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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 4
to
SCHEDULE 13D
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Under the Securities Exchange Act of 1934
(Amendment No. 4)*
Bucyrus International, Inc.
(Name of Issuer)
Common Stock, $.01 par value per share
(Title of Class of Securities)
118902105
(CUSIP Number)
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J. Andrew Rahl, Jr. Esq.
Anderson Kill & Olick, P.C.
1251 Avenue of the Americas, New York, NY 10020-1182
(212) 278-1469
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 21, 1997
(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d- 1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
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Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP No. 118902105
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jackson National Life Insurance Company
38-1659835
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
Conversion of pre-bankruptcy debt and equity obligations to
post-bankruptcy equity in reorganized Issuer pursuant to a
Plan of Reorganization. (00).
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OR ORGANIZATION
Michigan
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER - 4,228,382
8. SHARED VOTING POWER - 4,228,382
9. SOLE DISPOSITIVE POWER - 4,228,382
10. SHARED DISPOSITIVE POWER - 4,228,382
11. AGGREGATE AMOUNT BENEFICIALLY OWED BY EACH REPORTING
PERSON - 4,228,382
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.14%
14. TYPE OF REPORTING PERSON*
Life Insurance Company (IC)
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE
ATTESTATION
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SCHEDULE 13D
CUSIP No. 118902105
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PPM America, Inc.
36-3714794
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
Conversion of pre-bankruptcy debt and equity obligations to
post-bankruptcy equity in reorganized Issuer pursuant to a
Plan of Reorganization. (00).
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OR ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER - 4,228,382
8. SHARED VOTING POWER - 4,228,382
9. SOLE DISPOSITIVE POWER - 4,228,382
10. SHARED DISPOSITIVE POWER - 4,228,382
11. AGGREGATE AMOUNT BENEFICIALLY OWED BY EACH REPORTING
PERSON - 4,228,382
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.14%
14. TYPE OF REPORTING PERSON*
Investment Adviser (IA)
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE
ATTESTATION
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AMENDMENT NO. 4 TO SCHEDULE 13D
This Amendment relates to the Schedule 13D dated December 23,
1994 ("Original Schedule 13D"), as amended by Amendment No. 1 thereto dated
April 10, 1995 ("First Amendment"), Amendment No. 2 thereto dated April 18, 1996
("Second Amendment") and Amendment No. 3 thereto dated August 5, 1997 ("Third
Amendment"), each filed by Jackson National Life Insurance Company ("JNL") and
PPM America, Inc. ("PPM America") relating to the common stock, par value $.01
per share ("Common Stock"), of Bucyrus International, Inc. (the "Issuer").
Notwithstanding this Amendment No. 4, the Original Schedule 13D, the First
Amendment, the Second Amendment and the Third Amendment speak as of their
respective dates. All capitalized terms used but not otherwise defined in this
Amendment have the meanings given to them in the Original Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Original Schedule 13D, as amended by the First
Amendment, Second Amendment and Third Amendment, is hereby amended and restated
in its entirety as follows:
Except as otherwise described herein, the reporting persons
acquired the shares of Common Stock described in Item 5 of the Original Schedule
13D for investment purposes.
Except as otherwise described herein, the reporting persons
presently do not intend to acquire additional shares of Common Stock in the open
market or through privately negotiated transactions.
The Merger
As disclosed in the Issuer's press release dated August 21,
1997, Bucyrus Acquisition Corp. (the "Purchaser"), American Industrial Partners
Acquisition Company, LLC (the "Parent"), each an affiliate of American
Industrial Partners Capital Fund II, L.P., have entered into a merger agreement
(the"Merger Agreement") with the Issuer, a copy of which is attached hereto as
Exhibit 2, providing for the acquisition of the Issuer by the Purchaser (the
"Merger"). Under the terms of the Merger Agreement, the Purchaser will make a
cash tender offer (the "Offer"), to acquire all of the shares of Common Stock of
the Issuer at a price of $18 per share. The transaction is subject to
shareholder approval, if necessary, regulatory approvals and the purchase of
shares of Common Stock in the Offer by the Purchaser.
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Stockholder Agreement
In connection with the execution of the Merger Agreement, JNL,
the Parent and the Purchaser entered into a Stockholder Agreement, dated as of
August 21, 1997, (the "Stockholder Agreement"), pursuant to which and subject to
the terms thereof, JNL agreed to tender, or cause to be tendered, all shares of
Common Stock owned by JNL (the "Shares") into the Offer. In the Stockholder
Agreement, JNL represented that it owns, in the aggregate, 4,228,382 Shares and
$63,963,000 in principal amount of the Company's 10.5% Secured Notes due
September 14, 1999 (the "Secured Notes").
The following description of the Stockholder Agreement does
not purport to be complete and is qualified by reference to the text of the
Stockholder Agreement, a copy of which is filed as Exhibit 3 hereto and
incorporated herein by reference. Capitalized terms not otherwise defined below
have the meanings set forth in the Stockholder Agreement.
Pursuant to the Stockholder Agreement, JNL has agreed that it
will tender its Shares into the Offer promptly, and in any event no later than
the fifth business day following the commencement of the Offer, and that it will
not withdraw any Shares so tendered. The Purchaser has agreed to purchase all
of the Shares so tendered at $18.00 per Share, or such higher price per Share
as may be offered by the Purchaser in the Offer; provided that the Purchaser's
obligation to accept for payment and pay for the Shares in the Offer is subject
to all the terms and conditions of the Offer set forth in the Merger Agreement
and Annex I thereto.
Further, pursuant to the Stockholder Agreement, JNL has
granted to the Parent during the term of the Merger Agreement an irrevocable
proxy to vote the Shares, or grant a consent or approval in respect of the
Shares, in connection with any meeting of the stockholders of the Company (i) in
favor of the Merger and (ii) against any action or agreement which would impede,
interfere with or prevent the Merger, including any other extraordinary
corporate transaction such as a merger, reorganization or liquidation involving
the Company and a third party or any other proposal by a third party to acquire
the Company.
During the term of the Stockholder Agreement, JNL has agreed
that it will not (subject to certain exceptions) (i) transfer, or enter into any
contract, option, agreement or other understanding with respect to the transfer
of, the Shares or the Secured Notes held by it or any interest therein, (ii)
except as provided in the Stockholder Agreement, grant any proxy, power of
attorney or other authorization or consent in or with respect to the Shares or
Secured Notes, (iii) deposit the Shares or Secured Notes in any voting trust or
enter into any voting agreement or arrangement with respect to the Shares or
Secured Notes, or (iv) take any other action with respect to the Shares or
Secured Notes that would in any way restrict, limit or interfere with the
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performance of its obligations pursuant to the Stockholder Agreement; provided,
however, that JNL may transfer all or a portion of the Shares or Secured Notes
to a person or entity who, by written instrument reasonably acceptable in form
and substance to the Parent, agrees to be bound by each of the terms of the
Merger Agreement. In addition, JNL, the Parent and the Purchaser have agreed
that (i) JNL will notify the Purchaser of any inquiry JNL receives which might
lead to an acquisition of the Company by a third party; and (ii) JNL will waive,
if requested, the provisions of the Indenture relating to the prior notice of
redemption of the Secured Notes, or will immediately following consummation of
the Senior Notes Offering (as hereinafter defined) and subject to being
indemnified by the Parent and Purchaser, sell its Secured Notes to the Company
at face value plus accrued interest from June 30, 1997 through the date of
purchase.
The Stockholder Agreement shall terminate upon the earlier of
(a) the date (the "Termination Date") that is six months following the date upon
which the Merger Agreement is terminated in accordance with its terms, or (b)
the Effective Time, provided that certain provisions specified in the
Stockholder Agreement will survive such termination. Neither party has any other
unilateral right to terminate the Stockholder Agreement.
