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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(RULE 14D-101)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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BRUNSWICK TECHNOLOGIES, INC.
(NAME OF SUBJECT COMPANY)
BRUNSWICK TECHNOLOGIES, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $0.0001 PER SHARE
(TITLE OF CLASS OF SECURITIES)
117394 10 6
(CUSIP NUMBER OF COMMON STOCK)
MARTIN S. GRIMNES
CHIEF EXECUTIVE OFFICER
BRUNSWICK TECHNOLOGIES, INC.
43 BIBBER PARKWAY
BRUNSWICK, ME 04011
(207) 729-7792
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
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WITH A COPY TO:
Robert A. Trevisani, Esquire
Gadsby Hannah LLP
225 Franklin Street
Boston, MA 02110
(617) 345-7000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION
The name of the subject company is Brunswick Technologies, Inc., a Maine
corporation (the "Company"). The address of the Company's principal executive
offices is 43 Bibber Parkway, Brunswick, Maine 04011. The telephone number of
the principal executive offices of the Company is (207) 729-7792. The title of
the class of equity securities to which this Schedule 14D-9 relates is the
common stock, par value $0.0001 per share, of the Company and the associated
rights to purchase preferred stock (the "Shares"). As of May 2, 2000, there were
5,234,415 shares of the Company's common stock issued and outstanding.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON
The name and business address of the Company, which is the person filing
this statement, are set forth in Item 1 above.
This statement relates to the tender offer being made by VA Acquisition
Corporation, a Maine corporation (the "Purchaser") and a wholly owned subsidiary
of CertainTeed Corporation, a Delaware corporation (the "Parent"), both of which
are indirect wholly owned subsidiaries of Compagnie de Saint-Gobain, a French
corporation ("Saint-Gobain"), disclosed in a Tender Offer Statement on Schedule
TO (the "Schedule TO"), dated April 20, 2000, as amended to date by Amendments
1, 2, 3, 4 and 5 thereto, and filed with the Securities and Exchange Commission
(the "Commission" or the "SEC"), to purchase all the outstanding Shares not
already beneficially owned by Parent, at a price of $8.00 per share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated April 20, 2000 (the "Offer
to Purchase") and the related Letter of Transmittal (which, together with the
Offer to Purchase and any further amendments or supplements thereto,
collectively constitute the "Offer") included in the Schedule TO.
According to the Schedule TO, the principal executive offices of the
Purchaser are located at 750 E. Swedesford Road, Valley Forge, Pennsylvania
19482. All information in this Schedule 14D-9 or incorporated by reference
herein concerning the Purchaser or its affiliates, or actions or events in
respect of any of them, was provided by the Purchaser or the Parent, and the
Company assumes no responsibility therefor.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
Certain contracts, agreements, arrangements or understandings between the
Company or its affiliates with certain of its directors and executive officers
are, except as noted below, (i) described in the section entitled "PART I, ITEM
1: BUSINESS -- SUPPLY" of the Company's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the Commission on March 30, 2000, a copy of
which is filed as Exhibit 1 hereto and hereby incorporated herein by reference
and (ii) described in the sections entitled "INFORMATION ABOUT THE BOARD OF
DIRECTORS AND COMMITTEES," "EXECUTIVE OFFICERS OF THE COMPANY," "EXECUTIVE
COMPENSATION," and "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" in the
Company's Proxy Statement for its Annual Meeting of Stockholders to be held on
May 16, 2000 (the "Proxy Statement"). The Proxy Statement, together with
Definitive Additional Materials filed by the Company in connection with the
Proxy Statement, are filed as Exhibit 2 hereto and are hereby incorporated
herein by reference. Except as described or referred to herein and in Exhibits 1
and 2, to the knowledge of the Company, as of the date hereof, there are no
material agreements, arrangements or understandings, or any actual or potential
conflicts of interest, between the Company or its affiliates and (i) the
Company, its executive officers, directors or affiliates; or (ii) the Parent or
the Purchaser, their respective officers, directors or affiliates.
As mentioned in the Company's Proxy Statement, the Company's Board of
Directors (the "Board") has approved employment contracts with certain executive
officers. The Company has since entered into such employment contracts with the
following executive officers (each an "Executive" and collectively, the
"Executives"): Martin S. Grimnes, Chairman and Chief Executive Officer; William
M. Dubay, President and Chief Operating Officer; Robert Fuller, Vice President,
Sales; Alan M. Chesney, Vice President, Chief Financial Officer and Treasurer;
and Thomas L. Wallace, Vice President, Manufacturing; and the Company's
subsidiary, Brunswick Technologies Europe Ltd. has entered into an employment
contract with Malcolm Lee, General Manager of Brunswick Technologies Europe,
Ltd. (each an "Employment Agreement" and
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collectively, the "Employment Agreements"). The Employment Agreements are
renewable year to year unless terminated by either party. A copy of the Form of
Employment Agreement for each of the Executives is filed herewith as Exhibit 3
and hereby incorporated by reference.
The term of employment under each of the Employment Agreements is for one
year, unless extended or earlier terminated as provided therein (the "Employment
Term"). Pursuant to each Employment Agreement, each Executive will receive a
base salary, subject to annual review for possible increase by the Compensation
Committee of the Board as follows: Martin Grimnes, $156,222; William Dubay,
$138,208; Alan Chesney, $116,363; Robert Fuller, $125,475; Thomas Wallace,
$122,371; Malcolm Lee, L49,434 ("Base Salary"). Each Executive may participate
with other senior management personnel of the Company in discretionary bonuses
authorized and declared by the Compensation Committee and Board. Each Executive
may participate in any employee benefit plans of the Company relating to
pension, profit sharing, retirement, health insurance, medical reimbursement or
others adopted by the Company for the benefit of its executives. Each Executive
shall further be eligible to participate in any other fringe benefits which may
be available to the Company's executive employees, including stock option or
incentive plans adopted by the Board, life or disability insurance, a reasonable
expense account, along with such vacation, sick leave and other benefits
provided by the Company in its personnel policies or otherwise.
Each Executive's employment under his Employment Agreement may be
terminated in the event of the death or permanent disability of the Executive
during the Employment Term, for "Just Cause" as defined therein, or without Just
Cause upon ninety (90) days written notice. Each Executive may terminate his
employment for "Good Reason" as defined therein, or without Good Reason upon ten
(10) days written notice. In the event of the death or permanent disability of
the Executive during the Employment Term, the Executive or the Executive's
estate or designated beneficiary shall be entitled to receive compensation for a
one year period. In the event of a termination by the Company without Just
Cause, or by the Executive for Good Reason, the Company shall be obligated to
pay the Executive his Base Salary and other compensation due under the
Employment Agreement for twelve months or until the end of the Employment Term,
whichever is greater. "Other compensation" as defined in the Employment
Agreement includes the Executive's pro-rata share of any discretionary bonuses
that would otherwise have been payable had he remained employed through the
Employment Term, along with costs to continue medical insurance under COBRA.
Upon a "Hostile Change in Control" of the Company as defined therein, the
Employment Agreements provide that they automatically extend for three years. If
the Executive is terminated by the Company other than for Just Cause or by
reason of the Executive's death or permanent disability (which would include a
termination by the Executive for Good Reason as defined in the Employment
Agreement), the Executive would receive a severance amount equal to three times
both the Executive's highest base salary plus the highest bonus in effect during
the three year period, (as defined, in the case of a Change in Control, by
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")). If the Executive remains in the employ of the Company one year after
the Hostile Change in Control, he would receive a bonus equal to one times the
base salary plus bonus, and the severance amount would reduce to a multiple of
two. A Hostile Change in Control means a Change in Control which has not been
approved by at least two thirds of the Board incumbent as of April 17, 2000 at
or before the earlier of (i) a public announcement by any person, whether before
or after execution of the agreement, of the intention to obtain a sufficient
number of voting securities of the Company as would upon their acquisition
constitute a Change in Control or (ii) upon a Change of Control.
For purposes of the Employment Agreements and severance arrangements
described above, a Change in Control ("Change in Control") means and shall be
deemed to occur upon an acquisition (other than directly from the Company) of
any voting securities of the Company (the "Voting Securities") by any "Person"
(as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), immediately
after which such Person has "Beneficial Ownership" (within the meaning of Rule
13D-3 promulgated under the Exchange Act) of twenty-five percent (25%) or more
of the combined voting power of the Company's then outstanding Voting
Securities; provided, however, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) shall not constitute an acquisition which would cause a
Change
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in Control; and provided further that an acquisition for these purposes shall be
deemed to include a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 60% of the number of
outstanding securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation. A "Non-Control Acquisition"
shall mean an acquisition by (i) an employee benefit plan (or a trust forming a
part thereof) maintained by (1) the Company or (2) any corporation or other
Person of which a majority of its voting power of its voting equity securities
or equity interest is owned, directly or indirectly, by the Company (for
purposes of this definition, a "Subsidiary"), (ii) the Company or its
Subsidiaries, or (iii) any Person in connection with a "Non Hostile Change of
Control" (as hereinafter defined).
In the event of a "Non-Hostile Change in Control" which is defined as a
Change in Control approved by at least two thirds of the Incumbent Board which
is not a Hostile Change in Control (as defined in the Employment Agreement),
each Employment Agreement would automatically convert to a two year contract.
Upon any Change in Control, each Executive would have the right to terminate the
Employment Agreement for any reason within six months of the date of the Change
in Control and receive an eighteen month severance payment, provided that in the
case of a Change in Control approved by at least two thirds of the Incumbent
Board, the Executive is subject to a non-competition agreement during the
eighteen month severance period.
In the event that any payments or benefits paid to the Executive under his
Employment Agreement, or for his benefit paid or payable or distributed or
distributable pursuant to the terms of the Employment Agreement, or otherwise in
connection with, or arising out of, his employment with the Company or of a
substantial portion of its assets (a "Payment" or "Payments"), would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive will be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties, other than interest and penalties imposed by reason of the
Executive's failure to file timely a tax return or pay taxes shown due on his
return, imposed with respect to such taxes and the Excise Tax), including any
Excise Tax imposed upon the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments. The initial determination as to whether a Gross-Up Payment is
required pursuant to the Employment Agreement, and the amount of such Gross-Up
Payment, shall be made by an accounting firm selected by the Company and
reasonably acceptable to the Executive, which is designated as one of the five
largest accounting firms in the United States.
The Company shall also pay legal fees and related expenses incurred by each
Executive as a result of the Executive's termination of employment or in the
event the Executive seeks to obtain or enforce any right or benefit provided by
the Employment Agreement or relating to Executive's employment by the Company.
The Company shall also, consistent with applicable law and the Company's bylaws,
indemnify and hold each Executive harmless in connection with any claims that
arise out of his employment by the Company. The Employment Agreements further
provide that all claims or disputes, other than for equitable relief to enforce
the non-competition restrictions, shall be subject to final and binding
arbitration before the American Arbitration Association.
David E. Sharpe, until his resignation from the Board on May 1, 2000, was a
member of the Board and Compensation Committee. Mr. Sharpe is an executive
officer of Vetrotex CertainTeed Corporation ("Vetrotex"), a Delaware corporation
and subsidiary of Parent. Vetrotex holds approximately 14% of the Shares of the
Company and is a major supplier of raw materials to the Company.
