2006, Steel Partners II received from Bairnco certain
information requested by Steel Partners II. Thereafter, during the due
diligence review period, Steel Partners II conducted a review of
Bairnco's business and historical and projected financial results,
including discussions with representatives of Bairnco and its financial
advisors. Steel Partners II also retained an independent environmental
consultant to review environmental studies of Bairnco's facilities that
had been previously prepared for the Company.
o On November 21, 2006, a representative of Steel Partners II spoke with
representatives of Lazard regarding the process that Lazard had
undertaken to determine potential purchasers' interests in acquiring
Bairnco. During this discussion, Lazard's representatives indicated
that this process did not produce any offers for the acquisition of the
entire Company.
o On December 6 and December 7, 2006, representatives of Steel Partners
II visited Bairnco's executive offices in Lake Mary, Florida for the
primary purpose of determining the achievability of the guidance
Bairnco had issued for 2007. During this visit, Steel Partners II's
representatives met with Mr. Fichthorn, Kenneth L. Bayne, the Company's
Chief Financial Officer, and Lawrence C. Maingot, the Company's
Corporate Controller, to discuss, among other things, the assumptions
underlying the Company's 2007 financial projections and various
concerns expressed by Steel Partners II relating to some of the
Company's facilities, including Arlon Coated Materials San Antonio
facility and the Kasco plant in St. Louis. During these meetings, Steel
Partners II's representatives requested that they be allowed to visit
the San Antonio and St. Louis facilities, but Bairnco's representatives
denied this request.
-6-
o On December 20, 2006, representatives of Steel Partners II spoke with
Mr. Fichthorn and indicated that, as a result of Steel Partners II's
due diligence findings and its continued concerns about Bairnco's
ability to meet its projected financial results, Steel Partners II
would be willing to increase the Offer price to a maximum of $12.50 per
Share in cash. The increase in the Offer price to $12.50 per Share
depended upon Bairnco's willingness to enter into a mutually acceptable
merger agreement with Steel Partners II, and was not indicative of the
price Steel Partners II was prepared to pay in a non-negotiated
transaction, due to the additional costs involved in pursuing a
non-negotiated transaction. Among the concerns expressed by Steel
Partners II's representatives were: (1) the significant increase in
sales and production needed to ramp-up the Company's Chinese facility,
which began limited operations in October 2006, from its current
operating loss to its projected profitability in view of the Company's
prior announcement that production was expected to commence by the end
of 2005 and that the facility was expected to be profitable in 2006,
(2) continuing production and other problems at the Company's Arlon
Coated Materials San Antonio facility; (3) the Company's acquisition of
the Atlanta SharpTech business and the challenges faced by the Company
in integrating this business with the Company's underperforming Kasco
division; (4) the additional change in control contracts given to
certain senior executives of the Company following the commencement of
the Offer; (5) the substantial expenses incurred by the Company in
contesting the Offer without advancing any viable strategic
alternatives; and (6) the Company's overall poor track record in
meeting its stated goals in the past. Mr. Fichthorn said that he would
present Steel Partners II's proposal to the Bairnco Board but that he
did not expect the Bairnco Board to accept Steel Partners II's
increased offer.
o On December 21, 2006, representatives of Steel Partners II had a
telephone conversation with a representative of Lazard regarding Steel
Partners II's proposed increase in the Offer price to $12.50 per Share
in cash in a negotiated transaction. During this conversation, the
Lazard representative confirmed that no other offers had been made to
purchase the entire Company.
o On December 27, 2006, Mr. Fichthorn telephoned a representative of
Steel Partners II and informed him that the Bairnco Board had rejected
Steel Partners II's proposal to pursue a negotiated transaction with
Bairnco at an increased Offer price of $12.50 per Share in cash.
o On December 29, 2006, as a result of the inability to reach agreement
with Bairnco and the Bairnco Board's refusal to redeem the Company's
"poison pill" rights plan and opt out of Section 203 of the DGCL, Steel
Partners II announced that it was filing a preliminary consent
solicitation statement with the Commission for the purpose of, among
other things, removing and replacing the Bairnco Board and that it had
extended the expiration date of the Offer to 5:00 p.m., New York City
time, on January 29, 2007. Because the proposed increase in the Offer
price to $12.50 per Share in cash depended upon Bairnco's willingness
to enter into a mutually acceptable merger agreement with Steel
Partners II, and the Bairnco Board rejected Steel Partners II's
proposal, the Offer price has remained at $12.00 per Share in cash due
to the additional costs that Steel Partners II must incur to pursue a
non-negotiated transaction.
* * * *
For a complete description of the terms of the Offer, including,
without limitation, the conditions of the Offer, you are referred to the Offer
to Purchase. Complete information about the Offer is contained in the Offer to
Purchase, which is available in our tender offer statement on Schedule TO, which
-7-
was initially filed with the Commission on June 22, 2006, and is available,
along with any amendments thereto, including exhibits, on the Commission's
website at http://www.sec.gov.
THIS CONSENT STATEMENT IS NEITHER A REQUEST FOR THE TENDER OF SHARES
NOR AN OFFER WITH RESPECT THERETO. WE ARE MAKING THE OFFER ONLY BY MEANS OF THE
OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL.
FOR THE REASONS LISTED IN THIS CONSENT STATEMENT, WE BELIEVE THAT OUR
FULLY FUNDED, $12.00, ALL-CASH OFFER, FOLLOWED BY THE PROPOSED MERGER, IS THE
BEST ALTERNATIVE AVAILABLE TO MAXIMIZE VALUE TO THE COMPANY'S STOCKHOLDERS. IF
YOU AGREE, WE URGE YOU TO PROMPTLY SIGN, DATE AND RETURN THE ENCLOSED GOLD
CONSENT CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
AS WE EXPLAIN LATER IN THIS CONSENT STATEMENT, BY TAKING THESE STEPS,
YOU CAN ELECT DIRECTORS THAT WILL GIVE YOU THE OPPORTUNITY TO RECEIVE $12.00 PER
SHARE PURSUANT TO THE OFFER.
YOU MUST SEPARATELY TENDER YOUR SHARES PURSUANT TO THE OFFER IF YOU
WISH TO PARTICIPATE IN THE OFFER. EXECUTING A CONSENT DOES NOT OBLIGATE YOU TO
TENDER YOUR SHARES PURSUANT TO THE OFFER, AND YOUR FAILURE TO EXECUTE A CONSENT
DOES NOT PREVENT YOU FROM TENDERING YOUR SHARES PURSUANT TO THE OFFER.
YOUR TENDER OF SHARES PURSUANT TO THE OFFER DOES NOT CONSTITUTE THE
GRANTING OF A CONSENT IN CONNECTION WITH THIS SOLICITATION. IF YOU HAVE TENDERED
YOUR SHARES PURSUANT TO THE OFFER, YOU STILL MUST SEPARATELY EXECUTE A CONSENT
IN ORDER TO CONSENT TO OUR PROPOSALS.
-8-
IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW FEW SHARES YOU OWN. STEEL
PARTNERS II URGES YOU TO SIGN, DATE, AND RETURN THE ENCLOSED GOLD CONSENT CARD
TODAY TO VOTE FOR THE PROPOSALS DESCRIBED HEREIN.
o If your Shares are registered in your own name, please sign
and date the enclosed GOLD consent card and return it to Steel
Partners II, c/o MacKenzie Partners, Inc., in the enclosed
envelope today.
o If any of your Shares are held in the name of a brokerage
firm, bank, bank nominee or other institution on the Record
Date, only it can vote such Shares and only upon receipt of
your specific instructions. Accordingly, please contact the
person responsible for your account and instruct that person
to execute on your behalf the GOLD consent card. Steel
Partners II urges you to confirm your instructions in writing
to the person responsible for your account and to provide a
copy of such instructions to Steel Partners II, c/o MacKenzie
Partners, Inc., who is assisting in this solicitation, at the
address and telephone numbers set forth below, and on the back
cover of this Consent Statement, so that we may be aware of
all instructions and can attempt to ensure that such
instructions are followed.
