-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T5oeQQiPnMuqyRbJKEiBHfkfSgC/NEOxuL2LSddomNHQ4c+fIwDfYLWatPAJ7wZr wpOiVd0687J/mmo4+LGknQ== 0000950128-03-000579.txt : 20030424 0000950128-03-000579.hdr.sgml : 20030424 20030424153451 ACCESSION NUMBER: 0000950128-03-000579 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20030424 GROUP MEMBERS: CHAS A. NEAL & COMPANY GROUP MEMBERS: DONALD A. SMITH GROUP MEMBERS: ROGER H. CLAYPOOLE GROUP MEMBERS: SNYDER ASSOCIATED COMPANIES, INC. GROUP MEMBERS: VIRGIL JURGENSMEYER FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ZENSEN DENNIS C CENTRAL INDEX KEY: 0000939421 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 828 S PIKE ROAD CITY: SAVER STATE: PA ZIP: 16055 BUSINESS PHONE: 4122953910 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SYLVAN INC CENTRAL INDEX KEY: 0000861291 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 251603408 STATE OF INCORPORATION: NV FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-41138 FILM NUMBER: 03662307 BUSINESS ADDRESS: STREET 1: 333 MAIN STREET STREET 2: P.O. BOX 249 CITY: SAXONBURG STATE: PA ZIP: 16056-0249 BUSINESS PHONE: 724-352-75 MAIL ADDRESS: STREET 1: 333 MAIN STREET STREET 2: P.O. BOX 249 CITY: SAXONBURG STATE: PA ZIP: 16056-0249 FORMER COMPANY: FORMER CONFORMED NAME: SYLVAN FOODS HOLDINGS INC DATE OF NAME CHANGE: 19930328 SC 13D 1 j0053001sc13d.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 SYLVAN INC. (Name of Issuer) Common Stock, $.001 par value (Title of Class of Securities) 871371100 (CUSIP Number) Roger H. Claypoole One Moonlight Dr. Worthington, PA 16262 724-297-5491 (Ext. 201) (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Daniel L. Wessels Cohen & Grigsby, P.C. 11 Stanwix Street Pittsburgh, PA 15222 (412) 297-4900 April 15, 2003 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]. SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 2 of 18 Pages - ------------------------- -------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Dennis C. Zensen - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [X] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS PF - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 30,000 OWNED BY -------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING 694,128 PERSON WITH -------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 30,000 -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 694,128 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 724,128 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.0% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 3 of 18 Pages - ------------------------- -------------------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Donald A. Smith - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [X] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS N/A - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 40,334 OWNED BY -------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING - 0 - PERSON WITH -------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 40,334 -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 40,334 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.8 % - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 4 of 18 Pages - ------------------------- -------------------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Virgil Jurgensmeyer - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [X] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS PF - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 30,000 BENEFICIALLY OWNED BY -------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING - 0 - PERSON WITH -------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 30,000 -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 30,000 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.6% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 5 of 18 Pages - ------------------------- -------------------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Roger H. Claypoole - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [X] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS N/A - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES - 0 - BENEFICIALLY OWNED BY -------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING - 0 - PERSON WITH -------------------------------------------------------- 9 SOLE DISPOSITIVE POWER - 0 - -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 - - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 6 of 18 Pages - ------------------------- -------------------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Snyder Associated Companies, Inc. - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [X] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS N/A - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Pennsylvania - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES - 0 - BENEFICIALLY OWNED BY -------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING - 0 - PERSON WITH -------------------------------------------------------- 9 SOLE DISPOSITIVE POWER - 0 - -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 - - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 7 of 18 Pages - ------------------------- -------------------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Chas. A. Neal & Company - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [X] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS N/A - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Oklahoma - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES - 0 - BENEFICIALLY OWNED BY -------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING - 0 - PERSON WITH -------------------------------------------------------- 9 SOLE DISPOSITIVE POWER - 0 - -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 - - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) - 0 - - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 8 of 18 Pages - ------------------------- -------------------------- This Schedule 13D (the "STATEMENT") is being filed to report the formation of a group for the purpose of acquiring, holding, voting or disposing of securities of Sylvan Inc., a Nevada corporation (the "ISSUER"), as described in Item 4 below. With respect to Dennis C. Zensen, this Statement amends and supersedes his Amendment No. 10 to Schedule 13G filed with respect to the Issuer on February 18, 2003. For the other Reporting Persons (as defined in Item 2 below), this Statement represents their initial filing on Schedule 13D or Schedule 13G with respect to the Issuer. Until the group is disbanded or any of the Reporting Persons determines that they are no longer required to file joint Schedules 13D with other members of the group, each of the Reporting Persons intends to continue to fulfill such Reporting Person's Schedule 13D filing obligations by filing amendments to this joint Schedule 13D. ITEM 1. SECURITY AND ISSUER. This Statement relates to shares of the Issuer's common stock, $0.001 par value per share (the "COMMON STOCK"). The principal executive offices of the Issuer are located at 333 Main Street, P.O. Box 249, Saxonburg, Pennsylvania, 16056. ITEM 2. IDENTITY AND BACKGROUND. This Statement is being filed jointly by Dennis C. Zensen, Virgil Jurgensmeyer, Roger H. Claypoole, Donald A. Smith, the Snyder Associated Companies, Inc. and Chas. A. Neal & Company. Each of the foregoing is referred to as a "REPORTING PERSON" and collectively as the "REPORTING PERSONS." The agreement among the Reporting Persons relating to the joint filing of this Statement is attached as Exhibit 99.1 to this Statement. Information with respect to each of the Reporting Persons and any Related Person (as defined below) of such Reporting Person is given solely by such Reporting Person, and no Reporting Person assumes responsibility for the accuracy or completeness of the information given by or on behalf of any another Reporting Person or of any Related Person of such other Reporting Person. By their signatures on this Statement, each of the Reporting Persons agrees that this Statement is filed on behalf of such Reporting Persons. The Reporting Persons constitute a "group" for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). However, the Reporting Persons expressly disclaim that they have agreed to act as a group other than as described in this Statement. The filing of this Statement shall not be construed as an admission that any of the Reporting Persons is, for purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of the shares of the Issuer covered by this Statement. It is anticipated that additional individuals or entities may become Reporting Persons. Dennis C. Zensen is the chairman of the board, president, and chief executive officer of the Issuer. The Issuer is a producer and distributor of products for the mushroom industry. Mr. Zensen's business address, and the principal business address of the Issuer, is 333 Main Street, P.O. Box 249, Saxonburg, Pennsylvania, 16056. Donald A. Smith is the chief financial officer of the Issuer. The Issuer is a producer and distributor of products for the mushroom industry. Mr. Smith's business address, and the principal business address of the Issuer, is 333 Main Street, P.O. Box 249, Saxonburg, Pennsylvania, 16056. SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 9 of 18 Pages - ------------------------- -------------------------- Virgil Jurgensmeyer is a director of the Issuer. Mr. Jurgensmeyer is also the chairman of the board of J-M Farms, Inc., a grower and marketer of fresh mushrooms. Mr. Jurgensmeyer's business address, and the principal business address of J-M Farms, Inc., is 7001 South 580 Rd, Miami, Oklahoma, 74354. Roger H. Claypoole is the president of WWF Mushrooms, Inc., which is the general partner of Creekside Mushrooms, Ltd. Creekside Mushrooms, Ltd., is engaged in the growing and marketing of mushrooms. Mr. Claypoole's business address, and the principal business address of WWF Mushrooms, Inc., is One Moonlight Drive, Worthington, PA, 16262 The Snyder Associated Companies, Inc. is a Pennsylvania corporation that acts as a holding company for its various subsidiaries, which are engaged in the mining, manufacturing, and oil and gas industries. The address of the Snyder Associated Companies' principal business, and of its principal office, is P.O. Box 1022, One Glade Park East, Kittanning, PA 16201. The name, business address, present principal occupation and citizenship of each of the directors, executive officers and controlling shareholders of the Snyder Associated Companies (collectively, the "SNYDER RELATED PERSONS") is set forth on Annex A to this Statement. Chas. A. Neal & Company, is an Oklahoma corporation that invests in oil and gas exploration and production, marketable securities and private equities. Its principal business address, and its principal office address, is P.O. Box 269 Miami, Oklahoma. The name, business address, present principal occupation and citizenship of each of the directors, executive officers and controlling shareholders of Chas. A. Neal & Company (collectively, the "NEAL RELATED PERSONS") is set forth on Annex B to this Statement. The Snyder Related Persons and the Neal Related Persons are sometimes collectively referred to in this Statement as the "RELATED PERSONS." During the last five years, none of the Reporting Persons, and to the best knowledge of the Reporting Persons, none of the Related Persons, has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Each of Messrs. Zensen, Jurgensmeyer, Smith and Claypoole are citizens of the United States of America. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. As noted in Item 4 below, the Reporting Persons have formed a group for purposes of Section 13(d) of the Exchange Act. Upon its formation, such group was deemed to have "acquired" the shares of Common Stock held by each of its members. No consideration was paid by the Reporting Persons, as a group, in connection with such deemed acquisition. Below is information as to the shares of Common Stock held by each of the Reporting Persons and, to the knowledge of the Reporting Persons, the Related Persons. Dennis C. Zensen beneficially owns 724,128 shares of Common Stock. He acquired 694,128 of these shares at various times, including in connection with the Issuer's organization in 1989, for an SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 10 of 18 Pages - ------------------------- -------------------------- aggregate consideration of $25,625, using personal funds. Mr. Zensen holds currently exercisable options to acquire an additional 30,000 shares of Common Stock, which options were granted to him by the Issuer in connection with his services as a executive officer and director of the Issuer. Virgil Jurgensmeyer beneficially owns 20,000 shares of Common Stock, which he acquired for $218,850 using personal funds. Mr. Jurgensmeyer also holds options to acquire an additional 10,000 shares of Common Stock, which options were granted to him by the Issuer in connection with his service as a director of the Issuer. Donald A. Smith holds currently exercisable options to acquire 40,334 shares of Common Stock, which options were granted to him by the Issuer in connection with his services as an officer and employee of the Issuer. Mark A. Snyder, one of the Snyder Related Persons, beneficially owns 2,000 shares of Common Stock, of which (i) 1,000 shares are held directly by Mark A. Snyder and were acquired for $9,325.98 using personal funds, and (ii) the remaining 1,000 shares are held by the Elmer A. & Annabelle C. Snyder Family Limited Partnership, a Pennsylvania limited partnership of which Mark A. Snyder is the sole general partner. The shares held by the family limited partnership were gifted to it from a trust controlled by Elmer A. Snyder (another of the Snyder Related Persons) and his wife, Annabelle C. Snyder. The trust had acquired these shares for $8,981.18 using personal funds. Mark Snyder is a director, executive officer and controlling shareholder of the Snyder Associated Companies. None of the other Reporting Persons nor, to the knowledge of the Reporting Persons, any of the other Related Persons beneficially owns any shares of Common Stock as of the date hereof. The information contained in Item 4 below, to the extent it relates to the anticipated source of funds to be used in connection with the transactions described in such Item 4, if consummated, is incorporated herein by reference. ITEM 4. PURPOSE OF TRANSACTION. On April 15, 2003, the Reporting Persons reached an agreement in principle to act together for the purposes described in this Item 4, as a result of which the Reporting Persons formed a "group," within the meaning of Section 13(d) of the Exchange Act and Rule 13d-5(b)(1) thereunder. This arrangement is not the subject of a binding agreement among the Reporting Persons. The formation of a group is deemed an acquisition by the group of the shares held individually by the group's members. The filing of this Schedule 13D is necessitated because one of the Reporting Persons, Dennis C. Zensen, currently has beneficial ownership of more than 5% of the outstanding Common Stock of the Issuer. On April 15, 2003, the Reporting Persons submitted to the board of directors of the Issuer a nonbinding indication of interest to pursue a management-led cash acquisition of the Issuer at a price of $11.00 per outstanding share. A copy of this nonbinding indication of interest is attached to this Statement as Exhibit 99.2 (the "PROPOSAL"). The Proposal contemplates that the transaction would occur pursuant to an agreement and plan of merger to be negotiated and entered into between the Issuer and a corporation to be formed by the Reporting Persons ("NEWCO"), whereby the Issuer would be merged with or into Newco. The Proposal also contemplates that the Reporting Persons would seek to have certain of the Issuer's significant shareholders enter into voting agreements with Newco simultaneously with the execution of the merger agreement, whereby such shareholders would (A) agree to vote their shares of Common Stock in favor of the merger; (B) grant an irrevocable proxy to Newco to vote the shares in SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 11 of 18 Pages - ------------------------- -------------------------- favor of the merger; and (C) agree not to sell or otherwise dispose of their shares of Common Stock. In the event that these shareholders agree to enter into such voting agreements, Newco and/or the Reporting Persons might be deemed to acquire shared voting power over such shares and, therefore, to beneficially own such shares. The Reporting Persons also have contacted certain key management employees of the Issuer to determine if they are interested in contributing to