By facsimile to the Company's Clerk dated April 17, 2000, by courier
dropped at the reception desk of Eaton, Peabody, Bradford & Veague on April 17,
2000, and by overnight courier to the Company's Clerk delivered on April 18,
2000, Vetrotex requested that the Company call a Special Meeting of Stockholders
for the purposes of (1) amending its articles of organization to provide that
the directors of the Company can be removed by majority vote of the Shares
(rather than two thirds of the Shares, as presently required) and (2)
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to remove and replace all of the incumbent members of the Board without cause
(the "Vetrotex Request"). By letter dated April 24, 2000, the Company advised
Vetrotex of its view that the Vetrotex Request was not made in compliance with
the applicable provisions of the Maine Business Corporation Act and requested
that Vetrotex renew its request for a Special Meeting of Stockholders in a
manner that complied with the Maine Business Corporation Act. By letter dated
April 25, 2000 received from counsel for Vetrotex, Vetrotex declined to reissue
the Vetrotex Request and insisted that the Company call a Special Meeting of
Stockholders. The Clerk of the Company, by notice dated May 2, 2000, advised the
stockholders of the Company of the Vetrotex Request and set the date of the
Special Meeting of Stockholders for June 16, 2000 subject to a determination by
the Company that the Vetrotex Request was made in accordance with the applicable
provisions of the Maine Business Corporation Act. Vetrotex has not indicated the
identity of the slate of directors it would propose to replace the incumbent
members of the Company's Board pursuant to the Vetrotex Request in the event a
Special Meeting of Stockholders is held. The Company intends to oppose adoption
of the resolutions set forth in the Vetrotex Request and the Company intends to
oppose any solicitation by Vetrotex or its affiliates with respect to the
proposed Special Meeting of Stockholders.
On April 25, 2000, Vetrotex also filed a preliminary proxy statement with
the Commission (the "Opposition Proxy") in opposition to the Company's
solicitation with respect to its Annual Meeting of Stockholders scheduled for
May 16, 2000. The Opposition Proxy opposes Proposal No. 2 of the Company's Proxy
Statement, the amendment to the Company's 1997 Equity Incentive Plan to increase
the number of shares of common stock available for awards under the plan from
421,740 to 821,740. The Board has voted not to issue any awards under the Plan
to its executive officers for a 90 day period to dispel rumors that the Company
would issue large awards to management in advance of a transaction.
On April 26, 2000, the Company filed suit in the United States District
Court for the District of Maine in Portland, Maine, seeking declaratory,
injunctive and other relief against Vetrotex, the Purchaser, the Parent, and
Saint-Gobain (collectively, the "Defendants"). The Company's five-count
Complaint and Jury Demand ("Complaint") alleges violations of federal securities
and State of Maine laws by the Defendants. The Company alleges that the
Defendants, owners of approximately 14% of the outstanding Shares of the Company
and one of the Company's major suppliers, violated Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as Amended (the "Exchange Act"), and SEC
regulations thereunder, by failing to make timely amendments to their previously
filed Schedule 13D disclosing their intent to acquire control of the Company,
and by failing to comply with SEC requirements concerning the delivery to the
Company of its Schedule TO and Offer materials. The Company has also made
separate allegations regarding violations of Maine law for tortious interference
with business relations and civil conspiracy.
Simultaneous with the filing in court of its Complaint, the Company also
filed motions seeking a temporary restraining order and a preliminary injunction
preventing the Defendants from taking certain actions in its efforts to continue
the Offer (the "Motions"). On April 28, 2000, Defendants Vetrotex, Purchaser and
Parent filed an objection to the Company's Motions. On May 2, 2000, the court
denied the Company's Motions; however, the Complaint has not been dismissed and
remains under consideration by the court. In light of the fact that such
Defendants have admitted a violation of the securities regulations, the Company
has not determined the future course of the litigation at this time, but notes
that the court reserved on the substantive issues presented by the Complaint.
The Company believes that although its preliminary Motions were denied, its
Complaint has merit, and that the filing of this litigation was necessary in
order to allow the Company sufficient time to respond to the Offer and assure
that the Company's shareholders and the investing public at large are fully and
fairly apprised of all facts while deciding whether to tender their Shares. The
entire text of the Complaint is filed herewith as Exhibit 4, and is hereby
incorporated by reference.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) Recommendation. On April 30, 2000 the Board unanimously determined
(other than Mr. Sharpe, who was not in attendance at the meeting) that the Offer
is inadequate and not in the best interests of the Company and its stockholders.
ACCORDINGLY, THE BOARD RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS REJECT THE
OFFER AND NOT TENDER ANY SHARES TO THE PURCHASER.
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The letter to stockholders communicating the Board's recommendation and a
form of the press release announcing such recommendation are filed as Exhibits 5
and 6 hereto, respectively, and are incorporated herein by reference.
(b) Reasons. In reaching the determination and recommendation set forth in
paragraph (a) above, the Board considered numerous factors, including, without
limitation, the following:
(i) The business, financial condition, and results of operations of
the Company.
(ii) The Company's business plans and current business strategy and
future prospects, which the Board believes will generate enhanced value for
its shareholders and other constituencies with the assistance of its
financial advisors.
(iii) The nature of the industry in which the Company operates and the
Company's competitive position in such industry, which the Board believes
is enhanced due to the Company's possession of the most advanced composite
reinforcement technology and the strongest market position in the industry,
making the Company uniquely positioned for growth through the burgeoning
demands for advanced composite technologies by the transportation,
infrastructure, marine, industrial, and oil and gas industries.
(iv) A presentation by McDonald Investments Inc. ("McDonald
Investments"), financial advisor to the Company, relating to various
financial and other matters concerning the Company and the Offer, and the
opinion delivered orally at the April 30, 2000 meeting by McDonald
Investments stating that the cash price of $8 per Share proposed to be paid
to the Company's stockholders by the Purchaser pursuant to the Offer is
inadequate from a financial point of view; such opinion being based on
various assumptions and subject to various limitations as discussed in the
written opinion delivered to the Board on May 3, 2000 (the "Opinion"). A
copy of the Opinion is attached as Annex A hereto and filed as Exhibit 7.
Stockholders are urged to read carefully the Opinion in its entirety.
(v) The Board's belief that the Company's business, operations and
strategic position afford significant inherent additional value to
strategic parties.
(vi) The Board's belief, based in part on the factors referred to
above, that the per Share price of the Offer does not reflect either the
true current value of the Company or the significant long-term values
inherent in the Company.
(vii) The Board's belief, in the absence of additional information
repeatedly requested by the Company as referenced in the April 17, 2000
letter of the Company to Saint-Gobain (a copy of which is filed as Exhibit
8 hereto and incorporated herein by reference), that acquisition of the
Company as contemplated in the Offer would have a significantly adverse
effect on the Company's relationship with employees, customers, suppliers
and other constituencies, including the communities that the Company serves
and in which its facilities are located.
(viii) The fact that consummation of the Offer is conditioned upon,
among other things: (A) the rights to purchase preferred stock (the
"Rights") issued to holders of the Company's common stock pursuant to that
certain Rights Agreement, dated April 17, 2000, between the Company and
State Street Bank and Trust Company being redeemed by the Board or
otherwise being rendered null and void and inapplicable to the Offer (the
Board has determined to take no action which would redeem the Rights at
this time); (B) the provisions of Section 611-A of the Maine Business
Corporation Act being inapplicable to the acquisition of Shares pursuant to
the Offer and any subsequent business transaction involving the Purchaser,
Parent or Saint-Gobain with the Company, including the merger proposed in
the Offer; and (C) the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall
have been expired or been terminated by the expiration date of the Offer.
(c) Intent To Tender. To the Company's knowledge, none of its executive
officers, directors, affiliates or subsidiaries currently intend to tender any
Shares that are held of record or are beneficially owned by them pursuant to the
Offer.
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ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
(a) McDonald Investments.
Pursuant to a letter agreement dated April 27, 2000 (the "Letter
Agreement"), the Company has retained McDonald Investments in connection with
the Offer. Pursuant to the Letter Agreement, the Company has paid a retainer fee
of $35,000 upon its execution of its engagement letter with the Company and a
fee of $200,000 in connection with its delivery of a report or opinion to the
Company.
The Company has agreed with McDonald Investments that if a transaction
takes place involving the sale of the business and assets of the Company by way
of tender offer, merger, asset sale, divestiture, other transaction or
combination thereof (a "Transaction"), the Company will pay to McDonald
Investments at the closing of such Transaction a transaction fee equal to 2% of
the first $47.6 million of the transaction value and 3% of the amount that
exceeds $47.6 million (the "Transaction Fee").
The Company has also agreed to reimburse McDonald Investments for its
reasonable out-of-pocket expenses, including legal fees, incurred in connection
with its engagement by the Company. In addition, the Company has agreed to
indemnify McDonald Investments against certain liabilities in connection with
its engagement.
McDonald Investments is an investment banking firm engaged on a regular
basis to provide a range of investment banking and financial advisory services,
including the valuation of businesses and their securities in connection with
mergers and acquisitions.
(b) Morrow & Co., Inc.
The Company has also retained Morrow & Co., Inc. ("Morrow") to assist the
Company with its communications with stockholders with respect to, and to
provide other services to the Company in connection with, the Offer. The Company
will pay Morrow $200,000 for its services and will reimburse Morrow for its
reasonable out-of-pocket expenses incurred in connection therewith.
Except as set forth above, neither the Company nor any person acting on its
behalf has employed, retained or compensated any person to make solicitations or
recommendations to stockholders with respect to the Offer.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
To the best of the Company's knowledge, except as set forth herein, no
transactions in the Shares have been effected during the past 60 days by the
Company or by any executive officer, director, affiliate or subsidiary of the
Company.
On April 11, 2000 (i) the Company issued to its independent directors, in
the aggregate, 2,592 shares of Common Stock for directors' fees due in
accordance with the Company's standard director compensation policy and (ii)
granted options to purchase 1,000 shares of Common Stock to Kenneth Hatten, a
recently appointed independent director, consistent with prior grants made to
newly appointed directors of the Company.
ITEM 7. CERTAIN PLANS OR PROPOSALS
The Company, consistent with its long-term strategy and past practices,
continues to discuss possible strategic transactions with third parties. At the
April 30, 2000 Board Meeting, the Board further concluded that it was desirable
and in the best interests of the Company and its stockholders that management,
with the assistance and advice of McDonald Investments and the Company's legal
advisors, proceed to develop and evaluate alternatives to the Offer. The Company
may undertake negotiations and actions which relate to or would result in: (i)
an extraordinary transaction such as a merger or reorganization (including a
leveraged buyout or other recapitalization transaction) involving the Company or
any of its subsidiaries; (ii) a purchase, sale or transfer of a material amount
of assets by the Company or any of its subsidiaries; (iii) a tender offer or
exchange offer for, or other acquisition of, securities by or of the Company;
(iv) a material change in the
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present capitalization or dividend policy of the Company; or (v) capital
investments involving the incurrence of additional debt or the issuance of
additional Shares or voting preferred stock, the proceeds of which will be used
to finance growth through expansion and acquisitions. There can be no assurance
that any of the aforementioned activity will result in a transaction being
recommended to the Board or that any transaction which is recommended will be
authorized or consummated.
The Board has determined that disclosure at this time with respect to the
parties to, and the possible terms of, any transactions or proposals of the type
referred to above in this Item 7 might jeopardize the institution or
continuation of any discussions or negotiations that the Company may conduct.
Accordingly, the Board adopted a resolution at the April 30, 2000 Board Meeting
instructing management not to disclose the possible terms of any such
transactions or proposals, or the parties thereto, unless and until an agreement
in principle relating thereto has been reached.
ITEM 8. ADDITIONAL INFORMATION
None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
Exhibit 1. Part I, Item 1: "Business -- Supply," of the Company's
Annual Report on Form 10-K for the year ended December 31,
1999 (previously filed with the Commission on March 30, 2000
and hereby incorporated by reference).
Exhibit 2. Definitive Proxy Statement of the Company dated April 17,
2000 (previously filed with the Commission on April 17, 2000
and hereby incorporated by reference), as supplemented by
Definitive Additional Materials dated April 25, 2000
(previously filed with the Commission on April 25, 2000 and
hereby incorporated by reference) and as supplemented by
Definitive Additional Materials dated April 28, 2000
(previously filed with the Commission on April 28, 2000 and
hereby incorporated by reference).
Exhibit 3. Form of Employment Agreement with certain executive officers
of the Company.
