<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION
14(d)(1) OR 13(e)(1)OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 15)
---------------------
BRUNSWICK TECHNOLOGIES, INC.
(Name of Subject Company)
------------------------
VA ACQUISITION CORPORATION
CERTAINTEED CORPORATION
Indirect wholly owned subsidiaries of
COMPAGNIE DE SAINT-GOBAIN
(Name of Filing Person--Offeror)
------------------------
COMMON STOCK, PAR VALUE $0.0001 PER SHARE
(Title of Class of Securities)
117394 10 6
(CUSIP Number of Class of Securities)
------------------------
JOHN R. MESHER
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
CERTAINTEED CORPORATION
750 E. SWEDESFORD ROAD
VALLEY FORGE, PENNSYLVANIA 19482
TELEPHONE: (610) 341-7108
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Persons)
------------------------
COPY TO:
PETER O. CLAUSS, ESQ.
PEPPER HAMILTON LLP
3000 TWO LOGAN SQUARE
EIGHTEENTH AND ARCH STREETS
PHILADELPHIA, PENNSYLVANIA 19103-2799
TELEPHONE: (215)981-4541
------------------------
<PAGE>
CALCULATION OF FILING FEE
________________________________________________________________________________
TRANSACTION VALUATION* AMOUNT OF FILING FEE
________________________________________________________________________________
________________________________________________________________________________
$40,735,280 $8,147
________________________________________________________________________________
* Based on the offer to purchase, all of the outstanding shares of common
stock of Brunswick Technologies, Inc. at a purchase price of $8.00 cash per
share, 5,230,830 shares issued and outstanding as of March 15, 2000, less
713,746 shares owned by an affiliate of Offeror, and outstanding options with
respect to 574,826 shares as of December 31, 1999 with an exercise price of
$10.00 or less per share, in each case as reported in Brunswick Technologies,
Inc.'s Annual Report on Form 10-K for the calendar year ended December 31, 1999.
[x] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: $8,147
Form or Registration No.: Schedule TO
Filing Party: VA Acquisition Corporation, CertainTeed Corporation
Date Filed: April 20, 2000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[x] third party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[x] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
2
<PAGE>
This Amendment No. 15 (this "Amendment") amends and supplements the Tender
Offer Statement on Schedule TO filed with the Securities and Exchange Commission
on April 20, 2000, as amended by Amendment No. 1, by Amendment No. 2, by
Amendment No. 3, by Amendment No. 4, by Amendment No. 5, by Amendment No. 6, by
Amendment No. 7, by Amendment No. 8, by Amendment No. 9, by Amendment No. 10, by
Amendment No. 11, by Amendment No. 12, by Amendment No. 13 and by Amendment No.
14 thereto filed with the Commission on April 24, 2000, April 26, 2000, April
28, 2000, May 2, 2000, May 2, 2000, May 3, 2000, May 4, 2000, May 5, 2000, May
8, 2000, May 11, 2000, May 15, 2000, May 16, 2000, May 17, 2000 and May 25,
2000, respectively (collectively, the "Schedule TO") by CertainTeed Corporation,
a Delaware corporation ("CertainTeed" or the "Parent"), and VA Acquisition
Corporation, a Maine corporation and an indirect wholly owned subsidiary of
CertainTeed (the "Purchaser"), both of which are indirect wholly owned
subsidiaries of Compagnie de Saint-Gobain. The Schedule TO relates to the offer
by the Purchaser to purchase all outstanding shares of common stock, par value
$0.0001 per share, including the associated rights to purchase preferred stock
(the "Shares"), of Brunswick Technologies, Inc., a Maine corporation ("BTI" or
the "Company"), at $8.00 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated April
20, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal,
copies of which are attached as Exhibits (a)(1) and (a)(2), respectively, to the
Schedule TO. Capitalized terms used and not defined herein shall have the
meanings ascribed to such terms in the Offer to Purchase and in the Schedule TO.
This Amendment No. 15 to Schedule TO also constitutes Amendment No. 15 to the
statement on Schedule 13D of Parent, Saint-Gobain and Vetrotex, filed on
February 18, 1997.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
The information with respect to Item 5 of the Schedule TO which is set
forth in the Offer to Purchase and incorporated by reference in the Schedule TO,
is hereby amended and supplemented by including the following information:
On May 26, 2000, Vetrotex CertainTeed Corporation, an affiliate of
CertainTeed, sent a letter to the directors of BTI, which is attached as Exhibit
(a)(21), and the contents of which are incorporated herein by reference.
ITEM 11. ADDITIONAL INFORMATION
Item 11 of the Schedule TO is hereby amended and supplemented to include
the following information:
The litigation instituted by BTI against Vetrotex and described in
Amendment No. 14 to the Schedule TO has been removed from the Maine
Superior Court to the Federal District Court of Maine. Vetrotex has on May
26, 2000 filed a motion seeking to enjoin BTI and its board of directors
from postponing, cancelling or otherwise interfering with the special
shareholders' meeting scheduled for June 16, 2000, or interfering with the
shareholders' vote on Vetrotex's proposals. Vetrotex believes that the BTI
shareholders have a fundamental right to vote on the proposals put before
that meeting by Vetrotex. Vetrotex further believes that BTI is using this
litigation in an attempt to provide its board of directors with
justification to delay that meeting and disenfranchise the BTI shareholders
from exercising their right to determine the future of BTI. Vetrotex has
also asked the court to deny all of BTI's claims and rule that Vetrotex's
demand for the special meeting is valid and enforceable. Vetrotex has
requested an expedited hearing on all of these matters.
Copies of Vetrotex's Answer and Counterclaims to the BTI Complaint and
Vetrotex's Motion for Declaratory Judgment and Preliminary Injunction in
this litigation are filed as Exhibits (a)(19) and (a)(20) respectively, and
are incorporated herein by reference.
ITEM 12. MATERIALS TO BE FILED AS EXHIBITS.
Item 12 of the Schedule TO is hereby amended and supplemented to include
the following information:
(a)(19) Copy of Vetrotex Answer and Counterclaims filed on May 26, 2000, in
response to the BTI Complaint filed on May 23, 2000.
(a)(20) Copy of Vetrotex Motion for Declaratory Judgment and Preliminary
Injunction filed on May 26, 2000.
(a)(21) Copy of Vetrotex letter of May 26, 2000 to directors of BTI.
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: May 26, 2000
VA Acquisition Corporation
By: /s/ John R. Mesher
------------------
John R. Mesher
Vice President and Secretary
CertainTeed Corporation
By: /s/ John R. Mesher
------------------
John R. Mesher
Vice President, General Counsel
and Secretary
4
<PAGE>
EXHIBIT INDEX
(a)(1) Offer to Purchase, dated April 20, 2000.*
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Notice of Guaranteed Delivery.*
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.*
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.*
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.*
(a)(7) Form of summary advertisement, dated April 20, 2000.*
(a)(8) Text of press release issued by CertainTeed, dated April 20, 2000.*
(a)(9) Text of press release issued by CertainTeed, dated April 24, 2000.*
(a)(10) Text of press release issued by CertainTeed, dated April 26, 2000.*
(a)(11) Text of letter to shareholders of Brunswick Technologies, Inc. dated May
2, 2000.*
(a)(12) Text of press release issued by CertainTeed, dated May 2, 2000.*
(a)(13) Text of press release issued by CertainTeed, dated May 3, 2000.*
(a)(14) Text of newspaper advertisement issued by CertainTeed and published on
May 4, 2000 in the Portland Press Herald and Brunswick Times Record.*
(a)(15) Text of press release and open letter to the directors of Brunswick
Technologies, Inc. issued by CertainTeed, dated May 8, 2000.*
(a)(16) Text of press release issued by CertainTeed, dated May 11, 2000.*
(a)(17) Text of definitive additional proxy materials dated May 12, 2000 and
sent by Vetrotex CertainTeed Corporation, a shareholder of Brunswick
Technologies, Inc. and an affiliate of CertainTeed.*
(a)(18) Text of press release issued by CertainTeed, dated May 16, 2000.*
(a)(19) Copy of Vetrotex Answer and Counterclaims filed on May 26, 2000, in
response to the BTI Complaint filed on May 23, 2000.
