<PAGE>
SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF
THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[_] Preliminary Information Statement [_] Confidential, for Use of the
Commission Only
(as permitted by Rule 14c-5(d)(2))
[X] Definitive Information Statement
AIR & WATER TECHNOLOGIES CORPORATION
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee previously paid with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
AIR & WATER TECHNOLOGIES CORPORATION
U.S. HIGHWAY 22 WEST AND STATION ROAD
BRANCHBURG, NEW JERSEY 08876
----------------
NOTICE OF ACTION TAKEN BY STOCKHOLDERS
----------------
NOTICE IS HEREBY GIVEN that on January 26, 1998 and February 6, 1998,
respectively, the Board of Directors of Air & Water Technologies Corporation,
a Delaware corporation (the "Company"), and holders of a majority of the
voting power of the Company approved the following:
An amendment to Article Fourth of the Restated Certificate of
Incorporation of AIR & WATER TECHNOLOGIES CORPORATION as described in the
attached Information Statement under the caption "CHARTER AMENDMENT."
Section 228 of the General Corporation Law of the State of Delaware provides
that any action which may be taken at a meeting of the stockholders may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders
of outstanding stock having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted, provided that prompt
notice of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing and who, if the action had been taken at a meeting, would
have been entitled to notice of the meeting if the record date for such
meeting had been the date that written consents signed by a sufficient number
of holders to take the action were delivered to the corporation.
On February 6, 1998, a consent in writing approving the foregoing amendment
to the Restated Certificate of Incorporation approved and proposed by the
Board of Directors on January 26, 1998 was signed by Compagnie Generale des
Eaux and Anjou International Company, which are holders of outstanding stock
having 47,895,689 votes, said votes representing greater than a majority of
the aggregate outstanding voting power of the Company, and was delivered to
the Company. Accordingly, the Company is notifying you of the actions so taken
by delivering this Notice along with the attached Information Statement.
WE ARE NOT ASKING YOU FOR A PROXY OR CONSENT AND YOU ARE REQUESTED NOT TO
SEND US A PROXY OR CONSENT WITH RESPECT TO THE MATTERS SET FORTH HEREIN.
Douglas A. Satzger
Corporate Secretary
Branchburg, New Jersey
February 9, 1998
<PAGE>
AIR & WATER TECHNOLOGIES CORPORATION
U.S. HIGHWAY 22 WEST AND STATION ROAD
BRANCHBURG, NEW JERSEY 08876
----------------
INFORMATION STATEMENT
----------------
ACTION TAKEN BY WRITTEN CONSENT OF STOCKHOLDERS
----------------
EFFECTIVE
MARCH 2, 1998
WE ARE NOT ASKING YOU FOR A PROXY OR CONSENT AND YOU ARE REQUESTED NOT TO
SEND US A PROXY OR CONSENT WITH RESPECT TO THE MATTERS SET FORTH HEREIN.
GENERAL INFORMATION
Introduction. This Information Statement is furnished by the Board of
Directors of Air & Water Technologies Corporation, a Delaware corporation (the
"Company"), pursuant to Rule 14c-2 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), in connection with certain actions taken by
certain of the stockholders of the Company. This Information Statement is
first being sent to the Company's stockholders on or about February 9, 1998.
On January 26, 1998, the Board of Directors of the Company adopted a
resolution setting forth proposed amendments to the Restated Certificate of
Incorporation of the Company (the "Charter Amendment"). The form of the
Charter Amendment is dependent upon whether the Requisite Consents (as defined
hereinafter) are obtained. Consequently, the Board of Directors of the Company
has adopted two alternative forms of amendment. In the event the Requisite
Consents are not obtained prior to the Expiration Date (as defined
hereinafter), the Charter Amendment will increase the number of shares of the
Company's Class A Common Stock, par value $.001 per share (the "Class A Common
Stock"), and the Company's Class B Common Stock, par value $.001 per share
(the "Class B Common Stock" and together with the Class A Common Stock, the
"Common Stock"), which the Company will have the authority to issue and amend
certain terms of the Class B Common Stock. In the event the Requisite Consents
are obtained prior to the Expiration Date, the Charter Amendment will increase
the number of shares of the Company's Class A Common Stock which the Company
will have the authority to issue. The Charter Amendment was adopted by the
Board of Directors to consummate the transactions contemplated by the
Recapitalization Agreement (as defined hereinafter). See "Charter Amendment--
Background--Recapitalization" and "--Reasons for the Charter Amendment." On
February 6, 1998, as agreed to pursuant to the Recapitalization Agreement, two
stockholders, Compagnie Generale des Eaux, a company organized under the laws
of the Republic of France ("CGE"), and its indirect wholly owned subsidiary,
Anjou International Company, a Delaware corporation ("Anjou") (together, the
"Consenting Stockholders"), executed a written consent approving the Charter
Amendment, effective upon the expiration of the twenty calendar day period
following the mailing of this Information Statement to the Company's
stockholders, and delivered such written consent to the Company (the "Written
Consent"). As of February 6, 1998 CGE and Anjou beneficially owned in the
aggregate approximately 72.2% of the outstanding Class A Common Stock and
voting power of the Company.
Section 228 of the General Corporation Law of the State of Delaware provides
that any action which may be taken at a meeting of the stockholders may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders
of outstanding stock having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted, provided that prompt
notice of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those
<PAGE>
stockholders who have not consented in writing and who, if the action had been
taken at a meeting, would have been entitled to notice of the meeting if the
record date for such meeting had been the date that written consents signed by
a sufficient number of holders to take the action were delivered to the
corporation.