In the Stockholder Agreement, JNL has granted to the Parent an
irrevocable option (the "Purchaser Option") to purchase the Shares at a purchase
price of $18.00 per Share (the "Exercise Price"). The Parent's ability to
exercise the option is contingent upon the occurrence of certain events. At any
time or from time to time prior to the Termination Date, the Parent (or its
designee) may exercise the Purchaser Option, in whole but not in part, if on or
after the date thereof any Third Party (as defined therein) shall have taken
certain defined steps that could evidence, lead to or result in the acquisition
of or exercise of control over the Company. Notwithstanding any other provision
of the Stockholder Agreement, in the event that the Merger Agreement is
terminated and at any time prior to the Termination Date, a person other than
the Parent or any of its affiliates acquires a majority of the outstanding
Shares at a price higher than the Exercise Price (an "Alternative Transaction"),
then the Parent shall promptly either reduce the number of Shares subject to the
Purchaser Option, pay cash to JNL or do both such that the actual Total Profit
realized or to be realized by the Parent upon the consummation of an Alternative
Transaction does not exceed 50% of the Total Profit that the Parent would
otherwise realize had it not taken the foregoing actions; provided, that, in the
event that the Parent elects to reduce the number of Shares subject to the
Purchaser Option, there shall be pending, at the time the Parent makes such
election, a transaction involving the Company that, if consummated, would allow
JNL to dispose of any remaining Shares that would not otherwise be purchased by
the Parent upon the
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exercise of the Purchaser Option. As used in the Stockholder Agreement, the term
"Total Profit" shall mean the aggregate amount (before taxes) of the net cash
amounts and the fair market value (as reasonably determined by a nationally
recognized investment banking firm acceptable to each of the Parent and JNL or,
if one cannot be agreed upon, by Salomon Brothers, Inc.) of all other
forms of consideration received or to be received by the Parent pursuant
to the sale of the aggregate number of Shares subject to the Purchaser
Option (or any other securities into which such Shares are converted or
exchanged) in any Alternative Transaction, less the aggregate Exercise Price of
all of such Shares. In the event that the Parent or the Purchaser pays a price
higher than $18.00 per Share for Shares tendered into the Offer, the Exercise
Price shall be increased to equal such higher price.
The Stockholder Agreement prohibits JNL from entering into
discussions with third parties to engage in extraordinary corporate transactions
involving the Issuer or the sale or transfer of a material amount of assets of
the Issuer or its subsidiaries.
The reporting persons believe that the terms of the proposed
transactions contemplated by the Merger Agreement and the Stockholder Agreement
will allow JNL to continue to pursue its pending actions against Mikael
Salovaara, the South Street group of investment funds, the law firm of Milbank,
Tweed, Hadley & McCloy ("Milbank") and others with respect to the Issuer.
Joint Prosecution Agreement
Contemporaneously with the execution of the Stockholder
Agreement, the Issuer and JNL entered into the Joint Prosecution Agreement (the
"Joint Prosecution Agreement") attached as Exhibit 4 hereto and incorporated
herein by reference, relating to various claims the Issuer and JNL have or may
have resulting from the Issuer's reorganization in 1994 under Chapter 11 of the
United States Bankruptcy Code (the "Chapter 11 Reorganization") against Milbank
for disgorgement of fees (the "Disgorgement Claim") and other possible claims
(collectively, the "Milbank Claims"). The Issuer and JNL have agreed that,
effective September 1, 1997, they will jointly prosecute the Milbank Claims in
their respective names (the "Joint Prosecution"). All proceeds resulting from
the Joint Prosecution will be allocated as follows: (i) first, to pay, or to
reimburse the prior payment of, all bona fide party costs, expenses and
liabilities incurred in connection with the Joint Prosecution including, without
limitation, the reasonable fees and disbursements of counsel and other
professional advisors, which are to be advanced by JNL; (ii) the next $8.675
million of proceeds from the Milbank Claims, if any, will be paid to JNL,
provided that the Issuer will retain ten percent of the proceeds of the
Disgorgement Claim, if any, and will direct payment to JNL of the balance of
such proceeds; and (iii) all additional proceeds of the Milbank Claims will be
divided equally between JNL and the Issuer. The Joint Prosecution Agreement also
provides that the Issuer will receive
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the benefit of any reduction of any obligation it may have to pay Milbank's
outstanding fees, if any.
JNL and the Issuer have agreed that JNL may, in its discretion
and after consultation with the Issuer, direct the prosecution of the Milbank
Claims in a manner which JNL reasonably deems necessary to minimize the cost and
expense of such prosecution; provided, that JNL and the Issuer will vigorously
prosecute the Milbank Claims and defend any Milbank counterclaim for outstanding
fees. JNL will indemnify the Issuer in respect of any liability resulting from
the Joint Prosecution other than in respect of legal fees and expenses incurred
prior to September 1, 1997. The Joint Prosecution Agreement will continue in
force irrespective of whether the Merger is consummated.
Settlement Agreement
During the pendency of the Chapter 11 Reorganization, JNL
filed a claim (the "503(b) Claim") against the Issuer with the United States
Bankruptcy Court, Eastern District of Wisconsin ("Bankruptcy Court") for
reimbursement of approximately $3.3 million of professional fees and
disbursements incurred in connection with the Chapter 11 Reorganization pursuant
to Section 503(b) of the Bankruptcy Code. By order dated June 3, 1996, the
Bankruptcy Court awarded JNL the sum of $500. JNL appealed the decision to the
United States District Court for the Eastern District of Wisconsin. On June 26,
1997, the District Court denied the appeal as moot but returned the matter to
the Bankruptcy Court for further proceedings with leave to appeal again after
further determination of the Bankruptcy Court. On July 11, 1997, JNL moved the
Bankruptcy Court for relief from the final judgment entered on the 503(b) Claim.
Pursuant to a Settlement Agreement between the Issuer and JNL dated as of August
21, 1997, attached as Exhibit 5 hereto and incorporated herein by reference,
subject to Bankruptcy Court approval, JNL will settle and release the Issuer
from the 503(b) Claim in consideration of the payment to JNL by the Issuer of
$200,000.
Acquisition of Additional Shares
In addition, the reporting persons continue to anticipate that
JNL may acquire additional shares of Common Stock pursuant to the terms of the
Plan. As discussed in Item 3 of the Original Schedule 13D, pursuant to Section
3.09(b)(ii) of the Plan, any recovery of cash or property obtained by or on
behalf of the Issuer with respect to any Cause of Action against a Non-Released
Person which arose prior to February 18, 1994 shall constitute a distribution on
JNL's claim as the holder of the Bucyrus Resettable Senior Notes. Accordingly,
pursuant to
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Section 3.09(b)(ii) of the Plan, JNL may be entitled from time to time after the
date of this filing to receive additional shares of Common Stock. Specifically,
JNL is vigorously pursuing as a representative of Holdings' and Bucyrus'
bankruptcy estates claims, rights and Causes of Action against South Street
Corporate Recovery Fund I, L.P., South Street Leveraged Corporate Recovery Fund,
L.P., South Street Corporate Recovery Fund I (International), L.P., Greycliff
Partners, Ltd. and their respective successors, predecessors and other related
parties, including Mikael Salovaara and Alfred Eckert, each in its or his
capacity as a Non-Released Person ("Claims Against Non-Released Persons"). At
this time, the reporting persons believe it is premature and speculative to
estimate the number of shares which would be received by JNL if JNL were to be
wholly or partially successful in pursuing such claims.
The reporting persons may in the future seek in open market or
privately negotiated transactions to acquire additional shares of Common Stock
or to dispose of all or a portion of Common Stock covered by this Schedule 13D.
The reporting persons may from time to time consider or discuss with third
parties the disposition of some or all of such shares of Common Stock. In making
any decision whether to acquire or dispose of shares of Common Stock, in
addition to the other considerations discussed herein, the reporting persons
will consider various factors, including, among other things, the Issuer's
financial condition, business and prospects, the price at which such securities
are trading and the nature of other opportunities available. Any additional
shares of Common Stock which JNL acquires will be subject to the terms and
conditions of the Stockholder Agreement.
General
On August 25, 1997, the Issuer acquired certain assets of as
subsidiary of Global Industrial Technologies, Inc. ("Global"), The Marion Power
Shovel Company, and certain subsidiaries and divisions of Global that represent
Global's surface mining equipment business in Canada, Australia, and South
Africa. In connection with the Marion acquisition, the Issuer obtained a $45
million bridge loan from the PPM America Special Investments Fund, L.P., an
affiliate of the reporting persons, to fund the purchase of the business and
assets of Marion. The maturity date of such Bridge Loan is 180 days from the
closing date of such loan.
