SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT (AMENDMENT NO. 8) PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
-------------------------------
DYNAMICS CORPORATION OF AMERICA
(Name of Subject Company)
WHX CORPORATION
SB ACQUISITION CORP.
(Bidders)
COMMON STOCK, PAR VALUE $.10 PER SHARE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
268039 10 4
(CUSIP Number of Class of Securities)
MR. RONALD LABOW
CHAIRMAN OF THE BOARD
WHX CORPORATION
110 EAST 59TH STREET
NEW YORK, NY 10022
TELEPHONE: (212) 355-5200
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
with a copy to:
ILAN K. REICH, ESQ.
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 PARK AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 753-7200
-------------------------------
This Statement amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed with the Securities and Exchange Commission on March 31,
1997, as previously amended and supplemented, by SB Acquisition Corp.
("Purchaser"), a New York corporation and a wholly owned subsidiary of WHX
Corporation, a Delaware corporation ("Parent"), to purchase any and all shares
of Common Stock, par value $.10 per share (the "Shares") of the Company,
including the associated Common Stock Purchase Rights issued pursuant to the
Rights Agreement, dated as of January 30, 1986, as amended on December 27, 1995,
between the Company and First National Bank of Boston, as Rights Agent, at a
price of $45 per Share, net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated March 31, 1997, as amended and supplemented from time to time (the "Offer
to Purchase") and in the related Letters of Transmittal (which, together with
any amendments or supplements thereto, including the First Supplement dated
April 9, 1997, the Second Supplement dated April 15, 1997 and the Third
Supplement dated April 30, 1997, constitute the "Offer"). Capitalized terms used
and not defined herein shall have the meanings assigned to such terms in the
Offer to Purchase and the Schedule 14D-1.
<PAGE>
ITEM 10. ADDITIONAL INFORMATION
Item 10 is hereby amended and supplemented by reference to the Proposed
Answer and First Amended Counterclaims filed herewith as Exhibit a(24).
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Offer to Purchase, dated March 31, 1997.*
(2) Letter of Transmittal.*
(3) Notice of Guaranteed Delivery.*
(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.*
(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
(7) Text of Press Release, issued by Parent on March 31, 1997.*
(8) Summary Advertisement published on April 1, 1997.*
(9) Text of Press Release, issued by Parent on April 9, 1997.*
(10) First Supplement to Offer to Purchase, dated April 9, 1997.*
(11) Revised Letter of Transmittal*
(12) Revised Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(13) Revised Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(14) Second Supplement to Offer to Purchase, dated April 15,
1996.*
(15) Revised Letter of Transmittal.*
(16) Revised Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(17) Revised Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(18) Revised Notice of Guaranteed Delivery.*
(19) Complaint in DYNAMICS CORPORATION OF AMERICA vs. WHX
CORPORATION AND SB ACQUISITION CORP. (3:97 CV 702 (GLG))
filed in the United States District Court, District of
Connecticut, on April 14, 1997.*
(20) Text of Press Release, issued by Parent on April 29, 1997.*
(21) Text of Press Release, issued by Parent on April 30, 1997.*
(22) Third Supplement to Offer to Purchase, dated April 30,
1997.*
(23) Text of Press Release, issued by Parent on May 1, 1997.*
(24) Motion to Amend Counterclaims and Proposed Answer and First
Amended Counterclaims in DYNAMICS CORPORATION OF AMERICA vs.
WHX CORPORATION AND SB ACQUISITION CORP. (3:97 CV 702 (GLG))
filed in the United States District Court, District of
Connecticut, on May 5, 1997.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
- --------
* Previously provided.
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<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: May 5, 1997
WHX CORPORATION
By:/S/ STEWART E. TABIN
--------------------
Name: Stewart E. Tabin
Title: Assistant Treasurer
SB ACQUISITION CORP.
By: /S/ STEWART E. TABIN
---------------------
Name: Stewart E. Tabin
Title: Vice President
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER PAGE
- --------------------------------------------------------------------------------
(a) (1) Offer to Purchase, dated March 31, 1997.*
(2) Letter of Transmittal.*
(3) Notice of Guaranteed Delivery.*
(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.*
(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
(7) Text of Press Release, issued by Parent on March 31, 1997.*
(8) Summary Advertisement published on April 1, 1997.*
(9) Text of Press Release, issued by Parent on April 9, 1997.*
(10) First Supplement to Offer to Purchase, dated April 9, 1997.*
(11) Revised Letter of Transmittal*
(12) Revised Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(13) Revised Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(14) Second Supplement to Offer to Purchase dated April 15,
1997.*
(15) Revised Letter of Transmittal.*
(16) Revised Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(17) Revised Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(18) Revised Notice of Guaranteed Delivery.*
(19) Complaint in DYNAMICS CORPORATION OF AMERICA vs. WHX
CORPORATION AND SB ACQUISITION CORP. (3:97 CV 702 (GLG))
filed in the United States District Court, District of
Connecticut, on April 14, 1997.*
(20) Text of Press Release, issued by Parent on April 29, 1997.*
(21) Text of Press Release, issued by Parent on April 30, 1997.*
(22) Third Supplement to Offer to Purchase, dated April 30,
1997.*
(23) Text of Press Release, issued by Parent on May 1, 1997.*
(24) Motion to Amend Counterclaims and Proposed Answer and First
Amended Counterclaims in DYNAMICS CORPORATION OF AMERICA vs.
WHX CORPORATION AND SB ACQUISITION CORP. (3:97 CV 702 (GLG))
filed in the United States District Court, District of
Connecticut, on May 5, 1997.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
- --------
* Previously provided.
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UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
DYNAMICS CORPORATION OF AMERICA, : CIVIL ACTION NO.
: 3:97CV702 (GLG)(WIG)
Plaintiff, :
:
VS. :
:
WHX CORPORATION and :
SB ACQUISITION CORP., :
:
Defendants. : May 5, 1997
:
SB ACQUISITION CORP., :
:
Counterclaim-plaintiff, :
:
VS. :
:
DYNAMICS CORPORATION OF AMERICA, :
ANDREW LOZYNIAK, PATRICK J. DORME, :
HENRY V. KENSING, RUSSELL H. :
KNISEL, SAUL SPERBER, HAROLD COHAN, :
FRANK A. GUNTHER, JOHN A. THOMPSON, :
and RONALD STEINER, :
:
Counterclaim-defendants. :
MOTION TO AMEND COUNTERCLAIMS
-----------------------------
Counterclaim-plaintiff hereby moves the Court pursuant to Rule
15(a) of the Federal Rules of Civil Procedure for an order (in the form annexed
hereto) granting leave to amend its counterclaims.