As of February 6, 1998, the date the Written Consent was executed and
delivered by the Consenting Stockholders (the "Action Date"), the Company had
outstanding 66,304,968 shares of its Class A Common Stock. The approval of the
holders of a majority of the outstanding shares of Class A Common Stock is
necessary to adopt the Charter Amendment. Each outstanding share of Class A
Common Stock is entitled to one vote on the proposal to adopt the Charter
Amendment. Accordingly, because CGE and Anjou own collectively greater than a
majority of the voting power of the Company and the Written Consent approves
the Charter Amendment by greater than a majority of the number of votes of
outstanding shares entitled to vote thereon, the approval of the Charter
Amendment is complete and the Company is notifying you of the actions so
taken. NO MEETING OF STOCKHOLDERS IS BEING HELD TO CONSIDER THE CHARTER
AMENDMENT.
Appraisal Rights. The stockholders of the Company do not have appraisal
rights or similar rights of dissent with respect to the matter acted upon.
CHARTER AMENDMENT
GENERAL
The Board of Directors duly approved and recommended that the stockholders
consider and approve a proposal to amend the Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation") by amending Article FOURTH
thereof. The form of the Charter Amendment is dependent upon whether the
Requisite Consents are obtained. Consequently, the Board of Directors of the
Company has adopted two alternative forms of amendment.
IN THE EVENT THE REQUISITE CONSENTS ARE NOT OBTAINED PRIOR TO THE EXPIRATION
DATE, ARTICLE FOURTH WILL BE AMENDED AS FOLLOWS:
(i) That the first paragraph of Article FOURTH of the Certificate of
Incorporation be deleted in its entirety and the following paragraph be
inserted in lieu thereof:
"FOURTH: The total number of shares of stock which the Corporation
shall have the authority to issue is 262,500,000 shares, of which
260,000,000 shares shall be Common Stock, par value $.001 per share,
and 2,500,000 shares shall be Preferred Stock, par value $.01 per
share."
(ii) That the first paragraph of Paragraph B of Article FOURTH of the
Certificate of Incorporation be deleted in its entirety and the following
paragraph be inserted in lieu thereof:
"B. The Common Stock shall consist of 230,000,000 shares of Class A
Common Stock ("Class A Common") and 30,000,000 shares of Class B Common
Stock ("Class B Common"). Except as otherwise provided herein, all
shares of Class A Common and Class B Common will be identical and will
entitle the holders thereof to the same rights and privileges."
(iii) That Paragraph 3A of Paragraph B.3 of Article FOURTH of the
Certificate of Incorporation be deleted in its entirety and the following
paragraph be inserted in lieu thereof:
"3A. Conversion of Class B Common. On the Conversion Date (as such
term is defined below), a holder's shares of Class B Common shall
automatically convert into the same number of shares of Class A Common.
For purposes of this Paragraph 3, the "Conversion Date" shall mean the
date which is the earlier of (i) August 1, 2000 or, (ii) seventy-five
days following the date on which the "Right to Require Repurchase"
provided in Section 1501 of the Indenture governing the Corporation's
8% Convertible Subordinated Debentures due 2015 (the "Debentures")
which grants holders the right to require the corporation to repurchase
the Debentures when any person becomes the beneficial owner of 75% or
more of the voting stock of the Corporation becomes inapplicable with
respect to such holder."
2
<PAGE>
Attached as Exhibit A is Article FOURTH of the Company's Certificate of
Incorporation as it will be amended in the event the Requisite Consents are
not obtained prior to the Expiration Date, reflecting the changes proposed and
approved by the Board of Directors.
IN THE EVENT THE REQUISITE CONSENTS ARE OBTAINED PRIOR TO THE EXPIRATION
DATE, ARTICLE FOURTH WILL BE AMENDED AS FOLLOWS:
(i) That the first paragraph of Article FOURTH of the Certificate of
Incorporation be deleted in its entirety and the following paragraph be
inserted in lieu thereof:
"FOURTH: The total number of shares of stock which the Corporation
shall have the authority to issue is 262,500,000 shares, of which
260,000,000 shares shall be Common Stock, par value $.001 per share,
and 2,500,000 shares shall be Preferred Stock, par value $.01 per
share."
(ii) That the first paragraph of Paragraph B of Article FOURTH of the
Certificate of Incorporation be deleted in its entirety and the following
paragraph be inserted in lieu thereof:
"B. The Common Stock shall consist of 255,000,000 shares of Class A
Common Stock ("Class A Common") and 5,000,000 shares of Class B Common
Stock ("Class B Common"). Except as otherwise provided herein, all
shares of Class A Common and Class B Common will be identical and will
entitle the holders thereof to the same rights and privileges."
Attached as Exhibit B is Article FOURTH of the Company's Certificate of
Incorporation as it will be amended in the event the Requisite Consents are
obtained prior to the Expiration Date, reflecting the changes proposed and
approved by the Board of Directors.
Based upon preliminary conversations with certain holders of the Convertible
Debentures, the Company currently expects that it will obtain the Requisite
Consents prior to the Expiration Date. However, there can be no assurance that
the Requisite Consents will be obtained.
THE BOARD OF DIRECTORS BELIEVES THE CHARTER AMENDMENT IS IN THE BEST
INTEREST OF THE STOCKHOLDERS AND DOES NOT ADVERSELY AFFECT THE RIGHTS OF THE
HOLDERS OF THE CLASS A COMMON STOCK.