Exhibit 4. Complaint filed by the Company on April 26, 2000.
Exhibit 5. Letter to Stockholders, dated May 3, 2000.*
Exhibit 6. Press Release issued by the Company on May 3, 2000.
Exhibit 7. Opinion of McDonald Investments dated May 3, 2000 (contained
as Annex A to this Schedule 14D-9 and hereby incorporated by
reference).*
Exhibit 8. Letter of the Company to Saint-Gobain dated April 17, 2000.*
</TABLE>
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* Included in copies mailed to stockholders. This Schedule 14D-9 is being filed
electronically with the SEC on its EDGAR database. Electronic copies of this
Schedule 14D-9 and all exhibits filed herewith or incorporated herein by
reference may be obtained for free on the SEC's Internet web site at
http://www.sec.gov.
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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.
BRUNSWICK TECHNOLOGIES, INC.
By: /s/ MARTIN S. GRIMNES
------------------------------------
Name: Martin S. Grimnes
Title: Chief Executive Officer
Dated: May 3, 2000
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ANNEX A
MCDONALD INVESTMENT LOGO
May 3, 2000
Board of Directors
Brunswick Technologies
43 Bibber Parkway
Brunswick, ME 04011
Members of the Board:
We understand that on April 20, 2000, VA Acquisition Corporation, a Maine
corporation (the "Purchaser") and a wholly owned subsidiary of CertainTeed
Corporation, a Delaware corporation (the "Parent"), both of which are indirect
wholly owned subsidiaries of Compagnie de Saint-Gobain, a French corporation
("Saint-Gobain"), disclosed in a Tender Offer Statement on Schedule TO (the
"Schedule TO"), dated April 20, 2000 and filed with the Securities and Exchange
Commission, that it has commenced a tender offer to purchase all outstanding
shares of Common Stock, par value $0.0001 (the "Common Stock"), including
associated rights to purchase Preferred Stock, of Brunswick Technologies Inc.
(the "Company") not already beneficially owned by Parent, at a price of $8.00
per share, net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated April
20, 2000 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with the Offer of Purchase and any amendments or supplements thereto,
collectively constitute the "Offer") included in the Schedule TO.
You have asked for our opinion as to whether the Parent Offer is adequate
from a financial point of view to the holders of Common Stock other than the
Parent and its affiliates.
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of the Company;
(ii) reviewed certain internal financial statements and other financial
and operating data concerning the Company prepared by the
management of the Company;
(iii) reviewed certain financial projections prepared by the management
of the Company;
(iv) discussed the past and current operations and financial condition
and the prospects and business strategy of the Company with senior
executives of the Company;
(v) toured and inspected the main manufacturing facility of the
Company;
(vi) reviewed the reported prices and trading activity for the Common
Stock;
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(vii) compared the financial performance of the Company and the prices
and trading activity of the Common Stock with that of certain
other comparable publicly-traded companies and their securities;
(viii) reviewed the financial terms, to the extent publicly available,
of certain comparable acquisition transactions;
(ix) participated in preliminary exploratory discussions with third
parties in connection with our evaluation of the Parent Offer;
(x) reviewed the Offer to Purchase, the Schedule TO and certain
related documents;
(xi) reviewed possible synergies for certain prospective buyers in the
areas of glass fiber and carbon fiber as well as SG&A synergies
for all buyers.
(xii) performed such other analyses and considered such other factors
as we have deemed appropriate.
We have assumed and relied upon, without independent verification, the
accuracy and completeness of the information reviewed by us for the purposes of
this opinion. With respect to the Company's financial projections, we have
assumed that they have been reasonably prepared on bases reflecting management's
best currently available estimates and judgements of the future financial
performance of the Company. We have not made any independent valuation or
appraisal of the assets or liabilities of the Company, nor have we been
furnished with any such appraisals. Our opinion is necessarily based on
economic, market and other conditions as in effect on, and the information made
available to us as of, the date hereof.
It is understood that this letter is for the information of the Board of
Directors of the Company and may not be used for any other purpose without our
prior written consent, except that this opinion may be included in its entirety
in any filing made by the Company in respect of the tender offer, or otherwise
required, with the Securities and Exchange Commission. This opinion is not
intended to be and shall not constitute a recommendation to any holder of Common
Stock as to whether to tender shares of Common Stock pursuant to the Parent
Offer.
We have acted as financial advisor to the Board of Directors of the Company
in Connection with this transaction and will receive a fee for our services.
Based upon and subject to the foregoing, we are of the opinion on the date
hereof that the Parent Offer is inadequate from a financial point of view to the
holders of Common Stock other than the Parent and its affiliates.
Very truly yours,
McDONALD INVESTMENTS INC.
By: /s/ RAJ TRIKHA
------------------------------------
Raj Trikha
Managing Director
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Exhibit 3
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered as of the 14th day of April, 2000, by and
between Brunswick Technologies, Inc. (hereinafter referred to as the
"Corporation") [as to Malcolm Lee, his employment is with Brunswick Technologies
Europe, Ltd., but references to "the Corporation" include Brunswick
Technologies, Inc. relative to termination and change of control matters] and
[ name ] (hereafter referred to as the "Executive").
WHEREAS, the Executive has heretofore been employed as [______________
title]; and
WHEREAS, it is essential to the best interests of the Corporation to
foster the continuous employment of key management personnel. The Corporation,
through its Board of Directors, recognizes that the possibility of a change in
control of the Corporation exists and that such possibility, and the uncertainty
and questions which it may raise among senior management, may result in the
departure or distraction of senior management personnel to the detriment of the
Corporation and the Corporation's stockholders; and
WHEREAS, the Board of Directors has determined that it is in the best
interests of the Corporation and its stockholders that the Corporation execute
this Agreement, to induce Executive to remain in the employ of the Corporation
and devote his full time and efforts to the affairs of the Corporation; and
WHEREAS, the Executive is unwilling to continue in the employment of
the Corporation if this Agreement is not executed; and
WHEREAS, the parties therefore desire by this writing to set forth the
employment relationship of the Corporation and the Executive.
NOW, THEREFORE, it is AGREED as follows:
1. RECITATIONS ACCURATE; EMPLOYMENT.
(a) The above recitations are accurate.
(b) The Executive is employed as [_________________ title]. The
Executive shall render administrative and management services to the Corporation
such as have been historically performed by him. He shall also promote, to the
extent permitted by law, the business of the Corporation. The Executive's other
duties shall be such as the Board of Directors may from time to time reasonably
direct and which are customarily performed by persons situated in a similar
executive capacity, including normal duties as an officer of the Corporation.
2. BASE SALARY. The Corporation agrees to pay the Executive
during the term of this Agreement compensation in the amount of $_______ per
annum annual basis to be paid on a weekly basis ("Base Salary"); provided, that
the rate of such salary shall be
<PAGE> 2
reviewed by the Compensation Committee of the Board of Directors of the
Corporation not less often than annually and may be increased, but not
decreased.
3. DISCRETIONARY BONUSES. The Executive shall be entitled to
participate in an equitable manner with all other senior management personnel of
the Corporation or its subsidiaries in discretionary bonuses authorized and
declared by the Compensation Committee of the Board of Directors of the
Corporation to its senior management executives. No other compensation provided
for in this Agreement shall be deemed a substitute for the Executive's right to
participate in such discretionary bonuses when and as declared by the
Compensation Committee of the Board of Directors.
4. (a) PARTICIPATION IN RETIREMENT AND MEDICAL PLANS. The
Executive shall be entitled to participate in any employee benefit plan of the
Corporation relating to pension, profit sharing, retirement, health insurance,
medical reimbursement or other employee benefit plans that the Corporation may
adopt for the benefit of its executives and, at Executive's option, for other
employees, consistent with the terms and conditions of such employee benefit
plans.
(b) EXECUTIVE BENEFITS; EXPENSES. The Executive shall be
eligible to participate in any fringe benefits which may be or become applicable
to the Corporation's executive employees including without limitation
participation in any stock option or incentive plans adopted by the Boards of
Directors, life or disability insurance, a reasonable expense account, and any
other benefits which are commensurate with the responsibilities and functions to
be performed by the Executive under this Agreement and in any event, no less
than equivalent to such benefits as have historically been available to the
Executive. The Corporation shall promptly reimburse Executive for all reasonable
out-of-pocket expenses which Executive shall incur in connection with his
services for the Corporation or its subsidiaries. In addition, the Executive
shall have the right to avail himself of such vacation, sick leave and other
benefits provided by personnel policies or otherwise, from time to time in
effect for other senior management personnel of the Corporation, and in any
event no less than equivalent to such benefits as have historically been
available to Executive.
5. EMPLOYMENT TERM. The initial term of employment under this
Agreement shall be for the one year period commencing April 14, 2000 and ending
April 13, 2001 and on each annual anniversary date from the date of commencement
of this Agreement the term of employment shall automatically be extended for an
additional one year period beyond the then effective expiration date unless
written notice from the Corporation or the Executive is received not less than
90 days prior to an anniversary date advising the other party that this
Agreement shall not be further extended (the "Employment Term"); provided,
however, that if the Effective Date of a Change in Control, as defined in
Section 9(a), occurs after such written notice has been given by Corporation,
but before the end of the Employment Term, Executive shall be entitled to the
Extended Employment Term and other provisions of Section 9 without regard to
such notification.
6. LOYALTY; NONCOMPETITION.
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(a) The Executive shall devote his full business time to the
performance of his employment under this Agreement. During the Employment Term
the Executive shall not engage in any business or activity contrary to the
business affairs or interests of the Corporation or any of its subsidiaries.
(b) Nothing contained in this Paragraph 6 shall be deemed to
prevent or limit the right of Executive to invest in the capital stock or other
securities of any business dissimilar from that of Employer, or, solely as a
passive or minority investor, in any business.
(c) In the event the Executive elects to terminate this
Agreement during the Window Period after a Non-Hostile Change in Control
pursuant to Section 9(d)(ii)(B)(II), for a period of eighteen (18) months (the
"Non-Compete Period"), Executive will not directly or indirectly engage in
activities similar or reasonably related to those in which Executive shall have
engaged hereunder during the Employment Term for, nor render services similar or
reasonably related to those which Executive shall have rendered hereunder during
the Term to, any person or entity whether now existing or hereafter established
which competes with (or has proposed or has specific plans to compete with) the
Corporation (as determined in good faith by the Board, which determination shall
be conclusive, a "Direct Competitor") in any line of business engaged in or
under development by the Corporation; nor shall Executive entice, induce or
encourage any of the Corporation's other employees to engage in any activity
which, were it done by Executive would violate any provision hereof. As used in
this Section the term "any line of business engaged in or under development by
the Corporation" shall be applied as at the Termination Date (as hereinafter
defined). No provision hereof shall be construed to preclude Executive from
performing the same services which the Corporation hereby retains Executive to
perform for any person or entity which is not a Direct Competitor of the
Corporation so long as Executive does not thereby violate any of the terms
hereof.
(d) Executive acknowledges that the restrictions contained
in this Section 6 correctly set forth the understanding of the parties at the
time this Agreement is entered into, are reasonable and necessary to protect the
legitimate interests of the Corporation, and that any violation will cause
substantial injury to the Corporation. In the event of any such violation, the
Corporation shall be entitled, in addition to any other remedy, to preliminary
or permanent injunctive relief. If any court having jurisdiction shall find that
any part of the restrictions set forth in this Agreement are unreasonable in any
respect, it is the intent of the parties that the restrictions set forth herein
shall not be terminated, but that this Agreement shall remain in full force and
effect to the extent (as to time periods and other relevant factors) that the
court shall find reasonable.
7. STANDARDS. The Executive shall perform his duties under this
Agreement in accordance with such reasonable standards expected of executives
with comparable positions in comparable organizations as may be established from
time to time by the Corporation's Board of Directors. The Corporation will
provide Executive with the
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<PAGE> 4
working facilities and staff customary for similar executives and necessary for
him to perform his duties.