This motion is based upon the proposed Answer and First
Amended Counterclaims, attached hereto, and counterclaim-plaintiff's Memorandum
in Support of its Motion for Leave to Amend its Counterclaims.
<PAGE>
Dated: May 5, 1997
-------------------------
John F. Conway (CT 04763)
Phyllis M. Pari (CT 08132)
WIGGIN & DANA
One Century Tower
New Haven, CT 06508
(203) 498-4400
Attorneys for Defendants/
Counterclaim-Plaintiff
Of Counsel:
Thomas J. Fleming
David E. Bamberger
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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<PAGE>
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
DYNAMICS CORPORATION OF AMERICA, : CIVIL ACTION NO.
: 3:97CV702 (GLG)(WIG)
Plaintiff, :
:
VS. :
:
WHX CORPORATION and :
SB ACQUISITION CORP., :
:
Defendants. : May __, 1997
:
SB ACQUISITION CORP., :
:
Counterclaim-plaintiffs, :
:
VS. :
:
DYNAMICS CORPORATION OF AMERICA, :
ANDREW LOZYNIAK, PATRICK J. DORME, :
HENRY V. KENSING, RUSSELL H. :
KNISEL, SAUL SPERBER, HAROLD COHAN, :
FRANK A. GUNTHER, JOHN A. THOMPSON, :
and RONALD STEINER, :
:
Counterclaim-defendants. :
ANSWER AND FIRST AMENDED COUNTERCLAIMS
--------------------------------------
Defendants WHX Corporation ("WHX") and SB Acquisition Corp.
("SB"), by their attorneys, Wiggin & Dana and Olshan Grundman Frome & Rosenzweig
LLP, state:
1. Deny the allegations in paragraphs 7, 28, 34, 39, 40 41,
45, 63, 64, 72, 73, 74, 77,78 79, 82, 83, 89, 91, 92, 96, 97, 98 and 100.
<PAGE>
2. Deny knowledge or information sufficient to form a belief
as to the truth of the allegations in paragraph 9, 45, 47, 65 and 66.
3. Deny the allegations in paragraphs 3, 4 5, 6, 13, 25, 26,
27, 29, 30, 31, 33, 38, 42, 48, 49, 51, 52,54, 55, 56, 58, 59, 61, 62 and 67 and
refer the Court to WHX's Tender Offer Statement on Schedule 14d-1, as
supplemented and amended,for its complete contents.
4. The allegations in paragraph 8, 69, 70, 71, 76, 81, 85, 86,
87, 88, 90, 94, 95 and 102 are legal conclusions as to which no answer need be
made.
5. In response to paragraphs 68, 75, 80, 84, 93 and 99,
restate their denials and admissions in cross-referenced paragraphs.
6. Deny the allegations in paragraph 1, except admit that WHX,
through its subsidiary SB, has commenced a tender offer and previously announced
its desire to acquire DCA and its intent to solicit proxies to enable it to
elect four of its nominees to DCA's Board of Directors and to adopt certain
changes in its by-laws and respectfully refer the Court to WHX's Schedule 14d-1,
as supplemented and amended, for its contents.
7. Deny the allegations in paragraph 2, except admit that WHX
filed tender offer materials, which have been supplemented and amended, and
preliminary proxy materials and respectfully refer the Court to WHX's Schedule
14d-l, as
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<PAGE>
supplemented and amended, and the preliminary proxy statement, for their
complete contents.
8. Admit the allegations in paragraphs 10 and 11.
9. Deny the allegations in paragraph 12, except that admit
that Mr. LaBow is a bankruptcy specialist, who formerly worked in a New York
City investment bank, a firm that he left in 1989 to form a partnership that
acquired control of Wheeling-Pittsburgh Steel Corporation ("WPS") through a plan
of reorganization in its Chapter 11 proceedings, and that Mr. LaBow was chairman
of WPS which, along with other affiliates, was reorganized into a new holding
company, WHX, on or about July 26, 1994.
10. Deny the allegations in paragraphs 14, 15 and 16 and refer
the Court to the Schedule 13d, as amended, filed by the Regency Shareholders
Committee for its complete contents, except admit that Robert Frome and Marvin
Olshan are partners of Olshan Grundman Frome & Rosenzweig LLP and that Marvin
Olshan is a director and secretary of WHX.
11. Deny the allegations in paragraph 17, except admit that in
late 1994, WHX sought to acquire Teledyne, Inc., ("Teledyne"), a
California-based aviation and electronics business.
12. Deny the allegations in paragraph 18, except admit that
Teledyne rejected WHX's proposals and refer the court to Teledyne's public
announcements for their complete terms.
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<PAGE>
13. Deny the allegations in paragraph 19, except admit that
WHX continued to pursue its proposals concerning a business combination with
Teledyne after Teledyne indicated a lack of interest in its initial proposal,
and that WHX thereafter made additional bids and participated in proxy contests
involving Teledyne, and that Teledyne ultimately announced a merger agreement
with Allegheny Ludlum Corp.
14. Deny the allegations in paragraph 20, except admit that on
or about October 1, 1996, the Steelworkers' contract expired and union workers
struck at WHX plants.
15. Deny the allegations in paragraph 21, except deny
knowledge or information sufficient to form a belief as to the truth of the
allegations concerning the length of strikes at other steelmakers, the
statements by union officials and admit that the strike continues to this day.
16. Deny the allegations in paragraph 22, except admit that
WHX submitted its business proposals to DCA while the strike was underway and
further that, among other things, DCA owns approximately 44% of CTS.
17. Deny the allegations in paragraph 23, and refer the Court
to WHX's letter for its complete contents, except admit that the letter was sent
on or about March 27, 1997.