BACKGROUND--RECAPITALIZATION
On September 24, 1997, the Company, CGE and Anjou entered into a
recapitalization agreement (the "Recapitalization Agreement"). The
Recapitalization Agreement provides, among other things, for the exchange (the
"Exchange") by CGE and its subsidiaries of 1,200,000 shares, having an
aggregate liquidation value of $60,000,000, of 5 1/2% Series A Convertible
Exchangeable Preferred Stock, par value $.01 per share (the "Series A
Preferred Stock"), representing all of the issued and outstanding Series A
Preferred Stock, for shares of Class A Common Stock. On January 28, 1998, the
Company and CGE effected the Exchange and the Company issued 34,285,714 shares
of Class A Common Stock to CGE in exchange for the Series A Preferred Stock.
In addition, the Recapitalization Agreement provides for a rights offering
(the "Rights Offering") in which the Company will distribute on a pro rata
basis to holders of record of shares of Class A Common Stock transferable
subscription rights (the "Rights") to subscribe for and purchase additional
shares of its Common Stock and Warrants (as defined hereinafter). The Rights,
Common Stock and Warrants are described in the Company's Prospectus dated
January 30, 1998 (the "Prospectus"). In the Rights Offering, the Company is
offering (i) an aggregate of 120,000,000 shares of its Common Stock,
consisting of its Class A Common Stock and, in certain circumstances described
below, Class B Common Stock and (ii) an aggregate of 10,000,000 transferable
three-year warrants (the "Warrants") to purchase 10,000,000 shares of Class A
Common Stock. In the Rights Offering, each Right allows the holder thereof (i)
to subscribe (the "Basic Subscription Privilege") at a cash price of $1.75 per
share (the "Subscription Price") for one share of Common Stock (an "Underlying
Share") and (ii) to receive 0.30014 of a Warrant for each Underlying Share
subscribed for pursuant to the Basic Subscription Privilege. Each Warrant
allows the holder to purchase one share of Class A Common Stock at an exercise
price of $2.50 per share. Only Rights holders other than CGE and Anjou are
eligible to receive Warrants in the Rights Offering. Rights holders other than
CGE and Anjou are referred to hereinafter as "Public Rights holders" or the
"Public."
3
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In addition, Public Rights holders which exercise their Basic Subscription
Privilege also will be eligible to subscribe (the "Oversubscription
Privilege") at the Subscription Price for Underlying Shares that are not
otherwise purchased pursuant to the exercise of Rights, subject to
availability and proration, and will receive 0.30014 of a Warrant for each
Underlying Share acquired pursuant to the Oversubscription Privilege.
In the Rights Offering, CGE has agreed to exercise its Basic Subscription
Privilege in full. In addition if Public Rights holders do not exercise all of
their Rights and do not purchase the total number of Underlying Shares
available to be purchased by the Public in the Rights Offering (including
pursuant to the Oversubscription Privilege), CGE will subscribe for and
purchase, at the Subscription Price (the "Conditional CGE Subscription"), the
Underlying Shares not purchased by the Public in the Rights Offering; provided
that (i) the total number of Underlying Shares subscribed for by CGE in the
Conditional CGE Subscription shall be no greater than (A) the total number of
Underlying Shares available to be purchased by the Public, minus (B) the total
number of Underlying Shares actually purchased by the Public, and (ii) in no
event shall the gross proceeds resulting from CGE's Basic Subscription
Privilege and the Conditional CGE Subscription exceed $185 million. CGE has
agreed that it will not receive any Warrants in respect of either its Basic
Subscription Privilege or the Conditional CGE Subscription.
Other than the first $25 million of gross proceeds received from
subscriptions by the Public, which shall be retained by the Company for
general corporate purposes, the gross proceeds of the Rights Offering,
including the Conditional CGE Subscription, if any, will be used to repay the
$185 million aggregate principal amount of debt of CGE and its subsidiaries
consisting of (i) the $125 million aggregate principal amount note from CGE
under an unsecured term loan and (ii) the $60 million aggregate principal
amount note from Anjou under an unsecured revolving credit facility. Expenses
payable by the Company in connection with the Rights Offering will be paid out
of existing cash of the Company.
Concurrently with the Rights Offering, the Company is soliciting the consent
(the "Consent Solicitation") of the holders of at least a majority in
principal amount (the "Requisite Consents") of the Company's outstanding 8%
Convertible Subordinated Debentures due 2015 (the "Convertible Debentures") to
amend certain provisions of the indenture governing the Convertible Debentures
(the "Indenture") permitting the holders thereof to require the Company to
repurchase the Convertible Debentures if any person acquires beneficial
ownership of 75% or more of the voting power of the Company (the "Change of
Control Provision"). In the event the Requisite Consents are not obtained
prior to February 23, 1998 (the "Expiration Date") and the exercise of Rights
in the Rights Offering would cause a Rights holder's beneficial ownership of
Class A Common Stock to exceed 74%, the Company will be obligated to issue to
such holder only such number of shares of Class A Common Stock as would cause
such holder's beneficial ownership of the Company's voting power to be no
greater than 74% of the outstanding voting power and any additional shares to
be issued thereunder will be shares of Class B Common Stock. The Class A
Common Stock and the Class B Common Stock will be identical in all respects
except that (i) the Class B Common Stock will not be entitled to vote and (ii)
a stockholder's Class B Common Stock will automatically convert into Class A
Common Stock immediately upon the earlier of August 1, 2000 or seventy-five
days following the date on which the Change of Control Provision becomes
inapplicable (by amendment of the Indenture, redemption of the Convertible
Debentures or otherwise) to such holder. Based upon the current ownership of
Class A Common Stock, the Company does not believe that any stockholder other
than CGE would be issued Class B Common Stock in the event the Company fails
to obtain the Requisite Consents.
