<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. ____)/1/
KENETECH CORPORATION
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(Name of Issuer)
Common Stock, $0.0001 par value
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(Title of Class of Securities)
488878109
---------------------------------------------------------------
(CUSIP Number)
KC Holding Corporation
c/o ValueAct Capital Partners, L.P.
One Maritime Plaza
Suite 1400
San Francisco, California 94111
Attn: Jeffrey W. Ubben
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Persons Authorized to Receive Notices and
Communications)
October 25, 2000
---------------------------------------------------------------
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
/1/ The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
Page 1 of 15 Pages
<PAGE>
------------------------ ----------------------
CUSIP No. 488878109 13D Page 2 of 15 Pages
--------- - --
------------------------ ----------------------
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NAME OF REPORTING PERSON
1
KC Holding Corporation
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
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SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS
4
OO
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) or 2(E) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
11,365,458 (See Item 5)
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 0
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
11,365,458 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 36%
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
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<PAGE>
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CUSIP No. 488878109 13D Page 3 of 15 Pages
--------- - --
------------------------ ----------------------
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NAME OF REPORTING PERSON
1
KC Merger Corp.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
------------------------------------------------------------------------------
SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) or 2(E) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
SHARES 0
-----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 11,365,458 (See Item 5)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
11,365,458 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 36%
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
------------------------------------------------------------------------------
<PAGE>
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CUSIP No. 488878109 13D Page 4 of 15 Pages
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------------------------ ----------------------
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NAME OF REPORTING PERSON
1
ValueAct Capital Partners, L.P.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
------------------------------------------------------------------------------
SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) or 2(E) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 11,365,458 (See Item 5)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
11,365,458 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 36%
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
------------------------------------------------------------------------------
<PAGE>
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CUSIP No. 488878109 13D Page 5 of 15 Pages
--------- - --
------------------------ ----------------------
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NAME OF REPORTING PERSON
1 VA Partners, L.L.C.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
------------------------------------------------------------------------------
SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) or 2(E) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 11,365,458 (See Item 5)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
11,365,458 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 36%
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
------------------------------------------------------------------------------
<PAGE>
Item 1. Security and Issuer.
The class of equity security to which this Statement relates is the common
stock, $0.0001 par value (the "Common Stock") of KENETECH Corporation, a
Delaware corporation (the "Company"). The name and address of the principal
executive offices of the Company are KENETECH Corporation, 500 Sansome Street,
Suite 140, San Francisco, California 94111.
Item 2. Identity and Background.
This Statement is being jointly filed by each of the following persons
pursuant to Rule 13d-1(a) promulgated by the Securities and Exchange Commission
(the "Commission") pursuant to Section 13 of the Securities Exchange Act of 1934
as amended (the "Exchange Act"):
(i) KC Holding Corporation ("KC Holding"), a Delaware corporation, by virtue
of its deemed beneficial ownership of 11,365,458 shares of Common Stock
(the "Shareholder Shares");
(ii) KC Merger Corp. ("KC Merger"), a Delaware corporation, by virtue of its
deemed beneficial ownership of the Shareholder Shares;
(iii) ValueAct Capital Partners, L.P. ("ValueAct"), a Delaware limited
partnership, as the sole shareholder of KC Holding; and
(iv) VA Partners, L.L.C. ("VA Partners"), a Delaware limited liability company,
as the sole general partner of ValueAct.
The address of the principal business and office of KC Holding, KC Merger,
ValueAct and VA Partners is c/o VA Partners, One Maritime Plaza, Suite 1400, San
Francisco, California 94111. KC Holding and KC Merger are newly formed
corporations that will be used to effect the acquisition of the Company.
ValueAct is principally engaged in the business of investing in securities. VA
Partners is principally engaged in the business of serving as the general
partner for ValueAct. KC Holding, KC Merger, ValueAct and VA Partners are
collectively referred to herein as the "Reporting Persons." The Reporting
Persons have entered into a Joint Filing Agreement, a copy of which is filed
with this Statement as Exhibit D (which is incorporated herein by reference),
pursuant to which the Reporting Persons have agreed to file this Statement
jointly in accordance with the provisions of Rule 13d-1(a) under the Exchange
Act.