18. Deny the allegations in paragraph 24, except admit that on
March 31, 1997, WHX filed a Tender Offer Statement on Schedule 14d-1 with the
SEC and respectfully refer the Court to its Tender Offer, as amended, for its
complete contents.
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<PAGE>
19. Deny the allegations in paragraph 32, and refer the Court
to the Rights Agreement for its complete contents.
20. Deny the allegations in paragraph 35, except admit that on
March 31, 1997 WHX filed a preliminary proxy statement with the SEC.
21. Deny the allegations in paragraph 36, except admit that
WHX has filed a proposed letter to DCA shareholders with the SEC as preliminary
proxy material and that the letter discusses WHX's offer to purchase shares at
$40 per share and a proposed merger.
22. Deny the allegations in paragraph 37, except admit that on
April 9, 1997, WHX issued a press release and refer the Court to the press
release for its complete contents.
23. Deny the allegations in paragraph 43, except admit that on
or about March 13, 1997 Lichtenstein sold 80,000 DCA shares to WHX for
approximately $32.50 per share and that approximately two weeks later WHX
proposed a merger between DCA and WHX, under which WHX would pay $40 per DCA
share, an offer which has since been increased to $45.
24. Deny the allegations in paragraph 44, except admit that
WHX purchased approximately 80,000 shares of DCA from Lichtenstein and that both
Lichtenstein and WHX have from time to time utilized the same law firm.
25. Deny the allegations in paragraph 50, except admit that
WHX has not disclosed that completion of the Tender Offer will trigger the
Rights Agreement, because such statement is
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<PAGE>
false and further respectfully refer the Court to WHX's Schedule 14d-1, as
amended and supplemented, for a correct statement of WHX's position with respect
to the effect of a consummated tender offer on the Rights Agreement.
26. Deny the allegations in paragraphs 53 and 57, and refer
the Court to DCA's Certificate of Incorporation for its complete terms.
27. Deny the allegations in paragraph 60, and refer the Court
to the letter for its complete terms, except admit that the letter was sent on
March 27 and signed by Mr. LaBow, as Chairman of the Board of WHX.
28. Deny the allegations in paragraph 101, except admit that
DCA has provided certain information to WHX and has communicated to WHX its
disagreement with WHX's request for certain additional information.
First Affirmative Defense
-------------------------
29. The Complaint fails to state a claim for relief.
Second Affirmative Defense
--------------------------
30. The Complaint and each of its claims are barred by the
doctrine of unclean hands.
Third Affirmative Defense
-------------------------
31. The Complaint and each of its claims are barred by the
doctrine of laches.
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<PAGE>
Fourth Affirmative Defense
--------------------------
32. The Court lacks subject matter jurisdiction because there
is no case or controversy. Defendants having mooted all of plaintiff's claims
through additional and/or corrective public disclosure.
FIRST AMENDED COUNTERCLAIMS
---------------------------
33. Counterclaim-plaintiff SB Acquisition Corp. for its First
Amended Counterclaims against the counterclaim- defendant alleges upon knowledge
as to itself and upon information and belief as to all other matters as follows:
The Parties
-----------
1. Counterclaim-plaintiff SB Acquisition Corp. ("SB") is a
New York corporation with its principal place of business in New York, New York.
SB owns 109,861 shares of Dynamics Corporation of America ("DCA"), representing
approximately 2.9% of DCA's outstanding shares.
2. Counterclaim-defendant Dynamics Corporation of America
("DCA") is a New York corporation with its principal place of business in
Greenwich, Connecticut. DCA's common stock is registered with the SEC under
Section 12 of the Exchange Act and its shares are listed for trading on the New
York Stock Exchange.
3. Counterclaim-defendants Andrew Lozyniak, Patrick S. Dorme,
Henry V. Kensing, Saul Sperber, Harold Cohan, Russell
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<PAGE>
H. Knisel, Frank A. Gunther, John A. Thompson and Ronald Steiner are each
directors of DCA (the "Director Defendants").
Jurisdiction
------------
4. This Court has jurisdiction over the counterclaims,
pursuant to 28 U.S.C. Sections 1331 & 1367, and Rule 13(a), Fed. R. Civ. P.
Whx's Merger Proposal
---------------------
5. On March 27, 1997, SB's parent company, WHX Corporation
("WHX") telecopied to DCA's corporate headquarters a letter offering to acquire
in a merger transaction all the outstanding shares of common stock of DCA at a
price of $40 per share. Because time is of the essence in merger and acquisition
activity, WHX's letter added, "If we do not hear from you by the close of
business on Friday, March 28, we are authorized to present this proposal
directly to your stockholders, through a proxy solicitation at the upcoming
annual meeting and through a cash tender offer."
6. WHX followed up on its proposal with telephone calls to
DCA's Chief Executive Officer, Andrew Lozyniak. Lozyniak neither accepted nor
returned WHX's calls.
SB's $45 Per Share Tender Offer
-------------------------------
7. On March 31, SB commenced a tender offer to acquire up to
649,000 shares of DCA common stock, representing
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<PAGE>
approximately 17% of DCA's outstanding shares. The initial tender offer price
was $40 per share in cash. At the same time, SB filed its Schedule 14D-1 with
the SEC. Inasmuch as SB's parent, WHX, has over $350 million of cash on its
balance sheet, neither the tender offer nor the cash merger proposal -- together
valued at $160 million -- is subject to financing.
8. In addition to its filing on Schedule 14D-1, SB also
disseminated to DCA's shareholders its offer to purchase their shares containing
the information required by SEC Rule 14d-3. The offer spells out in detail its
terms and provides information concerning DCA, SB and other matters that are
required to be disclosed. The tender offer discloses that SB's "purpose" is to
"acquire a significant equity interest in the Company as the first step in a
business combination of" SB and DCA.
9. SB's tender offer further disclosed its intent to propose 4
nominees for election to DCA's seven-person board at its annual meeting, which
was then scheduled for May 2, 1997. DCA simultaneously filed preliminary proxy
material with the SEC.
10. On April 9, SB announced that it was increasing its tender
offer price to $45 per share, as well as the cash merger price. On Thursday,
April 10, 1997, SB supplemented its tender offer by distributing to shareholders
a supplement (the "First Supplement") disclosing the higher price, as well as
the elimination of other conditions.