REASONS FOR THE CHARTER AMENDMENT
At the time the Company entered into the Recapitalization Agreement, there
were insufficient shares of Class A Common Stock and Class B Common Stock
authorized to permit issuance of Class A Common Stock upon the exercise of
Rights or Warrants or to permit issuance of Class B Common Stock pursuant to
the Rights Offering in the event the Requisite Consents are not obtained prior
to the Expiration Date. In order to consummate the transactions contemplated
by the Recapitalization, the Board of Directors duly approved and
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<PAGE>
adopted the Charter Amendment and sought by written consent the approval of
the Company's stockholders in respect to the Charter Amendment.
The Certificate of Incorporation currently authorizes the Company to issue
95,000,000 shares of Class A Common Stock and 5,000,000 shares of Class B
Common Stock. In the event the Requisite Consents are not obtained prior to
the Expiration Date, the Charter Amendment to increase by 135,000,000 the
number of shares of Class A Common Stock the Company may issue and to increase
by 25,000,000 the number of shares of Class B Common Stock the Company may
issue will authorize the Company to issue 230,000,000 shares of Class A Common
Stock and 30,000,000 shares of Class B Common Stock. In the event the
Requisite Consents are obtained prior to the Expiration Date, the Charter
Amendment to increase by 160,000,000 the number of shares of Class A Common
Stock that the Company may issue will authorize the Company to issue
255,000,000 shares of Class A Common Stock and 5,000,000 shares of Class B
Common Stock. The Charter Amendment will increase the authorized capital stock
of the Company such that it will have a sufficient number of shares of Class A
Common Stock and Class B Common Stock, to the extent required, to consummate
the transactions contemplated by the Recapitalization. The amendments to the
conversion feature of the Class B Common Stock in the event the Requisite
Consents are not obtained prior to the Expiration Date will permit the Company
to issue the maximum number of shares of Common Stock in the Rights Offering
without triggering the Change of Control Provision.
No preemptive rights exist with respect to any outstanding shares of Class A
Common Stock. The issuance of additional shares of Class A Common Stock could
have the effect of delaying, deferring or preventing a change in control of
the Company and could cause dilution in the equity of present stockholders.
DESCRIPTION OF CLASS B COMMON STOCK
The following is a summary of the terms of the Class B Common Stock, which
terms are set forth in Article FOURTH of the Company's Certificate of
Incorporation attached hereto as Exhibit A in the event the Requisite Consents
are not obtained prior to the Expiration Date and as Exhibit B in the event
the Requisite Consents are obtained prior to the Expiration Date.
Voting Rights. Holders of Class B Common Stock have no right to vote on any
matters to be voted on by the stockholders of the Company; provided that the
holders of the Class B Common Stock have the right to vote as a separate class
on any merger, consolidation, recapitalization, reclassification or
reorganization of the Company in which shares of Class B Common Stock would be
treated differently than shares of Class A Common Stock (other than with
respect to voting rights).
Dividend Rights. Holders of Class B Common Stock are entitled to receive
dividends as may from time to time be declared by the Board of Directors of
the Company and are entitled to share equally with the holders of Class A
Common Stock in such dividends. The Company has not paid cash dividends on the
Class A Common Stock in recent years, and does not expect to pay dividends in
the foreseeable future.
Terms of Conversion. The conversion feature of the Class B Common Stock will
be amended only in the event the Requisite Consents are not obtained prior to
the Expiration Date. In the event the conversion feature of the Class B Common
Stock is not amended by the Charter Amendment, upon the occurrence (or the
expected occurrence) of a Conversion Event, each holder of Class B Common
Stock will be entitled to convert into the same number of shares of Class A
Common Stock any and all of the shares of such holder's Class B Common Stock
being (or expected to be) distributed, disposed of or sold in connection with
such Conversion Event. A "Conversion Event" includes a public offering or
public sale of securities of the Company, a sale of securities of the Company
to a person, who after such sale, would possess the aggregate voting power to
elect a majority of the Company's directors or a merger, consolidation or
similar transaction with a person, who after such transaction, would possess
the aggregate voting power to elect a majority of the Company's directors.
5
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In the event the conversion feature of the Class B Common Stock is amended
by the Charter Amendment, on the Conversion Date, a stockholder's shares of
Class B Common Stock will automatically convert into the same number of shares
of Class A Common Stock. The "Conversion Date" is defined as the date which is
the earlier of (i) August 1, 2000 or, (ii) seventy-five days following the
date on which the Change of Control Provision becomes inapplicable with
respect to such holder.
STOCKHOLDER APPROVAL PREVIOUSLY OBTAINED
Pursuant to the Recapitalization Agreement, CGE and Anjou have given their
written consent to the Charter Amendment. CGE and Anjou did so by executing a
Written Consent approving the Charter Amendment and delivering such Written
Consent to the Company on the Action Date. Such action by written consent is
sufficient to satisfy the applicable requirements of Delaware law that any
amendment to the Company's Certificate of Incorporation be approved by the
stockholders.