(a)(20) Copy of Vetrotex Motion for Declaratory Judgment and Preliminary
Injunction filed on May 26, 2000.
(a)(21) Copy of Vetrotex letter of May 26, 2000 to directors of BTI.
(d) None.
(g) None.
(h) Not applicable.
___________________________
* Previously filed as exhibits to Schedule TO.
5
<PAGE>
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
BRUNSWICK TECHNOLOGIES, )
INC., )
) Civil No. 00-162-P-H
Plaintiff, )
)
v. )
)
VETROTEX CERTAINTEED )
CORPORATION d/b/a VETROTEX )
AMERICA, )
)
Defendant. )
ANSWER AND COUNTERCLAIMS
------------------------
(INJUNCTIVE RELIEF REQUESTED)
-----------------------------
ANSWER
------
Defendant Vetrotex CertainTeed Corporation d/b/a Vetrotex America
("Vetrotex") hereby answers the allegations in plaintiff Brunswick Technologies,
Inc. ("BTI")'s Complaint as follows:
1. Paragraph 1 contains introductory allegations to which no responses
are required. To the extent that a response is required, Vetrotex denies the
allegations in Paragraph 1.
2. Paragraph 2 contains introductory allegations to which no responses
are required. To the extent that a response is required, Vetrotex denies the
allegations in Paragraph 2.
3. As Vetrotex has removed this action to federal court, no response is
necessary to the state court jurisdiction allegation in Paragraph 3.
4. As Vetrotex has removed this action to federal district court, no
response is necessary to the state court venue allegation contained in Paragraph
4.
5. Vetrotex admits the allegations contained in Paragraph 5.
<PAGE>
6. Vetrotex admits the allegations contained in Paragraph 6, except
states that it has a manufacturing facility in Wichita Falls, Texas and that its
executive offices are in Valley Forge, Pennsylvania.
7. Vetrotex admits the allegations contained in Paragraph 7.
8. Vetrotex admits the allegations contained in Paragraph 8.
9. Vetrotex admits the allegations contained in Paragraph 9.
10. The allegations contained in Paragraph 10 concern a document that
speaks for itself. To the extent that BTI attempts to characterize this
document, Vetrotex denies the allegations contained in Paragraph 10.
11. Vetrotex admits that on April 17, 2000, BTI received Vetrotex's Call
for a special meeting of shareholders pursuant to Maine corporate law and BTI's
bylaws (the "Call"). Vetrotex further states that a letter confirming the Call
was also delivered on April 17, 2000 and that the Call was also "overnighted" to
BTI. The Call speaks for itself.
12. The allegations contained in Paragraph 12 concern a document that
speaks for itself.
13. The allegations contained in Paragraph 13 concern a document that
speaks for itself. To the extent that BTI attempts to characterize this
document, Vetrotex denies the allegations contained in Paragraph 13.
14. The allegations contained in Paragraph 14 concern a document that
speaks for itself.
15. The allegations contained in Paragraph 15 concern a document that
speaks for itself. To the extent that BTI attempts to characterize this
document, Vetrotex denies the allegations contained in Paragraph 15.
16. Vetrotex admits that an affiliate of Vetrotex filed a Tender Offer
Statement with the Securities and Exchange Commission ("SEC") on April 20, 2000.
The Tender Offer
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<PAGE>
Statement is a document that speaks for itself and Vetrotex denies any
allegations contained in Paragraph 16 that attempt to characterize this
document. Vetrotex admits that it has extended the tender offer until June 16,
2000.
17. Vetrotex admits that BTI sent out a Notice of Special Meeting on or
about May 2, 2000. This Notice of Special Meeting is a document that speaks for
itself and Vetrotex denies any allegations that attempt to characterize it.
Vetrotex denies the allegation that "BTI reproduced verbatim the two resolutions
proposed by Vetrotex" and states further that BTI omitted certain language from
the text of the resolutions that Vetrotex indicated it planned to offer at the
meeting.
18. Vetrotex admits that it has filed certain documents with the SEC.
These documents speak for themselves, and Vetrotex denies any attempt by BTI to
characterize them. Vetrotex denies the remaining allegations contained in
Paragraph 18.
19. Vetrotex admits that on May 16, 2000, BTI held its Annual Meeting of
shareholders in South Portland, Maine. Vetrotex admits that a quorum of BTI
shareholders, along with a representative of Vetrotex and its counsel, were
present at the meeting. Vetrotex admits further that one matter considered at
the Annual Meeting was the re-election of BTI's board of directors. Vetrotex
further admits that it cast a ballot concerning the re-election of BTI's board
of directors. Vetrotex denies the remaining allegations contained in Paragraph
19.
COUNT I
-------
20. Vetrotex repeats and realleges its responses to paragraphs 1 - 19.
21. Vetrotex admits that BTI shareholders elected certain individuals to
the BTI board of directors on or about May 16, 2000, but denies the remaining
allegations contained in Paragraph 21.
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<PAGE>
22. Vetrotex denies the allegations contained in Paragraph 22.
23. Vetrotex admits that it is engaged in the process of soliciting
proxies for the Special Meeting and that it intends to proceed with the Special
Meeting.
24. Vetrotex denies that there is an actual controversy concerning the
validity of the Special Meeting.
COUNT II
--------
25. Vetrotex repeats and realleges its responses to paragraphs 1 - 24.
26. Paragraph 26 contains a conclusion of law to which no response is
necessary. To the extent that a response is necessary, Vetrotex denies the
allegations contained in Paragraph 26.
27. Vetrotex admits that a Notice of Special Meeting has been distributed
to BTI shareholders. Vetrotex denies the remaining allegations contained in
Paragraph 27.
28. Vetrotex denies the allegations contained in Paragraph 28.
29. Vetrotex denies the allegations contained in Paragraph 29.
30. Vetrotex denies the allegations contained in Paragraph 30.
31. Vetrotex denies that there is an actual controversy concerning the
effect of the resolution set forth in the Notice of Special Meeting.
COUNT III
---------
32. Vetrotex repeats and realleges its responses to paragraphs 1 - 31.
33. Paragraph 33 contains allegations that reference the bylaws of BTI, a
document that speaks for itself. Vetrotex denies any allegations that attempts
to characterize this document. Paragraph 33 also contains allegations stating
conclusions of law as to which no response is required. Vetrotex denies the
remaining allegations contained in Paragraph 33.
-4-
<PAGE>
34. The allegations in Paragraph 34 refer to the BTI bylaws, a document
that speaks for itself. Vetrotex denies any allegations that attempt to
characterize this document. Vetrotex further states that the allegations of
Paragraph 34 contain conclusions of law as to which no response is required.
35. The allegations in Paragraph 35 refer to the BTI bylaws, a document
that speaks for itself. Vetrotex denies any allegations that attempt to
characterize this document. Vetrotex further states that the allegations of
Paragraph 35 contain conclusions of law as to which no response is required.