If you have any questions regarding your GOLD
consent card, or need assistance in voting your
Shares, please call:
MacKenzie
Partners, Inc.
105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
bairnco@mackenziepartners.com
or
CALL TOLL FREE (800) 322-2885
-9-
QUESTIONS AND ANSWERS ABOUT THIS CONSENT SOLICITATION
The following are some of the questions you, as a stockholder, may have
and answers to those questions. The following is not meant to be a substitute
for the information contained in the remainder of this document, and the
information contained below is qualified by the more detailed descriptions and
explanations contained elsewhere in this document. We urge you to carefully read
this entire document prior to making any decision on whether to grant any
consent hereunder.
WHO IS MAKING THE SOLICITATION?
Steel Partners II is making this solicitation. Steel Partners II is a
private investment partnership.
WHAT ARE THE PROPOSALS FOR WHICH CONSENTS ARE BEING SOLICITED?
We are asking you to consent to four proposals. The first proposal
seeks to remove the current members of the Bairnco Board. The second proposal
seeks to amend the Bylaws to fix the number of directors serving on the Bairnco
Board at five (5). The third proposal seeks to amend the Bylaws to provide that
any vacancies on the Bairnco Board resulting from the removal of directors by
the stockholders may not be filled by the directors and shall only be filled by
the stockholders. The fourth proposal seeks to fill the newly created vacancies
on the Bairnco Board with the Steel Nominees.
WHY ARE WE SOLICITING YOUR CONSENT?
We are soliciting your consent because we believe the current members
of the Bairnco Board are not acting, and will not act, in your best interests
with respect to the Offer. On July 6, 2006, the Bairnco Board announced that
after careful consideration it had unanimously determined that the Offer is
inadequate and not in the best interests of the Company's stockholders. The
announcement was made without first making any effort to seriously discuss the
Offer with us. The Bairnco Board rejected our Offer despite the fact that the
$12.00 per Share cash price proposed to be paid in the Offer represents a
premium of 21% to the last reported sales price per Share on June 15, 2006, the
day we informed Bairnco of our proposal to acquire all the outstanding Shares.
On July 28, 2006, Bairnco announced that it had hired a financial advisor to
explore a variety of possible strategic alternatives, including the possible
sale of the Company. However, less than three months later, the Bairnco Board
announced that it had determined that it would be in the best interests of
Bairnco's stockholders that the Company remain independent and continue to
implement its strategic plan, which it believed would provide the best
opportunity to enhance stockholder value over the long term. Accordingly, the
Bairnco Board has refused to take the steps necessary to allow Steel Partners II
to consummate the Offer and to allow the stockholders to receive the
consideration to be paid pursuant to the Offer, such as opting out of Section
203 of the DGCL, and has even created roadblocks to Steel Partners II's ability
to consummate the Offer, such as implementing a "poison pill" rights plan.
If the consent solicitation is successful and the Steel Nominees are
elected, they will, subject to their fiduciary duties as directors, remove the
obstacles to the consummation of the Offer by redeeming the Company's "poison
pill" rights plan and opting out of Section 203 of the DGCL. This would allow
the Company's stockholders to have the ability to decide for themselves whether
they want to accept the Offer, the Proposed Merger or any other third-party
acquisition proposal. Due to Mr. Lichtenstein's and Mr. Quicke's affiliation
with BZA and Steel Partners II, they may be deemed to have an interest in any
transaction between the Company and BZA or other affiliate of Steel Partners II.
Accordingly, if the Steel Nominees are elected, Messrs. Lichtenstein and Quicke
would abstain from any vote of the directors to approve such transaction.
-10-
WHAT MUST HAPPEN TO COMPLETE OUR TENDER OFFER?
Certain conditions must be met for us to complete the Offer, including,
without limitation, the following:
o Bairnco's stockholders must validly tender and not withdraw
before the expiration of the Offer a number of Shares that,
together with the Shares then owned by Steel Partners II and
its subsidiaries (including BZA), would represent at least a
majority of the total number of outstanding Shares on a fully
diluted basis.
o The Bairnco Board must redeem the preferred stock purchase
rights under the "poison pill" rights plan or Steel Partners
II must be satisfied, in its sole discretion, that such rights
have been invalidated or are otherwise inapplicable to the
Offer and the Proposed Merger.
o Steel Partners II must be satisfied, in its sole discretion,
that Section 203 of the DGCL will be inapplicable to the Offer
and the Proposed Merger.
o All waiting periods imposed by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations
thereunder (the "HSR Act") must have expired or been
terminated. The waiting period under the HSR Act expired on
August 7, 2006. Therefore, this condition has been satisfied.
The Offer is subject to certain other conditions as well. A more
detailed discussion of the conditions to consummation of the Offer may be found
in the Offer to Purchase.
HOW DOES YOUR VOTE AFFECT OUR TENDER OFFER?
Even if the Bairnco stockholders consent to the Proposals, BZA will not
be obligated to purchase Shares tendered in the Offer unless certain conditions
to the Offer are either satisfied or waived. However, the passage of the
Proposals is an important step in permitting Steel Partners II to consummate the
Offer and allowing the stockholders to receive the consideration to be paid
pursuant to the Offer.
IF YOU CONSENT TO OUR PROPOSALS, ARE YOU AGREEING TO TENDER YOUR SHARES IN THE
OFFER?
No. Delivery of your written consent to the Proposals does not obligate
you to tender your Shares in the Offer. Although the election of the Steel
Nominees is an important step toward prompt consummation of the Offer and the
Proposed Merger, we are not asking the Bairnco stockholders to tender their
Shares by means of this consent solicitation or to consent to or vote on the
Proposed Merger at this time. We are making the Offer only by means of the Offer
to Purchase and the related letter of transmittal.
-11-
WHO ARE STEEL PARTNERS II'S DIRECTOR NOMINEES?
Steel Partners II proposes that Warren G. Lichtenstein, Hugh F.
Culverhouse, John J. Quicke, Anthony Bergamo and Howard M. Leitner be elected as
directors to the Bairnco Board. We may modify the number and/or identity of the
Steel Nominees if we deem such modification advisable in light of Bairnco's
actions, subject to applicable law. The principal occupation and business
experience of these highly qualified individuals is set forth in this Consent
Statement under the section entitled "The Nominees," which we urge you to read.
WHO IS ELIGIBLE TO GRANT WRITTEN CONSENTS IN FAVOR OF THE PROPOSALS?
Holders of record of the Shares as of the close of business on the
Record Date are entitled to provide their written consent in favor of the
Proposals.
WHEN IS THE DEADLINE FOR SUBMITTING CONSENTS?
In order for the Proposals to be adopted, Bairnco must receive written
consents signed by a sufficient number of stockholders to adopt the Proposals
within 60 days of the date of the earliest dated consent delivered to Bairnco.
On January __, 2007, Steel Partners II delivered a signed written consent to
Bairnco. Consequently, you have until March __, 2007 to consent to the
Proposals. We urge you to act promptly to ensure that your consent will count.
HOW MANY CONSENTS MUST BE RECEIVED IN ORDER TO ADOPT THE PROPOSALS?
Consents representing a majority of the Shares issued and outstanding
as of the close of business on the Record Date are required in order to adopt
the Proposals.
WHAT SHOULD YOU DO TO SUPPORT OUR PROPOSALS?
If your Shares are registered in your own name, please sign, date and
return the enclosed GOLD consent card to Steel Partners II, in care of MacKenzie
Partners, Inc., in the postage-paid envelope.
If your Shares are held in the name of a broker, dealer, commercial
bank, trust company or other nominee, only it can execute a GOLD consent card
with respect to your Shares and only upon receipt of your specific instructions.
