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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(AMENDMENT NO. 9)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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GRUMMAN CORPORATION
(NAME OF SUBJECT COMPANY)
GRUMMAN CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, $1 PAR VALUE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHT)
(TITLE OF CLASS OF SECURITIES)
40018110
(CUSIP NUMBER OF CLASS OF SECURITIES)
THOMAS L. GENOVESE
VICE PRESIDENT AND GENERAL COUNSEL
GRUMMAN CORPORATION
1111 STEWART AVENUE
BETHPAGE, NEW YORK 11714-3580
(516) 575-3871
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSONS(S) FILING STATEMENT)
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This Amendment No. 9 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9, dated March 8, 1994 (the "Schedule 14D-9"), of
Grumman Corporation, a New York corporation (the "Company"), filed in connection
with the Offer as set forth in the Schedule 14D-9. Capitalized terms used herein
shall have the definitions set forth in the Schedule 14D-9 unless otherwise
provided herein.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
The response to Item 4(b) on pages 1 through 4 of the
Solicitation/Recommendation Statement on Schedule 14D-9, dated March 24, 1994
(the "March 24 Schedule 14D-9") of the Company, filed with the Securities and
Exchange Commission on March 25, 1994, with respect to the tender offer of
Northrop (the "Northrop Offer"), is incorporated by reference herein in its
entirety.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
The response to Item 8 on pages 5 through 6 of the March 24 Schedule 14D-9
is incorporated by reference herein in its entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
(c)(24) Solicitation/Recommendation Statement on Schedule 14D-9, dated March
24, 1994, of the Company with respect to the Northrop Offer.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GRUMMAN CORPORATION
By: /s/ Renso L. Caporali
Chairman of the Board and
Chief Executive Officer
Date: March 24, 1994
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EXHIBIT INDEX
EXHIBIT
(c)(24) Solicitation/Recommendation Statement on Schedule 14D-9, dated March
24, 1994, of the Company with respect to the Northrop Offer.
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EXHIBIT (C)(24)
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(WITH RESPECT TO THE TENDER OFFER BY NORTHROP CORPORATION)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
---------------------
GRUMMAN CORPORATION
(NAME OF SUBJECT COMPANY)
GRUMMAN CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, $1 PAR VALUE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHT)
(TITLE OF CLASS OF SECURITIES)
40018110
(CUSIP NUMBER OF CLASS OF SECURITIES)
THOMAS L. GENOVESE
VICE PRESIDENT AND GENERAL COUNSEL
GRUMMAN CORPORATION
1111 STEWART AVENUE
BETHPAGE, NEW YORK 11714-3580
(516) 575-3871
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE
PERSON(S) FILING STATEMENT)
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Grumman Corporation, a New York
corporation (the "Company"), and the address of its principal executive offices
is 1111 Stewart Avenue, Bethpage, New York 11714-3580. The title of the class of
equity securities to which this statement relates is the Common Stock, par value
$1 per share (the "Common Stock"), of the Company, including the associated
rights to purchase Series A Junior Participating Preferred Stock of the Company
(the "Rights") issued pursuant to the Rights Agreement dated as of February 18,
1988, as amended (the "Rights Agreement"), between the Company and The Bank of
New York, as Rights Agent (such Common Stock and the Rights being collectively
referred to herein as the "Shares").
ITEM 2. TENDER OFFER OF THE BIDDER.
This statement relates to the tender offer by Northrop Acquisition, Inc.
("Northrop Acquisition"), which is a newly-formed, wholly-owned subsidiary of
Northrop Corporation, a Delaware corporation ("Northrop"), to purchase all
outstanding Shares at a price of $60.00 per Share net to the seller in cash, as
disclosed in the Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
dated March 14, 1994 filed by Northrop Acquisition and Northrop with the
Securities and Exchange Commission (the "Commission"), upon the terms and
subject to the conditions set forth in the Offer to Purchase dated March 14,
1994 (the "Northrop Offer to Purchase") and the related Letter of Transmittal
(which together constitute the "Northrop Offer" and are referred to collectively
herein as the "Northrop Offer Documents").
The Schedule 14D-1 states that the principal executive offices of Northrop
Acquisition and Northrop are located at 1840 Century Park East, Los Angeles,
California 90067.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and address of the Company, which is the person filing this
Statement, are set forth in Item 1 above.