36. Vetrotex denies the allegations contained in Paragraph 36. Vetrotex
states further that it has no obligation to formally designate a slate of
proposed directors in its demand for a special meeting, and that Vetrotex has
informed shareholders of its slate of proposed directors by including such
information in Vetrotex's proxy solicitations.
37. Vetrotex denies the allegations contained in Paragraph 37.
38. Vetrotex denies the allegations contained in Paragraph 38.
39. Vetrotex denies that there is an actual controversy concerning the
effect of its proposed resolutions.
WHEREFORE, Vetrotex respectfully asks the Court to enter judgment in its
favor on all three Counts raised in BTI's Complaint, dismiss the Complaint in
its entirety and award Vetrotex its costs and such other and further relief as
this Court deems appropriate.
AFFIRMATIVE DEFENSES
--------------------
1. Plaintiff's claims are barred in whole or in part by the doctrine of
unclean hands.
2. Plaintiff's claims are barred in whole or in part by the doctrine of
waiver.
3. Plaintiff's claims are barred in whole or in part by the doctrine of
laches.
-5-
<PAGE>
4. Plaintiff's claims are barred in whole or in part by the doctrine of
estoppel.
5. Plaintiff's Complaint fails to state a claim upon which relief can be
granted.
COUNTERCLAIMS
-------------
Defendant/Counterclaim Plaintiff Vetrotex hereby counterclaims and alleges
as follows:
Nature of Counterclaims
-----------------------
Vetrotex seeks declaratory and injunctive relief to prevent BTI from
unjustifiably frustrating Vetrotex's attempt to call a special meeting of the
BTI shareholders on June 16, 2000. BTI's repeated attempts to delay and
interfere with the Call for a special shareholders meeting and the tender offer
made by Vetrotex's affiliates to purchase all the outstanding shares of BTI
common stock (the "Tender Offer"): (i) breach BTI's contractual duty under its
bylaws and statute to honor Vetrotex's demand for a special shareholders
meeting; and (ii) violate and impermissibly interfere with the Williams Act and
related federal securities laws. In addition to seeking expedited resolution of
BTI's claims for declaratory judgment on its state corporate law challenges to
Vetrotex's call for a special shareholders meeting, Vetrotex also seeks
injunctive relief enjoining BTI from taking any action to cancel, postpone,
improperly adjourn or frustrate in any way the holding and purposes of the
Special Meeting called by Vetrotex.
Jurisdiction and Venue
----------------------
-6-
<PAGE>
1. This Court has jurisdiction over all three counterclaims under 28
U.S.C. (S) 1332 because the parties are citizens of different states for
jurisdictional purposes and because the amount in controversy exceeds $75,000.
This Court also has jurisdiction over the Williams Act claim (Counterclaim III)
under 28 U.S.C. (S) 1331 because it arises under the Constitution, laws or
treaties of the United States, and over Counterclaims I and II under U.S.C
(S) 1367 because these two counterclaims are so related to the federal question
claim raised by the Williams Act that they form part of the same case or
controversy.
2. Venue in this Court is proper because BTI has a principal place of
business in Brunswick, Cumberland County, Maine.
PARTIES
-------
3. Counterclaim plaintiff Vetrotex is a corporation organized under the
laws of Delaware. It owns approximately 14% of the issued and outstanding
common stock of counterclaim defendant BTI. Vetrotex has its executive offices
in Valley Forge, Pennsylvania, and its manufacturing facilities in Wichita
Falls, Texas.
4. Counterclaim defendant BTI is a corporation organized under the laws
of the State of Maine with its principal place of business in Brunswick,
Cumberland County, Maine.
ALLEGATIONS COMMON TO ALL COUNTS
--------------------------------
5. The Bylaws of Brunswick Technologies, Inc. (the "Bylaws") contain a
provision that permits the holders of not less than 10% of the stock entitled to
vote at an annual meeting to call a special meeting of the BTI shareholders for
any purpose or purposes.
6. As a holder of more than 10% of the voting stock of BTI, Vetrotex is
authorized under the Bylaws to call a special meeting at any time for any
purpose.
-7-
<PAGE>
7. On April 17, 2000, George Amoss, Vice President of Vetrotex, delivered
via facsimile to Daniel J. McKay, Esq., counsel for and clerk of BTI, a written
call for a special meeting of the BTI shareholders (the "Call"). The purpose of
the special meeting called by Vetrotex was to consider (i) a proposal to amend
BTI's Articles of Incorporation to permit shareholders to remove directors by a
vote of a majority of the outstanding shares rather than two-thirds of the
outstanding shares; (ii) a proposal to remove the entire Board of Directors; and
(iii) a proposal to elect new directors who would, consistent with their
fiduciary duties as directors, facilitate the Tender Offer. Vetrotex also hand-
delivered a confirmatory letter containing an identical call for a special
meeting of the BTI shareholders to Mr. McKay on the afternoon of April 17, 2000.
8. On April 20, 2000, certain affiliates of Vetrotex issued the Tender
Offer to purchase all outstanding shares of BTI's common stock, at a price of
$8.00 per share.
9. On or about May 2, 2000, pursuant to the Call, BTI issued a Notice of
Special Meeting (the "Notice") scheduling the special meeting for June 16, 2000
(the "Special Meeting"). In its Notice, BTI included the following statement:
"The holding of the Special Meeting of Stockholders called at the request of
Vetrotex pursuant to this notice is subject to a determination by the
Corporation that the request was made in accordance with the Maine Business
Corporation Act."
10. Throughout late April and early May, BTI management lobbied the Maine
State Legislature strenuously to approve and pass L.D. 2000-2693, emergency
legislation that would have, among other things, amended the Maine Business
Corporation Act to eliminate retroactively Vetrotex's ability to call the
special shareholders' meeting for at least ninety days.
-8-
<PAGE>
11. BTI, through its management and directors, submitted written and oral
testimony to the Maine Legislature in support of L.D. 2000-2693, in an effort to
retroactively eliminate its obligation to hold the special shareholders meeting
called by Vetrotex.
12. On or about May 11, BTI's efforts to pass L.D. 2000-2693 failed, as
the measure did not get sufficient votes to pass on an emergency basis.
13. On or about May 19, BTI filed certain documents with the Securities
and Exchange Commission (the "SEC") describing the special meeting called by
Vetrotex as "currently" scheduled for June 16. BTI, through its management and
Directors, has made additional public statements that similarly suggest the
possibility that the June 16 Special Meeting may be canceled or postponed.
14. On May 23, 2000, BTI filed a complaint in Cumberland County Superior
Court seeking a declaratory judgment on three separate grounds that would render
Vetrotex's Call for a special shareholder's meeting null and invalid. To
Vetrotex's knowledge, BTI has not filed a motion for temporary restraining
order, motion for preliminary injunction or taken any other action to seek
expedited adjudication of its claims. On May 25, 2000, Vetrotex removed this
case to federal court. If BTI's complaint had been resolved in the normal
course of business by the Cumberland County Superior Court, BTI's claims would
have still been pending by the date of the June 16th Special Meeting.
15. On information and belief, BTI filed this complaint in state court and
failed to seek any type of expedited relief for the sole purpose of fabricating
a justification for BTI's Board of Directors to postpone, cancel or prematurely
adjourn the June 16th Special Meeting, as stated in the Notice, all in an effort
to protect BTI's current management and Board of Directors.
-9-
<PAGE>
On information and belief, BTI desires to cancel, delay or prematurely adjourn
the Special Meeting so as to frustrate Vetrotex's effort to elect a new Board of
Directors.