The corporate governance issues described in paragraphs 5
through 11 of the Original Schedule 13D ceased to be applicable as of the annual
meeting of stockholders of the Issuer held April 30, 1997 (the "1997 Annual
Meeting"). On March 5, 1997, the Board, acting pursuant to Section 4.2 of the
Restated Bylaws of the Issuer, adopted a resolution establishing the number of
directors at seven, effective as of the date of the 1997 Annual Meeting. At such
1997 Annual Meeting, seven directors were elected to hold office until the 1998
annual meeting of
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shareholders of the Issuer and until their successors are duly elected and
qualified. Effective April 30, 1997, the Board of Directors of the Issuer
appointed Armour F. Swanson as the NonExecutive Chairman of the Issuer's Board
of Directors, replacing F. John Stark III, who continued to serve as a Director.
Of the directors elected at the 1997 Annual Meeting, Russell
W. Swansen and F. John Stark III were reelected. Such individuals are also
directors and officers of PPM, which is the investment advisor to JNL (the "JNL
Directors"). Accordingly, JNL or PPM may be deemed to have the ability to
influence the Issuer's Board of Directors and the JNL Directors may be deemed to
participate, together with other members of the Issuer's Board of Directors, in
the management of the Issuer. The JNL Directors, in their capacity as members of
the Board of Directors, will necessarily consider proposals from time to time
regarding the business and affairs of the Issuer, possibly including matters of
the nature enumerated in clauses (a) through (j), inclusive, of Item 4 of
Schedule 13D. If any such matter is presented to the Issuer's Board of
Directors, the JNL Directors intend to act thereon in accordance with their
business judgment at such time.
Consummation of the transactions contemplated by the Merger
Agreement could result in a change in the present Board of Directors or
management of the Issuer. The terms of the Merger Agreement may also, among
other things, have the effect of (i) impeding the acquisition of control of the
Issuer by any person other than the Purchaser, (ii) causing the Issuer's Common
Stock to be delisted from a national securities exchange or cease to be
authorized or quoted in an inter-dealer quotation system of a registered
national securities association, or (iii) causing a class of equity securities
of the Issuer to become eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934.
Except as aforesaid, neither JNL, PPM America, Brooke, PPM
Ltd. or Prudential, nor to the best of their knowledge, any of the directors or
executive officers of any of them, presently has plans or proposals which relate
to or would result in any of the matters enumerated in clauses (a) through (j),
inclusive, of Item 4 of Schedule 13D.
The reporting persons may take any other action with respect
to the Issuer and its securities in any manner permitted by law.
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
Item 6 of the Original Schedule 13D is hereby amended to add
the following paragraphs:
The disclosure provided in Item 4 hereof with respect to the
Merger Agreement and the Stockholder Agreement is incorporated in this Item 6 by
reference.
ITEM 7. EXHIBITS.
(1) Issuer's Press Release dated August 21, 1997.
(2) Merger Agreement dated as of August 21, 1997 among
the Parent, the Purchaser and the Issuer
(incorporated by reference from exhibit 1 to the
Issuer's Schedule 14D-9 dated August 26, 1997).
(3) Stockholder Agreement dated as of August 21, 1997
between the Purchaser and JNL.
(4) Joint Prosecution Agreement dated as of August 21,
1997 between the Issuer and JNL.
(5) Settlement Agreement dated as of August 21, 1997
between the Issuer and JNL.
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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.
Date: August 27, 1997
JACKSON NATIONAL LIFE
INSURANCE COMPANY
By: /s/ F. John Stark, III
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Name: F. John Stark, III
Title: Attorney-in-fact
PPM AMERICA, INC.
By: /s/ F. John Stark, III
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Name: F. John Stark, III
Title: Senior Vice
President and
General Counsel
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EXHIBIT 1
PRESS RELEASE
BUCYRUS INTERNATIONAL, INC.
(NASDAQ: BCYR)
FOR IMMEDIATE RELEASE
BUCYRUS INTERNATIONAL, INC.
SIGNS DEFINITIVE MERGER AGREEMENT WITH
AMERICAN INDUSTRIAL PARTNERS
South Milwaukee, Wisconsin, August 21,1997 ... Bucyrus
International, Inc. ("Bucyrus") and American Industrial Partners Acquisition
Company, LLC ("American Industrial Partners"), jointly announced that they have
signed a definitive merger agreement for American Industrial Partners to acquire
all of the outstanding shares of common stock of Bucyrus. Pursuant to the merger
agreement, American Industrial Partners will pay $18.00 per each outstanding
share of Bucyrus common stock. Bucyrus currently has 10,534,574 shares of common
stock outstanding.
The transaction will be a cash tender offer followed by a cash
merger to acquire any shares not previously tendered. The transaction has been
recommended by the Board of Directors of Bucyrus and approved by American
Industrial Partners.
In connection with the execution of the merger agreement,
American Industrial Partners entered into a stockholder agreement with Jackson
National Life Insurance Company ("Jackson"), which is the holder of
approximately 40% of the outstanding shares of common stock of Bucyrus. The
stockholder agreement provides for, among other things, Jackson's commitment to
tender its shares into the tender offer and the granting of an option to
American Industrial Partners to purchase Jackson's shares for $18.00 per share.
American Industrial Partners expects to commence its cash
tender offer on or before August 27, 1997. The cash tender offer is subject to,
among other things, American Industrial Partners receiving at least 51% of the
fully diluted shares of common stock of Bucyrus. The closing of the transaction
is subject to the satisfaction of various conditions, including, but not limited
to, expiration of the waiting period under the Hart-Scott-Rodino Act.
Bucyrus is one of the world's leading manufacturers of large
scale surface mining equipment and a provider of aftermarket parts and services.
American Industrial Partners was formed at the direction of
American Industrial Partners Capital Fund II, L.P.,
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EXHIBIT 1
a private investment limited partnership which makes equity investments in
public and privately held companies located principally in the United States.
Contact: Willard R. Hildebrand, President and Chief Executive
Officer or
Daniel J. Smoke, Vice President and Chief
Financial Officer
(414) 768-5375 or (414) 768-5378
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EXHIBIT 3
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (this "Agreement"), dated as of August
21, 1997, by and among American Industrial Partners Acquisition Company, LLC, a
Delaware limited liability company ("Parent"), Bucyrus Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of Parent ("the Purchaser")
and Jackson National Life Insurance Company, a Michigan corporation (the
"Stockholder").
WHEREAS, the Stockholder is, as of the date hereof, the record
and beneficial owner of 4,228,382 shares of common stock, par value $0.01 per
share (the "Common Stock") of Bucyrus International, Inc., a Delaware
corporation (the "Company") and, together with PPM America, Inc., a Delaware
Corporation, shares voting power and dispositive power with respect to such
shares; and
WHEREAS, the Stockholder is, as of the date hereof, the record
and beneficial owner of $63,963,000 in principal amount of the Company's 10.5%
Secured Notes due December 14, 1999 (the "Secured Notes"), which Secured Notes
are governed by that certain Indenture, dated December 14, 1994, between
Bucyrus-Erie Company, predecessor to the Company, and Harris Trust and Savings
Bank, as Trustee (the "Indenture") and by that certain Security Agreement, dated
December 14, 1994, between Bucyrus-Erie Company and Harris Trust and Savings
Bank, as Collateral Agent (the "Security Agreement"); and
WHEREAS, Parent, the Purchaser and the Company concurrently
herewith are entering into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"), which provides, among other things, for the
acquisition of the Company by Parent by means of a cash tender offer (the
"Offer") for any and all of the outstanding shares of Common Stock and for the
subsequent merger (the "Merger") of the Purchaser with and into the Company upon
the terms and subject to the conditions set forth in the Merger Agreement; and
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WHEREAS, the Company and the Stockholder concurrently herewith
are entering into a Settlement Agreement, dated as of the date hereof, (the
"Settlement Agreement"), which provides, among other things, for the settlement
and release of certain claims that the Stockholder has asserted against the
Company and for the allocation, as between the Company and the Stockholder, of
amounts that the Company may recover in respect of certain claims against third
parties; and
WHEREAS, as a condition to the willingness of Parent and the
Purchaser to enter into the Merger Agreement, and in order to induce Parent and
the Purchaser to enter into the Merger Agreement, the Stockholder has agreed to
enter into this Agreement and the Settlement Agreement.