(b) Certain contracts, agreements, arrangements and understandings between
the Company or its affiliates and certain of its directors and executive
officers are described under the heading "Other Contracts, Agreements,
Arrangements or Understandings" at pages 6 through 8 of the Company's Statement
of March 8, 1994 on Schedule 14D-9 (the "March 8 Schedule 14D-9") mailed to its
shareholders in response to the tender offer by MMC Acquisition Corp., a
newly-formed, wholly-owned subsidiary of Martin Marietta Corporation ("Martin
Marietta"), to purchase all outstanding Shares at a price of $55.00 per Share
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated March 8, 1994 and the related Letter of
Transmittal (which together constitute the "Martin Offer"). A copy of the March
8 Schedule 14D-9 is filed as Exhibit (c)(1) hereto and such material on pages 6
through 8 is incorporated by reference herein in its entirety.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendation. At a special meeting of the Board of Directors of the
Company (the "Board") held on March 24, 1994, the Board unanimously adopted
resolutions that the Board, in light of all the relevant circumstances, takes no
position at this time with respect to the Northrop Offer.
(b) Background and Reasons for the Recommendation. The response to Item
4(b) on pages 8 through 18 of the March 8 Schedule 14D-9 is incorporated by
reference herein in its entirety.
On March 8, 1994, Martin Marietta filed its tender offer documents with the
Commission on Schedule 14D-1, and the Company filed the March 8 Schedule 14D-9
with the Commission, and thereafter copies of the Martin Marietta tender offer
documents and the March 8 Schedule 14D-9 were distributed to shareholders of the
Company.
On March 10, 1994, Northrop sent the Company a letter, a copy of which is
attached hereto as Exhibit (c)(2) and incorporated in its entirety herein by
reference. The letter stated that the Board of
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Directors of Northrop had authorized the acquisition of the Company at a cash
price of $60 per Share, and that on Monday, March 14, Northrop would commence a
tender offer for all Shares of the Company. The letter also stated that Northrop
had received a commitment letter from the Chase Manhattan Bank, N.A. and
Chemical Bank totalling $2.8 billion to finance the acquisition and that the
Northrop Board had authorized Northrop to enter into a tender offer/merger
agreement with the Company on substantially identical terms as those between the
Company and Martin Marietta. Among other things, the letter stated that, in
light of the fiduciary duty of the Board to its shareholders, Northrop believed
that the Board had a legal duty to facilitate the receipt by the shareholders of
Northrop's offer in order that the shareholders might freely choose what was
obviously a much more favorable transaction and that Northrop believed it should
be furnished substantially the same non-public information concerning the
Company that was furnished to Martin Marietta. Northrop requested confirmation
from the Company by the close of business on March 14, 1994 that the Company
would be prepared to furnish such information. Northrop also stated its belief
that the Company's agreement with Martin Marietta regarding the payment of a
termination fee to Martin Marietta pursuant to the terms of the Agreement and
Plan of Merger, dated as of March 6, 1994, among Martin Marietta, MMC
Acquisition Corp. and the Company (the "Merger Agreement") was improper and
illegal.
At a special meeting of the Board on March 14, 1994, the Board determined
to respond affirmatively to Northrop's request in its letter of March 10, 1994
to supply Northrop with "substantially the same non-public information
concerning the Company that was furnished to Martin Marietta" and to confirm "by
the close of business Monday, March 14, 1994 that we are prepared to furnish
such information," and directed that the letter filed herewith as Exhibit
(c)(3), which is incorporated by reference herein in its entirety, be sent to
Northrop.
Commencing on the afternoon of March 16, 1994 and until March 20, 1994,
representatives of the Company and Northrop met in connection with the
furnishing of such information.
On March 21, 1994, the Company received a letter from Martin Marietta, a
copy of which is attached hereto as Exhibit (c)(4) and incorporated by reference
herein in its entirety. Among other things, the letter made reference to the
Confidentiality Agreement between the Company and Northrop "which contains
certain 'standstill' provisions which prohibit Northrop from making an
unsolicited offer for Grumman's shares until after January 1996." The letter
further stated that "[i]f Grumman were not to enforce the Confidentiality
Agreement with Northrop, such failure will constitute a breach of Section 6.2
and 6.4 of the Merger Agreement" and that Martin Marietta "would appreciate your
prompt advice as to whether Grumman intends to seek to enforce the
Confidentiality Agreement against Northrop."
