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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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THE TURNER CORPORATION
(NAME OF SUBJECT COMPANY)
THE TURNER CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK, PAR VALUE $1.00 PER SHARE
SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
900273103
(CUSIP NUMBER OF CLASS OF SECURITIES)
ELLIS T. GRAVETTE, JR.
THE TURNER CORPORATION
375 HUDSON STREET
NEW YORK, NEW YORK 10014
(212) 229-6450
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICE AND COMMUNICATIONS
ON BEHALF OF THE PERSON(S) FILING STATEMENT)
COPY TO:
KENNETH R. BLACKMAN, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
(212) 859-8000
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is The Turner Corporation, a Delaware
corporation (the "Company"), and the address of the principal executive offices
of the Company is 375 Hudson Street, New York, New York 10014. The title of the
classes of equity securities to which this Statement relates is the Company's
common stock, par value $1.00 per share (the "Common Stock"), the Company's
Series C 8 1/2% Convertible Preference Stock, par value $1.00 per share (the
"Series C Preferred"), and the Company's Series D 8 1/2% Convertible Preference
Stock, par value $1.00 per share (the "Series D Preferred" and, together with
the Series C Preferred, the "Preferred Stock" and together with the Common
Stock, the "Shares").
ITEM 2. TENDER OFFER OF THE BIDDER.
This Statement relates to the tender offer by Beta Acquisition Corp., a
Delaware corporation (the "Offeror"), which is a wholly owned indirect
subsidiary of HOCHTIEF AG, a German corporation (the "Parent"). The tender offer
by the Offeror is being made pursuant to a Tender Offer Statement on Schedule
14D-1, dated August 20, 1999 (the "Schedule 14D-1"), to purchase all of the
outstanding shares of Common Stock, at a price of $28.625 per share, net to the
seller in cash, without interest, including the associated rights issued
pursuant to the Rights Agreement dated as of September 21, 1998, between the
Company and First Chicago Trust Company of New York as rights agent of the
Company. The tender offer is being made upon the terms and subject to the
conditions set forth in the Offeror's Offer to Purchase, dated August 20, 1999
(the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with the Offer to Purchase, constitute the "Offer"). The Offer to
Purchase also includes an offer to purchase the Preferred Stock for an amount in
cash per share equal to $28.625 multiplied by the number of shares of Common
Stock issuable upon conversion of the Preferred Stock.
As set forth in the Schedule 14D-1, the principal executive offices of the
Offeror are located at Opernplatz 2, 45128 Essen, Germany.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of August 16, 1999 (the "Merger Agreement"), among the Company, Parent and
the Offeror. Pursuant to the terms of the Merger Agreement, following the
consummation of the Offer and the satisfaction or waiver of certain conditions
set forth in the Merger Agreement and in accordance with the General Corporation
Law of the State of Delaware (the "DGCL"), the Offeror will be merged with and
into the Company (the "Merger"), the separate existence of the Offeror will
cease and the Company will continue as the surviving corporation following the
Merger (the "Surviving Corporation"). At the effective time of the Merger (the
"Effective Time"), each outstanding share of Common Stock or Preferred Stock
(other than shares held in the treasury of the Company, shares owned by any
subsidiary of the Company, shares owned by the Offeror or Parent or shares with
respect to which appraisal rights are properly exercised under the DGCL (the
"Dissenting Shares")) will be converted into and represent the right to receive,
in the case of the Common Stock, the price per share paid in the Offer for the
Common Stock and in the case of the Preferred Stock, the price per share paid in
the Offer for the Preferred Stock, in each case in cash without interest. The
Merger Agreement is summarized in Item 3(b). A copy of the Merger Agreement is
filed herewith as Exhibit 1 and is incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and address of the Company, which is the person filing this
Statement, are set forth in Item 1 above.
(b)(i) Certain arrangements with its Executive Officers, Directors and its
Affiliates.
1. Proxy Statement Disclosures
Certain contracts, agreements, arrangements and understandings between the
Company and its executive officers, directors and affiliates are described on
pages 1-14 of the Company's proxy statement relating to the annual meeting of
the Company's stockholders held on May 7, 1999 (the "1999 Proxy Statement") in
the
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sections, "Election of Directors," "Remuneration of Executive Officers," "Change
in Control Arrangements," "Retirement Plans," "Compensation Committee Interlocks
and Insider Participation" and "Compensation Committee Report." Pages 1-14 of
the 1999 Proxy Statement are filed as Exhibit 2 hereto and are incorporated
herein by reference. The information incorporated by reference is considered to
be a part of this document, except for any information that is superseded by
information that is included directly in this document.
2. Employment Agreements with Thomas C. Leppert
Effective June 9, 1999, the Company entered into two employment agreements
with Thomas C. Leppert.
Under the first of these agreements, Mr. Leppert agreed to serve as the
Vice Chairman of the Company's Board of Directors (the "Board") through
September 30, 1999. This agreement provides for a monthly base salary of $5,000,
for the award, without further payment, of 150,000 restricted stock units
(representing 150,000 shares of Common Stock), and for the award of options to
acquire 150,000 shares of Common Stock at $17.375 per share. On June 9, 1999,
the day these agreements were entered into, the closing price for the Common
Stock as quoted on the New York Stock Exchange (the "NYSE") was $17.375 per
share. The restricted stock units and the options granted to Mr. Leppert will
fully vest and be cashed out in connection with the Offer unless Offeror makes
available a mechanism to provide for the exercise of these restricted stock
units and options which does not prejudice Mr. Leppert with respect to economics
or the risk of holding Common Stock (the "Cash-Out Alternative"). If the
Cash-Out Alternative is available, Offeror may in its discretion require Mr.
Leppert to exercise and tender his options and restricted stock units in lieu of
a cash out.
Under the second of these agreements, Mr. Leppert agreed to serve as
Chairman of the Board from October 1, 1999 through December 31, 2003. This
agreement provides for an annual base salary of $850,000, for a signing bonus of
$750,000, and for participation in the Company's incentive and other employee
benefit plans (with a guaranteed incentive award of at least $550,000 for each
year of the term).
Both of these agreements provide for severance payments to be made to Mr.
Leppert in connection with a qualifying termination of his employment following
a change of control of the Company. In general, these agreements provide that,
in the event of termination of his employment following a change of control, Mr.
Leppert will be entitled to receive, among other things (1) a lump sum payment
equal to three times (x) his annual base salary plus (y) the bonus received for
the immediately preceding twelve month operating period (but not less than
$550,000), (2) full vesting of any unvested equity awards, and (3) continued
eligibility for certain employee welfare benefits. Consummation of the Offer or
the Merger would constitute a change of control for this purpose.
The employment agreements and related restricted stock and option
agreements between the Company and Thomas C. Leppert are filed as Exhibits 5, 6,
7, 8 and 9 hereto and are incorporated herein by reference.
3. Change of Control Arrangements
The Company or its subsidiaries have entered into change of control
agreements with all of their executive officers (other than Mr. Leppert and
Ellis T. Gravette, Jr., Chairman and Chief Executive Officer) and certain
employees of the Company or its subsidiaries. These agreements expire on
November 25, 2000 and will be automatically extended for one year each on each
November 25 thereafter unless the Company shall have given written notice to the
executive at least ninety days prior to the expiration date. They provide that,
in the event of a qualifying termination of employment following a change of
control of the Company, the executive will be entitled to receive (1) a lump sum
payment equal to 2.99 years (in the case of 13 senior executives) or one year
(in the case of 65 other executives) of compensation, (2) a lump sum payment
equal to the executive's average bonus, and (3) continued eligibility for
certain employee welfare benefits. Consummation of the Offer or the Merger would
constitute a change of control for this purpose.
The forms of the change in control agreements are filed as Exhibits 10 and
11 hereto and are incorporated herein by reference.
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4. Options and Stock Units
Options granted under all of the Company's incentive plans will fully vest
and be cashed out in connection with the Offer, so long as the Cash-Out
Alternative is not made available to option holders. In addition, share rights
to which certain of the Company's directors are entitled because of the
termination of the Company's Retirement Plan in August 1997, will be cashed out
in connection with the Offer. If the Cash-Out Alternative is available, Offeror
may in its discretion require holders to exercise and tender options and share
rights in lieu of a cash out.
5. Special Awards upon a Change of Control
At a meeting on July 20, 1999, the Board authorized the establishment of
special awards to be paid if there is a change of control of the Company by
October 31, 1999. Consummation of the Offer or the Merger would constitute a
change of control for this purpose. The special awards aggregating $3.45 million
are to be paid to 23 employees of the Company or its subsidiaries in recognition
of their exceptional leadership capabilities as exhibited over the last several
years. Among the employees to receive these special awards are two executive
officers of the Company, Robert E. Fee, President and Chief Operating Officer,
and Donald G. Sleeman, Senior Vice President, Chief Financial Officer and Chief
Accounting Officer. Messrs. Fee and Sleeman would receive $368,590 and $184,295,
respectively, under these special awards.