-9-
<PAGE>
11. In 1996, the highest trading price for DCA common stock
was $29.25 per share. The tender offer and merger proposal thus represent a 54%
premium over this high watermark. In response to the tender offer, DCA's shares
have traded at steadily increasing prices, closing at $44-1/8 on April 22, 1997.
SB's Amended Offer For Any And All DCA Shares
---------------------------------------------
12. On April 30, SB issued its Fourth Supplement to its tender
offer. In the Fourth Supplement, SB amended its offer to purchase any and all
shares of DCA common stock at $45 per, upon the condition that, among other
things, (i) DCA's "poison pill" rights have been redeemed by DCA's board and
(ii) the restrictions contained in N.Y.B.C.L. Section 912(b) have been waived by
DCA's board of directors. The Fourth Supplement also sets forth corrective
disclosure as directed by this Court's opinion dated April 29, 1997. The
expiration and withdrawal date for the tender offer was extended to May 20,
1997.
13. The Fourth Supplement re-affirmed SB's intent to conduct a
proxy contest to elect its nominees to DCA's Board at DCA's annual meeting
scheduled for August 1, 1997. SB's nominees will be pledged to take all steps
necessary and proper to effectuate WHX's merger proposal.
DCA's Response To SB's Tender Offer
-----------------------------------
14. As directors of DCA, the Director Defendants owe fiduciary
duties to the shareholders of DCA, including SB. The
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<PAGE>
Director Defendants are in fact trustees for the shareholders and are required
to consider the interests of the shareholders, along with other considerations
appropriate under New York law, above their own personal interests. In the
context of a proposed change of control, such as presented by SB's tender offer
and impending proxy contest, directors face a grave potential conflict of
interest, since their wish to retain privileges of office may conflict with
their obligation single-mindedly to advance the best interest of their
shareholders and other corporate constituencies.
15. The Director Defendants have already demonstrated that
they lack sufficient regard for their fiduciary duties and that, in their zeal
to profit from and retain their control of DCA, they are unwilling to abide by
their fiduciary responsibilities. Thus:
(a) Just a few hours after SB's tender offer had been
announced, DCA issued a press release describing it as "wholly inadequate."
DCA's knee-jerk response came without any inquiry into the offer;
(b) Defendant Lozyniak consistently failed to accept, or to
return, calls placed to him by WHX's Chairman, demonstrating that he was not
prepared to review the offer in furtherance of his fiduciary duties, but was
motivated by a desire to remain entrenched in office and more concerned about
retaining his executive perquisites than in fulfilling his responsibilities
under New York law;
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<PAGE>
(c) Instead of communicating with SB regarding its tender
offer, the Director Defendants decided to award lucrative "golden parachute"
contracts to themselves and senior management, further insulating senior
management and the Director Defendants from DCA's true owners, its shareholders;
(d) The Director Defendants immediately resorted to a series
of tactical maneuvers, many of which were illegal, in order to prevent
shareholders from voting upon SB's tender offer at the annual meeting scheduled
for May 2, 1996. The response of the Director Defendants included postponing the
meeting and taking steps to prevent a majority of directors from being submitted
for re-nomination at the annual meeting. As set forth in detail at counts III
through VI below, these actions violate New York law; and
(e) In evaluating SB's tender offer, the Director Defendants
have failed, and continue to fail, to take into consideration the long-term and
short-term interest of DCA and its shareholders as required in contravention of
New York law.
16. Directors who are determined to oppose an unsolicited
acquisition offer frequently resort to changes in and/or overly tortured
interpretations of by-laws and shareholder meeting procedures in their efforts
to stymie and defeat the acquisition proposal. On April 11, 1997, DCA and the
Director Defendants embarked on this very course, undertaking a series of
actions designed to entrench themselves and to prevent
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<PAGE>
shareholders from accepting SB's tender offer. These actions
include the following:
(a) Cancelling DCA's May 2 annual meeting and setting
a new meeting date, August 1, 1997;
(b) Adding two directors to its seven-person board and
dividing the staggered board into three classes, so
that only three directors would be nominated for
election at the August 1, 1997 annual meeting,
instead of a majority of the Board; and
(c) Extending the terms of six directors, so that they
would not stand for re-election at the times
appointed by DCA's shareholders.
17. On April 11, 1997, the Board also acted to deprive DCA
shareholders of their longstanding right to call special meetings upon a written
request by 25% of the issued and outstanding shares. The Director Defendants
increased the threshold for such a request from 25% to 66.6%, thereby
effectively nullifying the right to call such special meetings. In addition, the
Board amended its by-laws to deprive shareholders of their longstanding right to
remove directors without cause. The vote of 80% of the Shareholders would be
required to restore these rights.
The Issuance Of Golden Parachute Contracts
------------------------------------------
18. Directors who have placed their personal interests ahead
the interests of shareholders also frequently resort to
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<PAGE>
"golden parachute" contracts to insulate themselves and others from shareholder
wishes. These contracts both deter shareholder activism and enrich senior
management in the event shareholders decide that they have performed poorly. In
immediate response to WHX's tender offer, the Director Defendants promptly
turned to DCA and made one further grab from its corporate fisc.
19. On April 11, 1997, the Director Defendants thus approved
amendments to the employment agreements of defendants Lozyniak, Kensing and
Dorme, which now provide them with lavish benefits in the event of "change in
control." In addition on April 11, the Compensation Committee of the Board
awarded 5,000 shares to defendant Steiner. To demonstrate the over-reaching of
the Director Defendants, one need look no further than these amended employment
agreements, which provide that, should the shareholders vote out a majority of
the Board, then these Director Defendants will be entitled to lucrative payments
from DCA. In other words, even if these directors defy shareholder wishes, they
stand to be rewarded by DCA. These amended employment agreements display in
clearest terms the desire on the part of the Director Defendants to advance
their personal interests, rather than fulfill their obligations as fiduciaries
for the shareholders.
20. The Director Defendants similarly issued lucrative
"golden parachute" employment contracts to 37 employees and lucrative severance
benefits to at least six other persons. Each of these contracts provides that,
should the shareholders
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<PAGE>
exercise their right to remove the current Board, the employees will immediately
be entitled to substantial "severance" benefits. As a result, upon a change in
the Board, the entire senior management of DCA is now incentivized to quit in
order to obtain payments up to triple their annual salaries. Again, these
contracts are naked attempts to insulate the Board from shareholder wishes and
to punish shareholders who exercise their right to remove directors.