8. TERMINATION AND TERMINATION PAY.
The Executive's employment under this Agreement shall be terminated
upon the following occurrences:
(a) The death or permanent disability of the Executive
during Employment Term, in which event the Executive or the Executive's estate
or his designated beneficiary shall be entitled to receive the compensation
payable to the Executive hereunder for a one year period following his date of
death or permanent disability. For the purposes of this Agreement, "permanent
disability" means a physical or mental infirmity which impairs the Executive's
ability to substantially perform his duties under this Agreement, with or
without reasonable accommodation, which continues for a period of at least one
hundred eighty (180) consecutive days ("Disability");
(b) The Corporation reserves the right to terminate this
Agreement at any time for Just Cause. Termination for "Just Cause" shall mean
termination for conviction of the Executive of a felony involving a crime of
moral turpitude, deliberate dishonesty to the Corporation involving substantial
material personal profit, or gross and willful failure to perform stated duties
after written notice from the Board of Directors detailing with specificity any
such failures and providing a reasonable opportunity to cure any such failures,
to the extent they are curable. Subject to the provisions of Section 9 hereof,
in the event this Agreement is terminated for Just Cause, the Corporation shall
only be obligated to continue to pay the Executive his Base Salary up to the
date of termination for Just Cause;
(c) Executive's employment under this Agreement may be
terminated at any time by a decision of the Board of Directors of the
Corporation, without Just Cause, upon ninety (90) days written notice to the
Executive. For the purposes of this Agreement, in the event the stockholders
approve a plan of complete liquidation of the Corporation or an agreement for
the sale or disposition by the Corporation of all or substantially all of its
assets, the Agreement shall be deemed terminated without Just Cause. In the
event Executive's employment under this Agreement is terminated by the Board of
Directors without Just Cause, as defined above, the Corporation shall be
obligated to continue to pay the Executive his Base Salary and "other
compensation" due under this Agreement up to the later of (i) the date of
termination of the Employment Term of this Agreement , (ii) 12 months from the
date of such termination. "Other compensation" as defined herein shall include
(i) the Executive's pro rata share of any discretionary bonuses that would have
been otherwise payable to the Executive had he remained employed through the
Employment Term, (ii) payment by the Corporation of the costs to continue any
medical insurance under COBRA for eighteen (18) months following termination or
to the maximum extent permissible under COBRA, and (iii) an amount equal to the
value of any benefits Executive would have received pursuant to
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<PAGE> 5
Section 4(b) had he remained an employee during the one year period following
termination;
(d) The Executive may terminate his employment for "Good
Reason." For purposes of this Agreement, "Good Reason" shall mean (i) a change
in the Executive's status, title, position or responsibilities (including
reporting responsibilities) which, in the Executive's reasonable judgment,
represents an adverse change from his status, title, position or
responsibilities as in effect immediately prior thereto; (ii) the assignment to
the Executive of any duties or responsibilities which, in the Executive's
reasonable judgment, are inconsistent with his status, title, position or
responsibilities; (iii) any removal of the Executive from or failure to
reappoint or reelect him to any of such offices or positions as he currently
holds (including Director of the Corporation), except in connection with the
termination of his employment for death, disability, Just Cause, or by the
Executive other than for Good Reason; (iv) a reduction in the Executive's Base
Salary or any failure to pay the Executive any compensation or benefits to which
he is entitled within five days of the date due; (v) a failure to increase the
Executive's Base Salary at least annually at a percentage of Base Salary no less
than the average of the percentage increases (other than increases resulting
from the Executive's promotion) granted to the Executive during the three full
years ended prior to the year of termination (or such lesser number of full
years during which the Executive was employed); (vi) the Corporation's requiring
the Executive to be based at any place outside a 30-mile radius from Brunswick,
Maine, except for reasonably required travel on the Corporation's business;
(vii) the failure by the Corporation to (A) continue in effect (without
reduction in benefit level, and/or reward opportunities) any material
compensation or employee benefit plan in which the Executive was participating
immediately prior thereto, unless a substitute or replacement plan has been
implemented which provides substantially identical compensation or benefits to
the Executive or (B) provide the Executive with compensation and benefits, in
the aggregate, at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other compensation or employee
benefit plan, program and practice as in effect at any time within ninety (90)
days preceding such failure; (viii) the insolvency or the filing (by any party,
including the Corporation) of a petition for bankruptcy of the Corporation; (ix)
any material breach by the Corporation of any provision of this Agreement; (x)
any purported termination of the Executive's employment for Just Cause by the
Corporation which does not comply with the terms of Section 8(c) hereof; or (xi)
the failure of the Corporation to obtain an agreement, satisfactory to the
Executive, from any successor or assign of the Corporation to assume and agree
to perform this Agreement, as contemplated in Section 10(a) hereof. In the event
the Executive terminates his employment under this Agreement for Good Reason, as
defined above, the Corporation shall be obligated to continue to pay the
Executive his Base Salary and "other compensation" due under this Agreement up
to the later of (i) the date of termination of the Employment Term of this
Agreement or, (ii) 12 months from the date of such termination. The Executive's
right to terminate his employment pursuant to this Section 8(d) shall not be
affected by his incapacity due to physical or mental illness.
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<PAGE> 6
(e) The Executive may voluntarily terminate his employment
hereunder at any time without Good Reason, upon ten (10) days written notice.
9. CHANGE IN CONTROL.
(a) Notwithstanding anything herein to the contrary, an
"Extended Employment Term" shall commence on the first date on which a Change in
Control occurs (the "Effective Date"). The Extended Employment Term shall be for
a period of three years in the event of a Hostile Change in Control and two
years in the event of a Non-Hostile Change in Control. The Extended Employment
Term shall automatically be extended for a one year period beyond the expiration
date unless written notice from the Corporation or the Executive is received not
less than ninety (90) days prior to the expiration date of the Extended Term,
advising the other party that this Agreement shall not be further extended.
(b) Notwithstanding anything contained herein to the
contrary, if the Executive's employment is terminated prior to the Effective
Date and the Executive reasonably demonstrates that such termination occurred in
connection with, or in anticipation of, a Change in Control, then for all
purposes the Effective Date shall mean the date immediately prior to the date of
such termination.
(c) The Extended Employment Term shall:
(i) In the event of a Hostile Change in Control (as
defined in Section 10(b) below) commence on the Effective Date and continue for
a period of three (3) years from the Effective Date and for such additional
annual periods as it is automatically extended as provided in Section 9(a); or
(ii) In the event of a Non-Hostile Change in Control
(as defined in Section 10(c) below) commence on the Effective Date and continue
for a period of two (2) years from the Effective Date and for such additional
annual periods as it is automatically extended as provided in Section 9(a).
(d) During the Extended Employment Term:
(i) In the event of a Hostile Change in Control:
A. In addition to other amounts payable hereunder, if
the Executive remains employed with the Corporation through the first
anniversary of the Effective Date, the Corporation shall pay to the Executive a
Special Bonus (the "Special Bonus") in recognition of Executive's services
during the crucial one-year transition period following the Change in Control,
in cash equal to the sum of (i) Executive's base salary at the highest rate in
effect at any time subsequent to the 90th day prior to the Effective Date, and
(ii) the annual bonus paid or payable to the Executive for the most recently
completed fiscal year during the Extended Employment Term. The Special
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<PAGE> 7
Bonus shall be paid in cash within thirty (30) days from the date of expiration
of the first anniversary of the Effective Date.
B. If the Executive's employment with the
Corporation shall be terminated (other than by reason of death), (x) by the
Corporation other than for Just Cause or Disability, or (y) by the Executive for
Good Reason, the Executive shall be entitled to the following:
I. the Corporation shall pay the Executive
all accrued compensation;
II. the Corporation shall pay the Executive
as severance pay in a single payment an
amount in cash equal to three times the
sum of the Executive's "base amount" as
defined in Section 280G(b)(3) of the
Internal Revenue Code of 1986, as
amended (the "Code"), less one dollar,
provided, however, that if the Special
Bonus has been paid to the Executive
pursuant to Section 9(d)(i)(A) above,
the multiplier of "three" above shall
be decreased to "two."
(ii) In the event of a Non-Hostile Change in
Control:
A. The Executive
may within a period commencing on
the Effective Date and ending six
(6) months thereafter (the "Window
Period"), elect to terminate this
Agreement by written notice to the
Corporation given within five (5)
days prior to the last day of the
Window Period.
B. If the
Executive's employment with the
Corporation shall be terminated
(other than by reason of death), (1)
by the Corporation other than for
Just Cause or Disability, (2) by the
Executive for Good Reason or (3) by
the Executive within the Window
Period, the Executive shall be
entitled to the following:
I. The Corporation shall pay the Executive
all accrued compensation and
II. The Corporation shall pay the Executive
as severance pay in a single payment an
amount in cash equal to the greater of
(x) the total compensation payable
under this Agreement from
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the date of termination through the
date of expiration of the Extended Term
(including any extensions thereof) or
(y) the total compensation that would
be payable under this Agreement
assuming the Extended Employment Term
expired eighteen (18) months after the
date of termination. However, and only
in the event the Executive elects to
terminate this Agreement during the
Window Period other than for Good
Reason the compensation payable to
Executive under this Section 9(d)(ii)B
shall be payable ratably for an 18
month period in consideration of
Executive's agreement not to compete
with the Corporation during said period
as provided in Section 6(c) above.
(e) In addition to payment of amounts due to Executive
pursuant to Sections (9)(d)(i)(A) or 9(d)(ii)(B) above, if the Executive's
employment with the Corporation shall be terminated (other than by reason of
death), (1) by the Corporation other than for Just Cause or Disability, (2) by
the Executive for Good Reason or (3) by the Executive within the Window Period,
(as provided in Section 9(d)(ii)(A) above):
(i) The Corporation shall (x) pay to the Executive the costs
to continue any medical insurance under COBRA for
eighteen (18) months following termination, or to the
maximum extent permissible under COBRA, and (y) an
amount equal to the value of any benefits Executive
would have received pursuant to Section 4(b) had he
remained an employee during the two year period
following termination. This Section shall not be
interpreted so as to limit any benefits to which the
Executive, his dependents or beneficiaries may be
entitled under any of the Corporation's employee benefit
plans, programs or practices following the Executive's
termination of employment, including without limitation,
retiree medical and life insurance benefits;
(f) The amounts provided for in Sections 9(a) through (e)
shall be paid within five (5) days after the Executive's Termination Date.
(g) The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment.
(h) In the event that any payments or benefit (within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the "Code")), to the Executive or for his benefit paid or payable or
distributed or distributable pursuant to
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the terms of this Agreement or otherwise in connection with, or arising out of,
his employment with the Company or of a substantial portion of its assets (a
"Payment" or "Payments"), would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive will be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties, other than interest and penalties imposed
by reason of the Executive's failure to file timely a tax return or pay taxes
shown due on his return, imposed with respect to such taxes and the Excise Tax),
including any Excise Tax imposed upon the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.
(i) An initial determination as to whether a Gross-Up
Payment is required pursuant to this Agreement and the amount of such Gross-Up
Payment shall be made at the Corporation's expense by an accounting firm
selected by the Corporation and reasonably acceptable to the Executive which is
designated as one of the five largest accounting firms in the United States (the
"Accounting Firm"). The Accounting Firm shall provide its determination (the
"Determination"), together with detailed supporting calculations and
documentation to the Corporation and the Executive within five days of the
Termination Date if applicable, or such other time as requested by the
Corporation or by the Executive (provided the Executive reasonably believes that
any of the Payments may be subject to the Excise Tax) and if the Accounting Firm
determines that no Excise Tax is payable by the Executive with respect to a
Payment or Payments, it shall furnish the Executive with an opinion reasonably
acceptable to the Executive that no Excise Tax will be imposed with respect to
any such Payment or Payments. Within ten days of the delivery of the
Determination to the Executive, the Executive shall have the right to dispute
the Determination (the "Dispute"). The Gross-Up Payment, if any, as determined
pursuant to this Section 9(i) shall be paid by the Corporation to the Executive
within five (5) days of the receipt of the Accounting Firm's Determination. Upon
the final resolution of a Dispute, the Corporation shall promptly pay to the
Executive, any additional amount required by such resolution. If there is no
Dispute, the Determination shall be binding, final and conclusive upon the
Corporation and the Executive subject to the application of Sections 9(h) above
and 9(j) below. Nothing in this Section alters or impairs the rights of the
Executive under Sections 9(h) and 9(j), which shall control over this
Subsection.