6. Cash Award to Ellis T. Gravette, Jr.
Also at the July 20, 1999 Board meeting, the Board authorized a payment of
$3 million to Mr. Gravette in recognition of his 15 years of service as a
director of the Company and his service as Chairman and Chief Executive Officer
over the past three years in which the Company has had increasing profits,
earnings per share and stock price.
7. Waiver of Non Compete with Karl Steiner Holding AG
On August 13, 1999, the Company and Karl Steiner Holding AG ("KS Holding"),
a company owned 50% each by Peter K. Steiner and the wife of Heinrich
Baumann-Steiner (Mr. Steiner and Mr. Baumann-Steiner are directors of the
Company), entered into an agreement under which Turner Steiner International,
LLC ("TSI"), a joint venture between the Company and KS Holding, waived the
benefit of certain non-compete arrangements in order to permit the Parent and
its subsidiaries and affiliates to continue to do business in certain
territories outside of the United States where TSI is permitted to do business
in accordance with the TSI limited liability company agreement between the
Company and KS Holding. The agreement of August 13, 1999 is filed as Exhibit 12
hereto and is incorporated herein by reference.
(ii) Certain arrangements with Parent, Offeror or their Affiliates.
Capitalized terms used but not defined in this Section 3(b)(ii) shall have the
definitions used in the Schedule 14D-1.
1. The Merger Agreement
THE FOLLOWING IS A SUMMARY OF THE MERGER AGREEMENT, A COPY OF WHICH IS
FILED AS AN EXHIBIT TO THE SCHEDULE 14D-1 FILED BY PURCHASER AND PARENT WITH THE
COMMISSION IN CONNECTION WITH THE OFFER. SUCH SUMMARY IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as reasonably practicable, but in no event later than within five
business days after the initial public announcement of Purchaser's intention to
commence the Offer. The obligation of Purchaser to accept for payment Shares
tendered pursuant to the Offer is subject to the satisfaction of the Minimum
Condition and certain other conditions that are described in Section 14 of the
Schedule 14D-1. Purchaser and Parent have agreed that no change in the Offer may
be made which decreases the price per Share payable in the Offer, which reduces
the maximum number of Shares to be purchased in the Offer, which changes the
form of consideration paid by Purchaser for the Shares, which imposes conditions
to the Offer in addition to those set
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forth in Section 14 of the Schedule 14D-1 or which makes any other change in the
terms of the Offer that is materially adverse to the holders of the Shares,
without the prior consent of the Company.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, at the Effective
Time, Purchaser shall be merged with and into the Company. As a result of the
Merger, the separate corporate existence of Purchaser will cease and the Company
will continue as the Surviving Corporation and will become an indirect wholly
owned subsidiary of Parent. Upon consummation of the Merger (i) each share of
Company Common Stock issued and outstanding immediately prior to the Effective
Time (other than any shares of Company Common Stock held in the treasury of the
Company and each share of Company Common Stock owned by Purchaser, Parent or any
direct or indirect wholly owned subsidiary of Parent or of the Company and other
than shares of Company Common Stock held by stockholders who shall have demanded
and perfected appraisal rights under Delaware Law) shall be canceled and shall
be converted automatically into the right to receive $28.625 in cash (the
"Common Stock Merger Consideration"), or any greater price that may be paid per
share of Company Common Stock in the Offer, without interest, and (ii) each
share of Company Preferred Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of Company Preferred Stock held in the
treasury of the Company and each share of Company Preferred Stock owned by
Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or
of the Company and other than shares of Company Preferred Stock held by
stockholders who shall have demanded and perfected appraisal rights under
Delaware Law) shall be canceled and shall be converted automatically into the
right to receive an amount in cash equal to the product of the Common Stock
Merger Consideration multiplied by the number of shares of Company Common Stock
into which such share of Company Preferred Stock shall be convertible
immediately prior to the Effective Time, in each case, without interest.
Pursuant to the Merger Agreement, each share of common stock, par value
$.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, par value $.01 per share, of
the Surviving Corporation.
The Merger Agreement provides that the initial directors of the Surviving
Corporation shall be two directors designated by the Board prior to the
Effective Time, three directors designated by Purchaser (who may be employees of
Parent or an affiliate) and four independent directors, each to hold office in
accordance with the Certificate of Incorporation and By-laws of the Surviving
Corporation, and the officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation, in each case
until their respective successors are duly elected or appointed and qualified or
until their earlier death, resignation or removal. The Merger Agreement provides
that, at the Effective Time, the Certificate of Incorporation of Purchaser, as
in effect immediately prior to the Effective Time, will be the Certificate of
Incorporation of the Surviving Corporation; provided, however, that, at the
Effective Time, Article I of the Certificate of Incorporation of the Surviving
Corporation will be amended to read as follows: "The name of the corporation is
The Turner Corporation". The Merger Agreement also provides that the By-laws of
Purchaser, as in effect immediately prior to the Effective Time, will be the
By-laws of the Surviving Corporation.
Stockholders' Meeting. Pursuant to the Merger Agreement, the Company
shall, if required by applicable law in order to consummate the Merger, duly
call, give notice of, convene and hold an annual or special meeting of its
stockholders as soon as practicable following consummation of the Offer for the
purpose of considering and taking action on the Merger Agreement and the
Transactions (the "Stockholders' Meeting"). If Purchaser acquires at least the
number of shares of Company Common Stock and shares of Company Preferred Stock
(determined as if shares of Company Preferred Stock have been converted into
shares of Company Common Stock) that, when added to the Shares already owned by
Parent, constitute two-thirds of the outstanding shares of Company Common Stock,
then Purchaser will have sufficient voting power to approve the Merger, even if
no other stockholder votes in favor of the Merger.
Proxy Statement. The Merger Agreement provides that the Company shall, if
required by applicable law, promptly following consummation of the Offer, file
with the Commission under the Exchange Act, and use its reasonable best efforts
to have cleared by the Commission as promptly as practicable, a proxy
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statement and related proxy materials (the "Proxy Statement") with respect to
the Stockholders' Meeting and shall cause the Proxy Statement to be mailed to
stockholders of the Company at the earliest practicable time. The Company has
agreed, subject to its fiduciary duties under applicable law based upon advice
of outside legal counsel, to include in the Proxy Statement the unanimous
recommendation of the Board that the stockholders of the Company approve and
adopt the Merger Agreement and the Transactions and to use its best efforts to
obtain such approval and adoption. Parent and Purchaser have agreed to cause all
Shares then owned by them and their subsidiaries to be voted in favor of
approval and adoption of the Merger Agreement and the Transactions. The Merger
Agreement provides that, in the event that Purchaser shall acquire at least 90%
of the then outstanding shares of Company Common Stock and at least 90% of the
then outstanding shares of each series of Company Preferred Stock, Purchaser and
the Company agree, at the request of Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders, in accordance with Delaware Law.
Conduct of Business by the Company Pending the Merger. Pursuant to the
Merger Agreement, the Company has covenanted and agreed that, between the date
of the Merger Agreement and the Effective Time, unless Parent shall otherwise
agree in writing, the businesses of the Company and its subsidiaries (the
"Subsidiaries" and, individually, a "Subsidiary") shall be conducted only in,
and the Company and the Subsidiaries shall not take any action except in, the
ordinary course of business and in a manner consistent with past practice; and
the Company shall use its best efforts to preserve substantially intact the
business organization of the Company and the Subsidiaries, to keep available the
services of the current officers, employees and consultants of the Company and
the Subsidiaries and to preserve the current relationships of the Company and
the Subsidiaries with customers, suppliers and other persons with which the
Company or any Subsidiary has significant business relations. The Merger
Agreement provides that by way of amplification and not limitation, and except
as contemplated therein, neither the Company nor any Subsidiary shall, between
the date of the Merger Agreement and the Effective Time, directly or indirectly
do, or propose to do, any of the following, without the prior written consent of
Parent: (a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents, (b) issue, sell, pledge, dispose
of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant
or encumbrance of (i) any shares of any class of capital stock of the Company or
any Subsidiary, or any options, warrants, convertible securities or other rights
of any kind to acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest), of the Company
or any Subsidiary (except for the issuance of a maximum of 2,021,875 shares of
Company Common Stock issuable pursuant to employee stock options outstanding on
the date of the Merger Agreement and the issuance of a maximum of 2,400,000
shares of Company Common Stock upon conversion of Company Preferred Stock
outstanding on the date of the Merger Agreement) or (ii) any assets of the
Company or any Subsidiary, except in the ordinary course of business and in a
manner consistent with past practice, (c) declare, set aside, make or pay any
dividend or other distribution, payable in cash, stock, property or otherwise,
with respect to any of its capital stock (other than dividends and distributions
by a wholly owned Subsidiary to the Company or another wholly owned Subsidiary),
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock, (e) (i) acquire
(including, without limitation, by merger, consolidation, or acquisition of
stock or assets or any other business combination) any corporation, partnership,
other business organization or any division thereof or any material amount of
assets, (ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any person, or make any loans or
advances, or grant any security interest in any of its assets except in the
ordinary course of business and consistent with past practice, (iii) authorize
any single capital expenditure or capital expenditures which are, in the
aggregate, not disclosed in the Company's capital expenditure budget previously
delivered by the Company to Parent, or (iv) enter into or amend any contract,
agreement, commitment or arrangement with respect to any of the foregoing
matters, (f) (i) increase the compensation payable or to become payable or the
benefits provided to its current or former directors or executive officers, or
increase the compensation payable or to become payable or the benefits provided
to its current or former non-executive officers or employees other than in the
ordinary course in accordance with past practices, (ii) grant any severance or
termination pay to, or enter into any
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employment, retention, stay bonus or severance agreement with any director or
executive officer, or grant any severance or termination pay to, or enter into
any employment, retention, stay bonus or severance agreement with any
non-executive officer or employee other than in the ordinary course in
accordance with past practices, (iii) establish, adopt, enter into or amend any
collective bargaining, bonus, profit-sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director or executive officer, or take any
such action for the benefit of any non-executive officer or employee other than
in the ordinary course in accordance with past practices, or (iv) amend or
modify any employee benefit plan, except as required by law (g) take any action,
other than as required by generally accepted accounting principles, with respect
to accounting policies or procedures (including, without limitation, procedures
with respect to the payment of accounts payable and collection of accounts
receivable), (h) make any material tax election or settle or compromise any
material federal, state, local or foreign income tax liability, (i) amend,
modify or consent to the termination of any material contract, or amend, waive,
modify or consent to the termination of the Company's or any Subsidiary's rights
thereunder, other than in the ordinary course of business and consistent with
past practice, (j) settle any material litigation, suit, claim, action,
proceeding or investigation (other than any settlement which involves only the
payment of damages in an immaterial amount and does not involve injunctive or
other equitable relief), or (k) announce an intention, enter into any formal or
informal agreement or otherwise make a commitment, to do any of the foregoing.