Accordingly, it is critical that you promptly contact the person responsible for
your account and give instructions to promptly mark, sign, date and return the
enclosed GOLD consent card in favor of the Proposals. We urge you to confirm in
writing your instructions to the person responsible for your account and provide
a copy of those instructions to Steel Partners II, in care of MacKenzie
Partners, Inc., so that we will be aware of all instructions given and can
attempt to ensure that those instructions are followed.
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WHOM SHOULD YOU CALL IF YOU HAVE QUESTIONS ABOUT THE SOLICITATION?
Please call our consent solicitor MacKenzie Partners, Inc. at (212)
929-5500 (Collect) or (800) 322-2885 (Toll Free).
-13-
PROPOSAL NO. 1
REMOVAL OF EXISTING DIRECTORS SERVING ON
BAIRNCO BOARD
According to the Bylaws, any director may be removed from office, with
or without cause, by the affirmative vote of a majority of the voting power of
all shares of the Company entitled to vote generally in the election of
directors, voting as a single class. We are seeking to remove without cause each
member of the Bairnco Board and any person (other than those elected by this
consent solicitation) elected or appointed to the Bairnco Board by such
directors to fill any vacancy on the Bairnco Board or any newly-created
directorships.
The Bairnco Board is currently composed of five (5) directors as set
forth below, each of whom will be removed if Proposal No. 1 is approved:
Name Current Position
---- ----------------
Luke E. Fichthorn III Chairman of the Board and Chief Executive Officer
Gerald L. DeGood Director
Charles T. Foley Director
James A. Wolf Director
William F. Yelverton Director
REASONS FOR REMOVING EXISTING DIRECTORS
We recommend that the Bairnco stockholders consent to the removal of
all the directors serving on the Bairnco Board. The most important reason for
you to consent to the removal of directors is to allow the Bairnco stockholders
to decide for themselves whether to accept the Offer and receive the
consideration to be paid pursuant to the Offer.
We believe that the terms of the Offer are fair and generous to the
Bairnco stockholders. On July 6, 2006, the Bairnco Board announced that after
careful consideration it had unanimously determined that the Offer is inadequate
and not in the best interests of the Company's stockholders. The announcement
was made without first making any effort to seriously discuss the Offer with us.
The Bairnco Board rejected our Offer despite the fact that the $12.00 per Share
cash price proposed to be paid in the Offer represents a premium of 21% to the
last reported sales price per Share on June 15, 2006, the day we informed
Bairnco of our proposal to acquire all the outstanding Shares. On July 28, 2006,
Bairnco announced that it had hired a financial advisor to explore a variety of
possible strategic alternatives, including the possible sale of the Company.
However, less than three months later, the Bairnco Board announced that it had
determined that it would be in the best interests of Bairnco's stockholders that
the Company remain independent and continue to implement its strategic plan,
which it believed would provide the best opportunity to enhance stockholder
value over the long term. Accordingly, the Bairnco Board has refused to take the
steps necessary, including opting out of Section 203 of the DGCL, in order to
permit the Bairnco stockholders to accept the Offer and receive the
consideration to be paid pursuant to the Offer. In fact, following the
commencement of the Offer, the Bairnco Board made it even more difficult to
consummate the Offer and the Proposed Merger by adopting a "poison pill" rights
plan.
-14-
In addition to adopting the "poison pill" rights plan, the current
directors have also implemented other classic anti-takeover provisions which
serve to entrench management and are not in the best interests of the
stockholders. After we commenced the Offer, Bairnco announced that it had
entered into Change in Control agreements with various senior executives which
would obligate the Company to make payments in excess of $2 million to these
executives in cases where their employment with Bairnco is terminated within 24
months of a change in control of the Company.
By voting in favor of the removal of the existing directors, the
Bairnco stockholders can demonstrate their support for the Offer and their
dissatisfaction with the actions taken by the Bairnco Board in response to the
Offer.
The GOLD consent card delivered with this Consent Statement provides
each stockholder with the opportunity to adopt Proposal No. 1 in part by
designating the names of any member of the Bairnco Board whom such stockholder
does not want removed from the Bairnco Board.
STEEL PARTNERS II URGES YOU TO VOTE FOR ITS PROPOSAL TO REMOVE EACH
MEMBER OF THE BAIRNCO BOARD AND ANY PERSON (OTHER THAN THOSE ELECTED BY THIS
CONSENT SOLICITATION) ELECTED OR APPOINTED TO THE BAIRNCO BOARD BY SUCH
DIRECTORS TO FILL ANY VACANCY ON THE BAIRNCO BOARD OR ANY NEWLY-CREATED
DIRECTORSHIPS ON THE ENCLOSED GOLD CONSENT CARD.
-15-
PROPOSAL NO. 2
AMENDMENT OF THE BYLAWS TO FIX THE NUMBER OF DIRECTORS SERVING
ON THE BAIRNCO BOARD AT FIVE (5)
Section 2 of Article III of the Bylaws provides that the authorized
number of directors may be determined from time to time by a vote of a majority
of the then authorized number of directors; provided, however, that such number
shall not be less than a minimum of three nor more than a maximum of fifteen;
and provided, further, that such number and such minimum and maximum may be
increased or decreased pursuant to resolution of the Bairnco Board.
Assuming the members of the Bairnco Board are removed in accordance
with Proposal No. 1, Steel Partners II would like to ensure that if its five
director nominees are elected, they will constitute the entire board.
Accordingly, you are being asked to amend the Bylaws in order to fix the number
of directors serving on the Bairnco Board at five (5), as set forth in Schedule
I to this Consent Statement.
STEEL PARTNERS II URGES YOU TO VOTE FOR ITS PROPOSAL TO AMEND THE
BYLAWS TO FIX THE NUMBER OF DIRECTORS SERVING ON THE BAIRNCO BOARD AT FIVE (5)
ON THE ENCLOSED GOLD CONSENT CARD.
-16-
PROPOSAL NO. 3
AMENDMENT OF THE BYLAWS TO ONLY ALLOW STOCKHOLDERS TO FILL
VACANCIES ON THE BAIRNCO BOARD RESULTING FROM THE REMOVAL OF
DIRECTORS BY THE STOCKHOLDERS
Section 2 of Article III of the Bylaws provides that vacancies and
newly created directorships resulting from any increase in the authorized number
of directors, and any vacancies on the Bairnco Board resulting from death,
resignation, disqualification, removal or other cause shall be filled by the
affirmative vote of a majority of the remaining directors then in office, even
if less than a quorum of the board, or by a sole remaining director. The Bylaws
do not allow stockholders to fill any vacancies on the Bairnco Board.
Assuming that all or certain members of the Bairnco Board are removed
in accordance with Proposal No. 1, we would like to divest the current directors
of their ability to fill vacancies created by their removal and ensure that the
Steel Nominees are elected to fill such vacancies. Accordingly, you are being
asked to amend the Bylaws in order to only allow the stockholders to fill any
vacancies on the Bairnco Board resulting from the removal of directors by the
stockholders, as set forth in Schedule I to this Consent Statement.
STEEL PARTNERS II URGES YOU TO VOTE FOR ITS PROPOSAL TO AMEND THE
BYLAWS TO ONLY ALLOW THE STOCKHOLDERS TO FILL ANY VACANCIES ON THE BAIRNCO BOARD
RESULTING FROM THE REMOVAL OF DIRECTORS BY THE STOCKHOLDERS ON THE ENCLOSED GOLD
CONSENT CARD.
-17-
PROPOSAL NO. 4
ELECTION OF THE STEEL NOMINEES
The Bairnco Board is currently composed of five (5) directors. Each of
the Steel Nominees, if elected, would serve as a single class and would hold
office until the next annual meeting of stockholders and until such person's
successor has been elected or until such person's death, resignation, retirement
or removal.