On March 23, 1994, the Company sent a letter to Martin Marietta, a copy of
which is attached hereto as Exhibit (c)(5) and incorporated by reference herein
in its entirety. The letter stated, among other things, that "Grumman has
complied and continues to comply with the existing Merger Agreement between our
companies, including, without limitation, Sections 6.2 and 6.4 thereof" and that
"[w]ith respect to your request that we 'enforce the Confidentiality Agreement
with Northrop', we believe that in order to have a court enforce the
Confidentiality Agreement's standstill provisions against the $60 a share
Northrop tender offer under present circumstances, it would be necessary to
demonstrate the manner in which Grumman would be damaged if such standstill
provisions were not enforced and, to secure injunctive relief, to demonstrate
irreparable injury to Grumman." The letter further indicated that the Company
would be happy to discuss the foregoing with Martin Marietta.
On March 23, 1994, the Company received a letter from Northrop, a copy of
which is attached hereto as Exhibit (c)(6) and incorporated by reference herein
in its entirety. Among other things, the letter stated that the opportunity
Northrop was afforded to do "limited 'due diligence' at Grumman last
week . . . has confirmed our strong desire to complete the acquisition." The
letter also stated that Northrop "would object most strenuously to any amendment
of the existing Grumman-Martin Marietta agreement that would have the effect of
erecting still further barriers (in the form of increased 'lock-up' fees or
otherwise) to a free and open competitive bidding opportunity for Northrop."
Northrop requested assurance from the Company, in writing, by the close of
business, Pacific Standard Time, on Thursday, March 24, 1994 that the Company
would not "impede a free and open competitive bidding . . . ."
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At a special meeting of the Board held on the morning of March 24, 1994,
the Board authorized the sending of a letter to Northrop responding to Northop's
letter dated March 23, 1994 stating that the Board would only take actions that
it determines in its reasonable good faith business judgment are in the
interests of the shareholders of Grumman Corporation and also that the Board had
authorized entering into discussions with Northrop, a copy of which is attached
hereto as Exhibit (c)(7) and incorporated by reference herein in its entirety.
The Board had authorized entering into discussions with Northrop before
adjourning until later in the day to consider all relevant information
concerning the Martin Offer and the Northrop Offer before recommending a
position with respect to the Northrop Offer.
Pursuant to the Board authorization described above, representatives of the
Company had telephonic discussions with Northrop to clarify the Northrop Offer.
Representatives of the Company also telephoned Martin Marietta to inform Martin
Marietta of the actions being taken by the Board.
The Company also received from Northrop a copy of a proposed Agreement and
Plan of Merger, dated as of March 24, 1994, among Northrop, Northrop Acquisition
and the Company (the "Proposed Merger Agreement"), which had been executed by
Northrop and Northrop Acquisition, subject to Northrop's receipt and approval of
certain documents referenced in the Merger Agreement. The Proposed Merger
Agreement was substantially identical to the Merger Agreement, except that the
Proposed Merger Agreement contained revisions to reflect (i) consideration of
$60.00 per share, (ii) the existence of the Northrop Offer and amendments
proposed to be made thereto, (iii) a representation that the Company had
terminated the Merger Agreement pursuant to Section 8.1(d)(ii) thereof and (iv)
the names, jurisdiction of incorporation and other similar data pertaining to
Northrop and Northrop Acquisition. Certain of the documents referenced in the
Merger Agreement were provided to Northrop.
Representatives of the Company had a telephonic conversation with
representatives of Martin Marietta during which Martin Marietta reiterated
certain positions previously communicated by Martin Marietta to the Company.
Representatives of the Company also received a telephonic communication from
representatives of Northrop reiterating certain of the points made in Northrop's
March 23, 1994 letter to the Company and set forth in the Proposed Merger
Agreement.