NOW, THEREFORE, in consideration of the execution and delivery
by Parent and the Purchaser of the Merger Agreement and the foregoing and the
mutual representations, warranties, covenants and agreements set forth herein
and therein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Representations and Warranties of the Stockholder.
The Stockholder hereby represents and warrants, to Parent and the Purchaser as
follows:
(a) The Stockholder is the record and beneficial
owner of 4,228,382 shares of Common Stock (as may be adjusted from time to time
pursuant to Section 6 hereof, the "Shares"), and the Stockholder is the record
and beneficial owner of $63,963,000 in principal amount of the Secured Notes (as
may be adjusted from time to time pursuant to Section 6 hereof, the
"Stockholder's Secured Notes").
(b) The Stockholder is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction, has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby,
and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement.
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(c) This Agreement has been duly authorized, executed
and delivered by the Stockholder and constitutes the legal, valid and binding
obligation of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, and (ii) the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought.
(d) Neither the execution and delivery of this
Agreement nor the consummation by the Stockholder of the transactions
contemplated hereby will result in a violation of, or a default under, or
conflict with, any contract, trust, commitment, agreement, understanding,
arrangement or restriction of any kind to which the Stockholder is a party or
bound or to which the Shares or the Secured Notes are subject. Consummation by
the Stockholder of the transactions contemplated hereby will not violate, or
require any consent, approval, or notice under, any provision of any judgment,
order, decree, statute, law, rule or regulation applicable to the Stockholder,
the Shares or the Stockholder's Secured Notes, except for any necessary filing
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") or
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or state takeover laws.
(e) The Shares and the certificates representing the
Shares and the Stockholder's Secured Notes are now and at all times during the
term hereof will be held by the Stockholder, or by a nominee or custodian for
the benefit of the Stockholder, free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or arrangements
or any other encumbrances whatsoever, except for any such encumbrances or
proxies arising hereunder; provided, however, that the Stockholder may transfer
all or a portion of the Shares or the Secured Notes to be a person or entity
who, by written instrument reasonably acceptable in form and substance to
Parent, agrees to be bound by each of the terms of this Agreement.
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(f) To the best knowledge of the Stockholder, without
independent investigation, the representations of the Company set forth in
Section 3.6 (with respect to such matters as have been disclosed to the
Stockholder or any of its affiliates in writing prior to the date hereof), 3.7
(with respect to liabilities or indebtedness owed to the Stockholder or any of
its affiliates), 3.8 (with respect to such matters in which the Stockholder or
any of its affiliates is a party) 3.15 (with respect to such matters as to which
the Stockholder or any of its affiliates have received written notice), and 3.20
(with respect to such matters involving the Stockholder or any of its
affiliates) of the Merger Agreement, as modified by the Company Disclosure
Schedule (as defined in the Merger Agreement), are true and correct in all
material respects as of the date of this Agreement. The representations and
warranties of the Stockholder set forth in this paragraph (f) shall terminate
upon the earlier to occur of the Effective Time (as defined in the Merger
Agreement) and the Termination Date.
SECTION 2. Representations and Warranties of Parent and the
Purchaser. Each of Parent and the Purchaser hereby, jointly and severally,
represents and warrants to the Stockholder as follows:
(a) Parent is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby, and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby, and has taken
all necessary corporate action to authorize the execution, delivery and
performance of this Agreement.
(b) This Agreement has been duly authorized, executed
and delivered by each of Parent and the Purchaser and constitutes the legal,
valid and binding obligation of each of Parent and the Purchaser, enforce-
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able against each of them in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally and
(ii) the availability of the remedy of specific performance or injunctive or
other forms of equitable relief may be subject to equitable defenses and would
be subject to the discretion of the court before which any proceeding therefor
may be brought.
(c) Neither the execution and delivery of this
Agreement nor the consummation by each of Parent and the Purchaser of the
transactions contemplated hereby will result in a violation of, or a default
under, or conflict with, any contract, trust, commitment, agreement,
understanding, arrangement or restriction of any kind to which each of Parent
and the Purchaser is a party or bound. The consummation by each of Parent and
the Purchaser of the transactions contemplated hereby will not violate, or
require any consent, approval, or notice under, any provision of any judgment,
order, decree, statute, law, rule or regulation applicable to either Parent or
the Purchaser, except for any necessary filing under the HSR Act or state
takeover laws.
SECTION 3. Purchase and Sale of the Shares. The Stockholder
hereby agrees that it shall tender the Shares into the Offer promptly, and in
any event no later than the fifth business day following the commencement of the
Offer, or, if the Stockholder has not received the offering materials by such
time, within two business days following receipt of such materials, and that it
shall not withdraw any Shares so tendered. The Purchaser hereby agrees to
purchase all the Shares so tendered at a price per Share equal to $18.00 per
Share, or such higher price per Share as may be offered by the Purchaser in the
Offer; provided that the Purchaser's obligation to accept for payment and pay
for the Shares in the Offer is subject to all the terms and conditions of the
Offer set forth in the Merger Agreement and Annex I thereto.
SECTION 4. Transfer of the Shares and the Stockholder's
Secured Notes. Prior to the termination of this Agreement, except as otherwise
provided herein, the Stockholder shall not: (i) transfer (which term shall
include, without limitation, for the purposes of this Agreement, any sale, gift,
pledge or other disposition),
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or consent to any transfer of, any or all of the Shares or the Stockholder's
Secured Notes or any interest therein; (ii) enter into any contract, option or
other agreement or understanding with respect to any transfer of any or all of
the Shares or the Stockholder's Secured Notes or any interest therein; (iii)
except as provided in Section 8(b) hereto, grant any proxy, power-of-attorney or
other authorization or consent in or with respect to the Shares or the
Stockholder's Secured Notes; (iv) deposit the Shares or the Stockholder's
Secured Notes into a voting trust or enter into a voting agreement or
arrangement with respect to the Shares or the Stockholder's Secured Notes; or
(v) take any other action with respect to the Shares or the Secured Notes that
would in any way restrict, limit or interfere with the performance of their
obligations hereunder or the transactions contemplated hereby; provided,
however, that the Stockholder may transfer all or a portion of the Shares or the
Secured Notes to a person or entity who, by written instrument reasonably
acceptable in form and substance to Parent, agrees to be bound by each of the
terms of this Agreement.
SECTION 5. Voting of Shares; Grant of Irrevocable Proxy;
Appointment of Proxy.
(a) The Stockholder hereby agrees that, during the
term of this Agreement, at any meeting (whether annual or special and whether or
not an adjourned or postponed meeting) of the holders of Common Stock, however
called, or in connection with any written consent of the holders of Common
Stock, the Stockholder will appear at the meeting or otherwise cause the Shares
to be counted as present thereat for purposes of establishing a quorum and vote
or consent (or cause to be voted or consented) the Shares (i) in favor of the
Merger, (ii) against any action or agreement which would impede, interfere with
or prevent the Merger, including any other extraordinary corporate transaction,
such as a merger, reorganization or liquidation involving the Company and a
third party or any other proposal of a third party to acquire the Company, and
(iii) if requested by Parent, in favor of a shareholder resolution proposed by
Parent pursuant to Section 180.1150(4) of the Wisconsin Business Corporation
Law.
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(b) The Stockholder hereby irrevocably grants to, and
appoints, Parent and any nominee thereof, its proxy and attorney-in-fact (with
full power of substitution) during the term of this Agreement, for and in the
name, place and stead of the Stockholder, to vote the Shares, or grant a consent
or approval in respect of the Shares, in connection with any meeting of the
stockholders of the Company (i) in favor of the Merger, and (ii) against any
action or agreement which would impede, interfere with or prevent the Merger,
including any other extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company and a third party or any
other proposal of a third party to acquire the Company.
(c) The Stockholder represents that any proxies
heretofore given in respect of the Shares, if any, are not irrevocable, and that
such proxies are hereby revoked.
