kl09025.htm
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed
by
the registrant [ ]
Filed
by
a party other than the registrant [X]
Check
the
appropriate box:
[ ] Preliminary
Proxy Statement
[ ] Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive
Proxy Statement
[ ] Definitive
Additional Materials
[X] Soliciting
Material Under Rule 14a-12
---------------------------------------------------------------------------------------------------------------------
LANCASTER
COLONY CORPORATION
(Name
of
Registrant as Specified in Its Charter)
---------------------------------------------------------------------------------------------------------------------
BARINGTON
COMPANIES EQUITY PARTNERS, L.P.
(Name
of
Person(s) Filing Proxy Statement if Other Than the Registrant)
_____________________________________________________________________________
Payment
of Filing Fee (Check the appropriate box):
[X] No
fee required.
[ ] Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title
of
each class of securities to which transaction applies:
(2) Aggregate
number of securities to which transaction applies:
(3) Per
unit
price or other underlying value of transaction computed pursuant to Exchange
Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state
how it was determined):
(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee
paid:
[ ] Fee
paid previously with preliminary materials.
[ ] Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount
Previously Paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
Barington
Capital Group, L.P.
888
Seventh Avenue
New
York, New York 10019
September
17, 2007
John
B.
Gerlach, Jr.
Chairman
of the Board, Chief Executive
Officer
and President
Lancaster
Colony Corporation
37
West
Broad Street
Columbus,
Ohio 43215
Dear
Mr.
Gerlach:
Barington
Capital Group, L.P. invested in Lancaster Colony Corporation because we are
convinced that the Company is undervalued and has the potential to deliver
considerably stronger returns to shareholders. It is our belief that
the Company has been needlessly suffering as a result of the failure of its
management team to promptly initiate the cost cuts, strategic divestitures
and
improvements to the Company’s capital and corporate structure that we
recommended to you almost a year and a half ago.
As
a
significant shareholder of the Company, we find Lancaster’s disappointing share
price performance, decreasing profitably and poor record in the area of
corporate governance to be entirely unacceptable and eroding value for the
public shareholders of the Company. While we have called on the
Lancaster Board to take action, we lack confidence in the ability (or desire)
of
the Board to ensure that the interests of the Company’s public shareholders are
addressed. Even a cursory review of the Board reveals the presence of
longstanding business and social ties between a number of the directors and
the
Gerlach family. We intend to bring such information to the attention
of the Company’s shareholders, which we believe seriously calls into question
the independence of these directors from you.
The
Lancaster Board also suffers from having had little director
turnover. The Company does not maintain term limits for directors and
is in the practice of waiving its policy that no director may stand for
reelection after attaining the age of 75. As a result, the average
tenure of the Company’s directors is over 14.5 years, with five of the Company’s
nine directors having served on the Board for 16 years or more. It is
therefore not a surprise to us that the Company has received a “High” governance
risk assessment rating from The Corporate Library this year. As
stated in The Corporate Library’s March 2007 report on the
Company:
“A
CEO/Chairman who is also part of the family that dominates Lancaster Colony,
combined with the presence of a number of aging
and
long-tenured directors, are clear indicators of potential weaknesses in the
areas of management entrenchment and excessive
management/board
alignment…”
We
lack
faith in the ability of the Board to improve shareholder value based on its
track record to date. Seven of the Company’s nine directors have
presided over the Company for almost nine years. Over this time
period, the Company has significantly underperformed the market, as indicated
in
the table below:
| |
Share
Price Performance Over Nine Year Tenure of Board
|
|
|
(11/16/98
- 9/14/07)
|
|
Lancaster
Colony Corporation
|
26.5%
|
|
Russell
2000 Index
|
100.7%
|
|
Standard
& Poor’s Midcap 400 Index
|
148.7%
|
It
is
difficult for us to believe that the Company’s current directors are capable of
maximizing shareholder value in light of the fact that they have clearly failed
to do so for such a long period of time.
Finally,
it is our belief that the Lancaster Board has to be held accountable for the
Company’s poor record in the area of corporate governance. According
to Institutional Shareholder Services, over 72% of the companies in the Standard
& Poor’s 400 Index currently outperform the Company in the area of corporate
governance. The Board has the ability to cause the Company to change
its corporate governance landscape if it desired. It appears,
however, that the Board is content with the numerous defensive measures that
Lancaster has in place that not only facilitate the entrenchment of the
Company’s directors and executive officers but also minimize the influence that
shareholders (other than yourself) are capable of having on the Company they
own.1
In
light
of the foregoing, we lack confidence in the Board’s ability to improve
shareholder value and faithfully uphold the interests of the Company’s public
shareholders. We therefore intend to nominate alternative candidates
for election to the Board at the Company’s 2007 Annual Meeting of
Shareholders.