Company Board Representation. The Merger Agreement provides that, promptly
upon the purchase by Purchaser of Shares pursuant to the Offer, and from time to
time thereafter, the Board shall consist of two directors designated by the
Board prior to such purchase of Shares, three directors designated by Purchaser
(who may be employees of Parent or an affiliate of Parent) and four independent
directors, and the Company shall, at such time, promptly take all actions
necessary to cause Purchaser's designees and new independent directors, if any,
to be elected as directors of the Company, including increasing the size of the
Board or securing the resignations of incumbent directors, or both. The Merger
Agreement also provides that, at such times, the Company shall use its best
efforts to cause persons designated by Purchaser and new independent directors,
if any, to constitute the same percentage as persons designated by Purchaser and
new independent directors, if any, shall constitute of the Board of (i) each
committee of the Board, (ii) each board of directors of each domestic Subsidiary
and (iii) each committee of each such board, in each case only to the extent
permitted by applicable law. Notwithstanding the foregoing, until the earlier of
(i) the time Purchaser acquires two-thirds of the voting power of the
outstanding Shares, and (ii) the Effective Time, the Company has agreed not take
any action to induce any member of the Board, as of the date hereof, who are not
employees of the Company to resign from the Board.
The Merger Agreement provides that following the election or appointment of
Purchaser's designees in accordance with the immediately preceding paragraph and
prior to the Effective Time, any amendment of the Merger Agreement or the
Certificate of Incorporation or By-laws of the Company, any termination of the
Merger Agreement by the Company, any extension by the Company of the time for
the performance of any of the obligations or other acts of Parent or Purchaser
or waiver of any of the Company's rights thereunder, will require the
concurrence of a majority of those directors of the Company then in office who
were neither designated by Purchaser nor are employees of the Company.
Access to Information. Pursuant to the Merger Agreement, until the
Effective Time, the Company shall, and shall cause the Subsidiaries and the
officers, directors, employees, auditors and agents of the Company and the
Subsidiaries to, afford the officers, employees and agents of Parent and
Purchaser complete access at all reasonable times to the officers, employees,
agents, properties, offices, plants, building sites and other facilities, books
and records of the Company and each Subsidiary, and shall furnish Parent and
Purchaser with such financial, operating and other data and information as
Parent or Purchaser, through its officers, employees or agents, may reasonably
request and Parent and Purchaser have agreed to keep such information
confidential, except in certain circumstances.
No Solicitation of Transactions. The Company has agreed that neither it
nor any Subsidiary shall, directly or indirectly, through any officer, director,
agent or otherwise, (a) solicit, initiate, accept or knowingly encourage the
submission of, any Acquisition Proposal. "Acquisition Proposal" is defined to
mean (i) any
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bona fide proposal or offer from any person relating to any direct or indirect
acquisition of (A) all or a substantial part of the assets of the Company or of
any Subsidiary or (B) 30% or more of the then outstanding shares of Company
Common Stock and Company Preferred Stock (determined as if shares of Company
Preferred Stock have been converted into shares of Company Common Stock), (ii)
any tender offer or exchange offer as defined pursuant to the Exchange Act that,
if consummated, would result in any person beneficially owning 30% or more of
the then outstanding shares of Company Common Stock and Company Preferred Stock
(determined as if shares of Company Preferred Stock have been converted into
shares of Company Common Stock), (iii) any merger, consolidation, business
combination, sale of all or a substantial part of the assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company and any
Subsidiary, other than the Transactions, or (iv) any other transaction the
consummation of which would reasonably be expected to impede, interfere with,
prevent or materially delay the Transaction, or (b) except to the extent
required by fiduciary obligations under applicable law based upon advice of
outside legal counsel, participate in any discussions or negotiations regarding,
or furnish to any other person any information with respect to, or otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any proposal that constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal). Except to the extent required by fiduciary obligations
under applicable law based upon advice of outside legal counsel, the Merger
Agreement requires the Company immediately to cease and cause to be terminated
any discussions or negotiations with any parties that may be ongoing with
respect to any of the foregoing. The Company has also agreed to promptly advise
Parent orally and in writing of any Acquisition Proposal or any request for
information with respect to any Acquisition Proposal, the material terms and
conditions of such Acquisition Proposal or request and to also advise Purchaser
of the identity of the person making such Acquisition Proposal or request. The
Company has also agreed not to release any third party from any confidentiality
or standstill agreement to which the Company is a party.
Employee and Director Stock Options. The Merger Agreement provides that,
immediately prior to the Effective Time, the Company shall terminate the Company
Stock Plans and that the Company shall amend the provisions of any other company
plans, or related trust or funding vehicle, providing for the issuance, holding,
transfer or grant of any Shares, or any interest in respect of any Shares, to
provide no continuing rights to acquire, hold, transfer, or grant any Shares or
any interest in any Shares. Parent and the Company agree to take all action
necessary to provide that each option (an "Option") to purchase shares of
Company Common Stock that is an "incentive stock option" becomes fully vested
and exercisable as soon as practicable following the date of the Merger
Agreement (whether or not previously vested or exercisable). Parent and the
Company have also agreed to take all action necessary to provide that each
Option and each stock unit or other right to receive Shares (a "Unit") pursuant
to the Company Stock Plans or any stock option or stock unit agreement or other
arrangement to which the Company is a party which is outstanding immediately
prior to the acceptance of the Shares by the Purchaser pursuant to the Offer,
shall become fully exercisable and vested, whether or not previously exercisable
or vested, immediately prior to such acceptance and to provide that, with
respect to each such Option and Unit, the holder thereof becomes entitled to
either, at the election of Purchaser, (i) to receive from the Company, at the
time payment is made for the Shares tendered pursuant to the Offer, an amount in
cash equal to the Cash-Out Value (as defined below), or (ii) exercise any Option
or Unit prior to the time payment is made for the Shares tendered pursuant to
the Offer, provided, however, that any Option or Unit that is not cashed out or
exercised will terminate as of the Effective Time, and provided further that
Purchaser may elect clause (ii) above only if it provides a mechanism therefor
which the Company in its good faith judgment deems to not prejudice the holders
of Options with respect to economics or the risk of holding shares. The Merger
Agreement defines the "Cash-Out Value" to be: (i) with respect to each such
Option, an amount of cash in cancellation of such Option equal to the difference
between the Common Stock Merger Consideration and the per share exercise price
of such Option, multiplied by the number of shares of Company Common Stock to
which such Option remains unexercised, and (ii) with respect to each such Unit,
an amount of cash in cancellation of such Unit equal to the Common Stock Merger
Consideration (less, in the case of both Options and Units, any income or
employment tax withholding required under the Internal Revenue Code of 1986, as
amended or any provision of state or local law). The Company and Parent have
agreed to cooperate, and take all reasonable steps to share in advance
information, to effect the transactions contemplated by the foregoing.
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Employee Benefit Matters. The Merger Agreement also provides that,
following the Effective Time, Parent will cause the Company to honor all exiting
company plans which have been disclosed to Parent. Parent also agrees, through
at least December 31, 2000, to cause the Company to continue in effect the
annual incentive program of the Company, subject to such adjustments to the
targets under such program as shall be necessary or advisable to take into
account the Transactions and the business of the Company following the Effective
Time. The Merger Agreement provides that, following the Effective Time, Parent
shall cause the Company to establish a phantom option plan and a phantom
restricted stock plan for senior officers of the Company that will replace the
Company's existing option and restricted stock plans. Such phantom option plan
shall be similar in nature and scope to the Company's existing option plan.