DCA's Abuse Of Its Rights Plan And Section 912
----------------------------------------------
21. Since 1986 DCA has also had a "poison pill" shareholder
rights plan (the "Rights Plan") under which DCA distributed a security known as
a "right" to shareholders (the "Right(s)"). The Rights entitled shareholders to
purchase shares of DCA under certain circumstances on economic terms that impose
a substantial economic penalty on would be acquirors of DCA, such as SB. Among
the events that cause the exercisability of the Rights to be triggered is the
acquisition by any person, in a transaction that is not approved by the DCA
board, of more than 20% of DCA's outstanding shares. The "poison pill" is thus a
defensive measure that, unless voluntarily redeemed by DCA's board of directors,
can prevent an acquisition from occurring, since the would be acquiror would be
unwilling or unable to purchase shares if such purchases would trigger the
exercise of the Rights and thus impose a large economic penalty on the acquiror.
Section 912 of New York's Business Corporation Law
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<PAGE>
("Section 912") similarly imposes burdens on a person who acquires in excess of
20% of the outstanding shares of a New York corporation, making it onerous, and
perhaps impractical, to acquire more than 20% without Board approval.
22. The existence of DCA's Rights Plan and Section 912 may
require counterclaim-plaintiff SB to conduct and win a proxy contest to replace
DCA's existing board if SB wishes to present its merger proposal directly to
shareholder. Under the terms of the existing DCA poison pill Rights Plan, the
Rights can be rendered inapplicable to SB's offer and tender offer either by
DCA's current directors or by their duly elected successors. At the annual
meeting of shareholders scheduled for August 1, 1997, the director nominees
proposed by SB and WHX will be pledged to render the Rights and Section 912
inapplicable to SB's offer.
23. For the reasons set forth above, the Rights Plan and
Section 912 are powerful weapons. They permit the incumbent directors to
entrench themselves and prevent the consummation of SB's tender offer, even
though the non-management shareholders -- who control more than 93% of DCA's
outstanding shares -- may wish to sell their shares to SB in its premium tender
offer. These devices also permit the Director Defendants to continue the
excessive compensation and other policies that have separated top management's
personal economic interest from those of DCA's public shareholders and
employees.
24. By virtue of the facts set forth above,
counterclaim-plaintiff accordingly has reasonable grounds to
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believe that the director defendants will misuse DCA's "poison pill" shareholder
Rights Plan and Section 912, whose only proper purposes are to protect
shareholders against coercive and illegitimate takeover tactics and unfair and
inadequate offers, to block shareholder consideration of SB's offer,
notwithstanding that the offer is extended to all DCA shareholders on an equal
basis, is fully financed, and is for all cash at a very substantial premium to
the market price of DCA's stock just days before WHX's initial merger proposal.
Counterclaim-plaintiff SB's offer cannot be perceived by any reasonable business
person or fiduciary as an unfair or inadequate offer. Given that SB originally
intended, and still seeks to have, shareholders be afforded an opportunity to
vote at a meeting for directors pledged to enable shareholders to consider the
offer, SB's offer could not be reasonably perceived as coercive or illegitimate.
Under these circumstances, and as required by New York law, DCA and the Director
Defendants are obligated to redeem the DCA Rights plan and waive Section 912 for
SB's offer, or for any fully financed all-cash, all share offers at prices of
$45 and above. However, the Director Defendants have, by their conduct,
indicated that they wrongfully intend not to do so.
25. Moreover, DCA has misinterpreted its own articles of
incorporation so that its board of directors can be expanded from 7 directors to
9 directors and the staggered terms of the board can be stretched from two
classes of directors to three classes of directors. DCA's response to SB's offer
thus
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indicates that the Director Defendants are entrenched in their corporate offices
and intend to obstruct the appropriate and proper consideration of SB's offered
by the DCA Board and by DCA's shareholders. By so entrenching themselves, the
Director Defendants have violated, and are continuing to violate, their
fiduciary duties.
26. The efforts of SB and WHX to effectuate a business
combination with DCA at a substantial premium is a platform that SB believes
will enjoy enormous and widespread support among the non-management shareholders
of DCA. Proxy contests and tender offers are classic instances of shareholder
democracy and are extensively regulated by federal law. Federal law provides
parties such as SB with the federal right to make a nationwide tender offer and
complete the offer upon a federally-specified time schedule. Federal law also
provides parties such as SB with the right to solicit proxies nationwide. These
federal provisions are substantive efforts by the United States Congress to
promote shareholder democracy and guarantee a free market and corporate control
and to promote the national economic welfare by providing for efficient
allocation of economic resources. To the extent the Director Defendants, by
improperly manipulating the corporate machinery of DCA, seek to impinge upon or
frustrate the exercise of SB's right to seek to effectuate a business
combination with DCA, they will cause irreparable harm to SB, to all public
shareholders of DCA, and to the public interest.
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FIRST CLAIM FOR RELIEF
----------------------
27. Counterclaim-plaintiff restates the allegations in
paragraphs 1 through 26 above.
28. On July 1, 1975, DCA amended its Certificate of
Incorporation, pursuant to a Certificate of Amendment, annexed as Exhibit A (the
"Amendment"). In the Amendment, DCA eliminated Article XV of its then
Certificate of Incorporation in its entirety and substituted a new Article XV
("Article XV"). The new Article XV purports to require that the affirmative vote
of 80% of the outstanding voting stock of DCA is necessary to approve a merger
of DCA with another party if the other party is the "beneficial owner" of 5% of
more of the outstanding voting of DCA, unless (i) the transaction is consistent
with a Memorandum of Understanding approved by the Board of DCA prior to the
time such person shall have become a beneficial owner of 5%or more of the
outstanding voting stock of DCA, or (ii) DCA and its subsidiaries own a majority
of the outstanding voting stock of such person.