(j) Notwithstanding anything contained in this Agreement to
the contrary, in the event that, according to the Determination, an Excise Tax
will be imposed on any Payment or Payments, the Corporation shall pay to the
applicable government taxing authorities as Excise Tax withholding, the amount
of the Excise Tax that the Corporation has actually withheld from the Payment or
Payments.
10. DEFINITIONS.
(a) CHANGE IN CONTROL. A "Change in Control" shall mean
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<PAGE> 10
an acquisition (other than directly from the Corporation) of any voting
securities of the Corporation (the "Voting Securities") by any "Person" (as the
term person is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), immediately after which
such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty-five percent (25%) or more of the
combined voting power of the Corporation's then outstanding Voting Securities;
provided, however, in determining whether a Change in Control has occurred,
Voting Securities which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition which would cause a
Change in Control; and provided further that an acquisition for these purposes
shall be deemed to include a merger or consolidation of the Corporation with any
other corporation, other than a merger or consolidation which would result in
the Voting Securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 60% of the number of
outstanding securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation. A "Non-Control Acquisition"
shall mean an acquisition by (i) an employee benefit plan (or a trust forming a
part thereof) maintained by (A) the Company or (B) any corporation or other
Person of which a majority of its voting power or its voting equity securities
or equity interest is owned, directly or indirectly, by the Corporation (for
purposes of this definition, a "Subsidiary") (ii) the Corporation or its
Subsidiaries, or (iii) any Person in connection with a "NonHostile Change in
Control" (as hereinafter defined).
(b) HOSTILE CHANGE IN CONTROL. A "Hostile Change in Control"
shall mean a Change in Control which has not been approved by at least two
thirds of the Incumbent Board at or before the earlier of (i) a public
announcement by any Person, whether before or after execution of this Agreement,
of the intention to obtain a sufficient number of Voting Securities as would
upon their acquisition constitute a Change in Control or (ii) upon a Change in
Control.
(c) NON-HOSTILE CHANGE IN CONTROL. A Change in Control
which has been approved by at least two-thirds of the Incumbent Board and is not
a Hostile Change in Control.
(d) INCUMBENT BOARD. Those individuals who, as of April 17,
2000, are members of the Board, shall be considered members of the "Incumbent
Board";
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provided, however, that if the election, or nomination for election by the
Corporation's common stockholders, of any new director was approved by a vote of
at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Plan, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest.
(e) TERMINATE OR TERMINATION DATE. The date upon which
employment of the Executive is effective for any reason under this Agreement,
whether such termination is voluntary or involuntary, for Just Cause or Good
Reason, or effected by death or Disability.
11. SUCCESSORS AND ASSIGNS.
(a) This Employment Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Corporation which
shall acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets of the Corporation, and the
Corporation shall require any successor or assign to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Corporation would be required to perform it if no such succession or assignment
had taken place. The term "Corporation" as used herein shall include such
successors and assigns.
(b) Since the Corporation is contracting for the unique and
personal skills of the Executive, the Executive shall be precluded from
assigning or delegating his rights or duties hereunder without first obtaining
the written consent of the Corporation.
12. APPLICABLE LAW. This Agreement and the rights and obligations
of the parties hereunder shall be governed by the laws of the State of Maine
without giving effect to the conflict of law principles thereof. Any action
brought by any party to this Agreement shall be brought and maintained in a
court of competent jurisdiction in the State of Maine.
13. SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
14. FEES AND EXPENSES; INDEMNIFICATION. The Corporation shall pay
all legal fees and related expenses (including the costs of experts, evidence
and counsel) incurred by the Executive as they become due as a result of (a) the
Executive's termination of employment (including all such fees and expenses, if
any, incurred in contesting or disputing in good faith any such termination of
employment) or; (b) the Executive's
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seeking to obtain or enforce any right or benefit provided by this Agreement or
by any other plan or arrangement maintained by the Corporation under which the
Executive is or may be entitled to receive benefits; or (c) otherwise under or
relating to this Agreement, or relating to Executive's employment by the
Corporation. The Corporation shall also, to the greatest extent possible under
applicable law and not prohibited by the Corporation's bylaws, indemnify and
hold Executive harmless from all loss, liability and expense from all claims, of
whatever kind or nature, that arise in connection with or otherwise relate to
his employment by the Corporation, excluding only claims arising from
Executive's gross negligence or knowing and intentional malfeasance. Executive's
rights and remedies under this Section are in addition to, and shall not limit,
any other rights or remedies Executive may have against the Corporation,
including without limitation rights or remedies under the Corporation's bylaws
or applicable law.
15. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other, provided that all notices to
the Corporation shall be directed to the attention of the Board with a copy to
the Secretary of the Corporation. All notices and communications shall be deemed
to have been received on the date of delivery thereof or on the third business
day after the mailing thereof, except that notice of change of address shall be
effective only upon receipt.
16. NON-EXCLUSIVITY OF RIGHTS.Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Corporation
or any of its subsidiaries and for which the Executive may qualify, nor shall
anything herein limit or reduce such rights as the Executive may have under any
other agreements with the Corporation or any of its subsidiaries. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Corporation or any of its subsidiaries shall be
payable in accordance with such plan or program, except as explicitly modified
by this Agreement.
17. SETTLEMENT OF CLAIMS. The Corporation's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, defense, recoupment, or other right which
the Corporation may have against the Executive or others.
18. MISCELLANEOUS. No provision of this Agreement may be amended,
modified, waived or discharged unless such amendment, waiver, modification or
discharge is agreed to in writing and signed by the Executive and the
Corporation. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreement or representations, oral or
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otherwise, express or implied, with respect to the subject matter hereof has
been made by either party which is not expressly set forth in this Agreement.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
20. INDEPENDENT ADVICE. Executive hereby acknowledges that he has
been advised of the opportunity available to him to seek and obtain advice of
legal counsel and financial advisors of his own choosing prior to and in
connection with Executive's execution of this Agreement. In addition Executive
hereby affirms that he has either obtained such advice or knowingly and
willingly decided to forego the opportunity to avail himself of such advice.
21. ARBITRATION.
(a) To the fullest extent permitted by law, all contractual
disputes between Executive, his attorneys, personal representatives and assigns,
and the Corporation, its shareholders, directors, officers, employees, agents,
successors, attorneys and assigns, arising under this Agreement (the "Arbitrable
Claims") shall be resolved by arbitration, with the exception of any action for
equitable relief to enforce the non-competition restrictions pursuant to Section
6 hereof.
(b) Arbitration of Arbitrable Claims shall be in accordance
with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association, as amended ("AAA Rules"), as augmented by this
Agreement. Any demand for arbitration shall specify the claims asserted and the
facts upon which the claims are based. Arbitration shall be final and binding on
the parties and shall be the exclusive remedy for all Arbitrable Claims. All
arbitration hearings under this Agreement shall be conducted in Portland, Maine.
All parties shall have the rights of discovery permitted under the AAA Rules.
THE PARTIES WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY WITH REGARD TO
ARBITRABLE CLAIMS, INCLUDING THE EXISTENCE OF AN AGREEMENT TO ARBITRATE.
(c) All disputes involving Arbitrable Claims shall be
decided by a single arbitrator. The arbitrator shall apply the terms of this
Agreement, without modifying them in any respect.
(d) All proceedings and all documents prepared in connection
with any Arbitrable Claim shall be confidential and, unless otherwise required
by law, the subject matter thereof shall not be disclosed to any person other
than the parties, their counsel, witnesses and experts, the arbitrator, and, to
the extent involved, a court and court staff. The parties consent to all
arbitration and court orders necessary to implement this provision.
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<PAGE> 14
(e) This Section and Sections 6 and 15 shall survive
termination of the Executive's employment and the expiration of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first herein above written.
BRUNSWICK TECHNOLOGIES, INC.
By:
--------------------------------------
Peter N. Walmsley, Chairman of the
Independent Committee of the Board of
Directors
WITNESS:
- ------------------------------- ------------------------------------
Executive
14
<PAGE> 1
EXHIBIT 4
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
____________________________________________
)
BRUNSWICK TECHNOLOGIES, INC., )
)
Plaintiff, ) CIVIL ACTION NO. 00-124-P-H
)
v. )
)
VETROTEX CERTAINTEED CORPORATION )
d/b/a VETROTEX AMERICA, )
VA ACQUISITION CORPORATION, )
CERTAINTEED CORPORATION, and )
COMPAGNIE de SAINT-GOBAIN, )
)
Defendants. )
____________________________________________)
COMPLAINT AND JURY DEMAND
INTRODUCTION
This case arises in the context of a hostile takeover attempt by the
defendants, all of which are directly or indirectly controlled by defendant
Companie de Saint-Gobain, a French corporation, to take control of the plaintiff
Brunswick Technologies, Inc. ("BTI"), a Maine corporation whose shares are
publicly traded on the National Association of Securities Dealer Automatic
Quotation market. BTI alleges that the Defendants have violated federal
securities laws and regulations governing the disclosure of acquisitions of
securities as well as those governing the conduct of tender offers for control
of publicly-traded corporations. Specifically, BTI alleges that the Defendants,
acting in concert, violated federal securities laws by failing to timely
disclose that their 14.3% investment in BTI was for the purposes of seeking
control of BTI and not, as stated, for "investment purposes," thus depriving the
issuer and the securities markets of material information
<PAGE> 2
relating to BTI. BTI also alleges that the Defendants, acting in concert,
violated federal securities laws relating to the conduct of tender offers by
failing to timely serve the BTI with its tender offer documents as well as
failing to apprise the market that such a violation invalidated its tender offer
and rendered it a nullity. These tender offer rule violations were part of a
scheme designed to deprive BTI shareholders of the material information
necessary to properly evaluate the Defendants' tender offer in a timely fashion,
as is required by the federal securities laws. The Defendants have also violated
various laws of the State of Maine by intentionally interfering with BTI's
advantageous business relations and by engaging in a civil conspiracy designed
to bring about these violations all in an effort to acquire control of BTI's
business. BTI seeks preliminary and permanent injunctive relief as well as
damages for the above-mentioned violations of federal and state law.
JURISDICTION AND VENUE
1. Jurisdiction by the United States District Court of this matter is
proper under 28 U.S.C. Section 1331, pertaining to actions arising under the
Constitution, laws or treaties of the United States, and under this Court's
supplemental jurisdiction to hear related state claims pursuant to 28 U.S.C.
Section 1367.
2. Venue in this Court is proper pursuant to 28 U.S.C. Section 1391(a)
and (c).
PARTIES
3. The plaintiff, Brunswick Technologies, Inc. ("BTI") is a corporation
organized under the laws of the State of Maine and having a principal place of
business at 43 Bibber Parkway, Brunswick, Maine.
4. Defendant Vetrotex CertainTeed Corporation d/b/a Vetrotex America
("Vetrotex") is a corporation organized under the laws of the State of Delaware
and having a principal place of
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business at 4515 Allendale Road, Wichita Falls, Texas. On information and
belief, Vetrotex is a wholly owned subsidiary of defendant CertainTeed
Corporation.