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INTEREST AND SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's capital stock as of January 28, 1998 with respect
to (i) each person known by the Company to beneficially own in excess of 5% of
the outstanding shares of Class A Common Stock, (ii) each of the Company's
Directors, (iii) each named executive officer of the Company, and (iv) all
directors and executive officers as a group. Unless otherwise indicated, each
of the stockholders has sole voting and investment power with respect to the
shares beneficially owned.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SHARES OF CLASS A SHARES OF CLASS A
COMMON STOCK COMMON STOCK
NAME OF PERSON OR GROUP BENEFICIALLY OWNED OUTSTANDING
----------------------- ------------------ -----------------
<S> <C> <C>
William V. Kriegel.................... 0 *
Thierry M. Mallet..................... 0 *
Jean-Claude Banon..................... 0 *
Daniel Caille......................... 0 *
Alain Brunais......................... 53,800(1) *
Carol Lynn Green...................... 0 *
John W. Morris........................ 3,079 *
Alain Houdaille(2)**.................. 0 *
Robert B. Sheh(3)**................... 50,000(4) *
George C. Mammola..................... 29,522(5) *
Douglas A. Satzger.................... 35,142(6) *
Patrick L. McMahon.................... 11,750(7) *
Joseph R. Vidal....................... 5,675(8) *
Gail M. Fulwider...................... 0 *
Robert S. Volland..................... 34,850(9) *
Jekabs P. Vittands.................... 25,672(10) *
Compagnie Generale des Eaux........... 47,895,689(11) 72.2
52 Rue d'Anjou
75384 Paris Cedex 08
France
All directors and officers as a group
(14 persons)......................... 199,490(12) *
</TABLE>
- --------
* Less than 1% ownership
** No longer employed by the Company.
(1) Includes 52,800 shares of Class A Common Stock which may be acquired
within 60 days of the date of the table.
(2) Mr. Houdaille served as President and Chief Executive Officer of the
Company from May 1996 to November 1996.
(3) Mr. Sheh served as Chairman of the Board of Directors, President and
Chief Executive Officer of the Company from November 1996 to October
1997.
(4) Represents 50,000 shares of Class A Common Stock which may be acquired
within 60 days of the date of the table. On October 24, 1997, Mr. Sheh
and the Company jointly entered into an agreement, which terminated an
employment agreement dated November 7, 1996, between Mr. Sheh and the
Company, and entered into a separation agreement relating to their
relationship thereafter.
(Footnotes continued on next page)
7
<PAGE>
(5) Includes 28,642 shares of Class A Common Stock which may be acquired
within 60 days of the date of the table.
(6) Includes 33,142 shares of Class A Common Stock which may be acquired
within 60 days of the date of the table.
(7) Represents 11,750 shares of Class A Common Stock which may be acquired
within 60 days of the date of the table.
(8) Includes 5,460 shares of Class A Common Stock which may be acquired within
60 days of the date of the table.
(9) Includes 31,850 shares of Class A Common Stock which may be acquired
within 60 days of the date of the table.
(10) Includes 20,190 shares of Class A Common Stock which may be acquired
within 60 days of the date of the table.
(11) Includes 6,702,500 shares of Class A Common Stock owned indirectly through
Anjou.
(12) Includes 183,834 shares of Class A Common Stock which may be acquired
within 60 days of the date of the table.
OTHER MATTERS
The Company is presenting no other matters to the stockholders of the
Company.
By Order of the Board of Directors,
Douglas A. Satzger
Corporate Secretary
Branchburg, New Jersey
February 9, 1998
8
<PAGE>
EXHIBIT A
CHANGES TO ARTICLE FOURTH
OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION
IN THE EVENT THE REQUISITE CONSENTS
ARE NOT OBTAINED
PRIOR TO THE EXPIRATION DATE
Set forth below is Article FOURTH of the Company's Restated Certificate of
Incorporation, as it will be amended in the event the Requisite Consents are
not obtained prior to the Expiration Date, marked to reflect the changes
proposed and approved by the Board of Directors.
FOURTH: The total number of shares of stock which the Corporation shall have
the authority to issue is 102,500,000/*/ 262,500,000 shares, of which
100,000,000/*/ 260,000,000 shares shall be Common Stock, par value $.001 per
share, and 2,500,000 shares shall be Preferred Stock, par value $.01 per share.
A. Shares of the Preferred Stock of the Corporation may be issued from time
to time in one or more classes or series, each of which class or series shall
have such distinctive designation or title as shall be fixed by the Board of
Directors of the Corporation (the "Board of Directors") prior to the issuance
of any shares thereof. Each such class or series of Preferred Stock shall have
such voting powers, full or limited, or no voting powers and such preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated in
such resolution or resolutions providing for the issue of such class or series
of Preferred Stock as may be adopted from time to time by the Board of
Directors prior to the issuance of any shares thereof pursuant to the
authority hereby expressly vested in it, all in accordance with the laws of
the State of Delaware.
B. The Common Stock shall consist of 95,000,000/*/ 230,000,000 shares of Class
A Common Stock ("Class A Common") and 5,000,000/*/ 30,000,000 shares of Class B
Common Stock ("Class B Common"). Except as otherwise provided herein, all
shares of Class A Common and Class B Common will be identical and will entitle
the holders thereof to the same rights and privileges.
1. Voting Rights. Except as otherwise required by law, the holders of
Class A Common will be entitled to one vote per share on all matters to be
voted on by the stockholders of the Corporation, and the holders of Class B
Common will have no right to vote on any matters to be voted on by the
stockholders of the Corporation; provided that the holders of Class B
Common shall have the right to vote as a separate class on any merger,
consolidation, recapitalization, reclassification or reorganization of the
Corporation in which shares of Class B Common would be treated differently
than shares of Class A Common (other than with respect to voting rights
consistent with the provisions of this paragraph 1).
2. Dividends. When and as dividends are declared thereon, whether payable
in cash, property or securities of the Corporation, the holders of Class A
Common and the holders of Class B Common will be entitled to share equally,
share for share, in such dividends; provided that if dividends are declared
which are payable in shares of Class A Common or Class B Common, dividends
will be declared which are payable at the same rate on both classes of
stock, and the dividends payable in shares of Class A Common will be
payable to holders of that class of stock and the dividends payable in
shares of Class B Common will be payable to holders of that class of stock.