If the Steel Nominees are elected, they will, subject to their
fiduciary duties as directors, remove the obstacles to the consummation of the
Offer by redeeming the Company's "poison pill" rights plan and opting out of
Section 203 of the DGCL. This would allow the Company's stockholders to have the
ability to decide for themselves whether they want to accept the Offer, the
Proposed Merger or any other third-party acquisition proposal. Due to Mr.
Lichtenstein's and Mr. Quicke's affiliation with BZA and Steel Partners II, they
may be deemed to have an interest in any transaction between the Company and BZA
or other affiliate of Steel Partners II. Accordingly, if the Steel Nominees are
elected, Messrs. Lichtenstein and Quicke would abstain from any vote of the
directors to approve such transaction.
THE NOMINEES
The following information sets forth the name, age, business address,
present principal occupation, and employment and material occupations,
positions, offices, or employments for the past five years of each of the Steel
Nominees. Each of the Steel Nominees is a citizen of the United States of
America.
WARREN G. LICHTENSTEIN (AGE 41) has been the Chairman of the Board,
Secretary and the Managing Member of Partners, L.L.C., the general partner of
Steel Partners II, a private investment partnership, since January 1, 1996 and
the President, Chief Executive Officer and a director of Steel Partners, Ltd.
("SPL"), a management and advisory company that provides management services to
Steel Partners II and its affiliates, since June 1999. Mr. Lichtenstein has been
a director (currently Chairman of the Board) of United Industrial Corporation, a
company principally focused on the design, production and support of defense
systems and a manufacturer of combustion equipment for biomass and refuse fuels,
since May 2001. Mr. Lichtenstein has been a director (currently Chairman of the
Board) of SL Industries, Inc., a designer and manufacturer of power electronics,
power motion equipment, power protection equipment, and teleprotection and
specialized communication equipment, since January 2002 and served as Chief
Executive Officer from February 2002 to August 2005. He has served as Chairman
of the Board of WHX Corporation ("WHX"), a holding company, since July 2005. Mr.
Lichtenstein has been a director of KT&G Corporation, South Korea's largest
tobacco company, since March 2006. Mr. Lichtenstein was a director of Layne
Christensen Company ("Layne Christensen"), a provider of products and services
for the water, mineral, construction and energy markets, from January 2004 to
October 2006. Mr. Lichtenstein served as a director of WebFinancial Corporation,
a consumer and commercial lender, from 1996 to June 2005, as Chairman and Chief
Executive Officer from December 1997 to June 2005 and as President from December
1997 through December 2003. The business address of Mr. Lichtenstein is c/o
Steel Partners II, L.P., 590 Madison Avenue, 32nd Floor, New York, New York
10022. By virtue of his position with Partners LLC, Mr.
-18-
Lichtenstein has the power to vote and dispose of the Shares owned by Steel
Partners II. Accordingly, Mr. Lichtenstein may be deemed to be the beneficial
owner of the Shares owned by Steel Partners II. For information regarding
purchases and sales during the past two years by Steel Partners II of securities
of Bairnco that may be deemed to be beneficially owned by Mr. Lichtenstein, see
Schedule II.
HUGH F. CULVERHOUSE (AGE 57) is the owner of Palmer Ranch Holdings,
Ltd., a Florida real estate investor. Mr. Culverhouse is also presently the
principal of Culverhouse Limited Partnership which invests in real estate,
securities and hedge funds. From 1997 to 2001, he served as Head Trustee for
Hugh F. Culverhouse Trust, which is comprised of land holdings, orange groves,
utilities and other businesses. From 1979 to 1999, Mr. Culverhouse was an
attorney in private practice. Prior to such time, he was an Assistant U.S.
Attorney with the U.S. Justice Department and a Trial Attorney with the
Securities and Exchange Commission. The business address of Mr. Culverhouse is
SBS Tower, Suite PH 1-C, 2601 South Bayshore Drive, Miami, Florida 33133. Mr.
Culverhouse does not beneficially own, and has not purchased or sold during the
past two years, any securities of Bairnco.
JOHN J. QUICKE (AGE 57) has served as a Vice President of SPL since
September 2005. Mr. Quicke has served as Chairman of the Board of NOVT
Corporation, a former developer of advanced medical treatments for coronary and
vascular disease, since April 2006 and served as President and Chief Executive
Officer of NOVT from April 2006 to November 2006. He has served as a director of
WHX since July 2005 and as a Vice President since October 2005. Mr. Quicke
currently serves as a director of Layne Christensen and Angelica Corporation, a
leading provider of healthcare linen management services. He served as a
director, President and Chief Operating Officer of Sequa Corporation ("Sequa"),
a diversified industrial company, from 1993 to March 2004, and Vice Chairman and
Executive Officer of Sequa from March 2004 to March 2005. As Vice Chairman and
Executive Officer of Sequa, Mr. Quicke was responsible for the Automotive, Metal
Coating, Specialty Chemicals, Industrial Machinery and Other Product operating
segments of the company. From March 2005 to August 2005, Mr. Quicke occasionally
served as a consultant to Steel Partners II and explored other business
opportunities. The business address of Mr. Quicke is c/o Steel Partners II,
L.P., 590 Madison Avenue, 32nd Floor, New York, New York 10022. Mr. Quicke does
not beneficially own, and has not purchased or sold during the past two years,
any securities of Bairnco.
ANTHONY BERGAMO (AGE 60) has served in a variety of capacities with
Milstein Hotel Group, a hotel operator, since April 1996, most recently as
Managing Director. He has also served as the Chief Executive Officer of Niagara
Falls Redevelopment, Ltd., a real estate development company, since August 1998.
He has held various positions with MB Real Estate, a property management company
based in New York City and Chicago, since April 1996, including the position of
Vice Chairman since May 2003. Mr. Bergamo has been a director of Lone Star
Steakhouse & Saloon, Inc., an owner and operator of restaurants, since May 2002.
He has also been a director since 1995, a Trustee since 1986 and currently is
Chairman of the Audit Committee of Dime Community Bancorp. Mr. Bergamo is also
the Founder of the Federal Law Enforcement Foundation, a foundation that
provides economic assistance to both federal and local law enforcement officers
suffering from serious illness and to communities recovering from natural
disasters, and has served as its Chairman since 1988. The business address of
-19-
Mr. Bergamo is c/o MB Real Estate, 335 Madison Avenue, 14th Floor, New York, New
York 10017. Mr. Bergamo does not beneficially own, and has not purchased or sold
during the past two years, any securities of Bairnco.
HOWARD M. LEITNER (AGE 66) served as Senior Vice President, Finance of
Sequa from November 1999 to January 2006. From 1980 to 1999, he served in
various capacities including President and Chief Financial Officer of Chock Full
O' Nuts Corporation, a marketer of coffee. From 1977 to 1980, Mr. Leitner was a
Senior Audit Manager with the accounting firm of Ernst & Young. From 1963 to
1977, he was an accountant with SD Leidesdorf & Co., an accounting firm that was
acquired by Ernst & Young. Mr. Leitner is presently retired from active
employment. His principal address is 78335 Griffin Drive, Palm Desert,
California 92211. Mr. Leitner does not beneficially own, and has not purchased
or sold during the past two years, any securities of Bairnco.
There can be no assurance that the election of the Steel Nominees will
lead to the consummation of the Offer or the Proposed Merger or any other
acquisition proposal. Your vote to elect the Steel Nominees will have the legal
effect of replacing the directors serving on the Bairnco Board with the Steel
Nominees.