Information with respect to each Reporting Person is given solely by such
Reporting Person, and no Reporting Person assumes responsibility for the
accuracy or completeness of the information furnished by another Reporting
Person. Attached as Schedule A to this Statement is information concerning the
Reporting Persons to which such information is required to be disclosed in
response to Item 2 and General Instruction C to Schedule 13D.
During the last five years, none of the Reporting Persons or the persons
identified on Schedule A attached hereto has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
During the last five years, none of the Reporting Persons or the persons
identified on Schedule A attached hereto was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
any person was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Page 6 of 15 Pages
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Item 3. Source and Amount of Funds or Other Consideration.
As more fully described in Item 4 hereof, KC Holding, KC Merger and Mark D.
Lernal (the "Continuing Shareholder") have entered into a Voting Agreement,
dated October 25, 2000 (the "Voting Agreement"). The transactions contemplated
by the Voting Agreement prior to the effective time of the Exchange (as defined
in Item 4) are not expected to require the expenditure of any funds. The
Continuing Shareholder entered into the Voting Agreement to induce KC Holding
and ValueAct to enter into the Merger Agreement (as defined in Item 4).
Item 4. Purpose of Transaction.
On October 24, 2000, KC Holding, KC Merger, ValueAct, and the Continuing
Shareholder entered into a Subscription and Contribution Agreement (the
"Contribution Agreement") providing for (i) the sale of 865,214 shares of common
stock of KC Holding to ValueAct for aggregate cash consideration of
approximately $21,600,000 (the "Sale"), (ii) the issuance of 472,803 shares of
common stock of KC Holding to the Continuing Shareholder in exchange for the
Shareholder Shares (the "Exchange"). The value per share of such shares
transferred by the Continuing Shareholder is $1.04.
On October 25, 2000, the Company, KC Holding and KC Merger, a wholly owned
subsidiary of KC Holding, entered into an Agreement and Plan of Merger (the
"Merger Agreement") providing for (i) the making by KC Merger of an all cash
tender offer to purchase any and all of the shares of Common Stock (the
"Shares"), at a purchase price of $1.04 per Share (the "Offer"), and (ii)
following the completion of the Offer, the subsequent merger of KC Merger with
and into the Company (the "Merger"), whereupon the existence of KC Merger will
cease and the Company will continue as the surviving corporation (the "Surviving
Corporation").
The Offer is conditioned upon, among other things, there having been
validly tendered and not properly withdrawn prior to the expiration date of the
Offer that number of Shares which equals at least 85% of the total number of
outstanding shares of Common Stock on a fully diluted basis, excluding the
Shareholder Shares. The Offer will expire at 12:00 midnight, New York City time,
on the date that is the later of (i) twenty (20) business days following the
commencement of the Offer and (ii) December 7, 2000, unless otherwise extended.
Effective upon the consummation of the Offer, KC Merger will be entitled
under the Merger Agreement to designate a number of directors (rounded up to the
nearest whole number) to the Board of Directors of the Company equal to the
percentage of the aggregate voting power of the Shares held by KC Holding or KC
Merger.
At the effective time of the Merger (the "Merger Effective Time") and
subject to certain limitations set forth in the Merger Agreement, (i) each share
of common stock of KC Merger issued and outstanding immediately prior to the
Merger Effect Time will, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into one fully paid and nonassessable
share of Common Stock, $0.01 par value per share, of the Surviving Corporation
("Surviving Company Stock") and the holders of the outstanding shares of Common
Stock so converted will become holders of records of the shares of Surviving
Company Stock; (ii) all Shares held in the treasury of the Company or by any
wholly owned subsidiary of the Company and any Shares owned by KC Holding or by
any wholly owned subsidiary of KC Holding shall be canceled and no consideration
shall be delivered in exchange therefor, and (iii) each other Share issued and
outstanding immediately prior to the Merger Effective Time (other than with
respect to holders who properly exercise appraisal rights) shall be converted
into the right to receive from the Surviving Corporation in cash, without
interest, the per share price paid for Shares in the Offer (the "Merger
Page 7 of 15 Pages
<PAGE>
Consideration") and the holders of the outstanding Shares so converted shall
cease to have any rights with respect to such Shares, except the right to
receive the Merger Consideration.