Newco certain shares and options currently held by them in exchange for an ownership interest in Newco. At some point in the future, if these discussions develop, such key management employees may also be deemed part of the group described in this Schedule 13D. The merger contemplated by the Proposal is subject to a number of important conditions, including: (i) acceptance and approval of the Proposal by a special committee of the Issuer's board of directors; (ii) the execution of definitive merger and financing agreements; (iii) the receipt of satisfactory financing for the transaction; (iv) receipt of all necessary regulatory approvals, including any necessary approvals under the Hart-Scott Rodino Act; and (v) shareholder approval. Currently, the Reporting Persons anticipate that the proposed merger would be financed by (i) approximately $50 million in senior bank debt (to be provided by a third-party lender or lenders); (ii) approximately $15 million of senior subordinated debt (to be provided by one or more of the Reporting Persons) and (iii) the balance being provided in the form of equity contributions to Newco and/or the contribution to Newco of existing shares and options in the Issuer (which shares would not be cashed out in the merger). In addition, the Reporting Persons might use some of the Issuer's existing cash to reduce the amount of senior bank debt. The Reporting Persons, on behalf of Newco, are currently in the process of negotiating the terms of debt financing with various potential senior bank lenders. The senior subordinated debt is also being negotiated currently. As of the date of this Statement, the Issuer has not approved the Proposal, and none of the other conditions to the completion of the proposed transaction has been satisfied. Furthermore, the Reporting Persons expect to evaluate on an ongoing basis the Issuer's financial condition, business, operations and prospects, market price of the Common Stock, conditions in the securities markets generally, general economic and industry conditions and other factors. Accordingly, the Reporting Persons have reserved the right to modify or withdraw the Proposal, and hereby reserve the right to change their plans and intentions referred to in this Item 4 at any time, as they deem appropriate. The foregoing summary of the Proposal does not purport to be complete and is qualified in its entirety by reference to the complete text of the Proposal attached as an exhibit to this Statement. It is the understanding of the Reporting Persons that the Issuer has formed a special committee of its board of directors to consider the proposed transaction, and that the special committee has preliminarily engaged an independent financial advisor and legal counsel to provide advice in connection with such evaluation. SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 12 of 18 Pages - ------------------------- -------------------------- IMPORTANT INFORMATION: THE PROPOSAL BY THE REPORTING PERSONS IS PRELIMINARY. THE PROPOSAL MIGHT NOT BE ACCEPTED OR MIGHT BE ACCEPTED ONLY IN A MODIFIED FORM. A MERGER AGREEMENT HAS NOT BEEN EXECUTED OR APPROVED BY THE ISSUER, NOR HAVE ANY LOCK-UP AGREEMENTS BEEN NEGOTIATED OR ENTERED INTO WITH ANY SIGNIFICANT SHAREHOLDERS OF THE ISSUER. THERE CAN BE NO ASSURANCE THAT THE MERGER WILL BE CONSUMMATED OR, IF CONSUMMATED, AS TO THE TIMING THEREOF. IF A DEFINITIVE AGREEMENT CONCERNING A MERGER IS SIGNED BY NEWCO AND THE ISSUER AND A SHAREHOLDERS MEETING IS SCHEDULED, EACH SECURITY HOLDER OF THE ISSUER SHOULD READ THE ISSUER'S PROXY STATEMENT RELATING TO SUCH MEETING WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER. ONCE A PROXY FILING IS MADE, SECURITY HOLDERS OF THE ISSUER CAN OBTAIN THE PROXY STATEMENT AND OTHER DOCUMENTS THAT ARE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR FREE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT WWW.SEC.GOV. If the Proposal is accepted by the Issuer, and the proposed merger successfully negotiated and consummated, the Reporting Persons contemplate that there would be certain changes with respect to the Issuer for which disclosure is required under Item 4 of Schedule 13D, including the following: o The Issuer would become a privately held corporation, and the Common Stock would be delisted from trading on the NASDAQ National Market and any other exchange or inter-dealer quotations system; o The Common Stock would become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, and such registration would be terminated; o There may be changes in the present board of directors of the Issuer, including potential changes to the number or term of directors; and o There may be changes in the Issuer's articles of incorporation and bylaws. However, at the present time, the parties have not negotiated or proposed specific details on these matters. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of shares of Common Stock at prices that would make the purchase of such additional shares desirable, one or more of the Reporting Persons may endeavor to purchase additional shares of Common Stock, or to sell shares of Common Stock, through, among other things, the purchase or sale of shares of Common Stock on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons, or any of them, may deem advisable. Except as set forth in this Item 4, the Reporting Persons, and to the best knowledge of the Reporting Persons, the Related Persons, have no other plans or intentions that relate to or would result in the events set forth in Item 4 of the instructions to Schedule 13D. SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 13 of 18 Pages - ------------------------- -------------------------- ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. As a result of the joint actions of the Reporting Persons described in Item 4, the Reporting Persons formed a group for purposes of Section 13(d)(3) and Rule 13d-5(b)(1) of the Exchange Act. Accordingly, in the aggregate, the Reporting Persons may be deemed to own beneficially (and may be deemed to have shared voting and dispositive power over) 794,462 shares of Common Stock, constituting approximately 15.2% of the outstanding shares of Common Stock, based upon the 5,131,131 shares outstanding on February 28, 2003, as set forth in the Issuer's most recent report on Form 10-K for the period ended December 29, 2002. In addition, Mark A. Snyder, a Snyder Related Person, beneficially owns 2,000 shares of Common Stock which, when taken together with the 794,462 shares of Common Stock beneficially owned by the Reporting Persons, would represent 796,462 shares of Common Stock, or approximately 15.3% of the outstanding shares of Common Stock, based upon the 5,131,131 shares outstanding on February 28, 2003. The filing of this Statement and any future amendment by the Reporting Persons, and the inclusion of information herein and therein, shall not be considered an admission that any Reporting Person, or any of the Related Persons, are the beneficial owners of any shares of Common Stock in which such persons do not have a pecuniary interest. (a) The following table sets forth certain information with respect to the shares of Common Stock beneficially owned directly by the Reporting Persons and, to the knowledge of the Reporting Persons, the Related Persons, as well as the percentage of outstanding Common Stock that such shares represent, based upon the 5,131,131 shares of Common Stock outstanding on February 28, 2003, as set forth in the Issuer's most recent report on Form 10-K for the period ended December 29, 2002.
- ----------------------------------------------------------------------------------------------------- NAME NUMBER OF SHARES APPROXIMATE PERCENTAGE OF OUTSTANDING SHARES - ----------------------------------------------------------------------------------------------------- Dennis C. Zensen 724,128(1) 14.0% - ----------------------------------------------------------------------------------------------------- Virgil Jurgensmeyer 30,000(2) 0.6% - ----------------------------------------------------------------------------------------------------- Roger H. Claypoole 0 0.0% - ----------------------------------------------------------------------------------------------------- Donald A. Smith 40,334(3) 0.8% - ----------------------------------------------------------------------------------------------------- Snyder Associated Companies, Inc. 0 0.0% - ----------------------------------------------------------------------------------------------------- Snyder Related Persons 2,000(4) 0.0% - ----------------------------------------------------------------------------------------------------- Chas. A. Neal & Company 0 0.0% - ----------------------------------------------------------------------------------------------------- Neal Related Persons 0 0.0% - ----------------------------------------------------------------------------------------------------- TOTAL: 796,462 15.3% - -----------------------------------------------------------------------------------------------------
(1) Of the 724,128 shares of Common Stock beneficially owned by Mr. Zensen, 694,128 shares are owned as joint tenant with his wife, Carol A. Zensen. The remaining 30,000 consist of shares of Common Stock that are subject to options exercisable within 60 days of the date hereof. Mr. Zensen's Amendment No. 10 to Schedule 13G filed with the Securities and Exchange Commission on February 20, 2003 reported that Mr. Zensen had sole voting and dispositional power over 196,518 of the 694,128 shares of Common Stock that he beneficially owned at such time. On December 4, 2002, Mr. Zensen changed the nature of his ownership of such 196,518 shares from sole ownership to ownership as joint tenant with Ms. Zensen . Ms. Zensen is a citizen of the United States of America. During the last five years, she has not been convicted in a criminal proceeding or a party to a civil proceeding, in each case of the type described in Item 2 above. The address of Ms. Zensen's principal residence is 299 Rosehill Drive East, Tallahassee, Florida, 32312. (2) Of the 30,000 shares of Common Stock beneficially owned by Mr. Jurgensmeyer, 10,000 consist of shares of Common Stock that are subject to options exercisable within 60 days of the date hereof. (3) These consist of shares of Common Stock that are subject to options exercisable within 60 days of the date hereof. SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 14 of 18 Pages - ------------------------- -------------------------- (4) Of these 2,000 shares of Common Stock, 1,000 are held directly by Mark A. Snyder, who is an executive officer, director and controlling shareholder of the Snyder Associated Companies. The remaining 1,000 shares are held by a family limited partnership, of which Mark Snyder is the general partner. (b) The following table sets forth, with respect to each of the Reporting Persons and Related Persons who beneficially owns any shares of Common Stock (as set forth in subsection (a) above), the number of shares of Common Stock as to which such person has the sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or direct the disposition, or shared power to dispose or direct the disposition.