The Company is a party to the Merger Agreement with Martin Marietta. The
Merger Agreement provides that, inter alia:
(1) if
" . . . . there shall have been a breach of any covenant or agreement on
the part of the Company resulting in a Material Adverse Effect [as defined
in the Merger Agreement] on the Company or materially adversely affecting
(or materially delaying) the consummation of the [Martin] Offer, which
shall not have been cured prior to . . . "
certain specified times, Martin Marietta would have the right (but not the
obligation) to terminate the Merger Agreement and, in such event, the Company
would be obligated to pay Martin Marietta "$20 million in liquidated damages
immediately upon such a termination";
(2) if
" . . . . the Company shall engage in negotiations with any entity or group
(other than [Martin Marietta]) that has proposed a Third Party Acquisition
(as defined in [the Merger Agreement]), or . . . the Board shall have
withdrawn or modified (including by amendment of the Schedule 14D-9) in a
manner adverse to [Martin Marietta] its approval or recommendation of the
[Martin] Offer, this [Merger] Agreement or the Merger or shall have
recommended another offer, or shall have adopted any resolution to effect
any of the foregoing . . . ",
Martin Marietta would have the right (but not the obligation) to terminate the
Merger Agreement and, in such event, the Company would be obligated to pay
Martin Marietta's expenses up to $8.8 million and, if
" . . . the Company enters into an agreement with respect to a Third Party
Acquisition, or a Third Party Acquisition occurs, involving any party (or
any affiliate thereof) (x) with whom the Company (or its
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agents) had negotiations with a view to a Third Party Acquisition, (y) to
whom the Company (or its agents) furnished information with a view to a
Third Party Acquisition or (z) who had submitted a proposal or expressed an
interest in a Third Party Acquisition, in the case of each of clauses (x),
(y) and (z) after [March 6, 1994] and prior to such termination . . . ",
the Company would be obligated to pay Martin Marietta $50 million, and
(3) if
" . . . .prior to the purchase of Shares pursuant to the [Martin] Offer, a
corporation, partnership, person or other entity or group shall have made a bona
fide offer that the Board by a majority vote determines in its good faith
judgment and in the exercise of its fiduciary duties, based as to legal
matters on the written opinion of legal counsel, is more favorable to the
Company's shareholders than the Offer and the Merger, . . . "
the Company would have the right (but not the obligation) to terminate the
Merger Agreement and, in such event, the Company would be obligated to pay $50
million to Martin Marietta and to pay Martin Marietta's expenses up to $8.8
million. At this time, Martin Marietta's tender offer is at $55 per Share and
Northrop's tender offer is at $60 per Share.
Upon resumption of the meeting of the Board on the afternoon of March 24,
1994, the Board unanimously adopted resolutions that the Board, in light of its
inability to predict what bids or revisions to bids, if any, may be made or how
other uncertainties may be resolved and in light of all relevant circumstances
including the above, takes no position at this time with respect to the Northrop
Offer.
The Board did not assign relative weights to the factors discussed above.
After the conclusion of the meeting of the Board, representatives of the
Company contacted representatives of Northrop and informed Northrop of the
action taken by the Board. Representatives of the Company also contacted
representatives of Martin Marietta to inform Martin Marietta of the receipt by
the Company of the Proposed Merger Agreement and of the action taken by the
Board, and such representatives also discussed the actions being taken by the
Board.
A copy of the text of the press release regarding the filing of this
Schedule 14D-9 is filed as Exhibit (a)(1) hereto and is incorporated herein by
reference in its entirety.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The response to Item 5 on page 18 of the March 8 Schedule 14D-9 is
incorporated by reference herein in its entirety.
Neither the Company nor any person acting on its behalf intends to employ,
retain or compensate any other person to make solicitations or recommendations
to the Company's shareholders in connection with the Northrop Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) The response to Item 6(a) on page 18 of the March 8 Schedule 14D-9 is
incorporated herein by reference in its entirety.
(b) To the best knowledge of the Company, none of the Company's executive
officers, directors and affiliates presently intends to tender Shares pursuant
to the Northrop Offer and (ii) none of its executive officers, directors and
affiliates presently intends to sell any Shares which are owned beneficially or
held of record by such persons, except with respect to tenders of Shares
pursuant to the Martin Offer.
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ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) The Company is not engaged in any negotiation in response to the
Northrop Offer which relates to or would result in:
(1) an extraordinary transaction, such as a merger or reorganization,
involving the Company or any subsidiary of the Company;
(2) a purchase, sale or transfer of a material amount of assets by the
Company or any subsidiary of the Company;
(3) a tender offer for or other acquisition of securities by or of the
Company; or
(4) any material change in the present capitalization or dividend
policy of the Company.