The Steel Nominees will not receive any compensation from Steel
Partners II for their services as directors of Bairnco. Pursuant to letter
agreements dated December 29, 2006, Steel Partners II agreed to indemnify each
of the Steel Nominees against claims arising from the solicitation of consents
or proxies from Bairnco's stockholders in connection with this consent
solicitation and any related transactions. Other than as stated herein, there
are no arrangements or understandings between Steel Partners II and any of the
Steel Nominees or any other person or persons pursuant to which the nomination
described herein is to be made, other than the consent by each of the Steel
Nominees to be named in this Consent Statement and to serve as a director of
Bairnco if elected. Except as otherwise set forth herein, none of the Steel
Nominees is a party adverse to Bairnco or any of its subsidiaries or has a
material interest adverse to Bairnco or any of its subsidiaries in any material
pending legal proceedings. We may modify the number and/or identity of the Steel
Nominees if we deem such modification advisable in light of Bairnco's actions,
subject to applicable law.
The GOLD consent card delivered with this Consent Statement provides
each stockholder with the opportunity to adopt Proposal No. 4 in part by
designating the names of any of the Steel Nominees whom such stockholder does
not want elected to the Bairnco Board.
STEEL PARTNERS II URGES YOU TO VOTE FOR THE ELECTION OF THE STEEL
NOMINEES ON THE ENCLOSED GOLD CONSENT CARD.
-20-
CONSENT PROCEDURES
Section 228 of the DGCL provides that, unless the certificate of
incorporation of a Delaware corporation otherwise provides, any action required
to be taken at any annual or special meeting of stockholders of that
corporation, or any action that may be taken at any annual or special meeting of
those stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take that action
at a meeting at which all shares entitled to vote thereon were present and
voted, and those consents are delivered to the corporation by delivery to its
registered office in Delaware, its principal place of business or an officer or
agent of the corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. The certificate of incorporation of
Bairnco does not prohibit stockholder action by written consent.
Section 7 of Article VII of the Bylaws provides that any stockholder of
record seeking to have the stockholders authorize or take corporate action by
written consent shall, by written notice to the Secretary of Bairnco, request
that the Bairnco Board fix a record date. The Bairnco Board shall promptly, but
in all events within 10 days after the date on which such written notice is
received, adopt a resolution fixing the record date (unless a record date has
previously been fixed by the Bairnco Board). If no record date has been fixed by
the Bairnco Board within 10 days after the date on which such written notice is
received, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the
Bairnco Board is required by applicable law, shall be the first date after the
expiration of such 10 day time period on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to Bairnco by
delivery to its registered office in Delaware, its principal place of business,
or to any officer or agent of Bairnco having custody of the book in which
proceedings of meetings of stockholders are recorded. On January 10, 2007, Steel
Partners II provided written notice to the Secretary of Bairnco requesting that
the Bairnco Board fix a record date for this consent solicitation. The Bairnco
Board has established January __, 2007 as the record date for this consent
solicitation.
To be effective, the requisite written consents must be delivered to
Bairnco within 60 days of the earliest dated written consent delivered to
Bairnco. On January __, 2007, Steel Partners II delivered a written consent to
Bairnco. Thus, written consents must be delivered to Bairnco by March __, 2007
to be effective.
The Bylaws provide further that in the event of the delivery to Bairnco
of written consents to take corporate action and/or any related revocation or
revocations, Bairnco shall engage independent inspectors of elections for the
purpose of performing promptly a ministerial review of the validity of the
consents and revocations. For the purpose of permitting the inspectors to
perform such review, no action by written consent and without a meeting shall be
effective until such inspectors have completed their review, determined that the
requisite number of valid and unrevoked consents delivered to Bairnco in
accordance with its Bylaws and applicable law have been obtained to authorize or
take the action specified in the consents, and certified such determination for
entry in the records of Bairnco kept for the purpose of recording the
proceedings of meetings of stockholders.
-21-
If the Proposals become effective as a result of this consent
solicitation, prompt notice will be given under Section 228(e) of the DGCL to
stockholders who have not executed written consents. All stockholders will be
notified as promptly as possible by press release of the results of the
solicitation.
According to publicly available information, the Shares constitute
Bairnco's only class of voting securities and each Share entitles its record
holder to one vote. Stockholders of Bairnco do not have cumulative voting rights
in the election of directors and cumulative voting is not applicable in this
consent solicitation. Only holders of Shares as of the close of business on the
Record Date are entitled to execute written consents in favor of the Proposals.
If you are a stockholder of record at the close of business on the Record Date,
you will retain your right to consent even if you sell your Shares after the
Record Date. Also, the tender of Shares pursuant to the Offer does not
constitute the grant to BZA of a consent or any rights to consent with respect
to the tendered Shares until such time as such Shares are accepted for payment
by BZA. Accordingly, it is important that you provide consent for the Shares
held by you as of the close of business on the Record Date on the GOLD consent
card, even if you have tendered your Shares pursuant to the Offer prior to the
Record Date, or if you sell or tender your Shares after the Record Date.
REVOCATION OF CONSENTS
An executed consent card may be revoked at any time by marking, dating,
signing and delivering a written revocation before the time that the action
authorized by the executed consent becomes effective. A revocation may be in any
written form validly signed by the record holder as long as it clearly states
that the consent previously given is no longer effective. The delivery of a
subsequently dated consent card that is properly completed will constitute a
revocation of any earlier consent. The revocation may be delivered either to
Steel Partners II, in care of MacKenzie Partners, Inc., 105 Madison Avenue, New
York, New York 10016, or to the principal executive offices of Bairnco. Although
a revocation is effective if delivered to Bairnco, we request that either the
original or photostatic copies of all revocations of consents be mailed or
delivered to Steel Partners II, in care of MacKenzie Partners, Inc., at its
address set forth above, so that we will be aware of all revocations and can
more accurately determine if and when sufficient unrevoked consents in favor of
the Proposals have been received.
SPECIAL INSTRUCTIONS
If you are a record holder of Shares as of the close of business on the
Record Date for this consent solicitation, you may elect to consent to, withhold
consent to or abstain with respect to each Proposal by marking the "CONSENTS,"
"WITHHOLD CONSENT" or "ABSTAIN" box, as applicable, underneath each Proposal on
the accompanying GOLD consent card and signing, dating and returning it promptly
in the enclosed postage-paid envelope. The effectiveness of each Proposal will
require the properly completed and duly delivered, unrevoked written consent to
that Proposal by the holders of record, as of the close of business on the
Record Date, of a majority of the Shares then outstanding.
The accompanying GOLD consent card will be acted upon in accordance
with the stockholder's instructions on such GOLD consent card. You may consent
to the removal of all directors of Bairnco by marking the "CONSENTS" box or you
-22-
may consent to the removal of only certain of such directors by marking the
"CONSENTS" box and writing the name of any director you do not want removed in
the space provided on the GOLD consent card. You also may consent to the
appointment of the entire slate of the Steel Nominees by marking the "CONSENTS"
box or you may withhold consent to the appointment of any one or more of the
Steel Nominees by marking the "CONSENTS" box and writing the name of any Steel
Nominee you do not want to be appointed in the space provided on the GOLD
consent card.
IF A STOCKHOLDER EXECUTES AND DELIVERS A GOLD CONSENT CARD, BUT FAILS
TO CHECK A BOX MARKED "CONSENTS," "WITHHOLD CONSENT" OR "ABSTAIN" FOR A
PROPOSAL, THAT STOCKHOLDER WILL BE DEEMED TO HAVE CONSENTED TO THAT PROPOSAL.
YOUR CONSENT IS IMPORTANT. PLEASE SIGN, DATE AND RETURN THE ENCLOSED
GOLD CONSENT CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED TODAY. FAILURE TO RETURN
YOUR CONSENT WILL HAVE THE SAME EFFECT AS VOTING AGAINST THE PROPOSALS.
If your Shares are held in the name of a broker, dealer, commercial
bank, trust company or other nominee, only it can execute a consent with respect
to your Shares and only upon receipt of your specific instructions. Accordingly,
it is critical that you promptly contact the person responsible for your account
and give instructions for a GOLD consent card in favor of each of the Proposals.