3. Conversion.
3A. Conversion of Class B Common. On the Conversion Date (as such term is
defined below), a holder's shares of Class B Common shall automatically
convert into the same number of shares of Class A Common. For purposes of
this Paragraph 3, the "Conversion Date" shall mean the date which is the
earlier of (i) August 1, 2000 or, (ii) seventy-five days following the date
on which the "Right to Require Repurchase" provided in Section 1501 of the
Indenture governing the Corporation's 8% Convertible Subordinated
Debentures due 2015 (the "Debentures") which grants holders the right to
require the corporation to repurchase the Debentures when any person
becomes the beneficial owner of 75% or more of the voting stock of the
Corporation becomes inapplicable with respect to such holder./**/
- ----------
/*/ Indicates that Article FOURTH has been amended by replacing the number
immediately preceding such symbol by the number immediately following such
symbol.
/**/ Indicates that Paragraph 3A of Paragraph B.3 of Article FOURTH has been
amended by replacing paragraphs (i)-(iii) immediately following such symbol
by the paragraph immediately preceding such symbol.
<PAGE>
(i) Upon the occurrence (or the expected occurrence as described in (iii)
below) of any Conversion Event (as such term is defined in (ii) below),
each holder of Class B Common shall be entitled to convert into the same
number of shares of Class A Common any or all of the shares of such
holder's Class B Common being (or expected to be) distributed, disposed of
or sold in connection with such Conversion Event.
(ii) For purposes of this paragraph 3A, a "Conversion Event" shall mean
(a) any public offering or public sale of securities of the Corporation
(including a public offering registered under the Securities Act of 1933
and a public sale pursuant to Rule 144 of the Securities and Exchange
Commission or any similar rule then in force), (b) any sale of securities
of the Corporation to a person or group of persons (within the meaning of
the Securities and Exchange Act of 1934, as amended (the "1934 Act")) if,
after such sale, such person or group of persons in the aggregate would own
or control securities which possess n the aggregate the ordinary voting
power to elect a majority of the Corporation's directors (provided that
such sale has been approved by the Corporation's Board of Directors or a
committee thereof), (c) any sale of securities of the Corporation to a
person or group of persons (within the meaning of the 1934 Act) if, after
such sale, such person or group of persons in the aggregate would own or
control securities of the Corporation (excluding any Class B Common being
converted and disposed of in connection with such Conversion Event) which
possess in the aggregate the ordinary voting power to elect a majority of
the Corporation's directors and (d) a merger, consolidation or similar
transaction involving the Corporation if, after such transaction, a person
or group of persons (within the meaning of the 1934 Act) in the aggregate
would own or control securities which possess in the aggregate the ordinary
voting power to elect a majority of the surviving corporation's directors
(provided that the transaction has been approved by the Corporation's Board
of Directors or a committee thereof). A "person" shall include any natural
person and any corporation, partnership, joint venture, trust,
unincorporated organization and any similar entity or organization.
(iii) Each holder of Class B Common will be entitled to convert shares of
Class B Common in connection with any Conversion Event if such holder
reasonably believes that such Conversion Event will be consummated, and a
written request for conversion to the Corporation from any holder of Class
B Common stating such holder's reasonable belief that a Conversion Event
shall occur shall be conclusive and shall obligate the Corporation to
effect such conversion in a timely manner so as to enable each such holder
to participate in such Conversion Event. If any shares of Class B Common
are converted into shares of Class A Common in connection with a Conversion
Event and such shares of Class A Common are not actually distributed,
disposed of or sold pursuant to such Conversion Event, such shares of Class
A Common shall be promptly converted back into the same number of shares of
Class B Common.
3B. Conversion Procedure.
(i) Unless otherwise provided in this Section 3, each conversion of
shares of Class B Common into shares of Class A Common will be effected by
the surrender of the certificate or certificates representing the shares to
be converted at the principal office of the Corporation at any time during
normal business hours, together with a written notice by the holder of such
Class B Common stating that such holder desires to convert the shares, or a
stated number of the shares, of such Class B Common represented by such
certificate or certificates into shares of Class A Common. Such conversion
will be deemed to have been effected as of the close of business on the
date on which such certificate or certificates have been surrendered and
such notice has been received, and at such time the rights of the holder of
the converted Class B Common as such holder will cease and the person or
persons in whose name or names the certificate or certificates for shares
of Class A Common are to be issued upon such conversion will be deemed to
have become the holder or holders of record of the shares of Class A Common
represented thereby.
(ii) Promptly after such surrender and the receipt of such written
notice, the Corporation will issue and deliver in accordance with the
surrendering holder's instructions (a) the certificate or certificates for
the Class A Common issuable upon such conversion and (b) a certificate
representing any Class B Common which was represented by the certificate or
certificates delivered to the Corporation in connection with such
conversion but which was not converted.
A-2
<PAGE>
(iii) The issuance of certificates for Class A Common upon conversion of
Class B Common will be made without charge to the holder of such shares for
any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance of
Class A Common.
(iv) The Corporation will at all times reserve and keep available out of
its authorized but unissued shares of Class A Common, solely for the
purpose of issuance upon the conversion of the Class B Common, such number
of shares of Class A Common issuable upon the conversion of all outstanding
Class B Common. All shares of Class A Common which are so issuable will,
when issued, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges. The Corporation will take all such
actions as may be necessary to assure that all such shares of Class A
Common may be so issued without violation of any applicable law or
governmental regulation of any requirements of any domestic securities
exchange upon which shares of Class A Common may be listed (except for
official notice of issuance which will be immediately transmitted by the
Corporation upon issuance).