29. Effective December 16, 1985, the State of New York adopted
Section 912 to its Business Corporation Law in order to, among other things,
promote the long-term growth of New York resident corporations. As adopted,
Section 912 prohibited a New York resident corporation from engaging in a
"business combination" with any interested shareholder, which is defined as a
shareholder who is the beneficial owner of 20% of more of the stock of a
corporation for a period of five years from the time
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the shareholder acquired the stock, unless certain conditions are met, and
subject to certain exceptions.
30. Effective January 26, 1997, the State of New York amended
Section 912 to extend the statute to all New York corporations, irrespective of
residence. Accordingly, by its express terms, Section 912 now applies to DCA, a
New York corporation.
31. In Section 912(d), the statute provides in pertinent part:
"(d) The provisions of this section shall not apply"
(1) to any business combination of a domestic [New York]
corporation that does not have a class of voting stock registered with
the Securities and Exchange Commission pursuant to section twelve of
the Exchange Act, unless the certificate of incorporation provides
otherwise; or
* * *
(3) to any business combination of a domestic [New York]
corporation (i) the original certificate of incorporation of which
contains a provision expressly electing not to be governed by this
section, or (ii) which adopts an amendment of such corporation's
by-laws prior to March thirty-first, nineteen hundred eighty-six,
expressly electing not to be governed by this section, or (iii) which
adopts an amendment of such corporation's by-laws, approved by the
affirmative vote of the holders, other than interested shareholders and
their affiliates and associates, of a majority of the outstanding
voting stock of such corporation, excluding the voting stock of
interested shareholders and their affiliates and associates, expressly
electing not to be governed by this section, provided that such
amendment to the by-laws shall not be effective until eighteen months
after such vote of such corporation's shareholders and shall not apply
to any business combination of such corporation with an interested
shareholder whose stock acquisition date is on or prior to the
effective date of such amendment . . ."
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32. At no time have the shareholders of DCA approved an
amendment to its corporate by-law expressly electing not to be governed by
N.Y.B.C.L. 912.
33. Based upon the foregoing, DCA, as a New York corporation,
is bound to comply with Section 912. Article XV of DCA's corporate charter, as
amended, is invalid and unenforceable because it is inconsistent with Section
912 in at least the following ways:
(i) Article XV provides that a holder of 5% of DCA's
common shares cannot engage in a business combination of DCA, absent a
super-majority vote, instead of imposing such a requirement upon a holder in
excess of 20% of the common stock, as required by N.Y.B.C.L. Section
912(a)(10)(A);
(ii) Article XV establishes a requirement of 80%
affirmative vote for a business combination with an interested
shareholder, instead of a majority the disinterest shares, as set
forth in N.Y.B.C.L. Section 912(c)(2);
(iii) Article XV fails to include a "fair price"
exclusion for business combinations at or in excess of certain
prices, as set forth in N.Y.B.C.L. Section 912(c)(3).
34. In its tender offer, counterclaim-plaintiff SB now
proposes to acquire in excess of 5% of the common stock of DCA. In connection
with the SB tender offer, DCA has declared that upon such an acquisition, SB
will be bound by Article XV of its corporate charter, as amended. DCA has
further declared that SB is already the beneficial owner of in excess of 5% of
DCA's
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<PAGE>
shares due to a "group." As a result, a genuine dispute exists between the
parties concerning the enforceability of Article XV.
35. Accordingly, counterclaim-plaintiff SB seeks a declaration
pursuant to 28 U.S.C. Section 3301 that Article XV of DCA's Articles of
Incorporation, as amended, is invalid and unenforceable.
SECOND CLAIM FOR RELIEF
-----------------------
36. Counterclaim-plaintiff restates the allegations in
paragraphs 1 through 35 above.
37. On Monday, March 31, 1997, the same day that SB issued its
tender offer, DCA issued a press release announcing its position that SB's $40
per share cash merger offer was "totally inadequate."
38. Pursuant to Section 14(d) of the Securities Exchange Act
of 1934 (the "1934 Act"), the SEC has promulgated regulations governing the
tender offer process. SEC Rule 14d-9, 17 C.F.R. Section 240.14d-9, establishes
regulations governing solicitations or recommendations to securityholders
regarding tender offers.
39. Rule 14d-9 prohibits a company that is the subject of a
tender offer, such as DCA, from making any solicitation or recommendation
regarding the tender offer, unless the company has filed with the SEC a Schedule
14d-9 containing certain requisite disclosures. The press release issued by DCA
on March 31, clearly constituted a recommendation regarding a pending tender
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offer. DCA did not then have on file a Schedule 14d-9 and, in fact, did not file
such a schedule until April 11, 1997.
40. Based upon the foregoing, DCA has violated Section 14(d)
of the 1934 Act and Rule 14d-9 promulgated thereunder. The foregoing violation
was willful.
41. Absent preliminary and permanent injunctive relief,
counterclaim-plaintiff will likely suffer irreparable harm.
42. Counterclaim-plaintiff has no adequate remedy at law.
THIRD CLAIM FOR RELIEF
----------------------
43. Counterclaim-plaintiff restates the allegations in
paragraphs 1 through 42 above.
44. DCA's corporate charter, as amended, provides at Article
VII ("Article VII") as follows:
VII. A. The Board of Directors shall consist of not
less than 7 nor more than 21 members as determined from time
to time by the Board of Directors. Directors need not be
stockholders.
B. At such times as the number of directors
constituting the Board of Directors shall be seven or eight,
the Board of Directors shall be divided into two classes, the
term of the office of each class elected at any annual meeting
of stockholders will be two years and the terms thereof will
be staggered so that one class will be elected each year. At
such times as the number of directors constituting, the Board
of Directors shall be nine or more, the Board of Directors
shall be divided into three classes, the term of office of
each class elected at any annual meeting of stockholders
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will be divided into three classes; the term of office of each
class elected at any annual meeting of stockholders will be
three years and the terms thereof will be staggered so that
one class will be elected each year. At any annual meeting of
stockholders at which the number of classes shall be increased
or decreased, the number of directors of any class and the
respective terms of such directors shall be fixed by the Board
of Directors in a manner to obtain, as soon as practicable,
the proper number of directors in each class and the
respective terms of such directors."
45. Article VII of DCA's corporate charter thus purports to
allow DCA's board of directors to be divided into two classes or three classes.