We urge you to confirm in writing your instructions to the person responsible
for your account and provide a copy of those instructions to Steel Partners II,
in care of MacKenzie Partners, Inc., so that we will be aware of all
instructions given and can attempt to ensure that those instructions are
followed.
SOLICITATION OF CONSENTS
The solicitation of consents pursuant to this consent solicitation is
being made by Steel Partners II. Consents may be solicited by mail, facsimile,
telephone, telegraph, Internet, in person and by advertisements.
Steel Partners II has retained MacKenzie Partners, Inc. ("MacKenzie") for
advisory services in connection with this solicitation, for which MacKenzie will
receive a fee not to exceed $35,000.00, together with reimbursement of its
reasonable out-of-pocket expenses, and will be indemnified against certain
liabilities and expenses, including certain liabilities under the federal
securities laws. In addition, under certain circumstances, MacKenzie may receive
additional amounts. Steel Partners II will solicit consents from individuals,
brokers, banks, bank nominees and other institutional holders. Steel Partners II
-23-
has requested banks, brokerage houses and other custodians, nominees and
fiduciaries to forward all solicitation materials to the beneficial owners of
the Shares they hold of record. Steel Partners II will reimburse these record
holders for their reasonable out-of-pocket expenses in so doing. It is
anticipated that MacKenzie will employ approximately 25 persons in connection
with its services to Steel Partners II.
The entire expense of soliciting consents is being borne by Steel
Partners II. If the Proposals are approved, Steel Partners II intends to seek
reimbursement of the costs of this solicitation from Bairnco. Unless otherwise
required by law, Steel Partners II does not currently intend to submit the
question of reimbursement of the costs of this solicitation to a vote of
stockholders. The costs of this consent solicitation are currently estimated to
be approximately $225,000.00. Steel Partners II estimates that through the date
hereof, its expenses in connection with this solicitation are approximately
$72,000.00.
OTHER PARTICIPANT INFORMATION
Each member of the Group is a participant in this solicitation. Warren
G. Lichtenstein is Chairman of the Board, Secretary and the Managing Member of
Partners LLC, a Delaware limited liability company. Partners LLC is the general
partner of Steel Partners II. BZA is a wholly owned subsidiary of Steel Partners
II. Mr. Lichtenstein is the sole executive officer and director of BZA. The
principal business of Mr. Lichtenstein, Partners LLC and Steel Partners II is
investing in the securities of small-cap companies. BZA was formed for the sole
purpose of serving as an acquisition vehicle for Steel Partners II, with no
current operations other than those incident to the Offer and this solicitation.
The principal business address of Mr. Lichtenstein, Partners LLC, Steel Partners
II and BZA is 590 Madison Avenue, 32nd Floor, New York, New York 10022. As of
the date hereof, Steel Partners II is the beneficial owner of 1,110,200 Shares.
Partners LLC does not beneficially own any Shares on the date hereof, except by
virtue of its role in Steel Partners II. BZA does not beneficially own any
Shares on the date hereof. Mr. Lichtenstein may be deemed to beneficially own
the 1,110,200 Shares owned by Steel Partners II by virtue of his positions with
Partners LLC. For information regarding purchases and sales of securities of
Bairnco during the past two years by Steel Partners II, see Schedule II.
To the extent the Proposals have an effect on the consummation of the
Offer and the Proposed Merger, the members of the Group may be deemed to have an
interest in such matters as a result of (i) Steel Partners II's ownership of
1,110,200 Shares, (ii) BZA being the offeror in the Offer and (iii) Steel
Partners II and BZA being proposed parties to the Proposed Merger.
On December 29, 2006, the members of the Group entered into a Joint
Filing and Solicitation Agreement in which, among other things, (i) the parties
agreed to the joint filing on behalf of each of them of statements on Schedule
13D with respect to the securities of Bairnco, (ii) the parties agreed to
solicit written consents or proxies to elect the Steel Nominees or any other
person designated by the Group as directors of Bairnco and to take all other
action necessary or advisable to achieve the foregoing (the "Solicitation"), and
(iii) Steel Partners II agreed to bear all expenses incurred in connection with
the Group's activities, including approved expenses incurred by any of the
parties in connection with the Solicitation, subject to certain limitations.
Except as set forth in this Consent Statement (including the Schedules
hereto), (i) during the past 10 years, no participant in this solicitation has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); (ii) no participant in this solicitation directly or indirectly
beneficially owns any securities of Bairnco; (iii) no participant in this
solicitation owns any securities of Bairnco which are owned of record but not
beneficially; (iv) no participant in this solicitation has purchased or sold any
securities of Bairnco during the past two years; (v) no part of the purchase
price or market value of the securities of Bairnco owned by any participant in
this solicitation is represented by funds borrowed or otherwise obtained for the
-24-
purpose of acquiring or holding such securities; (vi) no participant in this
solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities of
Bairnco, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; (vii) no
associate of any participant in this solicitation owns beneficially, directly or
indirectly, any securities of Bairnco; (viii) no participant in this
solicitation owns beneficially, directly or indirectly, any securities of any
parent or subsidiary of Bairnco; (ix) no participant in this solicitation or any
of his/its associates was a party to any transaction, or series of similar
transactions, since the beginning of Bairnco's last fiscal year, or is a party
to any currently proposed transaction, or series of similar transactions, to
which Bairnco or any of its subsidiaries was or is to be a party, in which the
amount involved exceeds $60,000; (x) no participant in this solicitation or any
of his/its associates has any arrangement or understanding with any person with
respect to any future employment by Bairnco or its affiliates, or with respect
to any future transactions to which Bairnco or any of its affiliates will or may
be a party; and (xi) no person, including the participants in this solicitation,
who is a party to an arrangement or understanding pursuant to which the Steel
Nominees are proposed to be elected has a substantial interest, direct or
indirect, by security holdings or otherwise in any matter known to Steel
Partners II.
OTHER MATTERS AND ADDITIONAL INFORMATION
APPRAISAL RIGHTS
No appraisal rights are available in connection with this consent
solicitation, the Proposals or the Offer. However, if the Proposed Merger is
subsequently consummated, stockholders who have not tendered their Shares in the
Offer will have certain rights under the DGCL to dissent from the Proposed
Merger and demand appraisal of, and to receive payment in cash of the fair value
of, their Shares. The preservation and exercise of dissenters' rights in
connection with the Proposed Merger will require strict adherence to the
applicable provisions of the DGCL.
EXECUTING A GOLD CONSENT CARD IN FAVOR OF THE PROPOSALS WILL NOT
PREVENT A HOLDER OF SHARES AFTER CONSUMMATION OF THE OFFER FROM SUBSEQUENTLY
DEMANDING APPRAISAL OF THOSE SHARES IN CONNECTION WITH THE CONSUMMATION OF ANY
MERGER.
STOCKHOLDER PROPOSALS
According to Bairnco's public filings, any proposal that a stockholder
desires to have included in its proxy statement and form of proxy relating to
the 2007 Annual Meeting of Stockholders must have been received by Bairnco at
its executive offices no later than November 15, 2006. Bairnco will not be
required to include in its proxy statement or form of proxy a stockholder
proposal that is received after that date or which otherwise fails to meet the
requirements for stockholder proposals established by Commission regulations. In
addition, if a stockholder intends to present a proposal at the 2007 Annual
Meeting of Stockholders without the inclusion of that proposal in Bairnco's
proxy materials and written notice of the proposal is not received by Bairnco on
or before January 26, 2007, or if Bairnco meets other requirements of Commission
rules, proxies solicited by the Bairnco Board for the 2007 Annual Meeting of
-25-
Stockholders will confer discretionary authority to vote on the proposal at the
meeting. The procedures and deadlines for submitting stockholder proposals
contained in this paragraph are based on Bairnco's public filings and should not
be construed as an admission by Steel Partners II that such procedures and
deadlines are valid, and Steel Partners II reserves the right to challenge their
validity.