At the Merger Effect Time, the Restated Certificate of Incorporation of the
Company, as in effect immediately prior to the Merger Effective Time, will be
amended in its entirety to be in the form set forth on Schedule 1 to the Merger
Agreement. Similarly, the Restated Bylaws of the Company will be amended in
their entirety to be in the form set forth on Schedule 2 to the Merger
Agreement.
As a result of the Merger, the entire equity interest in the Surviving
Corporation will be owned by ValueAct and the Continuing Shareholder through KC
Holding. The shareholders of the Company will no longer have any interest in,
and will not be shareholders of the Surviving Corporation. Following the
Merger, ValueAct and the Continuing Shareholder will have the opportunity to
benefit from any earnings and growth of the Company, and will bear the risk of
any decrease in the Company's value. Following the Merger, the Surviving
Company Stock will no longer be traded on the NASDAQ Over The Counter Bulletin
Board, price quotations will no longer be available and the registration of the
Shares under the Exchange Act will be terminated. After such registration is
terminated, the Surviving Corporation will no longer be required to file
periodic reports with the Commission.
In the event that ValueAct, KC Holding and KC Merger acquire 90% or more of
the outstanding Shares, the Merger can be effected under Section 253 of the
Delaware General Corporation Law without a meeting of the shareholders of the
Company. Otherwise, the approval of the Company's shareholders will be required
by applicable law in order to consummate the Merger.
The obligations of the parties to the Merger Agreement to effect the Merger
are subject to certain conditions, and prior to the Effective Time, the Company,
KC Holding or KC Merger may terminate the Merger Agreement under certain
circumstances, in each case as set forth in the Merger Agreement.
As an inducement and a condition to KC Holding and KC Merger entering into
the Merger Agreement and concurrently with the execution and delivery of the
Merger Agreement, KC Holding, KC Merger and the Continuing Shareholder entered
into the Voting Agreement. Pursuant to the Voting Agreement, the Continuing
Shareholder (i) has agreed not to tender his Shares in the Offer and (ii) has
granted KC Merger and KC Holding an irrevocable proxy to vote his Shares owned
as of October 25, 2000 and any Shares acquired after October 25, 2000 (the
"Subject Shares"): (A) in favor of the Merger and the Merger Agreement, (B)
against any Takeover Proposal (as defined in the Merger Agreement) and against
any proposal for action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement or which is reasonably likely to result in
any of the conditions of the Company's obligations under the Merger Agreement
not being fulfilled, any change in the directors of the Company, any change in
the present capitalization of the Company or any amendments to the Company's
Certificate of Incorporation or By-Laws, any other material change in the
Company's corporate structure or business, or any other action, which could
reasonably be expected to impede, interfere with, delay, postpone or materially
adversely affect the transactions contemplated by the Merger Agreement or the
likelihood of such transactions being consummated and (C) in favor of any other
matter necessary for consummation of the transactions contemplated by the Merger
Agreement which is considered at any such meeting of shareholders or in such
consent, and to execute any documents which are necessary or appropriate in
order to effectuate the foregoing, including the ability for KC Merger to vote
the Subject Shares directly.
Page 8 of 15 Pages
<PAGE>
The Voting Agreement also provides, except as otherwise contemplated by the
Contribution Agreement and the Voting Agreement, that the Continuing Shareholder
will not, during the term of the Voting Agreement: (i) sell, transfer, assign,
gift, pledge, hypothecate, encumber or dispose of any or all of such Subject
Shares; (ii) enter into any contract, option or other agreement or understanding
with respect to any transfer of any or all such Subject Shares or any interest
in such Subject Shares, (iii) grant any proxy, power-of-attorney or other
authorization in or with respect to the Subject Shares; (iv) deposit the Subject
Shares into a voting trust or enter into a voting agreement or arrangement with
respect to the Subject Shares; or (v) take any other action that would in any
way restrict, limit or interfere with the performance of his obligations under
the Voting Agreement or of the transactions contemplated under the Voting
Agreement or the Merger Agreement.