COUNTERCLAIM I
--------------
(Declaratory Judgment)
----------------------
16. Vetrotex repeats and realleges the allegations contained in paragraphs
1 - 15 as if they were fully set forth herein.
17. An actual controversy exists regarding BTI's intention to hold the
Special Meeting scheduled for June 16, 2000, properly called by Vetrotex
pursuant to the Bylaws on April 17, 2000.
18. Pursuant to 28 U.S.C. (S) 2201, Vetrotex is entitled to a declaration
stating that BTI is obligated to hold the Special Meeting on June 16, 2000 and
to permit BTI shareholders to consider and vote upon the proposals contained in
the Call.
COUNTERCLAIM II
---------------
Breach of Contract
------------------
19. Vetrotex repeats and realleges the allegations contained in paragraphs
1 - 15 as if they were fully set forth herein.
20. The Bylaws constitute a contract and create contractual obligations
between BTI and its shareholders, including Vetrotex.
21. Vetrotex's contractual rights under the Bylaws, and its rights under
Maine law, include, but are not limited to, the right to demand a special
meeting of the BTI shareholders to consider amending the BTI Articles of
Incorporation and to consider the removal of BTI's Board of Directors, at any
time and without any limitation with regard to the timing of the annual meeting.
-10-
<PAGE>
22. Vetrotex's contractual rights under the Bylaws, and its rights under
Maine law, include, but are not limited to, the right to vote on a slate of
proposed new directors at any special meeting of the shareholders properly
called by any shareholder owning 10% or more of BTI's voting stock.
23. BTI's actions in response to the Tender Offer and to Vetrotex's demand
for a special meeting of BTI shareholders, including but not limited to the
filing of a meritless complaint in State Court, constitute an actual and/or
anticipatory breach of BTI's contractual obligations to Vetrotex and its fellow
BTI shareholders, and a denial of Vetrotex's statutory rights.
24. Vetrotex has been harmed by BTI's actual and/or anticipatory breach of
its contractual obligations.
25. Damages cannot adequately compensate Vetrotex for this breach of
contract and Vetrotex lacks any other adequate remedy at law.
COUNTERCLAIM III
----------------
Violation of the Williams Act, 15 U.S.C. (S) 78n(e) et seq.
-----------------------------------------------------------
26. Vetrotex repeats and realleges the allegations contained in paragraphs
1 - 15 as if set forth fully herein.
27. BTI's public statements, omissions and actions in response to the
Tender Offer and to Vetrotex's Call for the Special Meeting constitute
misleading, fraudulent, deceptive and/or manipulative acts or practices in
connection with a tender offer and solicitation of security holders.
28. BTI's misleading and deceptive acts and manipulative devices include,
but are not limited to, its statements regarding the scheduling of the Special
Meeting, the filing of a
-11-
<PAGE>
meritless complaint in Cumberland County Superior Court, and its failure to
identify or describe the complete lack of support for its legal claims when
disclosing the filing of its complaint in certain SEC filings.
29. BTI's misleading and deceptive actions were material in that they will
affect or have affected the shareholder voting process on the Tender Offer.
30. BTI's actions constitute an attempt to unjustifiably delay the Tender
Offer process and therefore constitute impermissible interference with the
purposes of the Williams Act.
31. BTI's actions have harmed Vetrotex.
32. Vetrotex lacks an adequate remedy at law.
WHEREFORE, Vetrotex respectfully requests that the Court enter judgment in
its favor on all three counterclaims and
1. Issue a declaratory judgment stating that BTI is obligated to hold the
Special Meeting on June 16, 2000 to permit BTI shareholders to consider and vote
upon the proposals set forth in the Call;
2. Award Vetrotex preliminary and final injunctive relief enjoining BTI
and its directors from canceling, postponing, prematurely adjourning or taking
any action that would frustrate the purposes of the June 16, 2000 Special
Meeting; and
3. Award Vetrotex its costs and such other and further relief deemed
appropriate by the Court.
Respectfully submitted,
VETROTEX CERTAINTEED
CORPORATION d/b/a VETROTEX
AMERICA,
By its attorneys,
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<PAGE>
____________________________________
Dated: May 26, 2000 James T. Kilbreth
Christopher B. McLaughlin
Attorneys for Third-Party Plaintiff
VERRILL & DANA, LLP
One Portland Square
P.O. Box 586
Portland, ME 04112
(207) 774-4000
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<PAGE>
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
BRUNSWICK TECHNOLOGIES, )
INC., )
) Civil No. 00-162-P-H
Plaintiff, )
)
v. )
)
VETROTEX CERTAINTEED )
CORPORATION d/b/a VETROTEX )
AMERICA, )
)
Defendant. )
MOTION FOR DECLARATORY JUDGMENT AND PRELIMINARY INJUNCTION
----------------------------------------------------------
(WITH INCORPORATED MEMORANDUM OF LAW)
-------------------------------------
Pursuant to Fed.R.Civ.P. 57 and 65(b), Defendant Vetrotex CertainTeed
Corporation d/b/a Vetrotex America ("Vetrotex") hereby moves for a declaratory
judgment and a preliminary injunction preventing Plaintiff Brunswick
Technologies, Inc. ("BTI") from canceling, postponing, prematurely adjourning or
frustrating in any other manner the purposes of the special meeting of BTI
shareholders scheduled for June 16, 2000 (the "Special Meeting").
INTRODUCTION
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The Court is familiar with the basic facts of the relationship between
Vetrotex and BTI as a result of its order, dated May 2, 2000, denying BTI's
request for injunctive relief in Docket No. 00-CV-124-P-H. Vetrotex owns over
700,000 shares of BTI's stock, representing approximately 14% of BTI's
outstanding shares. On April 17, pursuant to BTI's Bylaws, Vetrotex called a
special meeting of shareholders (i) to consider amending the Articles of
Incorporation of BTI to reduce the shareholder vote necessary to remove
incumbent members of BTI's Board of Directors and (ii) to consider the removal
of all incumbent members of BTI's Board (the "Special
<PAGE>
Meeting"). See Affidavit of Gregory S. Fryer, Esq., attached hereto and
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incorporated herein by reference ("Fryer Aff.").
On April 20, 2000, certain affiliates of Vetrotex issued a tender offer for
the purchase of all outstanding shares of BTI not owned by Vetrotex at a price
of $8.00 per share (the "Tender Offer"). Complaint, Par. 16. In response to
the call of the Special Meeting and the Tender Offer, BTI's management and
directors took several actions intended to frustrate Vetrotex's rights as a
shareholder and to protect the interests of BTI's management and directors at
the expense of its shareholders. These actions included the adoption of anti-
takeover defensive measures such as "golden parachutes" and a "poison pill,"
lobbying the Maine State Legislature for enactment of a bill that would have
retroactively eliminated Vetrotex's right to call the Special Meeting for a
period of at least ninety days after the re-election of the incumbent Directors,
the filing of a federal lawsuit seeking a "cooling off" period, and the filing
of a meritless state court action now removed to this Court, alleging that
Vetrotex's demand for a Special Meeting was void and invalid. BTI undertook
these actions in an effort to eliminate its obligation to hold the Special
Meeting and, in the case of the state court litigation, to fabricate
justification for BTI's Board of Directors to cancel, postpone or prematurely
adjourn the Special Meeting prior to a vote on Vetrotex's proposals.