- ---------------------------------------------------------------------------------------------------- NAME SOLE VOTING SHARED VOTING SOLE POWER SHARED POWER POWER POWER TO DISPOSE TO DISPOSE - ---------------------------------------------------------------------------------------------------- Dennis C. Zensen 30,000 694,128(1) 30,000 694,128(1) - ---------------------------------------------------------------------------------------------------- Virgil Jurgensmeyer 30,000 - 0 - 30,000 - 0 - - ---------------------------------------------------------------------------------------------------- Donald A. Smith 40,334 - 0 - 40,334 - 0 - - ---------------------------------------------------------------------------------------------------- Mark A. Snyder 2,000 - 0 - 2,000 - 0 - - ----------------------------------------------------------------------------------------------------
(1) Mr. Zensen shares voting and dispositive power over these shares with his wife, Carol A. Zensen. (c) There have been no transactions in the Common Stock during the past 60 days by any of the Reporting Persons or, to the best knowledge of the Reporting Persons, any Related Person. (d) The Elmer A. & Annabelle C. Snyder Family Limited Partnership, a Pennsylvania limited partnership of which Mark A. Snyder is the sole general partner, would have the right to receive dividends from, and proceeds of the sale of, the 1,000 shares of Common Stock owned by it (and beneficially owned by Mark A Sndyer by virtue of his role as general partner), as described above in Item 5. No other person other than the Reporting Persons or the Related Persons, as applicable, is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of the securities covered by this Statement. (e) Subsection (e) of Item 5 to Schedule 13D is not applicable as of the date of this Statement. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Each of the Reporting Persons has agreed in principal to act as a group in connection with the actions described in Item 4 hereof. This arrangement is not the subject of a legally binding agreement among the Reporting Persons. See Items 3 and 4 above. Each of the Reporting Persons is a party to a joint filing agreement, dated as of April 24, 2003, pursuant to which such person have agreed to jointly file this Statement and any and all amendments and supplements thereto with the Securities and Exchange Commission. A copy of the joint filing agreement is attached as Exhibit 99.1 to this Statement and incorporated herein by reference. Each of the Reporting Persons, other than Roger H. Claypoole, has granted to Roger H. Claypoole a power of attorney, with full right of substitution, to file amendments to this Schedule 13D SCHEDULE 13D - ------------------------- -------------------------- CUSIP NO. 871371100 Page 15 of 18 Pages - ------------------------- -------------------------- with the SEC and otherwise, which power of attorney is included on the signature page to this Statement. Each of Messrs. Zensen, Jurgensmeyer and Smith are parties to option agreements with the Issuer, pursuant to which they may acquire certain shares of Common Stock as described in Item 5 above. Except for the agreement described above, to the best knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Persons or any Related Person, and any other person, with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option agreements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 99.1 Joint Filing Agreement, dated as of April 24, 2003. Exhibit 99.2 Nonbinding Indication of Interest Letter, dated as of April 15, 2003. Exhibit 99.3 Power of Attorney (included on signature page). SIGNATURE After reasonable inquiry and to the best of each Reporting Person's respective knowledge and belief, each Reporting Person certifies that the information set forth in this Statement is true, complete and correct. KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Roger H. Claypoole his true and lawful attorney-in-fact and agent with full power of substitution or resubstitution, for such person and in such person's name, place and stead, in any and all capacities, to sign any and all amendments to this Schedule 13D, and to file the same, with all exhibits thereto, and other documentation in connection therewith, with the Securities and Exchange Commission, The NASDAQ National Market and the Issuer, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to accomplish the foregoing, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Date: April 24, 2003 /s/ Dennis C. Zensen /s/ Virgil Jurgensmeyer - --------------------------- --------------------------- Dennis C. Zensen Virgil Jurgensmeyer /s/ Donald A. Smith /s/ Roger H. Claypoole - --------------------------- --------------------------- Donald A. Smith Roger H. Claypoole Snyder Associated Companies, Inc. Chas. A. Neal & Company By: /s/ Elmer A. Snyder By: /s/ Charles C. Neal ------------------------ -------------------------------- Name: Elmer A. Snyder Name: Charles C. Neal ---------------------- -------------------------- Title: President Title: President ---------------------- ------------------------- ANNEX A Executive Officers, Directors and Controlling Shareholders of the Snyder Associated Companies, Inc. (Snyder Related Persons)(1)