Sincerely,
/s/
James
A. Mitarotonda
James
A.
Mitarotonda
------------------------------------
1 We
summarized a number of
these defensive measures in our June 22, 2007 letter to the
Board. Such measures include (a) a staggered board of directors, (b)
a “poison pill” rights plan with a 15% trigger that was adopted without
shareholder approval, (c) the ability of the Board to add directors without
shareholder approval, and (d) provisions in the Company’s articles of
incorporation that (i) deny shareholders the right to cumulate their votes
in
the election of directors, (ii) require that shareholders obtain Board
or
shareholder approval prior to acquiring 20%, 33% and 50% ownership thresholds
in
the Company and (iii) establish an 80% supermajority voting requirement
to
approve certain business combinations, effectively giving the Gerlach family,
which owns approximately 26% of the Company’s common stock, the ability to block
such transactions.
* * * * *
Barington
Companies Equity Partners, L.P. (“Barington”) intends to make a preliminary
filing with the Securities and Exchange Commission (the “SEC”) of a proxy
statement and an accompanying WHITE proxy card to be used to solicit votes
for
the election of its nominees at the 2007 Annual Meeting of Shareholders of
Lancaster Colony Corporation, an Ohio corporation (the “Company”).
The
following persons, which have joined with Barington in filing a Statement on
Schedule 13D with respect to the Company’s common stock, are anticipated to be,
or may be deemed to be, participants in any such proxy
solicitation: Barington Companies Equity Partners, L.P., Barington
Companies Investors, LLC, Barington Investments, L.P., Barington Companies
Advisors, LLC, Benchmark Opportunitas Fund plc, Barington Offshore Advisors,
LLC, Barington Companies Offshore Fund, Ltd., Barington Offshore Advisors II,
LLC, Barington Capital Group, L.P., LNA Capital Corp., James A. Mitarotonda,
RJG
Capital Partners, L.P., RJG Capital Management, LLC, Ronald Gross, D.B. Zwirn
Special Opportunities Fund, L.P., D.B. Zwirn Special Opportunities Fund, Ltd.,
HCM/Z Special Opportunities LLC, D.B. Zwirn & Co., L.P.,
DBZ
GP, LLC, Zwirn Holdings, LLC and Daniel B. Zwirn.
BARINGTON
STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ SUCH PROXY STATEMENT
WHEN IT IS AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION, INCLUDING
INFORMATION RELATING TO THE PARTICIPANTS IN THE PROXY
SOLICITATION. SUCH PROXY STATEMENT, WHEN FILED, AND ANY OTHER
RELEVANT DOCUMENTS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT
HTTP://WWW.SEC.GOV. IN ADDITION, SHAREHOLDERS MAY ALSO OBTAIN A COPY
OF THE PROXY STATEMENT, WHEN FILED, WITHOUT CHARGE, BY CONTACTING BARINGTON’S
PROXY SOLICITOR, MACKENZIE PARTNERS, INC., AT ITS TOLL-FREE NUMBER: (800)
322-2885 OR PROXY@MACKENZIEPARTNERS.COM.
INFORMATION
REGARDING THE DIRECT OR INDIRECT INTERESTS OF CERTAIN PERSONS ANTICIPATED TO
BE,
OR WHO MAY BE DEEMED TO BE, PARTICIPANTS IN SUCH POTENTIAL PROXY SOLICITATION
IS
AS FOLLOWS:
As
of
September 14, 2007, Barington Companies Equity Partners, L.P. beneficially
owns
an aggregate of 490,416 shares of Common Stock, representing approximately
1.62%
of the shares of Common Stock presently outstanding based upon the 30,361,000
shares of Common Stock reported by the Company to be issued and outstanding
as
of August 20, 2007 in its Form 10-K/A filed with the SEC on August 31, 2007
(the
“Issued and Outstanding Shares”).