Parent agrees to cause the Company to continue to maintain through December
31, 2000 compensation and benefits (including severance but excluding stock
based plans except as otherwise contemplated by the foregoing) for all
continuing directors, officers and employees of the Company and the Subsidiaries
which are, in the aggregate, at least substantially equivalent to the
compensation and benefits (including severance but excluding stock based plans
except as otherwise contemplated by the foregoing) that these persons had
immediately prior to the Effective Time. For purposes of determining eligibility
and vesting under any Purchaser benefit plans, employees of the Company and the
Subsidiaries will be credited with their years of service with the Company or
the Subsidiaries. To the extent that any Purchaser benefit plan in which a
Company employee participates after the Effective Time provides medical, dental,
vision or other welfare benefits, Purchaser has agreed to cause all pre-existing
condition exclusions and actively at work requirements of such plan to be waived
for such employee and his or her covered dependents except to the extent such
employee and his or her covered dependents were subject to such requirements
under the applicable Company Plans, and Purchaser has agreed to cause any
eligible expenses incurred by such employee on or before the Effective Time to
be taken into account under such plan for purposes of satisfying all deductible,
co-insurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year.
Directors' and Officers' Indemnification and Insurance. The Merger
Agreement further provides that the By-laws of the Surviving Corporation shall
contain provisions no less favorable with respect to indemnification than are
set forth in Article VIII of the by-laws of the Company, which provisions shall
not be amended, repealed or otherwise modified for a period of six years from
the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who at the Effective Time were directors, officers,
employees, fiduciaries or agents of the Company, unless such modification shall
be required by law.
Parent has agreed to indemnify, and to cause the Surviving Corporation to
indemnify, all officers, directors, employees or agents of the Company or any of
its Subsidiaries (collectively, the "Indemnified Parties") to the fullest extent
permitted by applicable law with respect to all acts and omissions arising out
of such individuals' services as officers, directors, employees or agents of the
Company or any of its subsidiaries or as trustees or fiduciaries of any plan for
the benefit of employees of the Company or any of its subsidiaries, occurring
prior to the Effective Time including, without limitation, the transactions
contemplated by the Merger Agreement. Without limitation of the foregoing, in
the event any such Indemnified Party is or becomes involved in any capacity in
any action, proceeding or investigation in connection with any matter,
including, without limitation, the transactions contemplated by the Merger
Agreement occurring prior to and including, the Effective Time, Parent, from and
after the Effective Time, will pay as incurred such Indemnified Party's
reasonable legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith.
In the event of any such claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), the Merger Agreement
provides that (i) Parent or the Surviving Corporation shall have the right, from
and after the Effective Time, to assume the defense thereof (with counsel
engaged by Parent or the Surviving Corporation to be reasonably acceptable to
the relevant Indemnified Party) and Parent shall not be liable to such
Indemnified Parties for any legal expense of other counsel or any other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof; (ii) such Indemnified Party will cooperate in the defense of any such
matter; and (iii) Parent or the Surviving Corporation shall not be liable to any
settlement effected without its prior written consent; and provided further that
Parent shall not have any
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<PAGE> 10
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law.
The Merger Agreement provides that the Surviving Corporation shall use its
best efforts to maintain in effect for six years from the Effective Time the
current directors' and officers' liability insurance policies maintained by the
Company (provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which are
not materially less favorable) with respect to matters occurring prior to the
Effective Time; provided, however, that in no event shall the Surviving
Corporation be required to expend more than an amount per year equal to 225% of
the current annual premiums paid by the Company for such insurance (which
premiums the Company has represented to Parent and Purchaser to be $269,400 in
the aggregate).
Parent, Purchaser and the Company have also agreed that in the event the
Company or the Surviving Corporation or any of their respective successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Company or the Surviving Corporation, as
the case may be, or at Parent's option, Parent, shall assume the foregoing
indemnity obligations.
Further Action; Reasonable Best Efforts. The Merger Agreement provides
that, subject to its terms and conditions, each of the parties thereto shall (i)
make promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act with respect to the Merger Agreement and the
transactions contemplated thereby, including each of the Offer and the Merger,
and the transactions contemplated by the Stockholders Agreement (collectively,
the "Transactions") and (ii) use its reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Transactions, including, without limitation,
using its reasonable best efforts to obtain all licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental authorities
and parties to contracts with the Company and the Subsidiaries as are necessary
for the consummation of the Transactions and to fulfill the conditions to the
Offer and the Merger.
In case, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of the Merger Agreement, the
proper officers and directors of each party to the Merger Agreement are required
to use their reasonable best efforts to take all such action.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company as to the absence of certain changes or events
concerning the Company's business, compliance with law, litigation, employee
benefit plans, labor matters, real property and leases, intellectual property,
Year 2000 compliance, environmental matters and taxes.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions: (a) the Merger
Agreement and the Transactions shall have been approved and adopted by the
affirmative vote of the stockholders of the Company to the extent required by
Delaware Law and the Company's Certificate of Incorporation, (b) no United
States federal, state, county or local or any foreign government, governmental,
regulatory or administrative authority, agency, instrumentality or commission or
any court, tribunal, or judicial or arbitral body (hereinafter, a "Governmental
Authority") shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them illegal or otherwise restricting in any material
manner, preventing or prohibiting consummation of the Transactions; and (c)
Purchaser or its permitted assignee shall have purchased all Shares validly
tendered and not withdrawn pursuant to the Offer; provided, however, that
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<PAGE> 11
this condition shall not be applicable to the obligations of Parent or Purchaser
if, in breach of the Merger Agreement, Purchaser fails to purchase any Shares
validly tendered and not withdrawn pursuant to the Offer.
Termination; Fees and Expenses. The Merger Agreement provides that it may
be terminated and the Merger and the other Transactions may be abandoned at any
time prior to the Effective Time, notwithstanding any requisite approval and
adoption of the Merger Agreement and the Transactions by the stockholders of the
Company: (a) by mutual written consent duly authorized by the Boards of
Directors of Purchaser and the Company and the Management Board of Parent, (b)
by either Parent, Purchaser or the Company if (i) the Effective Time shall not
have occurred on or before March 31, 2000; provided, however, that the right to
terminate the Merger Agreement shall not be available to any party whose failure
to fulfill any obligation under the Merger Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such date
or (ii) any Governmental Authority in the United States or the European Union
shall have enacted, issued, promulgated, enforced or entered any injunction,
order, decree or ruling which has the effect of making consummation of the
Merger illegal or otherwise preventing or prohibiting consummation of the
Merger, which injunction, order, decree or ruling has become final and
nonappealable, (c) by Parent if (i) due to an occurrence or circumstance that
would result in a failure to satisfy any condition set forth in Section 14 of
the Schedule 14D-1, Purchaser shall have (A) failed to commence the Offer within
60 days following the date of the Merger Agreement, (B) terminated the Offer
without having accepted any Shares for payment thereunder, or (C) failed to pay
for Shares pursuant to the Offer within 90 days following the commencement of
the Offer, unless such action or inaction under (A), (B) or (C) shall have been
caused by or resulted from the failure of Parent or Purchaser to perform, in any
material respect, any material covenant or agreement of either of them contained
in the Merger Agreement or the material breach by Parent or Purchaser of any
material representation or warranty of either of them contained in the Merger
Agreement or (ii) prior to the purchase of Shares pursuant to the Offer, the
Board or any committee thereof shall have withdrawn or modified in a manner
adverse to Purchaser or Parent its approval or recommendation of the Offer, the
Merger Agreement, the Merger or any other Transaction, or shall have recommended
or approved any Acquisition Proposal, or shall have resolved to do any of the
foregoing, or (d) by the Company, upon approval of the Board, if (i) due to an
occurrence or circumstance that would result in a failure to satisfy any of the
conditions set forth in Section 14 of the Schedule 14D-1, Purchaser shall have
(A) failed to commence the Offer within 60 days following the date of the Merger
Agreement, (B) terminated the Offer without having accepted any Shares for
payment thereunder or (C) failed to pay for Shares pursuant to the Offer within
90 days following the commencement of the Offer, unless such action or inaction
under (A), (B) or (C) shall have been caused by or resulted from the failure of
the Company to perform, in any material respect, any material covenant or
agreement of it contained in the Merger Agreement or the material breach by the
Company of any material representation or warranty of it contained in the Merger
Agreement or (ii) prior to the purchase of Shares pursuant to the Offer, (A) any
representation or warranty of Parent or Purchaser in the Merger Agreement shall
not be true and correct except to the extent that the failure of such
representation or warranty to be true and correct could not reasonably be
expected to prevent or materially delay consummation of the Offer or the Merger
or otherwise prevent or materially delay Parent or Purchaser from performing its
obligations under this Agreement, or (B) Parent or Purchaser shall have failed
to perform any obligation or to comply with any agreement or covenant to be
performed or complied with by it under the Merger Agreement, except to the
extent such non-performance or non-compliance could not reasonably be expected
to prevent or materially delay consummation of the Offer or the Merger or
otherwise materially reduce Purchaser's or Parent's obligations under the
Agreement, (iii) the Offer has not been timely commenced (except as a result of
actions or omissions by the Company), or (iv) prior to the purchase of Shares
pursuant to the Offer, the Board determines in good faith that it is required to
do so by its fiduciary duties under applicable law, based upon advice of outside
legal counsel in order to enter into a definitive agreement with respect to a
Superior Proposal. For purposes of the Merger Agreement, a "Superior Proposal"
means any Acquisition Proposal on terms which the Board determines, in its good
faith judgment (after consultation with a financial advisor of internationally
recognized reputation), to be more favorable to the Company's stockholders than
the Offer and the Merger and as to which, to the extent financing is required,
there shall have been obtained from a responsible financing source or sources
one or more commitment letters containing customary terms and conditions.