- --------------------------------------------------------------------------------------------------------------- NAME TITLE/POSITION PRINCIPAL OCCUPATION - --------------------------------------------------------------------------------------------------------------- Elmer A. Snyder Executive officer and director President and director - --------------------------------------------------------------------------------------------------------------- Charles H. Snyder, Sr. Executive officer and director Chairman and chief executive officer - --------------------------------------------------------------------------------------------------------------- Thomas C. Snyder Executive officer, director and Vice president and director controlling shareholder - --------------------------------------------------------------------------------------------------------------- David E. Snyder Executive officer, director and Vice president, treasurer, and director controlling shareholder - --------------------------------------------------------------------------------------------------------------- Mark A. Snyder Executive officer, director and Secretary and director controlling shareholder - --------------------------------------------------------------------------------------------------------------- Charles H. Snyder, Jr. Executive officer, director and Executive vice president and director controlling shareholder - --------------------------------------------------------------------------------------------------------------- Dennis C. Snyder Executive officer, director and Vice president and director controlling shareholder - --------------------------------------------------------------------------------------------------------------- Richard G. Snyder Executive officer, director and Vice president and director controlling shareholder - ---------------------------------------------------------------------------------------------------------------
(1) The business address of each of the Snyder Related Persons is P.O. Box 1022, One Glade Park East, Kittanning, PA 16201. Each of the Snyder Related Persons is a citizen of the United States of America. Unless otherwise indicated, each of the listed titles, positions and principal occupations is with the Snyder Associated Companies, Inc. ANNEX B Executive Officers, Directors and Controlling Shareholders of Chas. A. Neal & Company (Neal Related Persons)(1)
- ----------------------------------------------------------------------------------------------------------------- NAME TITLE/POSITION PRINCIPAL OCCUPATION - ----------------------------------------------------------------------------------------------------------------- Mary M. Neal(2) Controlling shareholder Retired - ----------------------------------------------------------------------------------------------------------------- Charles C. Neal(3) Director and executive officer President and director of Chas. A. Neal & Company - ----------------------------------------------------------------------------------------------------------------- Ann L. Neal(4) Director Vice President of The First National Bank & Trust Company of Miami (Oklahoma) - ----------------------------------------------------------------------------------------------------------------- Charles A. Neal, Jr.(5) Executive officer, director and Chairman of the board of Chas. A. Neal & controlling shareholder Company. - -----------------------------------------------------------------------------------------------------------------
(1) Each of the Neal Related Persons is a citizen of the United States of America. (2) Mary M. Neal's residence address is 609 Alvarado Row, Stanford, California, 94305. (3) Charles C. Neal's business address, and the business address of Chas. A. Neal & Company, is P.O. Box 269, Miami, Oklahoma, 74355. (4) Ann L. Neal's business address is P.O. Box 269, Miami, Oklahoma, 74355. The business address of The First National Bank & Trust Company of Miami is P.O. Box 850, Miami, Oklahoma, 74355. (5) Charles A. Neal, Jr.'s business address, and the business address of Chas. A. Neal & Company, is P.O. Box 269, Miami, Oklahoma, 74355. INDEX OF EXHIBITS TO SCHEDULE 13D Exhibit 99.1 Joint Filing Agreement, dated as of April 24, 2003 Exhibit 99.2 Nonbinding Indication of Interest Letter, dated as of April 15, 2003. Exhibit 99.3 Power of Attorney (included on signature page). EX-99.1 3 j0053001exv99w1.txt JOINT FILING AGREEMENT DATED AS OF APRIL 24, 2003 EXHIBIT 99.1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a statement on Schedule 13D dated April 24, 2003 (including any amendments thereto) with respect to the Common Stock of Sylvan Inc. The undersigned agree that each of the undersigned is responsible for the timely filing of this statement and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained herein or therein; but none of the undersigned is responsible for the completeness or accuracy of the information concerning any other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate. This joint filing agreement shall be filed as an exhibit to such statement. Date: April 24, 2003. /s/ Dennis C. Zensen /s/ Virgil Jurgensmeyer - --------------------------- --------------------------- Dennis C. Zensen Virgil Jurgensmeyer /s/ Donald A. Smith /s/ Roger H. Claypoole - --------------------------- --------------------------- Donald A. Smith Roger H. Claypoole Snyder