Because BTI's claims are meritless, Vetrotex is entitled to a declaratory
judgment denying BTI's claims and confirming that Vetrotex's call for a special
meeting is valid and enforceable. Because BTI's actions also frustrate
Vetrotex's contractual rights under the BTI Bylaws and its statutory rights
under the Maine Business Corporation Act ("MBCA") to call a special meeting of
shareholders and to vote at such a meeting on the removal of BTI's Board of
Directors, and because Vetrotex lacks an adequate remedy at law, Vetrotex is
entitled to
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<PAGE>
injunctive relief prohibiting any postponement, cancellation, or other
interference by BTI with the Special Meeting and the shareholders' vote on
Vetrotex's proposals. Finally, because BTI's actions violate the Williams Act,
15 U.S.C. (S)78 et seq. by unjustifiably delaying and interfering with the
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Tender Offer process, BTI should be enjoined from postponing, canceling, or
otherwise interfering with the shareholders' vote on Vetrotex's proposals at the
June 16 Special Meeting./1/
ARGUMENT
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The well-established four-part test for injunctive relief requires Vetrotex
to demonstrate (1) that it will likely succeed on the merits of its
counterclaims; (2) that it will suffer irreparable harm if the requested
injunctive relief is not granted; (3) that such irreparable harm exceeds any
harm which BTI will suffer if the relief is granted; and (4) that the public
will suffer no adverse effect if the requested injunctive relief is granted. San
---
Francisco Investors v. Real Estate Investment Trust of America, 701 F.2d 1000,
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1002 (1st Cir. 1983). Vetrotex satisfies all of these tests.
I. Vetrotex Will Suffer Irreparable Harm if BTI Unjustifiably Postpones,
Cancels or Otherwise Frustrates the June 16, 2000 Special Meeting.
If BTI were to prevent Vetrotex from calling the Special Meeting and
prevent BTI shareholders from considering the removal of BTI's Board of
Directors, Vetrotex will suffer irreparable harm. Vetrotex will be prevented
from exercising its vital right to call and vote at a special shareholders
meeting, a right which cannot be valued and the loss of which cannot be
compensated through monetary damages. When considering the impact of a
corporation's failure to satisfy a valid demand for a special shareholder's
meeting, another court in the First Circuit observed: "One of the most sacred
rights of any shareholder is to participate in corporate
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/1/ For a more detailed recitation of the facts of this case, Vetrotex
respectfully refers the Court to the Affidavit of Gregory S. Fryer, Esq.
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<PAGE>
democracy. . . The Board's suggestion that its proffered [and delayed] special
meeting does not endanger shareholder rights, but merely delays them, misses the
point. Courts have consistently recognized the irreparable harm associated with
delay in these contexts." ER Holdings, Inc. v. Norton Co. et al., 753 F. Supp.
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1094, 1101 (D. Mass. 1990)(enjoining effort by target of tender offer to delay
scheduling of shareholders meeting, allegedly to allow incumbent management
additional time to explore alternatives). See also Ocilla Indust., Inc. v. Katz,
--- ---- ----------------------------
677 F. Supp. 1291, 1301 (E.D.N.Y. 1987)(holding "the disenfranchisement of
shareholders poses a serious risk of irreparable harm that cannot be measured in
monetary damages"); International Banknote Co. v. Muller, 713 F. Supp. 612, 623
------------------------------------
(S.D.N.Y. 1989)(observing "corporate management subjects shareholders to
irreparable harm by denying them the right to vote their shares or unnecessarily
frustrating them in their attempt to obtain representation on the board of
directors"). See also Georgia-Pacific Corp. v. Great Northern Nekoosa Corp.,
--- ---- -----------------------------------------------------
727 F. Supp. 31, 34 (D. Me. 1987). The loss of the opportunity for Vetrotex and
its fellow shareholders to remove those BTI directors hostile to the Tender
Offer constitutes an unjustified impairment or deprivation of voting rights that
justifies injunctive relief. W. Fletcher, Cyclopedia of the Law of Private
--------------------------------
Corporations and Business Organizations (S) 2025 (discussing impermissible
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impairment of voting rights); ER Holdings, 735 F. Supp. at 1101.
-----------
In addition to the threatened frustration of the shareholders' right to
call meetings and vote on the control and future of BTI, the actions of BTI and
its Directors will cause irreparable harm to the Tender Offer if they
successfully cancel or postpone the Special Meeting. See Fryer Aff., Par. 18.
When ruling that the threat of delay to a tender offer constitutes substantial
and irreparable harm in Hyde Park Partners, L.P. v. Connolly, 839 F.2d 837, 853
------------------------------------
(1/st/ Cir. 1988), the First Circuit observed,
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<PAGE>
" It is obvious that timing is everything with tender offers, and that such
a delay would effectively kill the takeover bid in its present form. At
the very least it would allow management to institute substantial defensive
measures on which it otherwise could not depend. . . [An unjustified delay
can] substantially chill, if not freeze in its tracks, any continued
takeover effort. While time and money are lost, so also is diminished if
not destroyed any chance of success. . . [T]he loss of a best opportunity
to seize control of a major corporation could be crucial."
San Francisco Real Estate Investors, 701 F.2d at 1002-03 (finding irreparable
- -----------------------------------
harm from delaying tender offer). See also MAI Basic Four, Inc. et al. v.
--- ---- ---------------------------------
Prime Computer, Inc. et al., 871 F. 2d 212, 218 (recognizing "irreparable harm
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suffered by a takeover aspirant by any unjustifiable delay of consummation of a
tender offer"). Under this well-established line of First Circuit precedent,
Vetrotex will suffer irreparable harm if BTI is permitted to frustrate the
Tender Offer and the Special Meeting, both as a shareholder who could benefit
from the Tender Offer and as an affiliate of the entity pursuing the Tender
Offer.
II. Vetrotex Has Demonstrated A Likelihood of Success on The Merits.
The basis for Vetrotex's counterclaims is the fact that BTI's state law
challenges to the demand for a Special Meeting lack any legal or factual support
and represent a continuation of entrenched management's efforts to interfere
with and threaten the tender offer process. As demonstrated below, the evidence
is overwhelming that BTI's ultimate goal is simply to protect entrenched
incumbent management at the expense of Vetrotex and its fellow shareholders, a
goal that is impermissible under both BTI's Bylaws and the Williams Act.
Accordingly, Vetrotex is likely to prevail on both BTI's claims and its
counterclaims, as we now show.
i. Count I of BTI's Complaint
BTI's first claim for a declaratory judgment rests on the assertion that
Vetrotex's demand for a special meeting to consider the removal of BTI's
Directors is somehow moot because of the re-election of the six members of the
Board of Directors that occurred at the Annual Meeting on
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<PAGE>
May 16, 2000. Complaint, Par. Par. 20-24. BTI alleges that since the "new" Board
elected in May differs in composition from the Board in place on the date of
Vetrotex's demand for a special meeting, Vetrotex no longer has an interest or a
right to remove any of the Directors. This claim finds absolutely no support in
the facts, the Articles of Incorporation and By-Laws, or the Maine Business
Corporations Act ("MBCA").
First, neither the actual composition nor the political disposition of the
BTI Board changed as a result of the Annual Meeting: all six of the Directors
re-elected to their positions at the Annual Meeting were Directors as of May 2,
the date of the Notice of Special Meeting. Fryer Aff., Par. 13. Unless BTI has
failed to disclose a resignation or election in its SEC filings, the same six
men serve on the Board now as when BTI mailed the Notice of Special Meeting. The
last sentence of paragraph 19 of the Complaint, which asserts that "[t]he
composition of the new Board of Directors differed from the Board holding office
at the time of the Notice of Special Meeting," thus appears to constitute a
blatant falsehood./2/ Further, the political composition of the BTI Board
remains unchanged: the "new" Board has pursued the same dilatory and evasive
strategy in response to the Tender Offer and demand for the Special Meeting as
did the "old" Board. The "new" Board has not repudiated or repealed any of the
defensive measures enacted by the "old" Board, or taken any other action to
indicate that it is more receptive to the Tender Offer than its predecessor.