The Voting Agreement and all rights and obligations of the parties under
the Voting Agreement terminates immediately upon the earlier of: (i) the date
upon which the Merger Agreement is terminated in accordance with its terms or
(ii) the Merger Effective Time.
The preceding summaries of certain provisions of the Voting Agreement, the
Contribution Agreement and the Merger Agreement are not intended to be complete
and are qualified in their entirety by reference to the full text of such
agreements, copies of which are incorporated by reference as Exhibits A, B and C
hereto and are incorporated herein by reference.
Other than as described in this Statement, none of the Reporting Persons or
the persons identified on Schedule attached hereto presently has any plans or
proposals that relate to or would result in any of the actions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Prior to October 25, 2000, none of the Reporting Persons owned or was the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange Act)
of any Shares. Upon the execution of the Voting Agreement and the effectiveness
of the Contribution Agreement, KC Holding may be deemed to have acquired
"beneficial ownership" (as defined in Rule 13d-3 promulgated under the Exchange
Act), of the Shareholder Shares. Pursuant to the Voting Agreement, KC Holding
may be deemed to have the shared power to vote the Shareholder Shares with
respect to the matters set forth in the Voting Agreement. As of October 25,
2000, the Shareholder Shares totaled 11,365,458 and constituted approximately
36% of the issued and outstanding shares of Common Stock (based on the number of
shares of Common Stock represented to be issued and outstanding as of October
25, 2000, by the Company in the Merger Agreement).
KC Merger Corp. Pursuant to the Voting Agreement, KC Merger may be deemed
to have the shared power to vote the Shareholder Shares with respect to the
matters set forth in the Voting Agreement.
ValueAct Capital Partners, L.P. ValueAct is the sole shareholder of KC
Holding. By virtue of this ownership, ValueAct may be deemed to have acquired
beneficial ownership of the Shareholder Shares pursuant to the terms of the
Contribution Agreement and to have the shared power to vote the Shareholder
Shares with respect to the matters set forth in the Voting Agreement.
VA Partners, L.L.C. VA Partners, as the sole general partner of ValueAct,
may be deemed to have acquired beneficial ownership of the Shareholder Shares
pursuant to the terms of the Contribution Agreement and to have the shared power
to vote the Shareholder Shares with respect to the matters set forth in the
Voting Agreement.
Page 9 of 15 Pages
<PAGE>
Neither the filing of this Statement nor any of its contents shall be
deemed to constitute an admission that any Reporting Person is the beneficial
owner of any Common Stock referred to in this Statement for the purposes of
Section 13(d) of the Act or for any other purpose, and such beneficial ownership
is expressly disclaimed.
Item 6. Contracts, Arrangements, Understandings of Relationships With
Respect to Securities of the Issuer.
Except as otherwise set forth in this Statement (and the agreements
referenced herein), to the best knowledge of the Reporting Persons, no
contracts, arrangements, understandings or relationships (legal or otherwise)
exist among the persons named in Item 2 or between such persons and any other
person with respect to any securities of the Company, including but not limited
to transfer or voting of any of the securities of the Company, finder's fees,
joint ventures, loan or option arrangements, puts or calls, guarantees or
profits, divisions of profits or loss, or the giving or withholding of proxies,
or a pledge or contingency, the occurrence of which would give another person
voting power over the securities of the Company.
Item 7. Material to be filed as Exhibits.
Exhibit A- Voting Agreement, dated as of October 25, 2000, by and among
KC Holding Corporation, KC Merger Corp. and Mark D. Lerdal,
incorporated by reference to Exhibit 2 of the Amendment No.