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In the event of the termination of the Merger Agreement, the Merger
Agreement provides that it shall forthwith become void and there shall be no
liability thereunder on the part of any party thereto except under the
provisions of the Merger Agreement related to fees and expenses described below
and under certain other provisions of the Merger Agreement which survive
termination.
The Merger Agreement provides that in the event that (a) any person
(including, without limitation, the Company or any affiliate thereof), other
than Parent or any affiliate of Parent, shall have become the beneficial owner
of 30% or more of the then outstanding Shares of Company Common Stock and
Company Preferred Stock (determined as if shares of Company Preferred Stock have
been converted into shares of Company Common Stock and the Merger Agreement
shall have been terminated pursuant to the provisions described in the second
preceding paragraph above; or in the event that (b) the Merger Agreement is
terminated (x) pursuant to section (c)(ii) or (d)( iv) of the second preceding
paragraph above or (y) pursuant to section (c)(i) or (d)(i) of the second
preceding paragraph above, to the extent that the failure to commence, the
termination or the failure to accept any Shares for payment, as set forth in
section (c)(i) or (d)(i) of the second preceding paragraph above, as the case
may be, shall relate to the failure of the Company to perform, in any material
respect, any of its material covenants or agreements contained in the Merger
Agreement or the material breach by the Company of any of its material
representations or warranties contained in the Merger Agreement, then, in any
such event, the Company shall pay Parent a fee of $10 million, which amount
shall be payable in immediately available funds. The Merger Agreement also
provides that in the event that any person shall have commenced, publicly
proposed or communicated to the Company an Acquisition Proposal that is publicly
disclosed and (x) the Offer shall have remained open for at least 20 business
days, (y) the Minimum Condition shall not have been satisfied and (z) the Merger
Agreement shall have been terminated pursuant to section (c) or (d)of the second
preceding paragraph above, then, in any such event, the Company shall pay
Parent: (i) a fee of $5 million within one business day following termination of
the Merger Agreement and (ii) if the Company enters into an agreement in respect
of an Acquisition Proposal within 12 months of the termination of the Merger
Agreement, an additional fee of $7 million payable within one business day
following consummation of an Acquisition Proposal.
The Merger Agreement also provides that all costs and expenses incurred in
connection with the Merger Agreement, the Stockholders Agreement and the
Transactions shall be paid by the party incurring such expenses, whether or not
any Transaction is consummated.
The Merger Agreement is filed as Exhibit 1 hereto and is incorporated
herein by reference.
2. The Stockholders Agreement
THE FOLLOWING IS A SUMMARY DESCRIPTION OF THE STOCKHOLDERS AGREEMENT, A
COPY OF WHICH IS FILED AS AN EXHIBIT TO THE SCHEDULE 14D-1. SUCH SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE STOCKHOLDERS AGREEMENT.
Parent and Purchaser have also entered into the Stockholders Agreement with
the Principal Stockholders pursuant to which the Principal Stockholders have
agreed (i) to tender their Shares into the Offer, (ii) to vote their Shares in
favor of the Merger, if applicable, in each case subject to the conditions set
forth in the Stockholders Agreement, and (iii) to grant to Purchaser an option
to purchase their shares of Company Common Stock at the Per Share Amount and
their shares of Company Preferred Stock at an amount in cash equal to the
product of the Per Share Amount multiplied by the number of shares of Company
Common Stock issuable upon the conversion of such shares of Company Preferred
Stock, in each case subject to the conditions set forth in the Stockholders
Agreement.
Tender of Shares. Each Principal Stockholder has agreed to tender,
pursuant to and in accordance with the terms of the Offer, and not withdraw, all
such Principal Stockholder's Shares, provided, however, that any Principal
Stockholder who would incur liability under Section 16(b) of the Exchange Act as
a result thereof is not required to tender such Shares to the extent necessary
to avoid such liability.
Voting Agreement. Each Principal Stockholder has also agreed that, from
and after the date of the Merger Agreement and until the close of business on
the 180th day following termination of the Merger
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Agreement, at any meeting of the stockholders of the Company, however called,
and in any action by consent of the stockholders of the Company, such Principal
Stockholder will vote (or will cause to be voted) such Stockholder's Shares (a)
in favor of the approval and adoption of the Merger Agreement, the Merger and
all the transactions contemplated by the Merger Agreement and the Stockholders
Agreement and otherwise in such manner as may be necessary to consummate the
Merger, (b) against any action, proposal, agreement or transaction that would
result in a breach of any covenant, obligation, agreement, representation or
warranty of the Company contained in the Merger Agreement (whether or not
theretofore terminated) or of the Principal Stockholder contained in the
Stockholders Agreement, and (c) against any action, proposal, agreement or
transaction (other than the Merger Agreement or the Transactions) that could
result in any of the conditions to the Company's obligations under the Merger
Agreement (whether or not theretofore terminated) not being fulfilled or that is
intended, or could reasonably be expected, to impede, interfere or be
inconsistent with, delay, postpone, discourage or adversely affect the Merger
Agreement (whether or not theretofore terminated), the Offer, the Merger or the
Stockholders Agreement, including, but not limited to, any Superior Proposal.
Irrevocable Proxy. The Stockholders Agreement also provides that, if any
Principal Stockholder fails to comply with the foregoing voting agreement (as
determined by Parent in its sole discretion), such Principal Stockholder agrees
to the irrevocable appointment of Parent, and each of its officers, as such
Principal Stockholder's attorney and proxy pursuant to the provisions of Section
212(c) of Delaware Law, with full power of substitution, to vote and otherwise
act (by written consent or otherwise) with respect to such Principal
Stockholder's Shares at any meeting of stockholders of the Company, or consent
in lieu of any such meeting, or otherwise, on the matters and in the manner
specified in the foregoing paragraph.
Grant of Option. The Stockholders Agreement provides that each Principal
Stockholder grants to Purchaser an irrevocable option (each, an "Option" and,
collectively, the "Options") to purchase all, and not less than all, of such
Principal Stockholder's shares of Company Common Stock and/or such Principal
Stockholder's shares of Company Preferred Stock at the applicable Purchase
Price, net to such Principal Stockholder in cash. The Stockholders Agreement
provides further that each Option shall expire if not exercised prior to the
close of business on the 180th day following termination of the Merger
Agreement. Purchaser may exercise any or all of the Options as to any Principal
Stockholder, at any time and from time to time, following termination of the
Merger Agreement, under circumstances in which any fee (or any portion thereof)
shall be payable and prior to the expiration of such Options.
Option Closing. Under the Stockholders Agreement, if Purchaser wishes to
exercise an Option, Purchaser shall send a written notice to the applicable
Principal Stockholder of its intention to exercise the Option, specifying the
place, and, if then known, the time and the date of the closing (the "Option
Closing") of the purchase. At the Option Closing, (i) each Principal Stockholder
whose Shares are being purchased shall deliver to Purchaser (or its designee)
all of such Principal Stockholder's Shares by delivery of a certificate or
certificates evidencing such Shares, in the denominations designated by
Purchaser, duly endorsed to Purchaser or accompanied by stock powers duly
executed in favor of Purchaser, with all necessary stock transfer stamps
affixed, and (ii) Purchaser shall pay to each such Principal Stockholder the
aggregate Purchase Price for such Principal Stockholder's Shares.
Conditions to Option Closing. The Option Closing is subject to the
conditions that (i) no Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any foreign or domestic statute, law,
ordinance, regulation, rule, code, executive order, injunction, judgment, decree
or other order ("Law") (whether temporary, preliminary or permanent) which is
then in effect and has the effect of making the acquisition of Shares by
Purchaser pursuant to the exercise of the Options illegal, or otherwise
restricting, preventing or prohibiting consummation of the purchase and sale of
the Shares pursuant to the exercise of the Options, and (ii) any waiting period
applicable to the consummation of the purchase and sale of the Shares pursuant
to the exercise of the Options under the HSR Act shall have expired or been
terminated.
Recapture. The Stockholders Agreement also provides that, in the event
Purchaser sells any Shares acquired pursuant to the exercise of an Option within
the two-year period following the applicable Option Closing at a price in excess
of the Purchase Price for such Shares, Purchaser shall promptly pay to the
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<PAGE> 14
applicable Principal Stockholder an amount equal to such excess (less any taxes
incurred by Purchaser in connection therewith).