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/2/ Moreover BTI's argument on a related point is particularly curious in
light of the resignation, on May 1, 2000, the day before the date of the Notice
of Special Meeting, of David Sharpe, a former Director who works for Vetrotex.
If, as BTI contends, a board member serves until a successor has been elected,
Mr. Sharpe must still be a Director since no one was elected at the Annual
Meeting to replace him. This presents the further problem that BTI's Articles
require that there be at least seven directors, and only six were elected at the
Annual Meeting, suggesting that there is currently no validly elected Board in
--
place.
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<PAGE>
Second, contrary to BTI's suggestion in its Complaint, Vetrotex did not
have the right to nominate its own slate of directors at the Annual Meeting.
Art. III, Sect. 3 of the BTI's Bylaws requires shareholders to file written
nominations for the Board no later than 60 days prior to the Annual Meeting.
Nominations for the election held at the May 16, 2000 Annual Meeting were
therefore due on March 16, 2000 -- a full month before Vetrotex called a special
meeting. By the time Vetrotex served its demand, the deadline for nominating
directors had long since passed, meaning that Vetrotex was powerless to nominate
alternate directors at the Annual Meeting./3/
Third, the BTI's Bylaws place no limit on the ability of any 10% or greater
shareholder to call a special meeting for the removal of any or all of the
directors at any time, regardless of when those directors were elected. Bylaws,
Art. II, Sect. 2 ("special meetings may be called for any purpose or purposes,
unless otherwise proscribed by statute").
Fourth, as BTI apparently recognized, the MBCA provides no statutory limits
on the ability of shareholders to call a special meeting to remove directors.
See 13-A M.R.S.A. (S) 603(4)(D)(permitting 10% shareholders to call special
- ---
meetings without restriction). L.D. 2000-2693, the proposed amendment to
section 603 of the MBCA that BTI and its management strenuously lobbied the
Maine State Legislature to approve, would have limited a shareholder from
calling a special meeting for the purpose of removing a director who had been
elected within 90 days of the demand for a special meeting. The failure of L.D.
2000-2693 to become Maine law highlights the complete lack of statutory support
for BTI's first count. A search of Maine and other state corporate law failed
to identify a single case in which a properly called
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/3/ That conclusion is underscored by the fact that under the BTI Bylaws, no
nominations are permitted from the floor at the Annual Meeting and no votes are
counted except those cast for nominees nominated in writing at least 60 days
prior to the Annual Meeting. Bylaws, Article III, (S)3.
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<PAGE>
special meeting was moot simply because the directors who were the target of
removal at the special meeting had been recently elected.
Finally, it is important to realize that BTI -- not Vetrotex -- chose the
date of the Special Meeting. The Bylaws and the MBCA allow the BTI Board to
schedule a special meeting any date at least 10 and not more than 60 days from
receipt of a demand. Bylaws, Art. II, Section 4. BTI therefore could have
scheduled the Special Meeting before or after the Annual Meeting. Obviously, the
purpose of the special meeting provision would be frustrated if a demand for a
special meeting could be mooted through a unilateral scheduling decision of the
incumbent Board. Quite simply, Vetrotex is entitled to seek removal of the
Board through a validly called special meeting, regardless of when or how the
Board was elected. Count I of BTI's Complaint has no merit.
ii. COUNT II OF BTI'S COMPLAINT
BTI's second count seeks a declaratory judgment that Vetrotex's demand for
a Special Meeting is void and invalid due to a technical error in the
description of the purpose for the Special Meeting. Complaint Par. Par. 25-31.
Vetrotex's original Call for the Special Meeting, hand-delivered and faxed to
the counsel and Clerk of BTI on April 17, 2000, read as follows:
Pursuant to Sections 603(4)(D) and 805(4) of the Maine Business Corporation
Act, the undersigned shareholder ("Vetrotex") hereby calls a Special
Meeting of the Shareholders of Brunswick Technologies, Inc. (the
"Corporation") for the purpose of considering the following proposals: (1)
to amend the Articles of Incorporation to change the vote required to
remove directors and (2) regardless of whether such amendment is approved
by the shareholders, to remove the entire board of directors of the
Corporation and elect new directors.
At the Special Meeting, Vetrotex plans to offer the following proposed
resolution for action by the shareholders.
RESOLVED: That the Articles of Incorporation of the Corporation are
hereby amended to provide that, at a special
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<PAGE>
meeting of directors called expressly for that purpose, the entire
board of directors or any individual directors may be removed from the
board, with or without cause, by the affirmative vote of a majority of
the outstanding shares entitled to vote for directors; and that the
appropriate officers of the Corporation shall promptly file Articles
of Amendment with the Maine Secretary of State setting forth the
foregoing amendment.
Regardless of whether the foregoing amendment is approved by the
shareholders, Vetrotex then plans to offer the following proposed
resolution for action by the shareholders. (If the amendment has been
approved, this resolution would be offered after a brief adjournment to
permit the filing of Articles of Amendment reflecting the amendment.)
RESOLVED: That the entire board of directors of the Corporation is
hereby removed, effective immediately.
If this resolution is approved by the shareholders, Vetrotex plans to
propose a slate of directors to be elected at the meeting to fill the
resulting vacancies.
You are hereby requested to promptly notify the Corporation's shareholders
of a time, date, and place of the Special Meeting, and the purposes for
which it has been called.
Exhibit 2 to Fryer Aff. Although the Call explicitly called for a "Special
Meeting of Shareholders" to consider amending the Articles of Incorporation "to
change the vote required to remove directors, "BTI claims that the language was
unclear as to whether the meeting was to concern shareholders or directors. BTI
seizes on the fact that the first proposed resolution indicates that the
proposal to change the vote necessary to remove directors will be considered at
a "special meeting of directors." Complaint, Par. 28. Obviously, this
---------
resolution should have stated that the proposal will be considered at a meeting
of shareholders, not directors. The Call states no less than six times that the
------------ --- -----
proposals will be voted on by the shareholders, not the directors. And the
resolution seized on by BTI itself makes clear that it is the shareholders, not
the directors, who will be voting - "The entire board ... may be removed by the
affirmative vote of a majority of the outstanding shares...." When read in
------
context of the entire Call -- as it was
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<PAGE>
subsequently presented to all BTI shareholders by BTI -- the minor drafting
error is clear and harmless. Vetrotex subsequently corrected this technical
error in its SEC filings discussing the Call and the corrected resolution, as
well as a footnote explaining the typographical error, was included in the proxy
statement mailed by Vetrotex to all BTI shareholders entitled to vote at the
Special Meeting. Fryer Aff., Par. Par. 6, 10.
BTI's hypertechnical reading of the Call finds no support in Maine law. The
Law Court has repeatedly held that obvious and immaterial typographical errors
in legal documents are of no consequence. See Lanciani v. State, 667 A.2d 614,
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615 (Me.1995)(obvious scrivener's error in amendment to Maine Rules of Evidence
had no legal effect); Pelletier v. Langlois, 157 A. 577, 578 (Me. 1931)(two
---------------------
mistaken uses of "grantee" rather than "grantor" do not impact legal effect of
deed); State v. LaFlamme, 99 A. 772, 773 (Me. 1917)(typographical error, "the
------------------
correction of which is furnished by the context, "has no effect on the validity
of an indictment); Peabody v. Conley, 88 A. 411, 413 (Me. 1913)(mathematical or
------------------
typographical error in judgment does not affect amount due); Moulton v. Chapman,
------------------
81 A. 1007, 1008 (Me. 1911)(unexplainable clause in will resulting from
scrivener's error must be disregarded).