5. Defendant VA Acquisition Corporation ("VA Acquisition") is a
corporation organized under the laws of the State of Maine, with a principal
place of business at 750 East Swedesford Road, Valley Forge, Pennsylvania. On
information and belief, VA Acquisition is an indirect and wholly owned
subsidiary of defendant CertainTeed Corporation.
6. Defendant CertainTeed Corporation ("CertainTeed") is a corporation
organized under the laws of the State of Delaware with a principal place of
business at 750 East Swedesford Road, Valley Forge, Pennsylvania. On information
and belief, CertainTeed is an indirect and wholly owned subsidiary of defendant
Compagnie de Saint-Gobain.
7. Defendant Compagnie de Saint-Gobain ("Gobain") is a corporation
organized under the laws of France with a principal place of business at Les
Miroirs, 92096 La Defense Cedex, France.
FACTS
The Business of BTI
8. Brunswick Technologies, Inc. ("BTI") is a technologically advanced,
leading developer of engineered reinforcement "knit" fiberglass fabrics used in
the fabrication of composite materials. Incorporated in the state of Maine, its
principal executive offices are located 43 Bibber Parkway, Brunswick, Maine BTI
is a publicly held company with shares of Common Stock (trading symbol: BTIC)
quoted and traded on the NASDAQ National Market System since February 5, 1997.
9. BTI uses technologically advanced stitchbonding equipment and
processes to prepare glass, carbon and other high modulus fibers for combination
with resin to produce
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laminates used in the construction of such diverse items as boats, skis, diving
boards, protective helmets and ballistic armor applications, car and truck
parts, industrial tanks and pipes, undersea oil wellhead and pipeline protection
covers and offshore oil platform modules.
10. BTI sells domestically and internationally through distributors and
directly to end users. BTI's sales for 1999 were approximately $45 million. BTI
is one of three major players in the North American knit fiberglass market
accounting for approximately 50% of sales. Its nearest two competitors have
approximately 20 to 22% of the market.
BTI's Supply Relationship With Defendants
11. Fiberglass is the principal component of BTI's products. Of the raw
materials that make up BTI's products, approximately 95% of those materials are
fiberglass. From 1991 until December 1999, BTI's main supplier of fiberglass was
defendant Vetrotex CertainTeed Corporation d/b/a Vetrotex America ("Vetrotex").
12. Vetrotex has for all relevant times been a subsidiary of defendant
CertainTeed Corporation, a Delaware corporation, and defendant Compaignie de
Saint-Gobain, a publicly-owned French corporation with shares listed for trading
on the monthly settlement market of the Paris Stock Exchange and on the
principal European stock exchange. Vetrotex and its affiliates are referred to
collectively herein as "Gobain". The main business of Vetrotex, based in Wichita
Falls, Texas, is to manufacture and sell fiberglass.
13. Throughout its history, Vetrotex was a main supplier of fiberglass
to BTI. In 1999, Vetrotex was one of two principal suppliers, supplying BTI with
approximately 14 million pounds of fiberglass to meet its production
requirements.
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<PAGE> 5
Defendants' Corporate Relationship With BTI
14. In August 1993, at a time when BTI was still a privately held
company, Vetrotex invested approximately $2 million in BTI in exchange for
common and preferred stock representing approximately 20% of the company. As
part of a deal which resulted in the investment, a nominee of Vetrotex, David E.
Sharpe, Vetrotex's then and current President for Sales and Marketing and a
director of Vetrotex, was elected to BTI's Board of Directors. Sharpe continues
to serve as a director of BTI currently.
15. In February 1997, as part of an initial public offering, Vetrotex's
BTI stock and interest in accrued dividends was converted into 713,746 shares of
publicly traded common stock. Vetrotex's stock interest in BTI since August 1993
has remained unchanged. The shares then and now constitute approximately 14.3%
of the outstanding shares.
16. Contemporaneously with the February 1997 public offering and
Vetrotex's acquisition of 14.3% of the publicly traded shares of BTI, Gobain
filed with the Securities and Exchange Commission a Schedule 13D stating (in
Item 4) that its 14.3% stake in BTI was for "investment purposes" only.
The October 1999 Meeting
17. In October 1999, representatives of Gobain, including its Chairman
and Chief Executive Officer, Roberto Caliari, met with Martin Grimnes, Chairman
of the Board and Chief Executive Officer of BTI at the Hyatt Regency in Chicago.
The meeting was arranged by Sharpe under the pretext of discussing ways in which
to increase the volume of sales of fiberglass by Vetrotex to BTI.
18. Contrary to Sharpe's statements, the subject of the meeting was not
sales of fiberglass. Rather, Gobain used the meeting as an opportunity to
announce that it was going
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<PAGE> 6
"downstream" into BTI's business and solicit Grimnes to "work with them" in
accomplishing this objective. Grimnes ended the meeting stating that it was
inappropriate to discuss such a matter without the presence of an independent
director of BTI present at the meeting. Upon information and belief, by this
time, Gobain had embarked on a definite and concerted plan to acquire BTI. No
amendment to Gobain's Schedule 13D was filed at this time describing its
intentions.
Vetrotex's Abrupt Change in Course on Supplying BTI
19. Following the October 1999 meeting in December 1999, without any
notice or warning, Vetrotex announced to BTI that it was only willing to supply
half of what it historically supplied and what BTI projected its supply needs
would be for the year 2000 (6 million of 12 million pounds). As a result, BTI's
business was substantially disrupted and its ability to supply its customers
with competitively priced products called in to question. Upon information and
belief, Vetrotex's abrupt and arbitrary reduction in the volumes it was willing
to supply BTI was part and parcel of a strategy to disrupt BTI's business
operations and create a climate where BTI would be more "receptive" to a
business takeover by Gobain.
Gobain's Strong-Arm Tactics to Acquire BTI
20. After the October 1999 meeting, Gobain continued to press for a
follow-up meeting to ostensibly discuss possible collaboration and strategic
partnerships between the two businesses. In fact, upon information and belief,
Gobain continued its secret internal deliberations over the terms and conditions
under which it would acquire BTI. BTI eventually agreed to a subsequent meeting
which occurred on March 30, 2000 in Winchester, England.
21. At the meeting, Gobain's Caliari, without any prior notice, stated
that Gobain was interested in acquiring the outstanding shares of BTI not owned
by Vetrotex for $7.00 per share. No amendment to Gobain's Schedule 13D was filed
as of this date. Caliari demanded that BTI
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<PAGE> 7
respond quickly to the proposal. BTI's Grimnes responded that additional time
and information was needed before a proper response could be made.
22. Following the Winchester, England meeting, BTI began the process of
undertaking a deliberate and reasoned review of the overtures made by Gobain.
This included the formation on April 5, 2000 of a committee of independent
directors to evaluate proposals made by BTI. However, Gobain continued to press
BTI proceed on an accelerated pace. After repeated requests, a second meeting
was arranged in New York on April 10, 2000 between representatives of the two
companies. At the April 10, 2000 meeting, BTI was presented with a written
ultimatum that BTI's board enter into negotiations for the sale of outstanding
shares at $7.75 per share in two days, or Gobain would take the offer directly
to BTI's shareholders. Still, as of this date, April 10, 2000, Gobain had not
filed an amendment to their original Schedule 13D filing.
23. In addition to BTI's oral response, BTI's independent committee
responded by fax letter dated April 12, 2000. In the letter, Peter Walmsley,
head of the independent committee, stated that although the Board did not
believe BTI should be sold at this time it would consider serious proposals.
Walmsley informed Gobain that BTI had formed the independent committee to
evaluate Gobain's proposal, and requested additional information pertaining to
the offer and an additional two weeks to review the information. No such
information was ever supplied by Gobain.
24. On the following day, Thursday, April 13, 2000, BTI's counsel
called Gobain's Pennsylvania counsel and told him that the members of the
independent committee were prepared to meet telephonically with Gobain on
Saturday April 15, 2000 in order to ascertain the basis upon which Gobain
determined its per share value of $7.75 and the views of Gobain on the effects
of the acquisition upon BTI employees, customers, suppliers, distributors and
the Maine communities at
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<PAGE> 8
large. Gobain, through counsel, advised BTI that it would not meet with the
independent committee on these issues.
The Schedule 13D Amendment
25. It was not until Friday, April 14, 2000, that Gobain filed its
first amendment to its Schedule 13D, first filed in February 1997 ("Amendment
No. 1"). In its Amendment No. 1, Gobain disclosed publicly for the first time
that it was undertaking an "internal evaluation" and had engaged in "several
meetings" with BTI regarding a "negotiated transaction" to acquire BTI.
Amendment No. 1 specifically stated that the internal evaluation had been going
on "[D]URING THE PAST SEVERAL WEEKS. . . ." (emphasis added). As stated, no
amendments to their original Schedule 13D had been filed up to this point in
time. Amendment No. 1 was inaccurate to the extent that it implied that there
were "negotiations" between the companies. As recounted above, there were
negotiations - rather there were demands and ultimatums.
The Tender Offer
26. On the following Monday, April 17, 2000, the Board of BTI received
a letter from Gobain's Caliari marked "confidential" in which he stated that
Gobain intended "to commence a tender offer [for the remaining shares of BTI]
within the next few days . . . at a price of $8.00 per share." The letter
included inaccurate statements about Gobain's alleged attempts to negotiate with
BTI, implying that BTI was not acting in an expeditious manner. Although the
April 17, 2000 letter was marked confidential, at the same time, Gobain issued
and filed with the Securities and Exchange Commission a press release, together
with a copy of the April 17, 2000 letter, stating that it "intends to commence a
tender offer for all of the . . . outstanding common shares of [BTI]" for $8.00
per share.
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<PAGE> 9
27. At the same time, on April 17, 2000, Gobain filed with the
Securities and Exchange Commission Amendment No. 2 to their Schedule 13D
("Amendment No. 2") stating that it had made the decision over the preceding
weekend to make an all cash tender offer at $8.00 per share. BTI also received a
letter from Gobain's counsel announcing that Vetrotex had directed the
incorporation on April 14, 2000 of VA Acquisition Corporation in Maine.
28. On April 20, 2000, VA Acquisition Corp. and Gobain filed with the
Securities and Exchange Commission a Tender Offer Statement and Schedules
("Tender Offer Statement") announcing an offer to purchase all of the remaining
outstanding shares of BTI at $8.00 per share in cash pursuant to the April 20,
2000 Offer to Purchase and Letter of Transmittal, which were appended to the
Tender Offer Statement and Schedules. According to the Tender Offer Statement,
the offer is conditioned on, among other things, the valid tender of shares
which together with the 14% already owned by Vetrotex would give Gobain and VA
Acquisition Corp. a majority of the outstanding shares. The Tender Offer
Statement provided that the offer and withdrawal rights expire at 12:00 midnight
E.S.T. on May 17, 2000, unless the offer is extended.
29. Although the tender offer was commenced on April 20, 2000, BTI did
not receive a Schedule 14D-1, including all exhibits thereto, until it was hand
delivered at 3:30 p.m. April 21, 2000, immediately before the Easter weekend. On
April 24, 2000, Amendment No. 1 to Gobain's Schedule 14D-1 was hand delivered to
BTI. The amendment provides that the tender offer has been extended by one day,
until May 18, 2000. Although the Defendants offered no explanation in their
amendment why they were extending the tender offer by one day, Brunswick can
only assume this is the result of a letter sent to by Brunswick's counsel to the
Defendants on April 21, 2000 in which counsel informed the Defendants that their
tender offer was "improper, has not effectively commenced and may not be
conducted or pursued" because the Defendants violated SEC Rule
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14d-3(a)(2)(i) by failing to serve BTI at is "principal executive office" "as
soon as practicable on the date of the commencement of the tender offer," as is
required by the Rule.
The Irreparable Harm Suffered by BTI.