Section 704(a) of New York's Business Corporation Law, however, provides in
pertinent part:
(a) The certificate of incorporation or the specific
provisions of a by-law adopted by the shareholders may provide
that the directors be divided into EITHER two, three or four
classes. (emphasis added)
46. Article VII of DCA's charter is thus inconsistent with
Section 704(a) because it provides for multiple classes instead of either two
classes, three classes, or four classes.
47. Accordingly, counterclaim-plaintiff SB seeks a declaration
pursuant to 28 U.S.C. Section 2201 that Article VII of DCA's Articles of
Incorporation, as amended, is invalid and unenforceable.
FOURTH CLAIM FOR RELIEF
-----------------------
48. Counterclaim-plaintiff restates the allegations in
paragraphs 1 through 47 above.
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49. On or about April 14, 1997, DCA's board of directors
purported to "reclassify" the directors from two classes to three classes of
directors, pursuant to Article VII. Article VII, however, provides that the
number of classes "shall be increased or decreased" at an "annual meeting of
stockholders," rather than through unilateral action by DCA's directors. The
attempt by the Director Defendants to re-classify the Board, and extend their
own terms beyond those previously granted by shareholders, thus is unlawful
under Article VII.
50. Accordingly, counterclaim-plaintiff SB seeks a declaration
pursuant to 28 U.S.C. Section 2201 that the Director Defendants'
re-classification of DCA's board of directors from two classes to three classes
is invalid and unenforceable because it contravenes Article VII.
FIFTH CLAIM FOR RELIEF
----------------------
51. Counterclaim-plaintiff restates the allegations in
paragraphs 1 through 50 above.
52. At the 1995 annual meeting of directors, defendants Cohan,
Gunther, Lozyniak and Kensing were elected by DCA's shareholders to serve
two-year terms and until their successors were elected and qualified.
Notwithstanding the fact that these directors were elected to serve only two
years, on April 11, 1997, the Director Defendants purported to extend their
terms unilaterally, more than three years.
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53. On or about April 11, 1997, when DCA's board purported to
reclassify itself, the Director Defendants' determined to lengthen the terms of
all existing directors, except for defendant Kensing who will stand for election
in the same class along with the two new directors. As a result, three directors
who were elected to two-year terms at the 1995 annual meeting have purportedly
had their terms "extended" by the Board until 1998. These directors are
defendants Cohan, Gunther and Lozyniak.
54. Section 703(b) of New York's Business Corporation Law
provides:
Each director shall hold office until the
expiration of the term FOR WHICH HE IS
ELECTED, and until his successor has been
elected and qualified. (emphasis added)
55. This statute reflects bedrock corporate law that directors
are elected through corporate democracy to serve specific terms, not to hold
their posts for life. An equally fundamental principle of corporate law is that
shareholders, not directors, have the power to extend the terms of Board
members. In their bid to prevent DCA's shareholders from exercising their
corporate franchise, the Director Defendants decided to violate these principles
of corporate democracy and extend the terms of six directors, in contravention
of Section 703(b) and without shareholder approval. The Board's action is
inconsistent with Section 703(b) and as a result, all directors elected to serve
two-year terms at the 1995 annual meeting, must be stand for re-election at
DCA's 1997 annual meeting.
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<PAGE>
56. Accordingly, counterclaim-plaintiff SB seeks a
declaration, pursuant to 28 U.S.C. Section 2201, that the Directors Defendants'
unilateral lengthening of the terms of defendants Cohan, Gunther and Lozyniak
was improper and unenforceable and as a result these Director Defendants must
stand for re-election at the 1997 annual meeting.
SIXTH CLAIM FOR RELIEF
----------------------
57. Counterclaim-plaintiff restates the allegations in
paragraph 1 through 56 above.
58. In response to SB's tender offer, the Director Defendants
decided to tinker with DCA's corporate machinery for the sole purpose of
preventing DCA's shareholders from exercising their lawful franchise and from
participating in corporate democracy. Thus, on or about April 11, 1997, DCA and
the Director Defendants purported to increase the board of directors from 7 to 9
and then to "re-classify" the Board so that only 3 of 9 directors would stand
for re-election at the 1997 annual meeting. The Director Defendants also
purported to extend their terms in office beyond those voted by shareholders and
chose to continue in office by holding onto their posts and not letting
shareholders vote on their terms. In addition, DCA and the Director Defendants
postponed the annual meeting from May 2 to August 1, 1997, thereby preventing a
majority of shareholders from exercising their immediate right to remove the
board.
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<PAGE>
59. To further impede shareholder rights and to entrench
management, DCA and the Director Defendants amended DCA's by-laws to prevent
removal of any director without cause and to eliminate the right of shareholders
holding 25% or more of the outstanding share to call for a special meeting.
60. The conduct of DCA and the Director Defendants in
tinkering with DCA's corporate machinery solely to frustrate a shareholder vote
is illegal. Accordingly, counterclaim-plaintiff SB seeks a declaration pursuant
to 28 U.S.C. Section 2201 that the following acts by DCA's board are invalid and
unenforceable: (i) the increase in directors from 7 to 9; (ii) the
classification of the board into three classes; (iii) the extension of the terms
for existing directors so that only 3 of 9 directors will stand for re-election
at the 1997 annual meeting.
SEVENTH CLAIM FOR RELIEF
------------------------
61. Counterclaim-plaintiff restates the allegations in
paragraph 1 through 60 above.
62. Based upon the foregoing, counterclaim-plaintiff is
entitled to a preliminary and permanent injunction prohibiting DCA from
implementing the changes in corporate practice set forth in paragraph 60 above.
63. Counterclaim-plaintiff has no adequate remedy at law.
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<PAGE>
EIGHTH CLAIM FOR RELIEF
-----------------------
64. Counterclaim-plaintiff restates the allegations in
paragraph 1 through 63 above.
65. Counterclaim-plaintiff's tender offer represents a
substantial premium for DCA shareholders. Upon information and belief, it has
been and continues to be warmly embraced by DCA shareholders, who are anxious to
reap the financial rewards offered by SB and WHX.