Count II of BTI's Complaint also alleges that even if the resolution to
change the shareholder vote required to remove directors from two-thirds to a
majority were to pass, a two-thirds vote will still be required to remove the
directors. This allegation contradicts explicit requirements of the MBCA.
Pursuant to the MBCA, BTI's shareholders may amend the Articles with a simple
majority vote. Although the Articles of BTI could have contained a provision
requiring a two-thirds vote to remove directors or to amend such a requirement,
they do not. 13-A M.R.S.A. (S) 802(O)(corporation may amend articles of
incorporation to change "rights or powers of its shareholders"); (S) 805 (unless
articles of incorporation provide for higher vote
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<PAGE>
requirement, simple majority of shares entitled to vote may amend articles of
incorporation). The law regarding the right of BTI's shareholders to change the
vote required to remove directors is clear: the only confusion is that exhibited
by BTI's failure to read the MBCA.
Even if the Court were to find that a material error existed in Vetrotex's
demand for a special meeting, the doctrines of laches and waiver preclude BTI
from canceling the Special Meeting. BTI waited 36 days, from April 17 to May
23, to complain of the alleged errors in Vetrotex's demand. Any typographical
errors could have been easily corrected in the two weeks between BTI's receipt
of the demand and BTI's mailing of the Notice of Special Meeting. By failing to
identify the alleged errors, BTI prevented Vetrotex from making any corrections
to the Notice of Special Meeting. BTI has on several occasions, moreover,
itself communicated the actual intent of the proposals to its shareholders. See
---
Fryer Aff., Par. 8. BTI's prolonged and unexplained silence and clear statements
as to the purposes of the meeting eliminate any suggestion of actionable
ambiguity or uncertainty in Vetrotex's demand for a Special Meeting.
Furthermore, BTI's claim that only the resolutions set forth in the Call
can be presented at the meeting ignores 13-A M.R.S.A. (S) 805(1)(B), which
requires only that a summary of changes to be effected by a proposed amendment
need be included in the notice of special meeting. The Notice mailed by BTI to
shareholders, and numerous communications provided shareholders by BTI, clearly
states the changes to be effected by the proposed amendment. BTI particularly
cannot be heard to complain that only the resolution demanded can be presented
at the meeting since BTI in its Notice to Shareholders omitted three words from
the resolution Vetrotex had stated it "plans" to introduce at the meeting. See
---
Fryer Aff., Par. 4, note 4.
iii. Count III of BTI's Complaint
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<PAGE>
BTI's third and final claim offers the most blatant example of its repeated
misinterpretation of Maine corporate law. BTI alleges that Vetrotex's demand
for a special meeting is invalid because it fails to identify those directors
who will be nominated by Vetrotex at the Special Meeting if the current
directors are removed by the shareholders. This claim flies in the face of
clear and unambiguous statute and case law. 13-A M.R.S.A. 707(5) states
clearly: "If any or all directors are removed at such meeting of the
shareholders, new directors may be elected at the same meeting without express
notice being given of such election." As consistently interpreted by the
courts, any attempt by a corporation to require advance notice of the nomination
of director candidates following the removal of directors at a shareholder
meeting is inconsistent with the MBCA and void:
Section 707(5) of the MBCA expressly permits the election of new directors
at a shareholders' meeting without prior notice, when the election is
occasioned by the removal of directors at the same shareholders' meeting.
To the extent that Article II, Section 9 of Great Northern's By-Laws
attempts to impose a 90-day notice requirement for nomination of director
candidates after removal of the directors at a meeting of the shareholders,
it, too, is inconsistent with the Act and, therefore, void.
Georgia-Pacific Corp. v. Great Northern Nekoosa, 731 F. Supp. 38, 42 (D.
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Me. 1990). Accordingly, Vetrotex had no obligation to identify in its demand
the candidates it intends to propose for the Board if the current directors are
removed at the Special Meeting./4/ Count III is patently frivolous.
b. The Counterclaims.
i. Breach of Contract
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/4/ As required by SEC regulations, Vetrotex disclosed its proposed slate of
candidates for the Board to shareholders as part of its proxy solicitations on
or about May 19, 2000. BTI shareholders will have just under one month to
consider Vetrotex's proposed Directors. This is virtually the same amount of
time BTI provided to its shareholders prior to the Annual Meeting in connection
with its proposed re-election of directors. Fryer Aff. 15.
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<PAGE>
BTI's manifest desire and intent to cancel, postpone or frustrate the June
16 Special Meeting constitutes a breach of BTI's contractual obligations to its
shareholders. The bylaws of a Maine corporation "constitute part of a contract
between a corporation and its stockholders." Zimpritch, Maine Corporation Law &
-----------------------
Practice (S) 6.1; see also New England Trust Co. v. Penobscot Chemical Fibre
- -------- --- ---- -------------------------------------------------
Co., 50 A.2d 188, 191 (Me. 1946)(holding that by-laws constitute a contract
between corporation and its shareholders, which entitled preferred shareholders
to certain dividends); Spear v. Rockland-Rockport Lime Co., 93 A. 754, 756
------------------------------------
(Me. 1915)(describing corporate bylaws as a contract which must be interpreted
under traditional contract law); Centaur Partners, IV v. Nat'l Intergroup,
------------------------------------------
Inc., 582 A.2d 923, 927-28 (De. 1990)(corporate charter and bylaws are contracts
- ----
creating contractual obligations on corporation). Corporate bylaws,
accordingly, create substantive rights in shareholders of the corporation which
are enforceable against the corporation, including Vetrotex's right to call a
special meeting of shareholders to remove directors.
BTI's actions create an impermissible threat to BTI's contractual right to
call a special shareholders meeting. BTI's management and directors have taken
the following actions that demonstrate a clear and unequivocal intent to cancel
or postpone the Special Meeting: (1) in its Notice of Special Meeting, BTI
stated that holding the special meeting was subject to "a determination by the
Corporation that the request was made in accordance with the [MBCA]"; (2) at the
May 16 Annual Meeting, the Clerk of the Corporation responded to a question from
a shareholder by stating that the Special Meeting was "presently" scheduled for
June 16, creating doubt as to the finality of that scheduling decision. Fryer
Aff., Par. 16(b); (3) in a May 19 open letter to its shareholders published in
several Maine newspapers and subsequently filed with the SEC, BTI management
described the Special Meeting as "currently" scheduled for June 16, again
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<PAGE>
calling into question the finality of this date. Fryer Aff., Par. 16(c); and (4)
BTI waged a very public battle to convince the Maine Legislature to pass a bill
which would have retroactively changed the MBCA to eliminate Vetrotex's right to
demand a special meeting to remove the directors for ninety days. Fryer Aff.,
Par. 16(a). Once again, BTI's language suggests that Vetrotex's request is
invalid and need not be honored.
Most telling, as foretold by the language in the Notice of Special Meeting
- -- that the holding of the Special Meeting was subject "to a determination by
the Corporation that the request was made in accordance with the [MBCA]" -- BTI
filed an action on May 23 in Cumberland County Superior Court seeking judicial
approval of a decision not to hold the Special Meeting on June 16. BTI filed no
motion for injunctive or expedited relief and has yet to serve Vetrotex,
apparently content with the knowledge that, absent any action by Vetrotex, the
Superior Court would not rule on the validity of its claims until well after the
date of the Special Meeting. The only reasonable explanation for BTI's state
court filing is that its management and directors desired to fabricate a
justification for the cancellation or postponement of the Special Meeting due to
"pending litigation" regarding the validity of Vetrotex's demand.