Associated Companies, Inc. Chas. A. Neal & Company By: /s/ Elmer A. Snyder By: /s/ Charles C. Neal -------------------------- -------------------------- Name: Elmer A. Snyder Name: Charles C. Neal ------------------------ ------------------------ Title: President Title: President ----------------------- ----------------------- EX-99.2 4 j0053001exv99w2.txt NONBINDING INDICATION OF INTEREST LETTER EXHIBIT 99.2 April 15, 2003 Special Committee of the Board of Directors Sylvan Inc. 333 Main Street P.O. Box 249 Saxonburg, PA 16056-0249 Ladies and Gentlemen: I am writing to express a nonbinding indication of interest to pursue a management-led cash acquisition of Sylvan Inc. I and other members of the management group have the backing of a responsible equity investor group that includes Virgil Jurgensmeyer, Roger Claypoole, Chas. A. Neal & Company, and Snyder Associated Companies and are highly confident that the necessary bank financing will be obtained for the proposed transaction. Our current intention would be to offer approximately $11.00 per share in cash for each issued and outstanding share of common stock of Sylvan. Our current intention would be to consummate a transaction on the following terms and conditions. 1. PRINCIPAL AGREEMENTS. The acquisition would be consummated pursuant to (a) an Agreement and Plan of Merger (the "Merger Agreement") under which Sylvan will be merged with or into an acquisition entity to be formed by us ("Newco") and (b) Stock Voting Agreements (the "Stock Voting Agreements") among Newco and all or most of the owners of 5% or more of the common stock of Sylvan (the "Significant Shareholders"). 2. MERGER AGREEMENT. The Merger Agreement will, among other things: (i) provide for a break fee in an amount to be agreed upon, payable to Newco if the merger is abandoned or fails to close as a result of: (a) a material breach (i.e., willful failure to close) by Sylvan or any Significant Shareholder; or (b) acceptance by Sylvan's Board of Directors of a superior bid proposal. (ii) provide for a break fee in an amount to be agreed upon, payable to Sylvan if the Merger is abandoned or fails to close as a result of a material breach by Newco. (iii) contain representations and warranties of Sylvan that are customary in transactions of this kind. (iv) contain a nonsolicitation provision, with a "fiduciary out" clause in the event a superior bid proposal (to be defined) is received and, among other things, counsel to the Special Committee opines in writing that fiduciary duties mandate acceptance of the superior bid proposal. (v) provide for closing conditions, including: (a) closing of Newco's debt financing in an amount not less than $65 million of which approximately $15 million will be subordinated debt; (b) the representations and warranties of Sylvan will be true in all material respects as of the effective date of the merger; (c) no material adverse change in the financial condition, business or prospects of Sylvan will have occurred; and (d) all necessary approvals, consents, waivers and clearances (including expiration of waiting periods under the Hart-Scott-Rodino Act) from governmental or other parties shall have been obtained. 3. STOCK VOTING ("Lock-up") Agreement. Pursuant to the Stock Voting Agreement, the Significant Shareholders will: (i) agree to vote their shares of Common Stock in favor of the merger; (ii) grant an irrevocable proxy to Newco to vote the shares in favor of the merger; and (iii) agree not to sell or otherwise dispose of their shares of Common Stock. It will be a condition of Newco's willingness to sign the Merger Agreement that the number of shares of Common Stock that the undersigned, Virgil Jurgensmeyer and other members of Sylvan's management contribute to Newco plus the number of shares of Common Stock subject to Stock Voting Agreements exceed a percentage of the outstanding shares of Common Stock satisfactory to Newco. 4. DUE DILIGENCE. No special due diligence will be required, although we would expect Sylvan will give Newco access to all facilities and to all books and records of Sylvan and its subsidiaries to permit our lenders to make such inspections as they may require. 5. SPECIAL MEETING OF SYLVAN STOCKHOLDERS. The Board of Directors of Sylvan will call a special meeting of shareholders to approve the Merger. Sylvan will prepare and file with the SEC a proxy statement and will attempt to obtain the prompt approval of the SEC and following such approval promptly mail the proxy statement and related proxy materials to Sylvan's stockholders. Newco will cooperate with Sylvan in the preparation of the proxy statement. 6. H-S-R FILING. Promptly following the execution and delivery of the Merger Agreement, Sylvan and Newco will prepare and file with all necessary governmental authorities any and all applications and related materials that may be required to be filed under the H-S-R Act. This letter is an indication of interest only and is not intended to be legally binding. We would appreciate a prompt response to this letter from the Special Committee. Time is of the essence, and we are prepared to proceed expeditiously to prepare, negotiate and execute the definitive agreements described above. Thank you for your consideration. Very truly yours, /s/ Dennis C. Zensen Dennis C. Zensen -----END PRIVACY-ENHANCED MESSAGE-----