OWNERSHIP OF MORE THAN 5% SECURITY HOLDERS AND MANAGEMENT
See Schedule III for information regarding persons who beneficially own
more than 5% of the Shares and the ownership of the Shares by the management of
Bairnco.
INFORMATION CONCERNING BAIRNCO
The information concerning Bairnco contained in this Consent Statement
and the Schedules attached hereto has been taken from, or is based upon,
publicly available information. Although Steel Partners II does not have any
information that would indicate that any information contained in this Consent
Statement that has been taken from such documents is inaccurate or incomplete,
Steel Partners II does not take any responsibility for the accuracy or
completeness of such information.
STEEL PARTNERS II, L.P.
January __, 2007
-26-
SCHEDULE I
PROPOSED AMENDMENTS
TO THE AMENDED AND RESTATED BYLAWS OF BAIRNCO
PROPOSED AMENDMENT OF BYLAWS TO FIX NUMBER OF DIRECTORS
SERVING ON THE BAIRNCO BOARD AT FIVE (5)
Section 2 of Article III of the Amended and Restated Bylaws of Bairnco
is amended by replacing the first sentence of such section with the following:
"The authorized number of directors shall be fixed at five (5);
provided, however, that such number may be increased or decreased
pursuant to resolution of the Board."
PROPOSED AMENDMENT OF BYLAWS TO ONLY ALLOW THE STOCKHOLDERS TO FILL ANY
VACANCIES ON THE BAIRNCO BOARD RESULTING FROM THE
REMOVAL OF DIRECTORS BY THE STOCKHOLDERS
Section 2 of Article III of the Amended and Restated Bylaws of Bairnco
is amended by replacing the third sentence of such section with the following:
"Vacancies and newly created directorships resulting from any increase
in the authorized number of directors, and any vacancies on the Board
resulting from death, resignation, disqualification, removal (other
than removal by the stockholders) or other cause shall be filled by the
affirmative vote of a majority of the remaining directors then in
office, even if less than a quorum of the Board, or by a sole remaining
director, and the directors so chosen shall hold office, subject to
Sections 9 and 10 of Article III of these By-Laws, until the next
Annual Meeting of stockholders and until their respective successors
are elected and qualified. Any vacancies on the Board resulting from
removal by the stockholders may not be filled by the directors and
shall only be filled by the affirmative vote of the stockholders of the
Corporation entitled to vote generally in the election of directors,
voting together as a single class, and the directors so chosen shall
hold office, subject to Sections 9 and 10 of Article III of these
By-Laws, until the next Annual Meeting of stockholders and until their
respective successors are elected and qualified."
I-1
SCHEDULE II
TRANSACTIONS IN SECURITIES OF BAIRNCO
DURING THE PAST TWO YEARS
Class Quantity Price Per Date of
of Security Purchased Share ($) Purchase
------------------- ------------------ ------------------ -------------------
STEEL PARTNERS II, L.P.
--------------------------------------------------------------------------------
Common Stock 200 10.45 03/17/2005
Common Stock 45,300 10.46 03/18/2005
Common Stock 20,900 10.47 03/21/2005
Common Stock 39,300 10.50 06/28/2005
Common Stock 6,200 10.75 06/30/2005
Common Stock 5,000 10.75 07/01/2005
Common Stock 39,000 10.78 08/17/2005
Common Stock 8,900 10.80 08/18/2005
Common Stock 5,000 10.85 09/16/2005
II-1
SCHEDULE III
THE FOLLOWING TABLE IS REPRINTED FROM BAIRNCO'S SCHEDULE 14A FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON MARCH 15, 2006
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of February 17, 2006,
regarding the beneficial ownership of Bairnco Common Stock by the only persons
known to Bairnco to be the beneficial owners of more than 5% of Bairnco's issued
and outstanding Common Stock:
Amount and Nature Percentage of Issued
of Beneficial and Outstanding
Name and Address of Ownership of Common Stock on
Beneficial Owner Common Stock February 17, 2006
-------------------------- -------------------- --------------------
Steel Partners II, L.P.
590 Madison Avenue
32nd Floor
New York, NY 10022 1,110,200 (1) 15.28%
Marvin Schwartz
605 Third Avenue
New York, NY 10158 754,000 10.38%
FMR Corp.
82 Devonshire Street
Boston, MA 02109 676,573 (2) 9.32%
Dimensional Fund Advisors Inc.
1299 Ocean Avenue
Santa Monica, CA 90401 487,238 (3) 6.71%
Neuberger Berman, LLC
605 Third Avenue
New York, NY 10158 470,800 (4) 6.48%
(1) Based on Schedule 13D filed on 9/16/05.
(2) Based on Schedule 13F filed on 2/14/06.
(3) Based on Schedule 13G filed on 2/6/06.
(4) Based on Schedule 13G filed on 2/15/06.
The Company has retained the services of Neuberger Berman, LLC to serve
as investment manager with respect to a portion of the assets in the Bairnco
Corporation Retirement Plan. Neuberger Berman, LLC is a registered investment
III-1
advisor under the Investment Advisors Act of 1940 and serves as investment
advisor to numerous individuals and retirement plans. Fees payable under this
arrangement are customary for these services.
The following table presents information regarding beneficial ownership
of Bairnco Common Stock by each member of the Board of Directors, each nominee
for election as a director, each of the executive officers of Bairnco named in
the summary compensation table below and by all directors and executive officers
of Bairnco as a group, as of February 17, 2006.
Amount and Nature Percentage of Issued
of Beneficial and Outstanding
Ownership of Common Stock on
Name of Individual or Group Common Stock February 17, 2006
-------------------------- -------------------- --------------------
Luke E. Fichthorn III 435,498(1) 6.00%
Kenneth L. Bayne 20,000(2) (10)
Gerald L. DeGood 4,834(3) (10)
Charles T. Foley 255,102(4) 3.51%
Lawrence C. Maingot 18,059(5) (10)
Larry D. Smith 39,442(6) (10)
James A. Wolf 8,001(7) (10)
William F. Yelverton 51,635(8) (10)
All executive officers and
directors as a group
(8 persons) 832,571(9) 11.46%
-----------------------
(1) Includes 2,000 shares owned by Mrs. Fichthorn and 1,500 shares owned by
two trusts of which Mr. Fichthorn is a co-trustee. Mr. Fichthorn
disclaims beneficial ownership of these shares. Also includes shares
that would be issued upon exercise of 83,334 vested unexercised stock
options granted under the 1990 Bairnco Stock Option Plan, 37,500 vested
unexercised stock options granted under the 2000 Bairnco Stock Option
Plan, and 42,000 restricted shares granted under the 2000 Bairnco Stock
Option Plan.
(2) Includes 20,000 restricted shares under the 2000 Bairnco Stock Option
Plan.
(3) Includes shares that would be issued upon the exercise of 4,334 vested
unexercised stock options granted under the 2000 Bairnco Stock Option
Plan.
(4) Includes shares that would be issued upon the exercise of 6,001 vested
unexercised stock options granted under the 1990 Bairnco Stock Option
Plan and 4,001 vested unexercised stock options granted under the 2000
Bairnco Stock Option Plan.
(5) Mr. Maingot indirectly owns 1,634 shares through ownership in trust
under the Bairnco Corporation 401(k) Savings Plan and 550 shares in a
personal Individual Retirement Account (IRA). Also includes shares that
would be issued upon the exercise of 2,750 vested unexercised stock
options granted under the 1990 Bairnco Stock Option Plan, and 1,125
vested unexercised stock options and 12,000 restricted shares under the
2000 Bairnco Stock Option Plan.
III-2
(6) Mr. Smith indirectly owns 2,442 shares through ownership in trust under
the Bairnco Corporation 401(k) Savings Plan. Also includes shares that
would be issued upon exercise of 20,000 vested unexercised stock
options granted under the 1990 Bairnco Stock Option Plan and 17,000
restricted shares granted under the 2000 Bairnco Stock Option Plan.