66. Effective December 15, 1988, New York amended its Business
Corporation Law by enacting Section 505(a)(2) which, for the first time,
permitted boards to adopt "poison pill" rights plans. These plans had previously
been barred as discriminatory. In enacting Section 505(a)(2), N.Y.B.C.L., the
legislature of New York made the following finding: "It is the policy of this
state to provide the board of directors reasonable opportunity to evaluate and
respond to such [acquisition] offers. At the same time, the legislature
recognizes that adoption of this act provides significant powers to incumbent
directors, use of which may be subject to abuse and accordingly, wishes is to
provide for judicial review of the use of such powers."
67. Section 505(a)(2)(ii) of New York's Business Corporation
Law thus sharply limits the authority of directors, such as the Director
Defendants, to utilize a "poison pill" rights plan to frustrate shareholder
desires. The statute provides in pertinent part:
(ii) Determinations of the board of directors whether to
impose, enforce or waive or
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<PAGE>
otherwise render ineffective such limitations or conditions as
are permitted by clause (i) of this subparagraph shall be
subject to judicial review in an appropriate proceeding in
which the courts formulate or apply appropriate standards in
order to insure that such limitations or conditions are
imposed, enforced or waived in the best long-term interests
and short-term interests of the corporation and its
shareholders considering, without limitation, the prospects
for potential growth, development, productivity and
profitability of the corporation.
N.Y.B.C.L. Section 505(a)(2)(ii).
68. In refusing to speak to SB and WHX, much less to enter
into negotiations, the Director Defendants have violated their obligations under
New York law. The decision to reject SB's tender offer INSTANTER is contrary to
the best long-term and short-term interest of DCA and its shareholders.
69. Based upon the foregoing, counterclaim-plaintiff SB is
entitled to a preliminary and permanent injunction directing the Director
Defendants to redeem the Rights so that SB's tender offer may proceed.
70. Counterclaim-plaintiff has no adequate remedy at law.
NINTH CLAIM FOR RELIEF
----------------------
71. Counterclaim-Plaintiff restates the allegations in
paragraphs 1 through 70 above.
72. Plaintiff has alleged that counterclaim-plaintiff has
formed a "group" with other persons in violation of Section 13(d) of the 1934
Act. Counterclaim-plaintiff SB denies the
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<PAGE>
foregoing allegation. As a result, a genuine dispute exists between the parties
as to whether counterclaim-plaintiff SB has violated, or continues to violate,
Section 13(d) of the 1934 Act. Accordingly, counterclaim-plaintiff seeks a
declaration, pursuant to 28 U.S.C. Section 2201, that it has not violated, and
is not continuing to violate, Section 13(d) of the 1934 Act.
TENTH CLAIM FOR RELIEF
----------------------
73. Counterclaim-Plaintiff restates the allegations in
paragraphs 1 through 72 above.
74. DCA held its most recent annual meeting of shareholders on
May 3, 1996. Under Section 603 of New York's Business Corporation Law, a New
York corporation must hold its annual meeting within 13 months of the last date
of its prior annual meeting. In violation of this statute, DCA has adjourned its
1997 annual meeting from May 1 to August 2, 1997. As a result, DCA is now in
violation of Section 603 of New York's Business Corporation Law.
75. Based on the foregoing, counterclaim-plaintiff is entitled
to a mandatory injunction directing DCA to hold its meeting of shareholders
immediately and/or a preliminary and permanent injunction restraining DCA from
adjourning its August 1 annual meeting to any later date.
76. Counterclaim-plaintiff has no adequate remedy at law.
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<PAGE>
ELEVENTH CLAIM FOR RELIEF
-------------------------
77. Counterclaim-plaintiff restates the allegations in
paragraph 1 through 76 above.
78. By virtue of the foregoing, the Director Defendants have
breached, are breaching, and threaten to breach their fiduciary duties to the
shareholders of DCA.
79. Counterclaim-plaintiff has no adequate remedy at law.
WHEREFORE Defendants and counterclaim-plaintiff pray for the following relief:
A. Dismissing the Complaint with prejudice and awarding
defendants their costs, disbursements and such other relief as the Court deems
just and proper;
B. Declaring that Article XV of the DCA's Certificate of
Incorporation, as amended, is invalid and unenforceable;
C. Granting SB preliminary and permanent injunctive relief
prohibiting DCA's violation of Section 14(d) of the 1934 Act and Rule 14d-9
promulgated thereunder;
D. Declaring that Article VII of DCA's Articles of
Incorporation is invalid and unenforceable;
E. Declaring that the Director Defendants' re- classification
of DCA's board of directors from two classes to three classes is invalid and
unenforceable because it contravenes Article VII;
F. Declaring that the Directors Defendants' unilateral
lengthening of the terms of defendants Cohan, Gunther and Lozyniak was improper
and unenforceable and as a result these
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Director Defendants must stand for re-election at the 1997 annual meeting;
G. Declaring that, for the reasons set forth in Count V, the
following acts by DCA's board are invalid and unenforceable: (i) the increase in
directors from 7 to 9; (ii) the classification of the board into three classes;
(iii) the extension of the terms for existing directors so that only 3 of 9
directors will stand for re-election at the 1997 annual meeting;
H. Entering a preliminary and permanent injunction enjoining
DCA from the foregoing acts;
I. Entering a preliminary and permanent injunction directing
the Director Defendants to redeem the Rights so that SB's tender offer may
proceed;
J. Declaring that SB has not violated, and is not continuing
to violate, Section 13(d) of the 1934 Act;
K. Entering a mandatory injunction directing DCA to hold its
meeting of shareholders immediately and/or a preliminary and permanent
injunction restraining DCA from adjourning its August 1 annual meeting to any
later date;
L. Enjoining the Director Defendants from breaching their
fiduciary duties to the shareholders of DCA, including by failing to redeem the
Rights and to waive Section 912, N.Y.B.C.L.
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<PAGE>
M. Granting such other further relief as the Court deems just
and proper.
Dated: May __, 1997
-------------------------
John F. Conway (CT 04763)
Phyllis M. Pari (CT 08132)
WIGGIN & DANA
One Century Tower
New Haven, CT 06508
(203) 498-4400
Attorneys for Defendants and
Counterclaim-Plaintiff
Of Counsel:
Thomas J. Fleming
David E. Bamberger
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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