2 to Schedule 13D, as filed with the Commission on October
30, 2000
Exhibit B- Subscription and Contribution Agreement, dated as of October
24, 2000, by and among KC Holding Corporation, ValueAct
Capital Partners, L.P. and Mark D. Lerdal, incorporated by
reference to Exhibit 1 of the Amendment No. 2 to Schedule
13D, as filed with the Commission on October 30, 2000
Exhibit C- Agreement and Plan of Merger, dated as of October 25, 2000,
by and among KC Holding Corporation, KC Merger Corp. and
KENETECH Corporation, incorporated by reference to Exhibit 2
to the Company's Current Report on Form 8-K, as filed with
the Commission on October 26, 2000
Exhibit D- Joint Filing Agreement, dated November 1, 2000, between KC
Holding Corporation, KC Merger Corp., ValueAct Capital
Partners, L.P. and VA Partners, L.L.C.
Page 10 of 15 Pages
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SIGNATURES
----------
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certify that the information set
forth in this Statement is true, complete and correct.
Date: November 1, 2000 KC HOLDING CORPORATION
By: /s/ Jeffrey W. Ubben
--------------------------------
Its: Secretary/Treasurer
--------------------------------
Date: November 1, 2000 KC MERGER CORP.
By: /s/ Jeffrey W. Ubben
--------------------------------
Its: Secretary/Treasurer
--------------------------------
Date: November 1, 2000 VALUEACT CAPITAL PARTNERS, L.P.
By: VA Partners, L.L.C.,
its General Partner
By: /s/ Jeffrey W. Ubben
--------------------------------
Its: Managing Member
--------------------------------
Date: November 1, 2000 VA PARTNERS, L.L.C.
By: /s/ Jeffrey W. Ubben
--------------------------------
Its: Managing Member
--------------------------------
Page 11 of 15 Pages
<PAGE>
SCHEDULE A
The following persons serve as directors for each of KC Merger Corp. ("KC
Merger") and KC Holding Corporation ("KC Holding"): Jeffrey W. Ubben and Peter
H. Kamin. Mr. Ubben and Mr. Kamin also serve as the executive officers of each
of KC Merger and KC Holding. Mr. Ubben is the Secretary and Treasurer for each
of KC Merger and KC Holding and Mr. Kamin is President of KC Merger and KC
Holding. The business address for each of Mr. Kamin and Mr. Ubben is c/o VA
Partners, L.L.C., One Maritime Plaza, Suite 1400, San Francisco, California
94111.
VA Partners, L.L.C. ("VA Partners") is the sole general partner of ValueAct
Capital Partners, L.P. Mr. Ubben serves as the Managing Member of VA Partners
and the other founding members include Mr. Kamin and George F. Hamel, Jr. The
business address for Mr. Ubben, Mr. Kamin and Mr. Hamel is c/o VA Partners,
L.L.C., One Maritime Plaza, Suite 1400, San Francisco, California 94111. Each of
the above individuals is a citizen of the United States.
Page 12 of 15 Pages
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Name
----------- ------------------------------------------------------
A Voting Agreement, dated as of October 25, 2000, by and among
KC Holding Corporation, KC Merger Corp. and Mark D. Lerdal,
incorporated by reference to Exhibit 2 of the Amendment No.
2 to Schedule 13D, as filed with the Commission on October
30, 2000
B Subscription and Contribution Agreement, dated as of October
24, 2000, by and among KC Holding Corporation, ValueAct
Capital Partners, L.P. and Mark D. Lerdal, incorporated by
reference to Exhibit Amendment No. 2 to Schedule 13D, as
filed with the Commission October 30, 2000
C Agreement and Plan of Merger, dated as of October 25, 2000,
by and among KC Holding Corporation, KC Merger Corp. and
KENETECH Corporation, incorporated by reference to Exhibit 2
to the Company's Current Report on Form 8-K, as filed with
the Commission 26, 2000
D Joint Filing Agreement, dated November 1, 2000, between KC
Holding Corporation, KC Merger Corp., ValueAct Capital
Partners, L.P. and VP Partners, L.L.C.
Page 13 of 15 Pages