(v) The Corporation will not close its books against the transfer of
shares of Class A Common or Class B Common in any manner which would
interfere with the timely conversion of any shares of Class B Common.
3C. Stock Splits. If the Corporation in any manner subdivides or combines
the outstanding shares of Class A Common, the outstanding shares of Class B
Common will be proportionately subdivided or combined in a similar manner.
4. Registration of Transfer. The Corporation will keep at its principal
office (or such other place as the Corporation reasonably designates) a
register for the registration of shares of Common Stock. Upon the surrender
of any certificate representing shares of any class of Common Stock at such
place, the Corporation will, at the request of the registered holder of
such certificate, execute and deliver a new certificate or certificates in
exchange therefor representing in the aggregate the number of shares of
such class represented by the surrendered certificate, and the Corporation
forthwith will cancel such surrendered certificate. Each such new
certificate will be registered in such name and will represent such number
of shares of such class as is requested by the holder of the surrendered
certificate. The issuance of new certificates will be made without charge
to the holders of the surrendered certificates for any issuance tax in
respect thereof or other cost incurred by the Corporation in connection
with such issuance.
5. Replacement. Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder will be satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing one or more shares of any class of Common Stock, and
in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to the Corporation (provided that if the
holder is a financial institution its own agreement will be satisfactory),
or, in the case of any mutilation upon surrender of such certificate
(provided it is identifiable), the Corporation will (at its expense)
execute and deliver in lieu of such certificate a new certificate of like
kind representing the number of shares of such class represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate.
6. Transfer Taxes. Notwithstanding the provisions of Section 3B(iii) and
4 above, the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of
stock in any name other than that of the registered holder of the shares,
and the Corporation shall not be required to issue or deliver any such
stock certificate unless and until the person or persons requesting the
issuance thereof shall have paid to the Corporation the amount of any such
tax or shall have established to the satisfaction of the Corporation that
such tax has been paid.
A-3
<PAGE>
EXHIBIT B
CHANGES TO ARTICLE FOURTH
OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION
IN THE EVENT THE REQUISITE CONSENTS
ARE OBTAINED
PRIOR TO THE EXPIRATION DATE
Set forth below is Article FOURTH of the Company's Restated Certificate of
Incorporation, as it will be amended in the event the Requisite Consents are
obtained prior to the Expiration Date, marked to reflect the changes proposed
and approved by the Board of Directors.
FOURTH: The total number of shares of stock which the Corporation shall have
the authority to issue is 102,500,000/*/ 262,500,000 shares, of which
100,000,000/*/ 260,000,000 shares shall be Common Stock, par value $.001 per
share, and 2,500,000 shares shall be Preferred Stock, par value $.01 per share.
A. Shares of the Preferred Stock of the Corporation may be issued from time
to time in one or more classes or series, each of which class or series shall
have such distinctive designation or title as shall be fixed by the Board of
Directors of the Corporation (the "Board of Directors") prior to the issuance
of any shares thereof. Each such class or series of Preferred Stock shall have
such voting powers, full or limited, or no voting powers and such preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated in
such resolution or resolutions providing for the issue of such class or series
of Preferred Stock as may be adopted from time to time by the Board of
Directors prior to the issuance of any shares thereof pursuant to the
authority hereby expressly vested in it, all in accordance with the laws of
the State of Delaware.
B. The Common Stock shall consist of 95,000,000/*/ 255,000,000 shares of Class
A Common Stock ("Class A Common") and 5,000,000 shares of Class B Common Stock
("Class B Common"). Except as otherwise provided herein, all shares of Class A
Common and Class B Common will be identical and will entitle the holders
thereof to the same rights and privileges.
1. Voting Rights. Except as otherwise required by law, the holders of
Class A Common will be entitled to one vote per share on all matters to be
voted on by the stockholders of the Corporation, and the holders of Class B
Common will have no right to vote on any matters to be voted on by the
stockholders of the Corporation; provided that the holders of Class B
Common shall have the right to vote as a separate class on any merger,
consolidation, recapitalization, reclassification or reorganization of the
Corporation in which shares of Class B Common would be treated differently
than shares of Class A Common (other than with respect to voting rights
consistent with the provisions of this paragraph 1).
2. Dividends. When and as dividends are declared thereon, whether payable
in cash, property or securities of the Corporation, the holders of Class A
Common and the holders of Class B Common will be entitled to share equally,
share for share, in such dividends; provided that if dividends are declared
which are payable in shares of Class A Common or Class B Common, dividends
will be declared which are payable at the same rate on both classes of
stock, and the dividends payable in shares of Class A Common will be
payable to holders of that class of stock and the dividends payable in
shares of Class B Common will be payable to holders of that class of stock.
3. Conversion.
3A. Conversion of Class B Common.
(i) Upon the occurrence (or the expected occurrence as described in (iii)
below) of any Conversion Event (as such term is defined in (ii) below),
each holder of Class B Common shall be entitled to convert into the same
number of shares of Class A Common any or all of the shares of such
holder's Class B Common being (or expected to be) distributed, disposed of
or sold in connection with such Conversion Event.
(ii) For purposes of this paragraph 3A, a "Conversion Event" shall mean
(a) any public offering or public sale of securities of the Corporation
(including a public offering registered under the Securities Act of 1933
and a public sale pursuant to Rule 144 of the Securities and Exchange
Commission or any similar
- ----------
/*/ Indicates that Article FOURTH has been amended by replacing the number
immediately preceding such symbol by the number immediately following such
symbol.
