<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
SCHEDULE 14D-9
(AMENDMENT NO. 2)
(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)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
This Amendment No. 2 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9, dated March 24, 1994 (the "Schedule 14D-9"), of
Grumman Corporation, a New York corporation (the "Company"), filed in connection
with the Northrop 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 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The Company received a letter dated March 28, 1994 from Northrop
Corporation, a copy of which is attached hereto as Exhibit (c)(12) and
incorporated by reference herein in its entirety. The Company sent a letter
dated March 29, 1994 to Northrop Corporation, with a copy to Martin Marietta
Corporation, a copy of which is attached as Exhibit (c)(13) and incorporated by
reference herein in its entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(c)(12) Letter dated March 28, 1994 from Northrop Corporation to the Company.
(c)(13) Letter dated March 29, 1994 from the Company to Northrop Corporation.
(c)(14) Letter dated March 29, 1994 from the Company to its employees.
</TABLE>
1
<PAGE> 3
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 29, 1994
2
<PAGE> 4
EXHIBIT INDEX
EXHIBIT
(c)(12) Letter dated March 28, 1994 from Northrop Corporation to the Company.
(c)(13) Letter dated March 29, 1994 from the Company to Northrop Corporation.
(c)(14) Letter dated March 29, 1994 from the Company to its employees.
<PAGE> 1
Exhibit (c)(12)
March 28, 1994
Dr. Renso L. Caporali
Chairman and Chief Executive Officer
Grumman Corporation
1111 Stewart Avenue
Bethpage, NY 11714-3580
Dear Renso:
We have received, and are reviewing, your letter dated March 28, 1994.
I wish to point out that the process you have proposed continues the
unlevel playing field.
First, Northrop continues to be faced with the cost of the Martin Marietta
lockup fee, a $50 plus million expense that has been imposed on Northrop but not
(obviously) on Martin Marietta.
Second, the high bid presently "on the table" is Northrop's bid of $60 per
share. Martin Marietta has been aware of that fact for over two weeks. By
contrast, Northrop is now being asked to bid against a purely hypothetical price
increase from Martin Marietta without any notice or knowledge of whether such an
increase is in fact submitted. In essence, Grumman is proposing that Northrop
bid against itself. Since Northrop has fiduciary duties to its own stockholders,
this imposes a considerable burden upon us.
While the Grumman Board has "determined that it is in the best interests of
the shareholders of the Company to have free and open competitive bidding", the
proposed process is not open. While we share Grumman's desire to avoid undue
delay in concluding the present acquisition process, it is not in the best
interests of Grumman's stockholders to prematurely cut off potential bidding and
potentially deprive stockholders of the opportunity to receive the maximum value
for their shares. This, of course, will occur if Northrop is not allowed the
opportunity to top any increase in bid which Martin Marietta wishes to make.
A process, similar to that which you have proposed, might have been
appropriate in January before actions were taken to exclude Northrop from the
bidding which forced us to act publicly. Having done so, it is apparent that,
without the bidding rules and procedures described in your March 28 letter, the
current process is open (all correspondence, offers, etc., must be public); it
is fair (there can be no backroom deals); it is orderly (the SEC regulations
guide the process); it will conclude in the very near future (both suitors are
subject to time and financial constraints); and, it is in the best interest of
all concerned -- the shareholders, employees and communities benefit precisely
because the inherent transparency of the process means that the highest offer
will win. This then is what we believe is a true, open process in which we are
currently engaged.
Sincerely,
Kent Kresa
<PAGE> 1
Exhibit (c)(13)
GRUMMAN CORPORATION
BETHPAGE, NEW YORK 11714-3580
DR. RENSO L. CAPORALI
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
March 29, 1994
Mr. Kent Kresa
Chairman, President and Chief
Executive Officer
Northrop Corporation
1840 Century Park East
Los Angeles, California 90067
Dear Kent:
I want to acknowledge receipt of your letter of March 28 and thought that
it might be helpful to give you our thinking on the matters raised.