No Solicitation of Transactions. Each Principal Stockholder has agreed
that between the date of the Stockholders Agreement and the date of termination
of the Merger Agreement, such Principal Stockholder will not, directly or
indirectly, through any officer, agent or otherwise, (a) solicit, initiate,
accept or knowingly encourage the submission of any Acquisition Proposal, or (b)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or otherwise cooperate in any way, or
assist or participate in, facilitate or encourage any proposal that constitutes,
or may reasonably be expected to lead to, an Acquisition Proposal. Each
Principal Stockholder has agreed to, and has agreed to direct or cause its
directors, officers, employees, representatives and agents to, immediately cease
and cause to be terminated any discussions or negotiations with any parties that
may be ongoing with respect to any Acquisition Proposal. Each Principal
Stockholder has agreed to promptly advise Parent orally and in writing of any
Acquisition Proposal or any request for information with respect to any
Acquisition Proposal, the material terms and conditions of such Acquisition
Proposal or request and the identity of the person making such Acquisition
Proposal or request.
Termination. The Stockholders Agreement provides that the Principal
Stockholders' obligation thereunder to tender, and not withdraw, their Shares
pursuant to the Offer shall terminate on the expiration date of the Offer. The
Options (including any Option as to which an exercise notice has been delivered
but for which the Option Closing has not occurred) shall expire if not exercised
prior to the close of business on the 180th day following termination of the
Merger Agreement. The remaining provisions of the Stockholders Agreement
terminate upon the earliest of (a) the effective time of the Merger and (b) the
close of business on the 180th day following the termination of the Merger
Agreement.
The Stockholders Agreement is filed as Exhibit 3 hereto and is incorporated
herein by reference.
3. Confidentiality Agreement
THE FOLLOWING IS A SUMMARY OF THE CONFIDENTIALITY AGREEMENT, DATED APRIL 1,
1999, BETWEEN THE COMPANY AND PARENT (THE "CONFIDENTIALITY AGREEMENT"), A COPY
OF WHICH HAS BEEN FILED WITH THE COMMISSION AS AN EXHIBIT TO SCHEDULE 14D-1. THE
SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CONFIDENTIALITY
AGREEMENT.
Pursuant to the Confidentiality Agreement, Parent has agreed, among other
things, (i) not to use any of the Evaluation Material for any reason other than
to evaluate a possible transaction between Parent and the Company, (ii) that the
Evaluation Material will be kept strictly confidential by Parent and its
representatives and, except with the specific prior written consent of the
Company or as expressly otherwise permitted by the terms of the Confidentiality
Agreement, will not be disclosed by Parent or by its representatives. The
Confidentiality Agreement provides that Parent may disclose the Evaluation
Material to those representatives of Parent that require such material for the
purpose of evaluating a possible transaction. For purposes of the
Confidentiality Agreement, "Evaluation Material" is defined to mean non-public
information regarding the Company and any other non-public, confidential or
proprietary information concerning the Company that the Company and its advisors
furnish to Parent; provided, however, that Evaluation Material does not include
information which (i) becomes generally available to the public other than as a
result of disclosures by Parent or its representatives, (ii) was already in
Parent's possession or was independently developed by Parent without violation
of the Confidentiality Agreement prior to its disclosure to Parent by the
Company, its representatives or its agents, or (iii) becomes available to Parent
on a non-confidential basis from a source other than the Company, its
representatives or its agents, provided that such source is not, to Parent's
knowledge after reasonable investigation, bound by a confidentiality agreement
with the Company, its representatives or its agents or otherwise prohibited from
transmitting the information to Parent or Parent's representatives by a
contractual, legal or fiduciary obligation.
Pursuant to the Confidentiality Agreement, Parent has also agreed that for
a period of two years from the date of the Confidentiality Agreement, unless
Parent shall have been specifically invited in writing by the Company, neither
Parent nor any of its affiliates will in any manner, directly or indirectly, (a)
effect or seek,
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offer or propose to effect, or cause or participate in or in any way assist any
person to effect or seek, offer or propose (whether publicly or otherwise) to
effect or cause or participate in, (i) any acquisition of any securities or
assets of the Company or any of its subsidiaries, (ii) any tender or exchange
offer, merger or other business combination involving the Company or any of its
subsidiaries, (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
any of its subsidiaries, or (iv) any "solicitation" of "proxies" (as such terms
are used in the proxy rules of the Commission) or consents to vote any voting
securities of the Company, (b) form, join or in any way participate in a "group"
(as defined under the Exchange Act) with respect to any voting securities of the
Company, (c) otherwise act, alone or in concert with others, to seek to control
or influence the management, Board of Directors or policies of the Company, and
(d) take any action which might force the Company to make a public announcement
or arrangements with any third party with respect to any of the foregoing.
The Confidentiality Agreement is filed as Exhibit 4 hereto and is
incorporated herein by reference.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) At a meeting held on August 13, 1999, the Board unanimously approved
and adopted the Offer, the Merger, the Merger Agreement and the transactions
contemplated thereby, and unanimously recommended that the stockholders of the
Company accept the Offer and tender their Shares pursuant thereto.
As part of its ongoing analysis of its business strategy and operations,
Parent continually analyzes new markets into which it might expand. By the end
of 1998, Parent had concluded that it would be strategically important to be
present in a significant way in the United States market, because of both the
potential opportunities within the U.S. market and the cross-selling
opportunities between Parent's existing construction business in Europe and
multinational customers located in the United States.
Parent analyzed whether it would be optimal to build its own business in
the U.S. market or to acquire a significant construction company in the U.S.
Parent identified the Company, as its leading candidate for a business
combination due to its strong market presence, its reputation for high quality,
its strong management team and its prospects for further growth.
On March 10, 1999, Hans-Peter Keitel, President and Chief Executive Officer
of Parent and Harald Peipers, a former Member of the Executive Board of Parent,
met in New York City with Ellis T. Gravette, Jr., Chairman and Chief Executive
Officer of the Company, and Robert E. Fee, President and Chief Operating Officer
of the Company, and discussed, in general terms, the Company's business and
prospects and the possibility of an investment by Parent in the Company or other
strategic alliances between Parent and the Company. These discussions were
principally in the context of a proposal made by Parent to acquire all or some
of the Shares of the Company then the subject of a Registration Statement on
Form S-3 filed with the Commission on March 4, 1999 in connection with a
contemplated public offering of Shares then held by Karl Steiner Holding AG (the
predecessor to EBSPSW Holding AG) and the Company's pension plan.
On March 17 and 18, 1999, Hans-Wolfgang Koch, Member of the Executive Board
of Parent, and Bernhard Burklin, then Head of Corporate Development of Parent
and currently Vice President of Hochtief International, met in New York City
with Mr. Fee, President and Chief Operating Officer of the Company, and Donald
G. Sleeman, Senior Vice President and Chief Financial Officer of the Company, to
discuss further, in general terms, the business of the Company and a possible
Parent investment in, or other strategic transaction with, the Company.
On March 25, 1999, Mr. Koch, Mr. Burklin and Hanno Bastlein, Comptroller of
Parent, had further discussions in New York with Messrs. Gravette, Fee and
Sleeman.
On March 31, 1999, Mr. Koch, Mr. Burklin and Busso Peus, Member of the
Executive Board of Parent, continued discussions with Messrs. Gravette, Fee and
Sleeman regarding a transaction between the parties and the Company's business,
including the possible acquisition of 100% of the Company.
On April 1, 1999, the Company and Parent entered into a confidentiality
agreement.
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<PAGE> 16
On April 5, 1999, Mr. Gravette had a conversation with Mr. Burklin and on
April 9, 1999, Mr. Gravette met with Messrs. Koch and Burklin.
On April 7, 1999, at a telephonic meeting of the Board, the Board was
advised as to the previous discussions with Parent.
On April 14, 1999, the Company entered into an engagement letter with
PaineWebber Incorporated ("PaineWebber") to represent the Company as its
exclusive financial advisor in connection with the potential sale of the
Company.
From April 15 through April 17, 1999, Parent engaged in a limited due
diligence evaluation of the business and affairs of the Company. At the
conclusion of preliminary due diligence, Parent undertook to make a written
proposal for an acquisition of the Company.
From April 25 through April 27, 1999, representatives of the Company met in
Essen, Germany with representatives of Parent to gain a better understanding of
Parent's business.
On April 28, 1999, Mr. Keitel transmitted to Mr. Gravette a written
proposal to acquire the Company for total consideration of $270 million or
approximately $21.65 per share of Company Common Stock based upon the number of
shares of Company Common Stock outstanding on a fully diluted and as converted
basis. Mr. Keitel's letter indicated that further due diligence would be
required and attached a term sheet setting forth the principal terms of Parent's
offer, including Parent's requirement that the Company's significant
stockholders agree to tender their Shares pursuant to the Offer and that the
Company agree to pay a termination fee of $10 million in the event the Merger
Agreement is terminated under certain circumstances.