(d) The Stockholder hereby affirms that the
irrevocable proxy set forth in this Section 5 is given in connection with the
execution of the Merger Agreement, and that such irrevocable proxy is given to
secure the performance of the duties of the Stockholder under this Agreement.
The Stockholder hereby further affirms that the irrevocable proxy is coupled
with an interest and, except as set forth in Section 8 hereof, is intended to be
irrevocable in accordance with the provisions of Section 212(e) of the Delaware
General Corporation Law (the "DGCL").
SECTION 6. Certain Events. In the event of any stock split,
stock dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock, the Secured Notes
or the acquisition of additional shares of Common Stock, additional Secured
Notes or other securities or rights of the Company by the Stockholder, the
number of Shares and the aggregate principal amount of the Stockholder's Secured
Notes shall be adjusted appropriately, and this Agreement and the obligations
hereunder shall attach to any additional shares of Common Stock, additional
Secured Notes or other securities or rights of the Company issued to or acquired
by the Stockholder.
SECTION 7. Grant of Option.
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(a) The Stockholder hereby grants to Parent an
irrevocable option (the "Option") to purchase the Shares at a purchase price per
share of $18.00 per Share (the "Exercise Price"), in the manner set forth in
this Section.
(b) At any time or from time to time prior to the
termination of the Option granted hereunder in accordance with the terms of this
Agreement, Parent (or its designee) may exercise the Option, in whole but not in
part (except as expressly permitted by Section 7(d)), if on or after the date
hereof:
(i) any corporation, partnership, individual, trust,
unincorporated association, or other entity or "person" (as defined in
Section 13(d)(3) of the Exchange Act) other than Parent or any of its
"affiliates" (as defined in the Exchange Act) (a "Third Party"), shall
have:
(A) commenced or announced an
intention to commence a bona fide tender offer or exchange offer for
any shares of Common Stock, the consummation of which would result in
"beneficial ownership" (as defined under the Exchange Act) by such
Third Party (together with all such Third Party's affiliates and
"associates" (as such term is defined in the Exchange Act)) of 50% or
more of the then outstanding voting equity of the Company (either on a
primary or a fully diluted basis);
(B) acquired beneficial ownership of
shares of Common Stock which, when aggregated with any shares of Common
Stock already owned by such Third Party, its affiliates and associates,
would result in the aggregate beneficial ownership by such Third Party,
its affiliates and associates of 15% or more of the then outstanding
voting equity of the Company (either on a primary or a fully diluted
basis), provided, however, that "Third Party" for purposes of this
clause (ii) shall not include any corporation, partnership, person,
other entity or group which beneficially owns more than 15% of the
outstanding voting equity of the Company (either on a primary or a
fully diluted basis) as of the date hereof and that does not, after the
date hereof, increase such ownership percentage by more
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than an additional 1% of the outstanding voting equity of the Company
(either on a primary or a fully diluted basis);
(C) filed a Notification and Report
Form under the HSR Act, reflecting an intent to acquire the Company or
any assets or securities of the Company;
(D) acquired assets constituting
15% or more of the total assets or earning power of the Company taken
as a whole;
(E) entered into an agreement with
the Company which contemplates the acquisition of (x) assets
constituting 15% or more of the total assets or earning power of the
Company taken as a whole or (y) beneficial ownership of 15% or more of
the outstanding voting equity of the Company;
(F) solicited "proxies" in a
"solicitation" subject to the proxy rules under the Exchange Act,
executed any written consent or become a "participant" in any
"solicitation" (as such terms are defined in Regulation 14A under the
Exchange Act), in each case with respect to the Common Stock; or
(ii) any of the events described in Section 8.1(g) or
(h) of the Merger Agreement that would allow Parent to terminate the
Merger Agreement has occurred (but without the necessity of Parent
having terminated the Merger Agreement).
In the event that Parent wishes to exercise all or any part of
the Option, Parent shall give written notice (the "Option Notice", with the date
of the Option Notice being hereinafter called the "Notice Date") to the
Stockholder specifying the number of Shares it will purchase and a place and
date (not earlier than three (3) nor later than twenty (20) business days from
the Notice Date) for closing such purchase (a "Closing"). Parent's obligation to
purchase Shares upon any exercise of the Option, and the Stockholder's
obligation to sell Shares upon any exercise of the Option, is subject (at the
election of each of Parent or the Stockholder) to the conditions that (i) no
preliminary or permanent injunction or
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other order against the purchase, issuance or delivery of the Shares issued by
any federal, state or foreign court of competent jurisdiction shall be in effect
(and no action or proceeding shall have been commenced or threatened for
purposes of obtaining such an injunction or order) and (ii) any applicable
waiting period under the HSR Act shall have expired. The Parent's obligation to
purchase Shares upon any exercise of the Option is further subject (at its
election) to the condition that there shall have been no material breach of the
representations, warranties, covenants or agreements of the Stockholder
contained in this Agreement or of the Company contained in the Merger Agreement.
Notwithstanding the foregoing, any failure by Parent to purchase Shares upon
exercise of the Option at any Closing as a result of the non-satisfaction of any
of the foregoing conditions shall not affect or prejudice Parent's right to
purchase such Shares upon the subsequent satisfaction of such conditions. The
Stockholder's obligation to sell Shares upon any exercise of the Option (and the
Stockholder's obligations under Section 5 of this Agreement) is subject (at its
election) to the further conditions that there shall have been no material
breach of the representations, warranties, covenants or agreements of the
Purchaser or the Parent contained in this Agreement or contained in the Merger
Agreement, which breach has not been cured within thirty days of the receipt of
written notice thereof from the Stockholder.
(c) At any Closing, (i) the Stockholder will deliver
to Parent the certificate or certificates representing the number of Shares
being purchased in proper form for transfer upon exercise of the Option in the
denominations designated by Parent in the Option Notice, and, if the Option has
been exercised in part, a new Option evidencing the rights of Parent to purchase
the balance of the Shares subject thereto, and (ii) Parent shall pay the
aggregate purchase price for the Shares to be purchased by wire transfer of
immediately available funds to an account, which account shall be designated in
writing to Parent within five days after execution of this Agreement in the
amount of the Exercise Price times the number of Shares to be purchased.
(d) Notwithstanding any other provision of this
Agreement, in the event that the Merger Agreement is terminated and at any time
prior to the Termination
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Date (as hereinafter defined) a person other than Parent or any of its
affiliates acquires a majority of the outstanding shares of Common Stock at a
price higher than the Exercise Price (an "Alternative Transaction"), then Parent
shall promptly either reduce the number of Shares subject to the Option, pay
cash to the Stockholder or do both such that the actual Total Profit (as
hereinafter defined) realized or to be realized by Parent upon the consummation
of an Alternative Transaction does not exceed 50% of the Total Profit that
Parent would otherwise realize had it not taken the foregoing actions; provided
that, in the event that Parent elects to reduce the number of Shares subject to
the Option, there shall be pending, at the time Parent makes such election, a
transaction involving the Company that, if consummated, would allow the
Stockholder to dispose of any remaining Shares that would not otherwise be
purchased by Parent upon the exercise of the Option; provided, further, that in
the event such transaction is not consummated within three months following the
time Parent makes such election, Parent shall, at the option of the Stockholder,
purchase any remaining Shares held by the Stockholder such that Parent and the
Stockholder each retain 50% of the Total Profit following such purchase. As used
herein, the term "Total Profit" shall mean the aggregate amount (before taxes)
of the net cash amounts and the fair market value (as reasonably determined by a
nationally recognized investment banking firm acceptable to each of Parent and
the Stockholder or, if one cannot be agreed upon, by Salomon Brothers, Inc.) of
all other forms of consideration received or to be received by Parent pursuant
to the sale of the aggregate number of Shares subject to the Option (or any
other securities into which such Shares are converted or exchanged) in any
Alternative Transaction, less the aggregate Exercise Price of all of such
Shares.
(e) In the event that Parent or the Purchaser pays a
price higher than $18.00 per share for Shares tendered into the Offer, the
Exercise Price shall be increased to equal such higher price.
(f) The Stockholder has granted the Option to the
Parent in order to induce Parent to enter into and consummate the transactions
contemplated by the Merger Agreement. Parent covenants and agrees that it will
perform its obligations under the Merger Agreement.