First, I want to assure you that the Rules and Procedures for Submission of
Proposals developed by us and simultaneously transmitted to both you and Martin
Marietta on March 28, 1994, represent the carefully considered determination by
Grumman and its Board of Directors that this is the appropriate course to follow
for all the reasons set forth in our March 28 letter. We very much hope that you
and Martin Marietta will submit your "best and highest offer" as contemplated by
the Rules and Procedures and that each of you will make yourselves available for
the weekend commencing with the submission of the bids at 5 p.m., New York time,
on Thursday, March 31, as therein contemplated.
We continue to be firmly of the view that the Rules and Procedures are fair
to both Northrop and Martin Marietta and are consistent with and promote a free
and open bidding process as urged in Northrop's March 23 letter and are in the
best interests of our shareholders and other constituencies as indicated in our
March 28 letter.
Under the process, your bid would be based on the "Agreement and Plan of
Merger, dated as of March 24, 1994, among Northrop Corporation, Northrop
Acquisition, Inc., and Grumman Corporation" ("Northrop Agreement"), as executed
by you and transmitted by your counsel to our counsel. The Northrop Agreement
expressly incorporates what you refer to as a "lockup fee" in two respects.
First, the Northrop Agreement requires a representation by Grumman that Grumman
has terminated the Martin Marietta Agreement and Plan of Merger ("Martin
Agreement") pursuant to Section 8.1(d)(ii) thereof, which Section specifies that
no such termination can be effective until payment by Grumman to Martin Marietta
of the $50 million fee required by Section 8.3(b) thereof. Second, the Northrop
Agreement, once executed by both parties, requires precisely the same $50
million fee and expenses (for the benefit of Northrop) as does the Martin
Agreement (for the benefit of Martin Marietta).
Again, we feel that the Rules and Procedures set forth in our March 28
letter are the best assurance of a fair and orderly procedure, and we strongly
urge and hope that both Northrop and Martin Marietta will participate. We have
no confidence that in the absence of such Rules and Procedures the bidding would
conclude in the very near future; the submission by each bidder of its "best and
highest offer" at the earliest time so that the process can be brought to a
prompt and orderly conclusion is, we would suggest, in the best interest not
only of Grumman, its shareholders, and other constituencies, but also of the
bidders.
<PAGE> 2
So as to assure that any communications from us prior to the bid time,
i.e., 5:00 p.m. Thursday, March 31, are communicated at the same time to
Northrop and Martin Marietta, we are simultaneously transmitting this letter
both to you and to Martin Marietta.
Sincerely,
Renso L. Caporali
RLC:lee
cc: Mr. Norman R. Augustine,
Chairman and Chief Executive Officer
Martin Marietta Corporation
<PAGE> 1
EXHIBIT (C)(14)
GRUMMANWORLD
- --------------------------------------------------------------------------------
SPECIAL EDITION MARCH 29, 1994
- --------------------------------------------------------------------------------
A LETTER FROM THE CHAIRMAN
Fellow Grummanites:
It seems that just when we most need to communicate, we are least able to
do so. With competing tender offers for Grumman shares, we are in a complicated
situation with no easy answers. Our direct communication with our shareholders
right now is quite limited -- and most Grumman employees are also shareholders,
which makes matters worse. Many Grumman people are upset and angry that no one
is talking to them. They resent reading about their company in the newspapers
instead of hearing it first at work.
If you've been following accounts in the media, you won't see much that is
attributed to a Grumman source; the legal ramifications of a misstatement are
considerable. For the most part, comment is made by the two companies competing
to acquire us, or by investment companies or other interested parties. When we
do have something to say, we have a legal obligation to make a public
announcement and to make sure that information is distributed to all outlets at
the same time. This is done through press releases and filings with the
Securities and Exchange Commission. We are simply forbidden to single out one
group of shareholders -- our employees -- for special communication.
The uncertainty and the silence have been stressful for Grumman people. We
still have products to build and services to perform for our customers, and the
ongoing situation is disruptive to people's lives and to the work environment.
For this reason, we asked Martin Marietta and Northrop to submit their best and
final offers by Thursday, March 31. We hope to announce the winning bid by 9
a.m. on Monday morning, April 4.
We appreciate your hard work, your patience and understanding during this
very difficult time.
Sincerely,
Renso L. Caporali
Chairman
Published by Grumman Public Affairs Department, Kathleen Housley, editor, (516)
575-9643