30. As a result of Gobain's failure to make timely, adequate and proper
disclosures in an amendment to their Schedule 13D, BTI and its shareholders have
been irreparably prejudiced and harmed in their ability to respond to the tender
offer. The failure to make timely disclosures has prevented BTI from engaging in
the necessary and appropriate steps for it to evaluate the offer and advise its
shareholders as to its merits. These steps include (1) obtaining an independent
and objective valuation of BTI's business through the use of an investment
banker and other outsider resources; (2) assessing the impact of such an
acquisition on BTI's customers, employees, and the communities in Maine in which
it operates; (3) determining the compatibility of BTI's short and long range
business objectives and strategies with such an acquisition; and (4) assessing
the long range impact on the value of BTI's shareholders' interest stock
interest. Without the "cooling off" period requested in BTI's motion for
preliminary relief, BTI will be unable to engage in these steps to the
irreparable harm of the company and its shareholders.
COUNT I - DECLARATORY JUDGMENT
(28 U.S.C. Section 2201; Violation of Section 13(d) of the
Securities Exchange Act, 15 U.S.C. Section 78m(d))
31. BTI repeats and realleges the allegations made in paragraphs 1
through 30 above as if fully set forth herein.
32. Section 13(d) of the Securities Exchange Act, 15 U.S.C. Section
78m(d) provides, in relevant part that
[a]ny person who, after acquiring directly or indirectly the beneficial
ownership of any equity security . . . is directly or indirectly the
beneficial owner of more than 5 per centum of such class shall, within
tend days after such acquisition, send to the
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issuer of the security at is principal executive office . . . [and]
send to each exchange where the security is traded, and filed with the
Commission, a statement containing such of the following information,
and such additional information, as the Commission may by rules and
regulations, prescribe as necessary or appropriate in the public
interest or for the protection of investors -
. . .
(C) if the purpose of the purchases or prospective purchases is to
acquire control of the business of the issuer of the securities, any
plans or proposals which such persons may have to liquidate such
issuer, to sell its assets to or merge it with any other persons, or to
make any other major change in its business or corporate structure.
33. SEC Rule 13d-1, 17 C.F.R. Section 240.13d-1, promulgated
thereunder, requires that such information be disseminated to the public through
filing and service of a Schedule 13D.
34. SEC Rule 13d-2, 17 C.F.R. S 240.13d-2, also promulgated thereunder,
requires that "[i]f any material change occurs in the facts set forth in the
Schedule 13D . . . the person or persons who were required to file the statement
shall promptly file or cause to be filed with the Commission an amendment
disclosing that change."
35. The Defendants in fact filed an initial Schedule 13D on or about
February 24, 1997, disclosing that their intent with respect to their
accumulation of 710,327 shares of BTI stock (or 14.3% of the outstanding shares
of BTI) was "for investment purposes."
36. As early as October 1999 but in no event later than December 1999,
the Defendants' intent with respect to their stockholdings in BTI changed from
an "investment purpose" to a desire to seek to acquire control of the business
of BTI.
37. Such a change in intent was a material event requiring an amendment
to the Defendants' existing Schedule 13D.
38. At the time of this change of Defendants' intent, the Defendants
were required by law to disclose such a material change in a prompt amendment to
their existing Schedule 13D. The Defendants failed to make such an amendment
disclosing their intent possibly to acquire the
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business of BTI until April 14, 2000, when it filed its first amendment to their
Schedule 13D. The Defendants' intent to acquire and control BTI was made clearer
in their second amendment to Schedule 13D which was filed on April 17, 2000.
39. The Defendants failure to promptly amend their Schedule 13D as
early as October 1999 but in no event later than December 1999 was a violation
of the federal securities laws.
40. BTI, its past and present shareholders and the investing public at
large have suffered damages directly and proximately caused by the Defendants
violation of the federal securities laws.
41. The dispute between BTI and the Defendants is an actual controversy
within the jurisdiction of this Court.
COUNT II - DECLARATORY JUDGMENT
(28 U.S.C. Section 2201; Violation of Section 14(d) of the Securities
Exchange Act, 15 U.S.C. Section 78n(d) and SEC Rule 14d-3(a)(2)(i), 17 C.F.R.
Section 240.14d-3)
42. BTI repeats and realleges the allegations made in paragraphs 1
through 40 above as if fully set forth herein.
43. SEC Rule 14d-3(a), 17 C.F.R. Section 240.14d-3(a), promulgated
under Section 14(d) of the Securities Exchange Act, 15 U.S.C. Section 78n(d),
provides in relevant part that no person or persons commencing a tender offer (a
bidder)
shall make a tender offer if, after consummation thereof, such bidder
would be the beneficial owner of more than five percent of the class of
the subject company's securities for which the tender offer is made,
unless as soon as practicable on the date of the commencement of the
tender offer such bidder:
. . .
(2) Delivers a copy of such Schedule TO [tender offer
statement], including all exhibits thereto:
(i) To the subject company at its principal executive
office.
44. SEC Rule 14d-3(b)(1), 17 C.F.R. Section 240.14d-3(b)(1) promulgated
under Section 14(d) of the Securities Exchange Act, provides in relevant part
that a
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bidder making the tender offer must file with the Commission:
(1) An amendment to Schedule TO reporting promptly any
material changes in the information set forth in the schedule
previously filed and including copies of any additional tender offer
materials as exhibits.
45. On April 20, 2000, the Defendants purportedly commenced their
tender offer for "all outstanding shares of common stock" of BTI which is did
not already own.
46. On that date, the Defendants were required by federal law to
deliver a copy of such tender offer, with all exhibits, to BTI at is "principal
executive offices" in Brunswick, Maine, "as soon as practicable on the date of
the commencement of the tender offer."
47. The Defendants violated these provisions of the federal securities
laws by delivering a computer print-out of its Schedule TO - the tender offer
form filed with the SEC - the following day, April 21, 2000, in the afternoon
shortly before the Easter holiday weekend.
48. On April 21, 2000, BTI informed the Defendants that their tender
offer was improper, not effectively commenced and may not be further conducted
or pursued due to the failure to serve BTI with the Schedule TO on the date it
was filed, as required by law.
49. BTI's position that the Defendants' tender offer was a nullity and
must be recommenced in order to be valid was a material event requiring
amendment of the Defendants' existing Schedule TO.
50. On April 24, 2000, the Defendants filed their first amendment to
Schedule TO, stating that they were extending the expiration of their tender
offer for one additional day, from May 17, 2000 until midnight May 18, 2000. The
Defendants offered no explanation for this one-day extension, but, upon
information and belief, BTI avers that the Defendants did so in response to
BTI's position that the Defendants had improperly commenced their tender offer.
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51. At no time since or in the amendment to Schedule TO have the
Defendants disclosed the material fact that they extended the expiration of
their tender offer to ostensibly cure a potential fatal defect in their offer.
52. BTI, its past and present shareholders and the investing public at
large have suffered damages directly and proximately caused by the Defendants
violation of the federal securities laws including, without limitation, a
shortening of the ten day period required by federal regulations for BTI to
formally respond to the Defendants' tender offer, thereby providing shareholders
with BTI's position advising acceptance or rejection of the tender offer, and by
failing to disclose the material fact that BTI has questioned the validity of
their tender offer.
53. The dispute between BTI and the Defendants is an actual controversy
within the jurisdiction of this Court.
COUNT III - INJUNCTION
(Violation of Section 13(d) of the Securities Exchange Act, 15 U.S.C.
Section 78m(d), and Section 14(d) of the Securities Exchange Act, 15 U.S.C.
Section 78n(d) and SEC Rule 14d-3(a)(2)(i), 17 C.F.R. Section 240.14d-3)
54. BTI repeats and realleges the allegations made in paragraphs 1
through 53 above as if fully set forth herein.
55. The Defendants violations of the federal securities laws, as
detailed above, are clear, serious and continuing, and BTI is likely to succeeds
on the merits of its claims that the Defendants engaged in such violations.
56. If this Court does not grant injunctive relief, in the form
requested by BTI in its Prayer and accompanying injunctive motion, BTI, its
shareholders and the investing public at large will be irreparably harmed.
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57. The harm to BTI, its shareholders and the investing public is
greater if the injunction does not issue than the harm will be to the Defendants
if the injunction issues.
58. There will be no adverse impact on the public interest if the
requested injunctive relief issues.
COUNT IV - TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS
59. BTI repeats and realleges the allegations made in paragraphs 1
through 58 above as if fully set forth herein.
60. At all relevant times, BTI had advantageous and profitable business
relations with its customers to whom it supplied finished products manufactured
with fiberglass procured from the Defendants.
61. The Defendants were aware of such advantageous and profitable
business relations.
62. In December 1999, the Defendants contacted BTI and informed it that
they would be cutting in half the fiberglass supply that BTI had received in
1999 and was expecting to purchase from the defendants in 2000. On information
and belief, the Defendants knew that this tactic would have an adverse impact on
certain of BTI's advantageous and profitable business relations with certain
customers, and such a tactic was designed to intimidate BTI into negotiating
with the Defendants for an acquisition of BTI's business by the Defendants.
63. BTI's advantageous relations with certain customers would have
continued uninterrupted but for the Defendants' intimidation tactics.
64. As a direct and proximate result of the Defendants' actions, BTI
has been damaged and will continue to suffer damages.
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COUNT V - CIVIL CONSPIRACY
65. BTI repeats and realleges the allegations made in paragraphs 1
through 64 above as if fully set forth herein.
66. The Defendants, acting together and in conspiracy with one another,
have violated the federal securities laws and Maine state common law in an
effort to improperly acquire control of the business of BTI, as explained in the
preceding paragraphs.
67. As a direct and proximate result of the Defendants' actions, BTI
has been damaged and will continue to suffer damages.
WHEREFORE, the plaintiff Brunswick Technologies, Inc. respectfully asks
this Court to
(A) issue a temporary restraining order, preliminary injunction and
permanent injunction enjoining Defendants and their agents, representatives,
attorneys, employees and proxy solicitors, for a period of thirty (30) days,
from directly or indirectly:
(1) further accepting any shares or proxies in response to or in
connection with the Defendants' tender offer;
(2) making or disseminating any further public announcements or public
filings concerning Defendants' attempts to acquire control of BTI, except as
required by law;
(3) making any further solicitations of proxies from BTI shareholders;
and
(4) having further communications with BTI shareholders relating to
Defendants' attempts to acquire control of BTI, including but not limited to
communications with regard to any regularly scheduled or special meeting of the
shareholders;
(B) declare that the Defendants are in violation of Sections 13(d) and
14(d) of the Securities Exchange Act, 15 U.S.C. Sections 78m(d) & 78n(d),
as well as SEC Rules 14d-3(a)(2)(i), 17 C.F.R. Section 240.14d-3(a)(2)(i), and
14d-3(b)(1), 17 C.F.R. Section 240.14d-3(b)(1);
(C) declare that the Defendants tender offer was improperly commenced
and that such tender offer is null and void and of no effect;
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<PAGE> 17
(D) order Defendants to withdraw their tender offer and return to the
shareholders all shares tendered to the Defendants or their agents on or after
April 20, 2000;
(E) enter judgment in favor of BTI on Count IV and V of its Complaint
and Jury Demand and awarding BTI its damages in an amount to be proven at trial;
(F) award BTI it its reasonable costs and attorney fees in maintaining
the present action; and
(G) award BTI such other and further relief as this Court deems just
and proper.
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Respectfully submitted,
BRUNSWICK TECHNOLOGIES, INC.
By its attorneys,
------------------------------------
Evan Slavitt (MA BBO No. 466510)
Daniel J. Kelly (MA BBO No. 553926)
Edward W. Little, Jr. (MA BBO No. 628985)
Gadsby Hannah, LLP
225 Franklin Street
Boston, Massachusetts 02110-2811
(617)345-7000
------------------------------------
Stephen G. Morrell,
Maine State Bar No. 792
Federal Bar No. 0198
Eaton Peabody, Bradford & Veague, P.A.