On April 30, 1999, during a telephonic meeting of the Board, the Board was
updated as to the discussions with Parent.
During the week of May 3, 1999, several conversations took place between
Mr. Keitel and Mr. Gravette regarding Parent's offer and the possible benefits
to be achieved by a combination. Messrs. Keitel and Gravette agreed to continue
their discussions in New York City on May 24 and 25. On May 7, 1999, during a
Board meeting in New York City, the Board was further updated as to the
discussions with Parent.
On May 12, 1999, Mr. Keitel sent a letter to Mr. Gravette in which he
confirmed their conversations of the previous week (including the meetings
scheduled for May 24 and 25) and increased Parent's offer by $15 million to an
aggregate purchase price of $285 million, or approximately $23 per share of
Company Common Stock based upon the number of shares of Company Common Stock
outstanding on a fully diluted and as converted basis.
On May 24 and 25, 1999, several meetings took place in New York City
between representatives of the two companies regarding the benefits of a
possible combination. On May 25, Parent's representatives, in a meeting with the
Company's representatives, orally increased its offer to acquire the Company for
total consideration of $310 million, or approximately $25 per share of Company
Common Stock based on the number of shares of Company Common Stock outstanding
on a fully diluted and as converted basis, on the terms and conditions set forth
in Mr. Keitel's previous letters of April 28 and May 12.
On June 9, 1999, at a Board meeting in Seattle, Washington, the Board held
a further discussion concerning a possible business combination with Parent.
On June 15, 1999, Mr. Keitel sent a letter to Mr. Gravette in which he
requested that Mr. Gravette inform him of the results of the Board's
deliberations on Parent's offer and in which he confirmed in writing the
increase in the offer price made orally on May 25, 1999. Later that day, Mr.
Gravette responded with a letter informing Mr. Keitel that the Board determined
that the offer was inadequate for further consideration. Mr. Gravette also
informed Mr. Keitel that Thomas Leppert had been elected by the Board to succeed
Mr. Gravette as Chairman of the Board of the Company effective October 1, 1999.
On June 18, 1999, Mr. Keitel and Mr. Gravette spoke by telephone. Mr.
Keitel requested that the Company inform Parent of the price at which it would
be willing to enter into a transaction with Parent.
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<PAGE> 17
Mr. Gravette said that this was an issue for the Board to determine and that he
would undertake to provide a proposal to Parent in July.
On July 12, 1999, Mr. Keitel delivered a letter to Messrs. Gravette and
Leppert in which Parent, having refined its valuation analysis, particularly its
evaluation of the revenue opportunities available to the combined company, and
taking into account the Company's expected 1999 after-tax income, increased its
offer to $347 million in the aggregate, or approximately $28 per share of
Company Common Stock based on the number of shares of Company Common Stock
outstanding on a fully diluted and as converted basis. The letter indicated that
it was Parent's intention to keep the Company's management team intact for the
foreseeable future. Parent further stated in the letter that its offer would
expire if not accepted by the Board by July 30. Parent attached to the letter a
revised term sheet setting forth the principal terms of Parent's offer.
On July 16, 1999, Peter Steiner and Heinrich Baumann-Steiner, each members
of the Board, and their affiliates, EBSPSW Holding AG, PSW Holding AG, EBS
Holding AG and Esther Baumann-Steiner (collectively, the "Steiner Affiliates"),
filed an amendment to the Statement on Schedule 13D with respect to the Shares
previously filed by them and others. In the amended Schedule 13D, the Steiner
Affiliates disclosed that they had learned that an offer had been made to
purchase all the Shares of the Company at a substantial premium in excess of the
highest market price at which the shares of Company Common Stock had ever traded
in the public markets. The Steiner Affiliates also stated that they intended to
urge the Board to accept the offer and believed that the offer was fair to all
stockholders of the Company from a financial point of view.
On July 20, 1999, the Board met to address Parent's offer. At that meeting,
the Board appointed a committee of independent directors (the "Special
Committee"), to consider Parent's offer and other strategic alternatives. The
Special Committee consisted of all of the directors of the Company except
Messrs. Gravette, Leppert, Steiner, Baumann-Steiner and Fieger. At the meeting,
the Board also discussed the status of Parent's proposal. A representative of
the legal advisors, Fried, Frank, Harris, Shriver & Jacobson ("Fried Frank"),
participated in the meeting.
On July 22, 1999, Messrs. Leppert, Fee and Sleeman of the Company and
Messrs. Koch and Burklin of Parent met in Frankfurt, Germany. At that meeting,
the participants discussed various issues relating to the transaction, including
matters relating to the governance of the Company following the Merger. The
Company's representatives also informed Parent's representatives of recent
changes to certain compensation and benefits arrangements for employees and
officers of the Company. The Company's representatives further informed Parent
that Parent's offer of $28 per share of Company Common Stock was not acceptable.
From July 23 through July 25, 1999, Messrs. Koch and Leppert had several
conversations regarding price, in which Parent increased its offer to $370
million in the aggregate.
On July 28, 1999, the Special Committee held a telephonic meeting to
discuss the proposal by Parent. Representatives of Fried Frank participated in
these discussions. The Special Committee determined to accept Parent's offer,
subject to agreement on various matters and full Board approval.
On July 30, 1999, Mr. Gravette informed Mr. Keitel in writing of the
Special Committee's action.
Following several follow-up conversations clarifying certain aspects of
Parent's offer, Parent indicated its willingness to move forward with its
confirmatory due diligence investigation of the Company and to begin the
negotiation of definitive agreements.
On August 2, 1999, during a telephonic meeting of the Board, the Board was
updated as to the status of the discussions with Parent. Representatives of
Fried Frank and PaineWebber participated in the meeting.
From August 3 through August 5, 1999, representatives of Parent and its
financial and legal advisors conducted a due diligence investigation of the
business and affairs of the Company. Also on August 3, Parent's legal advisors
furnished to the Company's legal advisors a draft of the Merger Agreement and
the Stockholders Agreement. In addition, on August 3, representatives of Parent
and representatives of the Company met to arrive at a price per Share given an
aggregate offer price of $370 million and determined a price per share of
Company Common Stock to be $28.625, based on the then number of outstanding
shares of
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<PAGE> 18
Company Common Stock on a fully diluted and as converted basis and the average
exercise price per share of Company Common Stock issued upon the exercise of
outstanding stock options.
Several conversations took place during the period from August 5 through
August 12, 1999 between the legal advisors to the parties regarding the
principal issues on the Merger Agreement and the Stockholders Agreement.
On August 12, 1999, senior executives of Parent and the Company met at the
Company's headquarters to address the principal open issues between the parties.
On Friday, August 13, 1999, Parent received the requisite approval of the
Supervisory Board of RWE. Also on August 13, the Board met in person in New
York. After consideration of the presentations of legal counsel concerning the
Board's duties and the terms of the Offer, the Merger Agreement and the
Stockholders Agreement and of PaineWebber concerning its fairness opinion, the
Board unanimously approved and declared advisable the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, subject
to final negotiation of the terms of the Merger Agreement. The Principal
Stockholders indicated that, subject to the execution of the Merger Agreement,
they were prepared to enter into the Stockholders Agreement.
During the weekend of August 14 and 15, 1999, representatives of Parent and
Purchaser and their legal advisors worked out all remaining open issues.
On August 16, 1999, Parent, Purchaser and the Company entered into the
Merger Agreement and Parent and the Principal Stockholders entered into the
Stockholders Agreement. Immediately thereafter, Parent and the Company made a
public announcement to this effect.
(b) As set forth above, prior to approving the Offer and the Merger and
authorizing the Company to enter into the Merger Agreement, the Board received
presentations from representatives of PaineWebber regarding the financial
aspects of the proposed Offer and the Merger, and from representatives of Fried
Frank regarding the legal aspects of the proposed Offer and the Merger. In
reaching its conclusion that the Offer and the Merger is in the best interests
of the Company and its stockholders, the Board principally considered, among
other things, the following:
(i) the terms and conditions of the Offer and the Merger Agreement;
(ii) the trading history of the shares of Common Stock during the past
several years and a comparison of the trading history with those of other
comparable companies;
(iii) the purchase price of $28.625 per share of Common Stock in cash
represents a premium over recent and historical market prices for the
shares of Common Stock (on July 15, 1999, the last trading day before the
Company announced that it has received a proposal to acquire all of the
outstanding Common Stock, the closing price for the Common Stock as quoted
on the NYSE was $17.50 per share);
(iv) the opinion of PaineWebber to the Board to the effect that, as of
August 13, 1999, the proposed cash consideration to be received by the
stockholders of the Company pursuant to the Offer and Merger is fair to
such stockholders from a financial point of view. A copy of the PaineWebber
written opinion that was delivered to the Board is set forth as Exhibit 14
to this Schedule 14D-9. STOCKHOLDERS ARE URGED TO READ THE PAINEWEBBER
OPINION IN ITS ENTIRETY;
(v) the fact that the Offer is not contingent on Parent obtaining
financing and contains no other terms or conditions that, in the view of
the Board, could reasonably be expected to impair materially the
consummation of the Offer or the Merger;
(vi) other potential third party acquirors had the opportunity to
contact the Company or its advisors after the Company's public announcement
on July 16, 1999 that the Company had received a proposal to acquire all of
the outstanding Shares;
(vii) the terms and conditions of the Merger Agreement, including the
right of the Board to terminate the Merger Agreement if its fiduciary
duties require that action in the event a superior proposal
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<PAGE> 19
from a third party is made (subject to payment of a $10 million termination
fee to the Parent) and adopt the more favorable transaction;
(viii) the fact that EBSPSW Holding AG (the Company's largest
stockholder) and certain directors and executive officers of the Company
(who together beneficially hold in the aggregate approximately 23.8% of the
outstanding shares of Common Stock, assuming conversion of the Preferred
Stock) were willing to enter into the Stockholders Agreement pursuant to
which such stockholders agreed to tender into the Offer all of the Shares
beneficially owned by them or to vote in favor of the Merger;
(ix) the financial condition, results of operations, business and
prospects of the Company; and
(x) the fact that the Parent presently intends to operate the Company
as an autonomous division of the Parent, will maintain the Company's
current annual incentive program until at least December 31, 2000, and will
establish a phantom stock plan for the Company's senior executive officers.
