<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
DATE OF REPORT: AUGUST 26, 1996
MORRISON KNUDSEN CORPORATION
Commission File Number 1-8889
A Delaware corporation
IRS Employer Identification No. 82-0393735
MORRISON KNUDSEN PLAZA, BOISE, IDAHO 83729
208/386-5000
<PAGE>
MORRISON KNUDSEN CORPORATION
COMMISSION FILE NUMBER 1-8889
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
As previously reported, on June 25, 1996, Morrison Knudsen Corporation (the
"Corporation") filed a petition for relief under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") by filing a prepackaged Plan of
Reorganization (the "Plan") in the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court"). Case No. 96-1006 (PJW). The
Bankruptcy Court entered an order confirming the Plan on August 26, 1996 (the
"Confirmation Date").
The Plan contemplates the merger (the "Merger") of the Corporation with and
into Washington Construction Group, Inc. ("Washington"), pursuant to the
Restructuring and Merger Agreement, dated as of May 28, 1996 (the "Merger
Agreement"), by and between Washington and the Corporation, with Washington
being the surviving corporation in the Merger and being renamed Morrison Knudsen
Corporation (as such, the "Combined Company").
In addition to the Merger, the Plan provides for the satisfaction and
discharge of substantially all of the Corporation's existing senior debt
obligations and the cancellation of all of the Corporation's outstanding common
stock. Pursuant to the Plan, unless the Merger Agreement is terminated, each
holder of record of shares of the Corporation's common stock as of the close of
business on the Confirmation Date (including shares held for distribution to
certain securities litigation plaintiffs) will receive (i) its pro rata share of
warrants to purchase an aggregate of 2,765,000 shares of the Combined Company's
common stock at an exercise price of $12.00 per share (subject to adjustment),
(ii) a number of rights ("Combined Company Rights"), equal to the number of
shares of the Corporation's common stock so held by such holder, to purchase a
portion of the consideration otherwise distributable under the Plan to certain
of the Corporation's creditors as described below, and (iii) its pro rata share
of any distributions that may be required under the Plan to prevent the assumed
value of the aggregate consideration otherwise distributable under the Plan to
certain of the Corporation's creditors as described below from exceeding the
aggregate amount of such creditors' allowed claims (all as determined in the
manner provided in the Plan). As of the close of business on the Confirmation
Date, there were 36,887,370 shares of the Corporation's common stock outstanding
or deemed outstanding pursuant to the Plan.
The Plan provides that, unless the Merger Agreement is terminated, certain
creditors of the Corporation will receive distributions (a portion of which may
be made to a trust for their benefit) of (i) $13,300,000 in cash, (ii) all of
the common stock of MK Rail Corporation ("MK Rail") owned by the Corporation,
(iii) the promissory note of MK Rail owned by the Corporation (or the proceeds
thereof), (iv) an aggregate number of newly issued shares of common stock of the
Combined Company (estimated to be approximately 24,123,000 shares) equal to 45%
of the total number of such shares to be outstanding after giving effect to such
issuance, (v) newly issued shares of preferred stock of the Combined Company
entitling the holders thereof to receive up to $18,000,000 (subject to
adjustment) on account of certain tax refunds that may be received by the
Combined Company as successor to the Corporation, and (vi) if applicable, the
proceeds of any exercises of Combined Company Rights (in lieu of a portion of
the distributions described in this sentence).
The Plan provides that, if the Merger Agreement is terminated (in which
event the Merger would not occur), in lieu of the distributions described above,
(i) each holder of record of shares of the Corporation's common stock as of the
Confirmation Date will receive its pro rata share of warrants to purchase an
aggregate number of shares (estimated to be approximately 1,000,000) of common
stock of the reorganized Corporation equal to 10% of the total number of such
shares to be outstanding after giving effect to the issuance of such shares to
certain creditors of the Corporation as described below, at a price determined
pursuant to a formula set forth in the Plan, and (ii) certain creditors of the
Corporation will receive distributions (a portion of which may be made to a
trust for their benefit) of (a) the common stock of MK Rail owned by the
Corporation, (b) the promissory note of MK Rail owned by the Corporation (or the
proceeds thereof), (c) all of the common stock of the reorganized Corporation to
be outstanding as of the effective date of the Plan (estimated to be
approximately 10,000,000 shares), and (d) newly issued shares of preferred stock
of the reorganized Corporation entitling the holders thereof to receive up to
$18,000,000 (subject to adjustment) on account of certain tax refunds that may
be received by the reorganized Corporation.
The effectiveness of the Plan and the respective obligations of the
Corporation and Washington to consummate the Merger are subject to certain
conditions. In addition, the Merger Agreement may be terminated by the
Corporation or
<PAGE>
Washington under certain circumstances. Although there can be
no assurance with respect thereto, its is presently expected that all
conditions to the effectiveness of the Plan and the consummation of the Merger
will be satisfied or waived, that the Merger Agreement will not be terminated,
and that the Plan will become effective and the Merger will be consummated on
or about September 11, 1996.
The foregoing descriptions of the principal terms of the Plan and Merger
Agreement are qualified in their entirety by the full texts of such documents,
which are filed as Exhibits 2.1 and 2.2, respectively, hereto and incorporated
herein by this reference.
The information as to the assets and liabilities of the Corporation set
forth under the caption "The Combined Company Pro Forma Information" in
Washington's definitive proxy statement relating to the special meeting of
Washington's stockholders to be held on September 11, 1996, to consider and vote
upon the Merger, which was filed with the Securities and Exchange Commission on
August 22, 1996, is incorporated herein by this reference. A copy of such proxy
statement is filed as Exhibit 99.1 hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
2.1 The registrant's First Amended Plan of Reorganization under
Chapter 11 of the United States Bankruptcy Code as filed in the
United States Bankruptcy Court for the District of Delaware, Case
No. 96-1006 (PJW) (filed as Exhibit 2.1 to the registrant's Form
10-Q Quarterly Report for quarter ended June 30, 1996 and
incorporated herein by reference).
2.2 Restructuring and Merger Agreement dated May 28, 1996, by and
between Washington Construction Group, Inc. and the registrant
(filed as Exhibit 2.1 to the registrant's Form 8-K Current Report
dated May 28, 1996 and incorporated herein by reference).
99.1 Definitive Proxy Statement of Washington Construction Group, Inc.
(filed under Schedule 14A on August 22, 1996 and incorporated
herein by reference).
SIGNATURE
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MORRISON KNUDSEN CORPORATION
/s/ Stephen G. Hanks
September 9, 1996 By:
---------------------------
Stephen G. Hanks
Executive Vice President and
Chief Legal Officer
-2-