167 Park Row
P.O. Box 9
Brunswick, Maine 04011
(207) 729-1144
DATED: April 26, 2000
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BRUNSWICK TECHNOLOGIES INC 43 BIBBER PARKWAY TEL: 207.729.7792
BRUNSWICK, MAINE 04011 USA FAX: 207.729.7877
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May 3, 2000
Dear Fellow Stockholders:
On April 20, 2000, Compagnie de Saint-Gobain and its affiliates,
CertainTeed Corporation and VA Acquisition Corporation, began an unsolicited
tender offer to purchase, for $8.00 per share, all the outstanding Common Stock
of Brunswick Technologies. YOUR BOARD OF DIRECTORS HAS DETERMINED THAT
SAINT-GOBAIN'S OFFER IS INADEQUATE AND NOT IN THE BEST INTERESTS OF BRUNSWICK
TECHNOLOGIES, ITS STOCKHOLDERS AND ITS OTHER CONSTITUENCIES AND SHOULD BE
REJECTED. MOREOVER, SAINT-GOBAIN'S TENDER OFFER IS HIGHLY CONDITIONAL, LISTING A
MULTITUDE OF TERMS AND CONDITIONS WHICH MUST BE SATISFIED OR WAIVED PRIOR TO
COMPLETING THE OFFER. We will keep you advised of any changes in Saint-Gobain's
offer and of our recommendations with respect thereto, as well as of any other
significant developments.
YOU SHOULD NOT FEEL OBLIGATED TO RESPOND TO SAINT-GOBAIN'S OFFER. Your
Board reached its conclusion that Saint-Gobain's offer is inadequate after
carefully considering Brunswick's financial performance and future prospects,
the written opinion of the Company's financial advisor, McDonald Investments,
that the consideration to be received by the stockholders of Brunswick pursuant
to Saint Gobain's offer is inadequate from a financial point of view, and other
factors described in the attached Schedule 14D-9.
A committee of your Board (consisting of the four members who are not
executive officers of the Company) has been established and is working with the
Company's financial advisor, McDonald Investments, with the goal of enhancing
shareholder value.
THE BOARD BELIEVES THAT SAINT-GOBAIN'S OFFER FAILS TO RECOGNIZE EITHER THE
CURRENT VALUE OF BRUNSWICK OR ITS SIGNIFICANT LONG-TERM VALUE AS IT CONTINUES TO
IMPLEMENT ITS PLANS FOR GROWTH. Timing is everything, and the Saint-Gobain offer
is carefully timed to take advantage of the current low price of our stock and
to deprive the Company and its stockholders of the opportunity to achieve
growth.
We urge you to read the attached Schedule 14D-9 with care so that you will
be fully informed as to the Board's recommendation and certain actions that it
has taken in response to Saint-Gobain's unsolicited bid, some of which are not
described in this letter.
IN SUM, WE STRONGLY URGE THAT YOU SHOW SAINT-GOBAIN YOU HAVE NO INTEREST IN
ITS OFFER AND THAT YOU DO NOT TENDER YOUR SHARES.
We thank you for your continued support.
On behalf of the Board of Directors,
/s/ Martin S. Grimnes
Martin S. Grimnes
Chairman of the Board and
Chief Executive Officer
BRUNSWICK TECHNOLOGIES LOGO
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EXHIBIT 6
CONTACTS:
Phil Harmon Citigate Sard Verbinnen
Brunswick Technologies, Inc. David Reno/Andrew Cole
(207) 729-7792 (212) 687-8080
BRUNSWICK TECHNOLOGIES REJECTS SAINT-GOBAIN OFFER AS
INADEQUATE AND PLANS TO EXPLORE STRATEGIC ALTERNATIVES
BOARD OF DIRECTORS CITES BTI'S STRONG MARKET POSITION
AND VALUE OF CORE TECHNOLOGY
BRUNSWICK, ME, May 3, 2000 - Brunswick Technologies Inc. (Nasdaq: BTIC)
("BTI"), a leading manufacturer and innovative developer of composite
reinforcements, today announced its Board of Directors voted to recommend that
BTI shareholders reject as inadequate the unsolicited $8.00 per share offer made
by Vetrotex CertainTeed Corporation, a wholly-owned subsidiary of France-based
holding company Compagnie de Saint-Gobain. The vote was unanimous excepting
David Sharpe, an officer of Vetrotex America who did not attend the relevant
Board meeting and submitted his resignation from the Board on May 1st.
"The Board strongly believes that Saint-Gobain's unsolicited tender
offer undervalues the Company and is not in the best interests of BTI
shareholders, employees, customers or communities in which BTI operates," said
Martin S. Grimnes, Chairman and Chief Executive Officer of BTI. "With the
assistance of our financial advisors, McDonald Investments, the Board plans to
immediately begin an aggressive exploration of a range of strategic alternatives
to enhance value for all shareholders. The Board has established a committee of
independent directors to oversee the process."
In its recommendation to BTI shareholders, BTI's Board of Directors
cited the following reasons, among others, for rejecting the unsolicited
Saint-Gobain offer:
-- The belief of the Board that Saint-Gobain's offer does not reflect
the inherent value of BTI;
-- The opinions of BTI's financial advisor, McDonald Investments, that
the Saint-Gobain offer is inadequate from a financial standpoint;
-more-
<PAGE> 2
2
-- That BTI, possessing the most advanced composite reinforcement
technology and the strongest market position in the industry, is
uniquely positioned for growth through the burgeoning demands for
advanced composite technologies by the transportation,
infrastructure, marine, industrial and oil and gas industries.
Examples of products manufactured with BTI engineered reinforcements
include: ballistic armor, boats, snowboards, railcars, truck panels, wind
blades, airframe structures, automotive parts, marine pilings, bridges, and
offshore oil and gas production equipment. BTI has manufacturing facilities in
the Maine, Texas and the UK.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Matters discussed in this news release, including any discussion of or impact,
expressed or implied, on the Company's anticipated revenue growth, operating
results and future earnings per share contain forward-looking statements
(identified by the words "expect", "estimate", "project", "plans", "believe",
and similar expressions) that involve known and unknown risks and uncertainties.
For these statements the company claims the protection of the safe harbor of the
private Securities Litigation Reform Act of 1995. The company's results may
differ significantly from the results indicated by such forward-looking
statements. The Company's future results are dependent upon general economic
conditions, the availability of supplies of fiberglass, the ability to expand
new and existing markets, competition from competing product lines from both
fiberglass and non-fiberglass suppliers, the ability to manage growth in
inventory, the stability of its customers' capital spending plans and the
ability of the company to obtain necessary capital from time to time. These and
other risks are detailed from time to time in the Company's SEC reports,
including Form 10K for the year ended December 31, 1999.
# # #
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BRUNSWICK TECHNOLOGIES INC 43 BIBBER PARKWAY TEL: 207.729.7792
BRUNSWICK, MAINE 04011 USA FAX: 207.729.7877
April 17, 2000
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Mr. Roberto Caliari
St. Gobain
18, Avenue d'Alsace
92096 la Defense Cedes
France
Re: Saint-Gobain Announcement of April 17, 2000
Brunswick Technologies, Inc.
Dear Mr. Caliari:
This refers to your "Confidential" letter of April 17, 2000 advising the
Board of Brunswick Technologies, Inc. ("BTI") of Saint-Gobain's decision "to
commence a tender offer within the next few days ... at a price of $8.00 per
share" (the "Letter").
Certain portions of the Letter are inaccurate and require correction.
First, the "attempts to negotiate" by Saint-Gobain have consisted of a meeting
on March 30, 2000 called by Saint-Gobain at which it announced its desire to
negotiate a purchase of all the shares of BTI at $7.00 per share. At that
meeting Saint-Gobain was asked to explain how it had arrived at $7.00 per share.
Saint-Gobain responded that the price was fixed and demanded an affirmative
answer within two days. Subsequently, a meeting was held in New York City on
April 10, 2000, attended by BTI representatives, for the purpose of further
understanding Saint-Gobain's offer. At that meeting, Saint-Gobain advised the
Board by letter that it wished to "negotiate" the purchase of BTI for $7.75 per
share and admonished BTI that it had two days within which to accept the offer.
Again Saint-Gobain failed to advise BTI as to the basis of its $7.75 proposal
and insisted upon acceptance of the $7.75 per share before proceeding further.
BTI wrote to Saint-Gobain on April 12, 2000 and stated that it wished to be
advised of:
1. The manner in which Saint-Gobain had arrived at its valuation of $7.75
per share in view of BTI's dominant market position and other
intangible values; and
2. The effect an acquisition would have on all BTI constituencies
including shareholders, employees, suppliers, customers, distributors
and the community at large.
BTI also informed Saint-Gobain that it had formed an Independent Committee
to evaluate the Saint-Gobain proposal, but was unprepared to enter into
substantive negotiations at that time. BTI expressed its willingness to enter
into a Confidentiality and Standstill Agreement with Saint-Gobain and to respond
in a substantive manner to the Saint-Gobain proposal within two weeks.
BRUNSWICK TECHNOLOGIES LOGO
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Saint-Gobain again failed to respond to the two questions set forth in
items numbered 1 and 2 above.
Saint-Gobain was advised on Thursday, April 13, 2000, that members of the
Independent Committee were prepared to meet telephonically with Saint-Gobain on
Saturday, April 15, 2000 in order to ascertain:
1. The basis upon which Saint-Gobain determined its per share value of
$7.75 per share; and
2. The views of Saint-Gobain as to the effects of its acquisition upon the
BTI employees, customers, suppliers, distributors and community at
large.
Saint-Gobain was also advised that BTI had engaged a financial consultant
to assist the Board and that investment banking firms were being interviewed.
Saint-Gobain determined not to meet with BTI's Independent Committee, and again
did not answer BTI's two questions, one concerning Saint-Gobain's method of
valuation and the other concerning the effects of a Saint-Gobain acquisition on
the BTI constituents. In brief, at every point BTI was confronted by
Saint-Gobain not with opportunities to negotiate but rather ultimatums demanding
that BTI accept Saint-Gobain's proposal without sufficient time or information
upon which to act.
In view of the above, we find your "Confidential" Letter -- released to the
public -- misleading in the impression it intends to convey that BTI has acted
in other than an expeditious manner. Presenting BTI with proposals and demands
for acceptance within a time frame inadequate to permit responsible
consideration and analysis do not constitute bona fide "attempts to negotiate"
but rather, are attempts to pressure the BTI Board into approving a transaction
without proper time for it to determine whether or not the Saint-Gobain proposal
is in the interests of the BTI shareholders and other constituencies and without
responding to BTI's two questions concerning Saint-Gobain's method of valuation
and the effect of a Saint-Gobain acquisition on BTI constituencies.
We find the Letter particularly unfair in light of the fact, as stated by
Saint-Gobain in its Schedule 13-D filing dated April 14, 2000, that "a
representative of Saint-Gobain was a director of long standing on the BTI Board
and that Saint-Gobain had "during the last several weeks" evaluated whether it
"should acquire BTI". It is clear Saint-Gobain has taken several weeks to
deliberate whether or not to acquire BTI, yet it insisted that BTI respond in a
matter of a few days. Further, it appears based upon Saint-Gobain's statement in
its Schedule 13-D filing, that the Schedule 13-D amendment should have been
filed "several weeks" earlier when Saint-Gobain determined it was no longer
holding its BTI shares for investment.
Although the Letter is marked "Confidential", Saint-Gobain elected to
release it to the public concurrently with delivery to BTI. We feel public
release of the Letter was particularly unfortunate in view of prior discussions
between the parties and Saint-Gobain's statement that it is "still prepared to
discuss a negotiated transaction."
In view of the above, the BTI Board is taking the measures it deems
appropriate to protect the interests of BTI and its shareholders.
Sincerely,
/s/ Martin S. Grimnes
Martin S. Grimnes
Cc: Peter Klaus, Esq.
Fax: 215-981-4750