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The provisions of this Section 7(f) are intended both for the benefit of the
Stockholder and for the benefit of the Company and the other stockholders of the
Company, and may not be modified, waived or amended without the consent of the
Company.
SECTION 8. Certain Other Agreements.
(a) The Stockholder will notify the Purchaser
immediately if any proposals are received by, any information is requested from,
or any negotiations or discussions are sought to be initiated or continued with
the Stockholder or its officers, directors, employees, investment bankers,
attorneys, accountants or other agents, in each case in connection with any
Takeover Proposal or Takeover Proposal Interest (as such terms are defined in
the Merger Agreement) indicating, in connection with such notice, the name of
the person indicating such Takeover Proposal Interest and the terms and
conditions of any proposals or offers. The Stockholder agrees that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Takeover Proposal Interest. The Stockholder agrees that it shall keep
Parent informed, on a current basis, of the status and terms of any Takeover
Proposal Interest. The Stockholder agrees that it will not, and will use its
best efforts to ensure that its officers, directors, employees, investment
bankers, attorneys, accountants and other agents do not, directly or indirectly:
(i) initiate, solicit or encourage, or take any action to facilitate the making
of, any offer or proposal which constitutes or is reasonably likely to lead to
any Takeover Proposal, (ii) enter into any agreement with respect to any
Takeover Proposal, or (iii) in the event of an unsolicited written Takeover
Proposal engage in negotiations or discussions with, or provide any information
or data to, any person (other than Parent, any of its affiliates or
representatives and except for information which has been previously publicly
disseminated by the Company) relating to any Takeover Proposal. The obligations
provided for in this Section 8(a) shall become effective immediately following
the execution and delivery of this Agreement by the parties hereto.
(b) The Stockholder hereby agrees, if requested by
Parent, to take all action necessary to waive
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compliance by the Company with the provisions of Section 1105 of the Indenture
relating to the timely issuance of a notice of redemption prior to the
Redemption Date (as defined in the Indenture) in connection with the Company's
redemption of the Secured Notes, pursuant to Section 106 of the Indenture;
provided, however, that Parent shall indemnify and hold the Stockholder harmless
in connection with the foregoing; provided, further that Parent's maximum
liability in connection therewith shall be $14,500.
SECTION 9. Further Assurances; Stockholder Capacity. (a) Each
of the Stockholder shall, upon request of Parent or the Purchaser, execute and
deliver any additional documents and take such further actions as may reasonably
be deemed by Parent or the Purchaser to be necessary or desirable to carry out
the provisions hereof and to vest the power to vote the Shares as contemplated
by Section 5 hereof in Parent.
(b) Nothing in this Agreement shall be construed to
prohibit any affiliate of the Stockholder who is a member of the Board of
Directors of the Company from taking any action solely in his capacity as a
member of the Board of Directors of the Company to the extent specifically
permitted by the Merger Agreement.
SECTION 10. Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate immediately upon the
earlier of (a) the date (the "Termination Date") that is six months following
the date upon which the Merger Agreement is terminated in accordance with its
terms or (b) the Effective Time (as defined in the Merger Agreement); provided,
however, that (i) in the event that an Option Notice is delivered prior to the
Termination Date, the provisions set forth in Section 7 shall survive any
termination of this Agreement, (ii) in the event that the Merger is consummated,
the provisions set forth in Section 11 shall survive any termination of this
Agreement.
SECTION 11. Expenses. Except as provided in Section 7 hereof,
all fees and expenses incurred by any one party hereto shall be borne by the
party incurring such fees and expenses.
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SECTION 12. Public Announcements. Each of Parent, the
Purchaser and the Stockholder agrees that it will not issue any press release or
otherwise make any public statement with respect to this Agreement or the
transactions contemplated hereby without the prior consent of the other party,
which consent shall not be unreasonably withheld or delayed; provided, however,
that such disclosure can be made without obtaining such prior consent if (i) the
disclosure is required by law or by obligations imposed pursuant to any listing
agreement with the Nasdaq National Market and (ii) the party making such
disclosure has first used its best efforts to consult with the other party about
the form and substance of such disclosure.
SECTION 13. Miscellaneous.
(a) Capitalized terms used and not otherwise defined
in this Agreement shall have the respective meanings assigned to such terms in
the Merger Agreement.
(b) All notices and other communications hereunder
shall be in writing and shall be deemed given upon (i) transmitter's
confirmation of a receipt of a facsimile transmission, (ii) confirmed delivery
by a standard overnight carrier or when delivered by hand or (iii) the
expiration of five business days after the day when mailed in the United States
by certified or registered mail, postage prepaid, addressed at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(A) if to the Parent or Purchaser, to:
c/o American Industrial Partners
One Maritime Plaza, Suite 2525
San Francisco, CA 94111
Telephone: (415) 788-7354
Facsimile: (415) 788-5302
Attention: Lawrence W. Ward, Jr.
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with a copy to:
Skadden, Arps, Slate, Meagher
& Flom LLP
919 Third Avenue
New York, New York 10022
Telephone: (212) 735-3700
Facsimile: (212) 735-2000
Attention: Peter A. Atkins
and
(B) if to the Stockholder, to:
PPM America, Inc.
225 West Wacker Drive, Suite 1100
Chicago, Illinois 60606
Telephone: (312) 634-2500
Facsimile: (312) 634-0053
Attention: F. John Stark, III
with a copy to:
Anderson Kill & Olick, P.C.
1251 Avenue of the Americas
New York, New York 10020
Telephone: (212) 278-1000
Facsimile: (212) 278-1733
Attention: J. Andrew Rahl, Jr.
(c) The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
be considered one and the same agreement.
(e) This Agreement (including the Merger Agreement
and any other documents and instruments referred to herein) constitutes the
entire agreement, and supersedes all prior agreements and understandings,
whether written and oral, among the parties hereto with respect to the subject
matter hereof.
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(f) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware without giving
effect to the principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by, the parties
and their respective successors and assigns, and the provisions of this
Agreement are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
(h) If any term, provision, covenant or restriction
herein is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable or against its regulatory policy, the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
(i) Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto (i) will
waive, in any action for specific performance, the defense of adequacy of a
remedy at law and (ii) shall be entitled, in addition to any other remedy to
which they may be entitled at law or in equity, to compel specific performance
of this Agreement in any action instituted in any state or federal court sitting
in Wilmington, Delaware. The parties hereto consent to personal jurisdiction in
any such action brought in any state or federal court sitting in Wilmington,
Delaware and to service of process upon it in the manner set forth in Section
13(b) hereof.
(j) No amendment, modification or waiver in respect
of this Agreement shall be effective against any party unless it shall be in
writing and signed by such party.
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IN WITNESS WHEREOF, Parent, the Purchaser and the Stockholder
has caused this Agreement to be duly executed and delivered as of the date first
written above.
AMERICAN INDUSTRIAL PARTNERS ACQUI-
SITION COMPANY, LLC
By /s/ Lawrence W. Ward, Jr.
________________________________
Name: Lawrence W. Ward, Jr.
Title:
BUCYRUS ACQUISITION CORP.
By /s/ Lawrence W. Ward, Jr.
________________________________
Name: Lawrence W. Ward, Jr.
Title:
JACKSON NATIONAL LIFE INSURANCE
COMPANY
By: PPM AMERICA, INC.
As Attorney-In-Fact
By /s/ F. John Stark, III
________________________________
Name: F. John Stark, III
Title: Senior Vice President
and General Counsel
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EXHIBIT 4
JOINT PROSECUTION AGREEMENT
This Agreement is dated as of the 21st day of August, 1997 by
and among BUCYRUS INTERNATIONAL, INC. ("BI"), and JACKSON NATIONAL LIFE
INSURANCE COMPANY ("JNL"), both for itself and in its capacity as a
representative of the estate of Bucyrus Erie Company ("Bucyrus") pursuant to
Section 1123(b)(3)(b) of the Bankruptcy Code.