As
of
September 14, 2007, Barington Investments, L.P. beneficially owns 225,992 shares
of Common Stock, representing approximately 0.74% of the Issued and Outstanding
Shares. As of September 14, 2007, Benchmark Opportunitas Fund plc
beneficially owns 36,166 shares of Common Stock, representing approximately
0.12% of the Issued and Outstanding Shares. As of September 14, 2007,
Barington Companies Offshore Fund, Ltd. beneficially owns 825,446 shares of
Common Stock, representing approximately 2.72% of the Issued and
Outstanding
Shares. As
the general partner of Barington Companies Equity Partners, L.P., Barington
Companies Investors, LLC may be deemed to beneficially own the 490,416 shares
of
Common Stock beneficially owned by Barington Companies Equity Partners, L.P.,
representing approximately 1.62% of the Issued and Outstanding
Shares. As the general partner of Barington Investments, L.P.,
Barington Companies Advisors, LLC may be deemed to beneficially own the 225,992
shares of Common Stock beneficially owned by Barington Investments, L.P.,
representing approximately 0.74% of the Issued and Outstanding
Shares. As the investment advisor to Benchmark Opportunitas Fund plc,
Barington Offshore Advisors, LLC may be deemed to beneficially own the 36,166
shares of Common Stock beneficially owned by Benchmark Opportunitas Fund plc,
representing approximately 0.12% of the Issued and Outstanding
Shares. As the investment advisor to Barington Companies Offshore
Fund, Ltd., Barington Offshore Advisors II, LLC may be deemed to beneficially
own the 825,446 shares of Common Stock beneficially owned by Barington Companies
Offshore Fund, Ltd., representing approximately 2.72% of the Issued and
Outstanding Shares. As the majority member of Barington Companies
Investors, LLC, Barington Companies Advisors, LLC, Barington Offshore Advisors,
LLC and Barington Offshore Advisors II, LLC, Barington Capital Group, L.P.
may
be deemed to beneficially own the 490,416 shares of Common Stock beneficially
owned by Barington Companies Equity Partners, L.P., the 225,992 shares of Common
Stock beneficially owned by Barington Investments, L.P., the 36,166 shares
of
Common Stock beneficially owned by Benchmark Opportunitas Fund plc and the
825,446 shares of Common Stock beneficially owned by Barington Companies
Offshore Fund, Ltd., constituting an aggregate of 1,578,020 shares, representing
approximately 5.20% of the Issued and Outstanding Shares. As the
general partner of Barington Capital Group, L.P., LNA Capital Corp. may be
deemed to beneficially own the 490,416 shares of Common Stock beneficially
owned
by Barington Companies Equity Partners, L.P., the 225,992 shares of Common
Stock
beneficially owned by Barington Investments, L.P., the 36,166 shares of Common
Stock beneficially owned by Benchmark Opportunitas Fund plc and the 825,446
shares of Common Stock beneficially owned by Barington Companies Offshore Fund,
Ltd., constituting an aggregate of 1,578,020 shares of Common Stock,
representing approximately 5.20% of the Issued and Outstanding Shares. As the
sole stockholder and director of LNA Capital Corp., James A. Mitarotonda may
be
deemed to beneficially own the 490,416 shares of Common Stock beneficially
owned
by Barington Companies Equity Partners, L.P., the 225,992 shares of Common
Stock
beneficially owned by Barington Investments, L.P., the 36,166 shares of Common
Stock beneficially owned by Benchmark Opportunitas Fund plc and the 825,446
shares of Common Stock beneficially owned by Barington Companies Offshore Fund,
Ltd., constituting an aggregate of 1,578,020 shares of Common Stock,
representing approximately 5.20% of the Issued and Outstanding
Shares. Mr. Mitarotonda has sole voting and dispositive power
with respect to the 490,416 shares of Common Stock beneficially owned by
Barington Companies Equity Partners, L.P., the 225,992 shares of Common Stock
beneficially owned by Barington Investments, L.P., the 36,166 shares of Common
Stock beneficially owned by Benchmark Opportunitas Fund plc and the 825,446
shares of Common Stock beneficially owned by Barington Companies Offshore Fund,
Ltd. Mr. Mitarotonda disclaims beneficial ownership of any such
shares except to the extent of his pecuniary interest therein.