(7) Includes shares that would be issued upon the exercise of 7,001 vested
unexercised stock options under the 2000 Bairnco Stock Option Plan.
(8) Includes shares that would be issued upon the exercise of 6,001 vested
unexercised stock options granted under the 1990 Bairnco Stock Option
Plan and 4,001 vested unexercised stock options granted under the 2000
Bairnco Stock Option Plan.
(9) Includes a total of 3,500 shares owned by the wives, children or in
trusts or custodial accounts for relatives of executive officers or
directors but as to which each executive officer or director,
respectively, disclaims beneficial ownership. Also includes shares that
would be issued upon the exercise of 201,419 vested unexercised stock
options granted under the 1990 Bairnco Stock Option Plan and 53,795
vested unexercised stock options and 91,000 restricted shares granted
under the 2000 Bairnco Stock Option Plan.
(10) The percentage of shares owned by such executive officer or director
does not exceed 1% of the issued and outstanding Bairnco Common Stock.
III-3
IMPORTANT
Tell your Board what you think! Your vote is important. No matter how
many Shares you own, please give Steel Partners II your consent FOR the
Proposals described herein by taking three steps:
o SIGNING the enclosed GOLD consent card,
o DATING the enclosed GOLD consent card, and
o MAILING the enclosed GOLD consent card TODAY in the envelope
provided (no postage is required if mailed in the United
States).
If any of your Shares are held in the name of a brokerage firm, bank,
bank nominee or other institution, only it can vote such Shares and only upon
receipt of your specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the GOLD
consent card representing your Shares. Steel Partners II urges you to confirm in
writing your instructions to Steel Partners II in care of MacKenzie Partners,
Inc. at the address provided below so that Steel Partners II will be aware of
all instructions given and can attempt to ensure that such instructions are
followed.
If you have any questions or require any additional information
concerning this Consent Statement, please contact MacKenzie Partners, Inc. at
the address set forth below.
MacKenzie
Partners, Inc.
105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
bairnco@mackenziepartners.com
or
CALL TOLL FREE (800) 322-2885
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED JANUARY 10, 2007
GOLD CONSENT CARD
CONSENT OF STOCKHOLDERS OF BAIRNCO CORPORATION
THIS CONSENT IS SOLICITED BY STEEL PARTNERS II, L.P.
THE BOARD OF DIRECTORS OF BAIRNCO CORPORATION
IS NOT SOLICITING THIS CONSENT
C O N S E N T
Unless otherwise indicated below, the undersigned, a stockholder of
record of Bairnco Corporation (the "Company") on January __, 2007 (the "Record
Date"), hereby consents pursuant to Section 228(a) of the Delaware General
Corporation Law with respect to all shares of common stock of the Company (the
"Shares") held by the undersigned to the taking of the following actions without
a meeting of the stockholders of the Company.
CHECK THE APPROPRIATE BOX BELOW TO CONSENT OR WITHHOLD CONSENT TO, OR ABSTAIN
FROM, THE PROPOSALS BELOW.
IF NO BOX IS MARKED FOR ANY PROPOSAL, THE UNDERSIGNED WILL BE DEEMED TO CONSENT
TO SUCH PROPOSAL, EXCEPT THAT THE UNDERSIGNED WILL NOT BE DEEMED TO CONSENT TO
THE REMOVAL OF ANY CURRENT DIRECTOR OR TO THE ELECTION OF ANY NOMINEE WHOSE NAME
IS WRITTEN-IN IN THE SPACE PROVIDED. IN THE ABSENCE OF DISSENT OR ABSTENTION
BEING INDICATED BELOW, THE UNDERSIGNED HEREBY CONSENTS TO EACH ACTION LISTED
BELOW.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS CONSENT CARD PROMPTLY!
- CONTINUED AND TO BE SIGNED ON REVERSE SIDE -
[X] PLEASE MARK VOTE AS IN THIS EXAMPLE
STEEL PARTNERS II, L.P. ("STEEL PARTNERS II") RECOMMENDS THAT YOU CONSENT TO
PROPOSALS 1, 2, 3 AND 4.
1. Remove Luke E. Fichthorn III, Gerald L. DeGood, Charles T. Foley, James
A. Wolf, William F. Yelverton and any person (other than those elected
by the consent solicitation of Steel Partners II) elected or appointed
to the Board of Directors of the Company by such directors to fill any
vacancy on the Board of Directors of the Company or any newly-created
directorships.
[_____] CONSENTS [_____] WITHHOLD CONSENT [_____] ABSTAINS
INSTRUCTION: TO CONSENT, WITHHOLD CONSENT OR ABSTAIN FROM CONSENTING TO THE
REMOVAL OF ALL THE PERSONS NAMED IN PROPOSAL NO. 1, CHECK THE APPROPRIATE BOX
ABOVE. IF YOU WISH TO CONSENT TO THE REMOVAL OF CERTAIN OF THE PERSONS NAMED IN
PROPOSAL NO. 1, BUT NOT ALL OF THEM, CHECK THE "CONSENTS" BOX ABOVE AND WRITE
THE NAME OF EACH SUCH PERSON YOU DO NOT WISH REMOVED IN THE SPACE PROVIDED
BELOW.
--------------------------------------------------------------
2. Amend Section 2 of Article III of the Amended and Restated Bylaws of
the Company (the "Bylaws"), as set forth on Schedule I to the Consent
Statement of Steel Partners II, to fix the number of directors serving
on the Board of Directors of the Company at five (5).
[_____] CONSENTS [_____] WITHHOLD CONSENT [_____] ABSTAINS
3. Amend Section 2 of Article III of the Bylaws, as set forth on Schedule
I to the Consent Statement of Steel Partners II, to provide that any
vacancies on the Board of Directors of the Company resulting from the
removal of directors by the stockholders may only be filled by the
stockholders of the Company.
[_____] CONSENTS [_____] WITHHOLD CONSENT [_____] ABSTAINS
4. Elect Warren G. Lichtenstein, Hugh F. Culverhouse, John J. Quicke,
Anthony Bergamo and Howard M. Leitner to serve as directors of the
Company (or, if any such nominee is unable or unwilling to serve as a
director of the Company, any other person designated as a nominee by
the remaining nominee or nominees).
[_____] CONSENTS [_____] WITHHOLD CONSENT [_____] ABSTAINS
INSTRUCTION: TO CONSENT, WITHHOLD CONSENT OR ABSTAIN FROM CONSENTING TO THE
ELECTION OF ALL THE PERSONS NAMED IN PROPOSAL NO. 4, CHECK THE APPROPRIATE BOX
ABOVE. IF YOU WISH TO CONSENT TO THE ELECTION OF CERTAIN OF THE PERSONS NAMED IN
PROPOSAL NO. 4, BUT NOT ALL OF THEM, CHECK THE "CONSENTS" BOX ABOVE AND WRITE
THE NAME OF EACH SUCH PERSON YOU DO NOT WISH ELECTED IN THE SPACE PROVIDED
BELOW.
--------------------------------------------------------------
THE EFFECTIVENESS OF EACH OF THE ABOVE PROPOSALS IS CONDITIONED UPON THE
EFFECTIVENESS OF THE OTHER PROPOSALS.
IN ORDER FOR YOUR CONSENT TO BE VALID, IT MUST BE DATED.
Date:
------------------------------
------------------------------------
Signature of Stockholder
------------------------------------
Signature (if held jointly)
------------------------------------
Name and Title of Representative (if applicable)
IMPORTANT NOTE TO STOCKHOLDERS:
Please sign exactly as name appears
hereon. If the shares are held by
joint tenants or as community
property, both should sign. When
signing as executor, administrator,
trustee, guardian, or other
representative, please give full
title. If a corporation, please sign
in full corporate name by a duly
authorized officer. If a
partnership, please sign in
partnership name by an authorized
person.