When interpreted in context, these actions taken together constitute an
actual and/or anticipatory breach of BTI's contractual obligation to hold a
Special Meeting on June 16. See Wholesale Sand & Gravel, Inc. v. Decker, 630
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A.2d 710 (Me. 1993)(holding that "manifestation of intention" not to perform
contractual obligations through either words or conduct constitutes breach of
contract). Vetrotex is likely to prevail on its breach of contract claim.
ii. The Williams Act Counterclaim.
15 U.S.C. (S) 78n(e) prohibits any fraudulent, deceptive, or manipulative
acts or practices in connection with a tender offer. BTI's public statements
and SEC filings questioning the
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<PAGE>
validity of Vetrotex's demand, including the filing of a meritless state court
complaint, constitute prohibited manipulative acts designed to deceive investors
into believing that BTI is justified in canceling the June 16 Special Meeting.
See Schreiber v. Burlington Northern, Inc., 472 U.S. 1, 105 S.Ct. 2458 (1985)
- --- -------------------------------- ----
(defining "manipulative" under Section 78n(e)). Further, cases from the Supreme
Court of the United States, the First Circuit, and this Court demonstrate that
any unjustifiable delay in the tender offer process frustrates the purposes of
the Williams Act and violates federal law. See Edgar v. MITE, 457 U.S. 624, 635
--- -------------
(1982), 102 S.Ct. 2629 (observing that "providing the target company with
additional time within which to take steps to combat the [tender] offer
[provides] incumbent management with a powerful tool to combat tender offers...
These consequences are precisely what Congress determined should be avoided
and [which] frustrate the objectives of the Williams Act); San Francisco Real
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Estate Investors, 701 F.2d at 1003 (any unjustifiable delay in a tender offer
- ----------------
frustrates the Williams Act); Georgia-Pacific Corp. v. Great Northern Nekoosa
-----------------------------------------------
Corp., et al., 727 F. Supp. 31, 34 (D. Me. 1987)(refusing to issue injunction on
- -------------
other grounds but observing that any unjustified delay in holding a special
shareholders meeting would improperly interfere with the Williams Act).
Because BTI cannot justify its efforts to cancel, delay, or otherwise
interfere with the Special Meeting and to help management delay and avoid the
tender offer process, Vetrotex is likely to prevail on its Williams Act
counterclaim.
III. The Potential Harm To Vetrotex Outweighs
Any Harm To BTI If the Requested Relief is Granted.
BTI management and directors have enjoyed over 36 days in which to prepare
for and obtain proxy votes for the June 16 Special Meeting, and will have
another three weeks of preparation time if the Court orders that the Special
Meeting occur as scheduled. BTI
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<PAGE>
unilaterally selected the date of the Special Meeting, providing it a benefit
not possessed by Vetrotex or any potential acquiror. The Tender Offer was
announced on April 20, a mere three days after the Call, meaning that BTI has
enjoyed a similar amount of time to analyze and respond to the potential
acquisition. The Tender Offer's expiration date was extended from mid-May to
June 16, permitting BTI and its management an additional month to consider their
options. The Williams Act, which governs the tender offer process, requires that
a target corporation respond within 10 business days, 17 C.F.R. (S) 240.14e-2,
and that a tender offer be held open for 20 business days. Quite simply, BTI has
enjoyed more than sufficient time to convince shareholders to retain the
incumbent current directors and management. The playing field is already level,
and an order from the Court requiring that the Special Meeting be held on June
16 will preserve this equality. The only "harm" BTI's incumbent management may
suffer as result of Vetrotex's requested injunction is the possibility of losing
an even-handed proxy fight. The absence of potential harm to BTI justifies
Vetrotex's request for injunctive relief.
IV. The Public Interest Will Be Served By Holding the Special Meeting.
If the Special Meeting is held as scheduled, all BTI shareholders -- not
just Vetrotex --will be permitted to exercise their contractual right to vote
and control the destiny of the corporation they own. Issuing the injunction
does not guarantee that the Tender Offer will be successful or that BTI's Board
will be deposed. Rather, the requested injunction simply permits the corporate
democratic process to flourish, as intended by the MBCA and the BTI Bylaws. The
public's interest in enforcing the MBCA corporate governance provisions
justifies Vetrotex's request of injunctive relief. See ER Holdings, 735 F.
--- -----------
Supp. at 1103 (public interest served by preserving balance between dissenting
shareholders and incumbent management and by enforcing contractual rights
created by corporate bylaws).
-16-
<PAGE>
CONCLUSION
----------
Rather than allow its shareholders, the owners of the corporation, to
determine the appropriateness of the Tender Offer and of Vetrotex's effort to
remove incumbent directors, BTI, its directors and management have pursued a
strategy of delay and avoidance for over a month. BTI unsuccessfully sought
refuge in this Court, in the Legislature, and has now attempted to concoct legal
challenges out of whole cloth in this action. It is time for BTI's shareholders
to have their say. The Court should grant Vetrotex's request for injunctive
relief and allow the Special Meeting to proceed on June 16, 2000.
Dated: May 26, 2000
____________________________________
James T. Kilbreth
Gregory S. Fryer
Christopher B. McLaughlin
Attorneys for Defendant/Counterclaim Plaintiff
VERRILL & DANA, LLP
One Portland Square
P.O. Box 586
Portland, ME 04112
(207) 774-4000
-17-
<PAGE>
May 26, 2000
To the Directors of Brunswick Technologies, Inc.
Dear Director:
As you know, on April 17 we exercised our right under BTI's bylaws to request
a special meeting of shareholders. BTI set the date of this meeting for June
16, but has tried again and again to keep that meeting from happening, or at
least to further delay the meeting beyond the statutory 60-day period.
Soon after the Notice of Special Meeting was mailed, we sent all BTI
shareholders a letter that described why we had called this meeting. We said in
that letter:
We fully expect all BTI Directors to act responsibly toward CertainTeed's
offer and, in due course, to remove the impediments to the completion of
the offer. If for any reason they do not, the Special Meeting will give
BTI shareholders an opportunity to present and vote upon a new slate of
director candidates.
Unfortunately, the defensive measures undertaken by the BTI Board, considered as
a whole, suggest that BTI will go to any length to frustrate CertainTeed's
pending offer. BTI's defensive measures to date have:
. consumed hundreds of thousands of dollars of fees for failed efforts in
the litigation, legislative, and proxy arenas;
. loaded any future acquiror with a multi-million dollar severance cost for
the benefit of six senior executives;
. unfairly questioned our character in front of the same people we hope
will become our employees; and
. failed to generate any viable alternative to the CertainTeed offer.
In the coming days, you will be called upon to make very important decisions
about the handling of the Special Meeting, the evaluation of any competing
alternatives to the CertainTeed offer, and the redemption of the poison pill.
We trust that you are by now personally familiar with the strict legal duties to
which all directors are held in the context of these kinds of decisions. We
also trust that you will evaluate these decisions in light of your fundamental
duty to place the interests of shareholders first. In particular, any attempt
to postpone, cancel or otherwise interfere with the shareholders' June 16
meeting, or in any other way to skew the playing field so as to keep the
CertainTeed offer from the shareholders, will be seen as a breach of your
fiduciary duties to us and the other BTI shareholders.
Sincerely,
George B. Amoss
Vice President