WHEREAS, BI is the successor in interest to Bucyrus-Erie
Company ("Bucyrus") and B-E Holdings, Inc. ("Holdings" and, collectively with
Bucyrus, the "Debtors") under the Debtors' Second Amended Plan of Reorganization
(the "Plan") which was consummated on December 14, 1994 in proceedings (the
"Bankruptcy Proceedings") captioned In re B-E Holdings, Inc. and Bucyrus-Erie
Company, Case Nos. 94-20786, 94-20787 (Bankr.E.D.Wis.) (RAE) in the United
States Bankruptcy Court for the Eastern District of Wisconsin (the "Bankruptcy
Court");
WHEREAS, JNL objected in February, 1995 to the application for
compensation of fees and expenses of Milbank, Tweed, Hadley & McCloy ("Milbank")
for its representation of Bucyrus in the Bankruptcy Proceedings, JNL appealed
the Bankruptcy Court's partial award of fees and expenses to from Bucyrus to
Milbank in April 1996, Bucyrus subsequently joined in that objection in January,
1997 and JNL and Bucyrus are now prosecuting that objection and seeking
disgorgement to Bucyrus of up to approximately $1.8 million of fees and expenses
previously paid to Milbank (the "Disgorgement Claim"), as well as sanctions and
other relief;
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WHEREAS, the Disgorgement Claims would have been lost but for
the efforts of JNL to preserve Bucyrus' rights in them by objecting to Milbank's
fee application, appealing the Bankruptcy Court's allowance of Milbank's fees
and thereafter discovering Milbank's fraud on the Bankruptcy Court, Bucyrus and
JNL in the course of monitoring the trial between Mikael Salovaara and Alfred C.
Eckert, all at great effort and expense to JNL at a time when Milbank still
represented Bucyrus;
WHEREAS, BI and JNL each have additional claims against
Milbank and each of them had contemplated commencing separate additional actions
against Milbank, its partners and others for malpractice, fraud and other claims
related to and in connection with Milbank's representation of the Debtors and BI
and other matters before, during and after the Bankruptcy Proceedings;
WHEREAS, Milbank has asserted that it will pursue
counterclaims and other legal remedies against both BI and JNL if they in fact
pursue any of their claims against Milbank;
WHEREAS, Milbank has also alleged that BI owes payment to
Milbank for billed and unbilled fees, expenses and other charges arising after
December 14, 1994 in an alleged amount of approximately $1,000,000
(collectively, the "Milbank Fees");
WHEREAS, BI and JNL both believe that their respective Milbank
Claims may in some instances overlap, be duplicative of or conflict with each
other and JNL and BI also disagree as to the extent to which each of them has
the right to prosecute and retain the proceeds of certain of such claims;
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WHEREAS, BI wishes to avoid the cost and expenditure of time
and effort involved in prosecuting claims against Milbank and defending any
counterclaims and other proceedings brought by Milbank in response to such
claims and Jackson has agreed to advance such costs and expenses on behalf of BI
and to indemnify BI for them;
WHEREAS, BI and JNL both wish to avoid the potential for
confusion and conflict which may ensue if they separately prosecute their
respective claims against Milbank;
WHEREAS, JNL made an application for reimbursement of its
professional fees and expenses incurred in the Bankruptcy Proceedings pursuant
to Section 503(b) of the Bankruptcy Code (the "503(b) Claim"), the Bankruptcy
Court allowed that application to the extent of $500, JNL appealed the
Bankruptcy Court's ruling to the United States District Court for the Eastern
District of Wisconsin, that court has now referred the 503(b) Claim back to the
Bankruptcy Court and BI continues to oppose the 503(b) Claim; and
WHEREAS, BI and JNL believe that continuing the dispute
between them over the 503(b) Claim may impede their ability to prosecute the
Milbank Claims and they accordingly both wish to compromise and settle their
disagreements over the 503(b) Claim and the prosection of claims against
Milbank;
NOW, THEREFORE, the parties have agreed as follows:
1. Effective September 1, 1997, JNL and BI shall jointly
prosecute all of their respective claims against Milbank (collectively, the
"Milbank Claims") in their respective names
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subject to the terms and conditions of this Agreement. All proceeds of the
Milbank Claims will be allocated as follows: (i) first, to pay, or to reimburse
the prior payment of, all bona fide third party costs, expenses and liabilities
incurred on or after September 1, 1997 in connection with the Milbank Claims
including, without limitation, the reasonable fees and disbursements of counsel
and other professional advisors and all other amounts contemplated by the first
sentence of Paragraph 2 below; (ii) the next $8,675,000 of proceeds from the
Milbank Claims, if any, will be paid to JNL, provided that Bucyrus will retain
ten percent of the proceeds of the Disgorgement Claim, if any, and direct
payment to JNL of the balance of such proceeds; and (iii) all additional
proceeds of the Milbank Claims will be divided equally between JNL and BI.
Notwithstanding the foregoing, BI shall also receive the benefit of any
reduction of any obligation it may have to pay the Milbank Fees. JNL and BI will
each provide the other with all such documentation available to it which
evidences expenses contemplated by this Paragraph 1 as the other party shall
reasonably request. JNL may, in its discretion after consultation with the
designated representative of BI, direct prosecution of the Milbank Claims in a
manner and to the extent which JNL reasonably deems necessary to minimize the
cost and expense of doing so, provided, however, that BI and JNL shall at all
times vigorously prosecute the defense of Milbank's claims or counterclaims for
the Milbank Fees.
2. JNL shall advance all of the costs and expenses of
prosecuting the Milbank Claims incurred on or after September 1,
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1997 and shall indemnify and hold BI and the Debtors harmless in connection with
all of the Milbank Claims on the same terms and conditions as those which were
provided for in the Indemnification Agreement dated as of November 30, 1994
between the Debtors and JNL as if the Milbank Claims were "Claims" thereunder.
Notwithstanding the foregoing, BI shall bear the cost of: (i) its own reasonable
general and administrative expenses for work done and time spent by employees
who are not officers; (ii) the first fifteen days of interview, preparation,
deposition, witness or related time spent by officers of BI other than Willard
R. Hildebrand; (iii) incidental time spent by officers of BI; (iv) BI's own
gross negligence, willful misconduct and its actions or omissions taken or made
in contravention of the terms and conditions of this Agreement; and (v) payment
(as distinguished from netting), if any, of the Milbank Fees. JNL may direct and
implement the manner of prosecution and terms of settlement or other resolution
of the Milbank Claims in its discretion, provided that if JNL for any reason
elects to resolve, settle or cease prosecution of any or all of the Milbank
Claims, JNL shall give BI notice of its decision to do so. BI thereupon may, but
shall not be obligated to, elect within ten business days to prosecute such
Milbank Claims upon payment to JNL of all amounts JNL would have received under
this Agreement, if any, after giving effect to the terms of such proposed
resolution, settlement or cessation of prosecution as to which JNL has given BI
notice, whereupon BI may thereafter prosecute such Milbank Claims, and retain
all recoveries
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therefrom, at its own cost and expense. In that event, BI thereafter shall
indemnify and hold JNL harmless on the terms and conditions of the first two
sentences of this Paragraph 2 as if BI were the indemnifying party and JNL the
indemnified party thereunder and this Paragraph 2 shall otherwise thereafter be
of no further force and effect as to the Milbank Claims in question.
3. JNL and BI agree to settle and resolve the 503(b) Claim on
the terms and conditions set forth in, and as evidenced by, a Settlement
Agreement in the form of Exhibit A attached.
4. BI, the Debtors and JNL have shared and will continue to
share legal advice, work product, attorney-client privileged communications and
other confidential information received from their respective counsel which
pertains to the Claims (collectively, together with the terms and conditions of
this Agreement, the "Confidential Information"), and they agree that when any
Confidential Information has been or is shared, their respective counsel have
been and will be acting as consultants to one another in conjunction with the
Claims. BI and JNL each waive all conflicts of interest, if any, which their
respective counsel have or might have had with respect to the Milbank Claims of
the other.