Because of the variety of factors considered, the Board did not find it
practicable to, and did not make specific assessments of, quantify or otherwise
assign relative weights to the specific factors considered in reaching their
determination. The determination was made after consideration of all of the
factors together. In addition, individual members of the Board may have given
different weights to different factors.
The Board recognized that, while the consummation of the Offer gives the
Company's stockholders the opportunity to realize a premium over the prices at
which the shares of Common Stock were traded prior to the public announcement of
the Merger and Offer, consummation of the Offer and the Merger will eliminate
the Company's stockholders' ability to participate in the future growth and
possible profits of the Company.
The Board anticipates that if the Shares are not purchased in accordance
with the terms of the Offer or if the Merger is not consummated, the Company's
current management, under the general direction of the Board, will continue to
manage the Company as an ongoing business in accordance with the Company's
current business plan.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The Company retained PaineWebber pursuant to a letter agreement dated April
14, 1999 (the "PaineWebber Engagement Letter") to act as its exclusive financial
advisor in connection with any proposed sale transaction involving, among other
things, the acquisition by a third party of more than 50.0% of the capital stock
or assets of the Company. Pursuant to the PaineWebber Engagement Letter, the
Company has agreed to pay PaineWebber a fee of $250,000 upon delivery of the
opinion set forth as Exhibit 14 to this Schedule 14D-9. In addition, the Company
agreed to pay PaineWebber an additional fee if (a) during the term of the
agreement, the Company enters into a definitive agreement with a purchaser, (b)
within one year after the termination of the agreement, the Company enters into
a definitive agreement which subsequently results in a sale transaction, or (c)
within one year after the termination of the agreement, a sale transaction is
consummated with a purchaser in which PaineWebber advised the Company or had
discussions with the Company regarding a sale transaction. This fee is payable
in cash upon the closing of the sale transaction. The amount of the fee is based
upon an increasing percentage of the product of the number of outstanding shares
of Common Stock on a fully diluted basis and the purchase price per share of
Common Stock in excess of $14.125 (which percentage ranges from 0.7% for a
purchase price per share of Common Stock between $14.125 and $25.00 to 1% for a
purchase price per share of Common Stock above $27.00). In the case of the Offer
and the Merger, the transaction fee will be approximately $2.2 million
(including the $250,000 fee for the delivery of the fairness opinion). The
Company has also agreed to reimburse PaineWebber for all of its out-of-pocket
expenses incurred in connection with this engagement, including the fees,
disbursements, and other charges of legal counsel. The Company also agreed to
indemnify PaineWebber against certain liabilities relating to or arising out of
PaineWebber's engagement as financial advisor, including liabilities under the
federal securities laws.
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<PAGE> 20
Neither the Company nor any person acting on its behalf currently intends
to employ, retain or compensate any person to make solicitations or
recommendations to stockholders on its behalf concerning the Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) Except as set forth below or pursuant to the Stockholders Agreement
(see Item 3 hereof), during the past 60 days, neither the Company nor any
subsidiary of the Company nor, to the best of the Company's knowledge, any
executive officer, director or affiliate of the Company has effected a
transaction in the Shares.
- On June 29, 1999, Walter G. Ehlers, a director of the Company, exercised
an option for 1,500 shares of Common Stock at an exercise price of
$17.2917 per share and an option for 5,250 shares of Common Stock at an
exercise price of $15.50 per share.
- On August 4, 1999, Sara J. Gozo, Vice President, Secretary and Counsel of
the Company, exercised an option for 3,700 shares of Common Stock at an
exercise price of $5.25 per share and an option for 1,800 shares of
Common Stock at an exercise price of $5.7917 per share.
- On August 3, 1999, Mr. Gravette made a gift of 15,000 shares of Common
Stock to his grandchildren.
(b) To the best knowledge of the Company, all of its executive officers,
directors, affiliates and subsidiaries presently intend to tender to the Offeror
all Shares held of record or beneficially owned by such persons (other than
shares of Common Stock issuable upon exercise of stock options and Shares, if
any, which, if tendered, could cause such persons to incur liability under the
provisions of Section 16(b) of the Securities Exchange Act of 1934). Reference
is also made to the Stockholders Agreement described in Item 3 herein.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as set forth in this Statement, no negotiation is being
undertaken or is underway by the Company in response to the Offer which relates
to or would result in:
(1) an extraordinary transaction, such as a merger or reorganization,
involving the Company or any subsidiary of the Company;
(2) a purchase, sale or transfer of a material amount of assets by the
Company or any subsidiary of the Company;
(3) a tender offer for or other acquisition of securities by or of the
Company; or
(4) any material change in the present capitalization or dividend
policy of the Company.
(b) Not applicable.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
None.
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ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ----------- --------
<S> <C>
Exhibit 1 Agreement and Plan of Merger, dated as of August 16, 1999,
among The Turner Corporation, and HOCHTIEF AG.(1)
Exhibit 2 Pages 1-14 of the Proxy Statement, dated May 7, 1999, of The
Turner Corporation.(6)
Exhibit 3 Form of Stockholders Agreement, dated as of August 16, 1999,
among certain directors and executive officers of The Turner
Corporation, EBSPSW Holding AG, HOCHTIEF AG and Beta
Acquisition Corp.(2)
Exhibit 4 Confidentiality Agreement, dated April 1, 1999, between The
Turner Corporation and HOCHTIEF AG.(3)
Exhibit 5 Employment Agreement, dated as of June 9, 1999, between The
Turner Corporation and Thomas C. Leppert.(6)
Exhibit 6 Employment Agreement, dated as of June 9, 1999, as
supplemented, between The Turner Corporation and Thomas C.
Leppert.(6)
Exhibit 7 Restricted Stock Unit Agreement, dated as of June 9, 1999,
between The Turner Corporation and Thomas C. Leppert.(6)
Exhibit 8 Non-Qualified Stock Option Agreement for 50,000 Shares,
dated June 9, 1999, between The Turner Corporation and
Thomas C. Leppert.(6)
Exhibit 9 Non-Qualified Stock Option Agreement for 100,000 Shares,
dated June 9, 1999, between The Turner Corporation and
Thomas C. Leppert.(6)
Exhibit 10 Form of Change of Control Agreement, dated November 25,
1997, between The Turner Corporation and certain senior
executives.(4)
Exhibit 11 Form of Change of Control Agreement, dated November 25,
1997, between The Turner Corporation and other
executives.(5)
Exhibit 12 Letter Agreement, dated August 13, 1999, between The Turner
Corporation and Karl Steiner Holding AG.(6)
Exhibit 13 Press release, dated August 16, 1999.(6)
Exhibit 14* Opinion, dated August 13, 1999, of PaineWebber
Incorporated.(6)
Exhibit 15* Letter to Stockholders from E. T. Gravette, Jr., dated
August 20, 1999.(6)
</TABLE>
- ---------------
* Included in copies of Schedule 14D-9 mailed to stockholders.
(1) Incorporated herein by reference to Exhibit (c)(1) of the Schedule 14D-1 of
the Parent and the Offeror.
(2) Incorporated herein by reference to Exhibit (c)(2) of the Schedule 14D-1 of
the Parent and the Offeror.
(3) Incorporated herein by reference to Exhibit (c)(3) of the Schedule 14D-1 of
the Parent and the Offeror.
(4) Incorporated herein by reference from Exhibit 10(g) to the Company's Form
10-K for the year ended December 31, 1998 (File No. 1-8719).
(5) Incorporated herein by reference from Exhibit 10(h) to the Company's Form
10-K for the year ended December 31, 1998 (File No. 1-8719).
(6) As previously filed with Schedule 14D-9, dated August 20, 1999.
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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.
THE TURNER CORPORATION
By /s/ DONALD G. SLEEMAN
------------------------------------
Donald G. Sleeman
Senior Vice President,
Chief Financial Officer and
Chief Accounting Officer
Dated: August 20, 1999
22