As
of September 14, 2007, RJG Capital
Partners, L.P. beneficially owns 6,300 shares of Common Stock, representing
approximately 0.02% of the Issued and Outstanding Shares. As the
general partner of RJG Capital Partners, L.P., RJG Capital Management, LLC
may
be deemed to
beneficially
own the 6,300 shares beneficially owned by RJG Capital Partners, L.P.,
representing approximately 0.02% of the Issued and Outstanding
Shares. As the managing member of RJG Capital Management, LLC, which
in turn is the general partner of RJG Capital Partners, L.P., Ronald J. Gross
may be deemed to beneficially own the 6,300 shares beneficially owned by RJG
Capital Partners, L.P., representing approximately 0.02% of the Issued and
Outstanding Shares. Mr. Gross has sole voting and dispositive power
with respect to the 6,300 shares beneficially owned by RJG Capital Partners,
L.P. by virtue of his authority to vote and dispose of such
shares. Mr. Gross disclaims beneficial ownership of any such shares
except to the extent of his pecuniary interest therein.
As
of
September 14, 2007, D.B. Zwirn Special Opportunities Fund, L.P. beneficially
owns 34,592 shares of Common Stock, representing approximately 0.11% of the
Issued and Outstanding Shares. As of September 14, 2007, D.B. Zwirn
Special Opportunities Fund, Ltd. beneficially owns 67,501 shares of Common
Stock, representing approximately 0.22% of the Issued and Outstanding
Shares. As of September 14, 2007, HCM/Z Special Opportunities LLC
beneficially owns 7,908 shares of Common Stock, representing approximately
0.03%
of the Issued and Outstanding Shares.
As
the
manager of D.B. Zwirn Special Opportunities Fund, L.P., D.B. Zwirn Special
Opportunities Fund, Ltd. and HCM/Z Special Opportunities LLC, D.B. Zwirn &
Co., L.P. may be deemed to beneficially own the 34,592 shares of Common Stock
beneficially owned by D.B. Zwirn Special Opportunities Fund, L.P., the 67,501
shares of Common Stock beneficially owned by D.B. Zwirn Special Opportunities
Fund, Ltd. and the 7,908 shares of Common Stock beneficially owned by HCM/Z
Special Opportunities LLC, constituting an aggregate of 110,001 shares,
representing approximately 0.36% of the Issued and Outstanding
Shares. As general partner of D.B. Zwirn & Co., L.P., DBZ GP, LLC
may be deemed to beneficially own the 34,592 shares of Common Stock beneficially
owned by D.B. Zwirn Special Opportunities Fund, L.P., the 67,501 shares of
Common Stock beneficially owned by D.B. Zwirn Special Opportunities Fund, Ltd.
and the 7,908 shares of Common Stock beneficially owned by HCM/Z Special
Opportunities LLC, constituting an aggregate of 110,001 shares, representing
approximately 0.36% of the Issued and Outstanding Shares. As the
managing member of DBZ GP, LLC, Zwirn Holdings, LLC may be deemed to
beneficially own the 34,592 shares of Common Stock beneficially owned by D.B.
Zwirn Special Opportunities Fund, L.P., the 67,501 shares of Common Stock
beneficially owned by D.B. Zwirn Special Opportunities Fund, Ltd. and the 7,908
shares of Common Stock beneficially owned by HCM/Z Special Opportunities LLC,
constituting an aggregate of 110,001 shares, representing approximately 0.36%
of
the Issued and Outstanding Shares. As the managing member of Zwirn
Holdings, LLC, Daniel B. Zwirn may be deemed to beneficially own the 34,592
shares of Common Stock beneficially owned by D.B. Zwirn Special Opportunities
Fund, L.P., the 67,501 shares of Common Stock beneficially owned by D.B. Zwirn
Special Opportunities Fund, Ltd. and the 7,908 shares of Common Stock
beneficially owned by HCM/Z Special Opportunities LLC, constituting an aggregate
of 110,001 shares, representing approximately 0.36% of the Issued and
Outstanding Shares. Mr. Zwirn has sole voting and dispositive power
with respect to the 34,592 shares of Common Stock beneficially owned by D.B.
Zwirn Special Opportunities Fund, L.P., the 67,501 shares of Common Stock
beneficially owned by D.B. Zwirn Special Opportunities Fund, Ltd. and the 7,908
shares of Common Stock beneficially owned by HCM/Z Special Opportunities
LLC. Mr.
Zwirn
disclaims beneficial ownership of such shares except to the extent of his
pecuniary interest therein.
The
persons listed above do not believe that certain of the foregoing information
is
called for by the Items of Schedule 14A and are disclosing it for supplemental
informational purposes only. Information with respect to each of the
persons is given solely by such person and no person shall have responsibility
for the accuracy or completeness of information supplied by another
person.
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