5. JNL and BI each covenant and agree with the other that they
each will provide the other with all information and all other cooperation which
they reasonably can provide in order to effectuate the proposes of this
Agreement, to promote the parties' ability to prosecute the Milbank Claims on
the terms and conditions of this Agreement, as well as any other claims which
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JNL may in its discretion pursue against Non-Released Persons under the Plan and
any other party connected with the Bankruptcy Proceedings (collectively, the
"Claims"), and otherwise to comply with the terms and conditions of this
Agreement. Without limitation of the foregoing, JNL, BI and the Debtors will at
all times: (i) to the extent they have any right to do so, make all of their
present and former officers and employees available to cooperate in prosecuting
the Claims and cause them to do so; (ii) share and make available, and allow the
review and copying of all documents and other information which may be relevant
to the Claims; and (iii) execute and deliver any and all agreements, documents
and instruments, in their own name or otherwise, to the full extent of their
legal power and authority, which either JNL or BI may reasonably request in
order to prosecute and pursue the Claims pursuant to and in accordance with the
terms of this Agreement. JNL and BI shall each be entitled to injunctive relief
to enforce the terms and conditions of this Paragraph 5.
6. Nothing in this Agreement shall constitute or is intended
to be a waiver of any attorney-client, work product or any other privilege or
immunity, including protections or requirements imposed by or available under
any applicable law. All documents and other information contemplated hereby
shall remain jointly subject to the attorney-client privilege and the work
product privilege, and will be kept confidential by JNL and BI, except as
reasonably needed to review, pursue and litigate the Claims. Each of the parties
to this Agreement agrees that it will not disclose any Confidential Information,
except to the
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extent reasonably necessary to implement the terms and conditions of this
Agreement, to prosecute the Claims and as otherwise required by applicable law
or a court or government agency of competent jurisdiction, in each case to the
extent that the same: (i) is not publicly available; or (ii) was not or could
not be obtained from another source not bound by any obligation of
confidentiality to either party hereto. Without limitation of the foregoing, if
either party receives any subpoena or other request for disclosure of
Confidential Information, the party receiving the same shall so notify the other
party as promptly as practicable and both parties shall cooperate with each
other in any efforts which either of them reasonably elects to pursue at their
own expense in order to preserve the confidentiality of the information in
question.
7. Nothing in this Agreement shall constitute an agreement by
BI or JNL to limit its freedom or ability to make its own independent,
unilateral decisions about the conduct of its business or any other matter,
except to the extent expressly set forth in this Agreement. This Agreement is
intended to facilitate cooperation between BI and JNL in reviewing, pursuing and
litigating the Claims. BI and JNL hereby covenant that they will act in good
faith toward one another in their use of the Confidential Information and will
make all reasonable efforts to protect each other's interest when using any
Confidential Information received from one another in reviewing, pursuing and
litigating the Claims.
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8. Nothing in this Agreement shall be construed as limiting or
waiving the right of Jackson to pursue or realize all of the proceeds of any
Claim which is not a Milbank Claim. Nothing in this Agreement shall be construed
as an admission by any person that any claim, defense or objection of any other
person has merit. Nothing in this Agreement shall constitute or evidence an
assignment by either party hereto of any of its rights in its own respective
Milbank Claims to the other.
9. BI and JNL each represent and warrant to the other that it
has the requisite power and authority under its respective organizational
documents and otherwise (if applicable) to execute and deliver this Agreement,
that this Agreement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, and is enforceable against
it in accordance with its terms. No other representations or warranties of any
kind have been made to induce any party to enter into this Agreement. This
Agreement represents the entire agreement between the parties and supersedes all
prior negotiations, representations or agreements between the parties, either
written or oral, on the subject hereof including, without limitation, the Joint
Privilege and Confidentiality Agreement between the parties hereto dated April
9, 1997, which shall be of no further force and effect as to future events. No
amendment, change or modification of any provision of this Agreement, or any
waiver thereof, shall be effective unless in writing signed by the party to be
charged. BI and JNL shall each bear their own costs and expenses incurred
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prior to September 1, 1997 and otherwise in connection with the negotiation,
execution and delivery of this Agreement. This Agreement shall bind and inure to
the benefit of the principals, agents, representatives, successors, heirs and
assigns of the parties hereto.
10. The parties agree to resolve any controversy or dispute
arising under or relating to this Agreement (except to the extent otherwise
provided in Paragraph 5) in binding arbitration before a panel of the American
Arbitration Association, or another alternative dispute resolution forum
mutually acceptable to the parties, and pursuant to the rules and procedures of
that organization. Any such arbitration will take place in New York City. The
terms and language of this Agreement are the result of negotiations between the
parties hereto and there shall be no presumption that any ambiguities in this
Agreement should be resolved against either party hereto. Any controversy
concerning the construction of this Agreement shall be decided without regard to
authorship.
11. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original. This Agreement
shall in all respects be interpreted, enforced, governed and construed by and
under the laws of the State of New York without reference to principles of
conflicts of law or choice of law.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the date first written above.
By: /s/ Willard R. Hildebrand
---------------------------------
for Bucyrus International, Inc.,
Bucyrus-Erie Company and B-E
Holdings, Inc.
By: /s/ F. John Stark, III
----------------------------------
PPM America, Inc., as attorney-in-
fact for Jackson National Life
Insurance Company
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EXHIBIT 5
SETTLEMENT AGREEMENT
This agreement is made and entered into effective this 21st
day of August, 1997, by and among BUCYRUS INTERNATIONAL, INC. ("BI") and JACKSON
NATIONAL LIFE INSURANCE COMPANY ("JNL").
WHEREAS, BI is the successor in interest to Bucyrus-Erie
Company ("Bucyrus") and B-E Holdings, Inc. ("Holdings" and, collectively with
Bucyrus, the "Debtors") under the Debtors' Second Amended Plan of Reorganization
(the "Plan") which was consummated on December 14, 1994 in proceedings captioned
In re B-E Holdings, Inc. and Bucyrus-Erie Company, Case Nos. 94-20786, 94-20787
(Bankr. E.D. Wis.) (RAE) (the "Bankruptcy Proceedings") in the United States
Bankruptcy Court for the Eastern District of Wisconsin (the "Bankruptcy Court");
WHEREAS, JNL made an application for reimbursement of its
professional fees and expenses incurred in the Bankruptcy Proceedings pursuant
to Section 503(b) of the Bankruptcy Code (the "503(b) Claim"), the Bankruptcy
Court allowed that application to the extent of $500, JNL appealed the
Bankruptcy Court's ruling to the United States District Court for the Eastern
District of Wisconsin and that court has now referred the 503(b) Claim back to
the Bankruptcy Court for further proceedings; and
WHEREAS, BI and JNL both wish to compromise and settle their
disagreements over the 503(b) Claim;
NOW, THEREFORE:
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1. BI and JNL have agreed to settle and resolve the 503(b)
Claim for a cash payment to JNL of $200,000. JNL and BI also jointly agree to
petition the Bankruptcy Court to withdraw its June 6, 1996 ruling with respect
to the 503(b) Claim. The settlement of the 503(b) claim will be evidenced by a
Stipulation and Order of Dismissal in the form of Exhibit A attached. The
parties shall also execute and deliver a mutual release in the form of Exhibit B
attached.
2. It is expressly understood that this Agreement is subject
to and expressly contingent upon the entry of a final, non-appealable order of
the Bankruptcy Court in the Bankruptcy Proceedings.
3. Nothing in this Agreement shall be construed as an
admission by any person that any claim, defense or objection of any other person
has merit. This Agreement represents the entire agreement between the parties
and supersedes all prior negotiations, representations or agreements between the
parties, either written or oral, on the subject hereof. The parties warrant and
represent, each to the other, that they have been fully informed and have full
knowledge of the terms, conditions and legal effects of this Agreement, and that
each party is authorized to enter into this Agreement and related instruments.
No amendment, change or modification of any provision of this Agreement, or any
waiver thereof, shall be effective unless in writing signed by the party to be
charged. BI and JNL shall each bear their own costs and expenses incurred in
connection with the negotiation, execution and delivery of this Agreement. This
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Agreement shall bind and inure to the benefit of the principals, agents,
representatives, successors, heirs and assigns of the parties hereto. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the date first written above.
By: /s/ W.R. HILDEBRAND
-------------------------------------
W.R. Hildebrand
for Bucyrus International,
Inc., Bucyrus-Erie Company and
B-E Holdings, Inc.
By: /s/ F. JOHN STARK, III
-------------------------------------
F. John Stark, III
PPM America, Inc., as
attorney-in-fact for Jackson
National Life Insurance
Company
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