(b) The response to Item 3(b) on pages 1 through 8 of the March 8 Schedule
14D-9 is incorporated herein by reference in its entirety. Except as described
above and under Item 4, there are no transactions, Board resolutions, agreements
in principle or signed contracts in response to the Northrop Offer which relate
to or would result in one or more of the matters referred to in this Item 7.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Litigation
On or about March 7, 1994, a putative class action was filed in the Supreme
Court of the State of New York, County of Nassau (the "NY Supreme Court"), on
behalf of the Company's shareholders, alleging causes of action arising out of
the proposed acquisition of the Company by Martin Marietta: Croyden Associates,
et al. v. Grumman Corp., et al., Index No. 94-005796. On or about March 8, 1994,
a putative class action was filed in the NY Supreme Court, on behalf of the
Company's shareholders, alleging causes of action arising out of the proposed
acquisition of the Company by Martin Marietta: Allen M. Olender, et al. v.
Grumman Corp., et al., Index No. 94-005803. On or about March 11, 1994, a
putative class action was filed in the NY Supreme Court, on behalf of the
Company's shareholders, alleging causes of action arising out of the proposed
acquisition of the Company by Martin Marietta and the proposed Northrop
transaction; Paul Gardner v. Grumman Corp., et al., Index No. 94-006295. On or
about March 11, 1994, a putative class action was filed in the NY Supreme Court,
on behalf of the Company's shareholders, alleging causes of action arising out
of the proposed acquisition of the Company by Martin Marietta and the proposed
Northrop transaction: John Mezzasalma v. Grumman Corp., et al., Index No.
94-006300.
The defendants in the actions identified above are the Company, Martin
Marietta and each of the directors of the Company. The Company's financial
advisor, Goldman, Sachs & Co. is also a defendant in the Croyden action. The
lawsuits allege substantially similar causes of action or breaches of fiduciary
duty against Grumman and the Board, and allege that Martin Marietta aided and
abetted those breaches of duty. The actions seek, inter alia, to enjoin the
proposed transactions with Martin Marietta on the grounds that the consideration
to be paid is inadequate and unfair and that the Board has failed to maximize
shareholder value.
On March 11, 1994 and March 14, 1994, plaintiffs in the Croyden and Olender
actions, respectively, obtained from the NY Supreme Court ex parte orders to
show cause regarding expedited discovery, which were made returnable on March 17
and March 23, respectively. On March 16, 1994, defendants moved to dismiss the
Croyden action and on March 18 defendants moved to dismiss each of the other
actions. On March 17, 1994, the NY Supreme Court deferred ruling on the order to
show cause in the Croyden action, and on March 21, 1994, the NY Supreme Court
entered a stipulation and order governing all four actions which adjourned all
proceedings without date, including the motions for expedited discovery and the
motions to dismiss.
On or about March 18, 1994, a putative class action was filed in the United
States District Court for the Southern District of New York on behalf of the
Company's shareholders alleging claims arising out of the proposed acquisition
of the Company by Martin Marietta and the proposed transaction involving the
Company and Northrop. Dennis Fecci, et al. v. Grumman Corporation, et al., Index
No. 94 Civ. 1914. Two of the named
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plaintiffs, Allen M. Olender and David Rudnick, are plaintiffs in the Olender
action discussed above. Named as defendants are the Company, its directors and
Martin Marietta. The action asserts violations of Sections 10(b), 14(e) and
20(a) of the Securities Exchange Act of 1934, as amended, and alleges that the
Company's March 8 Schedule 14D-9 filed in response to the Martin Marietta offer
is materially false and misleading and that the individual defendants breached
their fiduciary duties. The action seeks a declaration of class action status,
monetary damages, and preliminary and permanent injunctive relief relating to
shareholder communications, the proposed acquisition of the Company by Martin
Marietta and any related transactions. The Company and its directors have not as
yet responded to this complaint.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) -- Press release issued by the Company on March 25, 1994
(b) -- None.
(c)(1) -- Company's Statement of March 8, 1994 on Schedule 14D-9 in response to the tender
offer by MMC Acquisition Corp.
(c)(2) -- Letter dated March 10, 1994 from Northrop Corporation to the Company
(c)(3) -- Letter dated March 14, 1994 from the Company to Northrop Corporation
(c)(4) -- Letter dated March 21, 1994 from Martin Marietta Corporation to the Company
(c)(5) -- Letter dated March 23, 1994 from the Company to Martin Marietta Corporation
(c)(6) -- Letter dated March 23, 1994 from Northrop Corporation to the Company
(c)(7) -- Letter dated March 24, 1994 from the Company to Northrop Corporation.
</TABLE>
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GRUMMAN CORPORATION
By: /s/ Renso L. Caporali
Chairman of the Board and
Chief Executive Officer
Date: March 24, 1994
7