<PAGE>
rule then in force), (b) any sale of securities of the Corporation to a
person or group of persons (within the meaning of the Securities and
Exchange Act of 1934, as amended (the "1934 Act")) if, after such sale,
such person or group of persons in the aggregate would own or control
securities which possess in the aggregate the ordinary voting power to
elect a majority of the Corporation's directors (provided that such sale
has been approved by the Corporation's Board of Directors or a committee
thereof), (c) any sale of securities of the Corporation to a person or
group of persons (within the meaning of the 1934 Act) if, after such sale,
such person or group of persons in the aggregate would own or control
securities of the Corporation (excluding any Class B Common being converted
and disposed of in connection with such Conversion Event) which possess in
the aggregate the ordinary voting power to elect a majority of the
Corporation's directors and (d) a merger, consolidation or similar
transaction involving the Corporation if, after such transaction, a person
or group of persons (within the meaning of the 1934 Act) in the aggregate
would own or control securities which possess in the aggregate the ordinary
voting power to elect a majority of the surviving corporation's directors
(provided that the transaction has been approved by the Corporation's Board
of Directors or a committee thereof). A "person" shall include any natural
person and any corporation, partnership, joint venture, trust,
unincorporated organization and any similar entity or organization.
(iii) Each holder of Class B Common will be entitled to convert shares of
Class B Common in connection with any Conversion Event if such holder
reasonably believes that such Conversion Event will be consummated, and a
written request for conversion to the Corporation from any holder of Class
B Common stating such holder's reasonable belief that a Conversion Event
shall occur shall be conclusive and shall obligate the Corporation to
effect such conversion in a timely manner so as to enable each such holder
to participate in such Conversion Event. If any shares of Class B Common
are converted into shares of Class A Common in connection with a Conversion
Event and such shares of Class A Common are not actually distributed,
disposed of or sold pursuant to such Conversion Event, such shares of Class
A Common shall be promptly converted back into the same number of shares of
Class B Common.
3B. Conversion Procedure.
(i) Unless otherwise provided in this Section 3, each conversion of
shares of Class B Common into shares of Class A Common will be effected by
the surrender of the certificate or certificates representing the shares to
be converted at the principal office of the Corporation at any time during
normal business hours, together with a written notice by the holder of such
Class B Common stating that such holder desires to convert the shares, or a
stated number of the shares, of such Class B Common represented by such
certificate or certificates into shares of Class A Common. Such conversion
will be deemed to have been effected as of the close of business on the
date on which such certificate or certificates have been surrendered and
such notice has been received, and at such time the rights of the holder of
the converted Class B Common as such holder will cease and the person or
persons in whose name or names the certificate or certificates for shares
of Class A Common are to be issued upon such conversion will be deemed to
have become the holder or holders of record of the shares of Class A Common
represented thereby.
(ii) Promptly after such surrender and the receipt of such written
notice, the Corporation will issue and deliver in accordance with the
surrendering holder's instructions (a) the certificate or certificates for
the Class A Common issuable upon such conversion and (b) a certificate
representing any Class B Common which was represented by the certificate or
certificates delivered to the Corporation in connection with such
conversion but which was not converted.
(iii) The issuance of certificates for Class A Common upon conversion of
Class B Common will be made without charge to the holder of such shares for
any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance of
Class A Common.
(iv) The Corporation will at all times reserve and keep available out of
its authorized but unissued shares of Class A Common, solely for the
purpose of issuance upon the conversion of the Class B Common,
B-2
<PAGE>
such number of shares of Class A Common issuable upon the conversion of all
outstanding Class B Common. All shares of Class A Common which are so
issuable will, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation
will take all such actions as may be necessary to assure that all such
shares of Class A Common may be so issued without violation of any
applicable law or governmental regulation of any requirements of any
domestic securities exchange upon which shares of Class A Common may be
listed (except for official notice of issuance which will be immediately
transmitted by the Corporation upon issuance).
(v) The Corporation will not close its books against the transfer of
shares of Class A Common or Class B Common in any manner which would
interfere with the timely conversion of any shares of Class B Common.
3C. Stock Splits. If the Corporation in any manner subdivides or combines
the outstanding shares of Class A Common, the outstanding shares of Class B
Common will be proportionately subdivided or combined in a similar manner.
4. Registration of Transfer. The Corporation will keep at its principal
office (or such other place as the Corporation reasonably designates) a
register for the registration of shares of Common Stock. Upon the surrender
of any certificate representing shares of any class of Common Stock at such
place, the Corporation will, at the request of the registered holder of
such certificate, execute and deliver a new certificate or certificates in
exchange therefor representing in the aggregate the number of shares of
such class represented by the surrendered certificate, and the Corporation
forthwith will cancel such surrendered certificate. Each such new
certificate will be registered in such name and will represent such number
of shares of such class as is requested by the holder of the surrendered
certificate. The issuance of new certificates will be made without charge
to the holders of the surrendered certificates for any issuance tax in
respect thereof or other cost incurred by the Corporation in connection
with such issuance.
5. Replacement. Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder will be satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing one or more shares of any class of Common Stock, and
in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to the Corporation (provided that if the
holder is a financial institution its own agreement will be satisfactory),
or, in the case of any mutilation upon surrender of such certificate
(provided it is identifiable), the Corporation will (at its expense)
execute and deliver in lieu of such certificate a new certificate of like
kind representing the number of shares of such class represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate.
6. Transfer Taxes. Notwithstanding the provisions of Section 3B(iii) and
4 above, the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of
stock in any name other than that of the registered holder of the shares,
and the Corporation shall not be required to issue or deliver any such
stock certificate unless and until the person or persons requesting the
issuance thereof shall have paid to the Corporation the amount of any such
tax or shall have established to the satisfaction of the Corporation that
such tax has been paid.
B-3
