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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x]
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[x] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DOMINION BRIDGE CORPORATION
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(Name of Registrant as Specified in Its Charter)
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PRELIMINARY COPY
September ___, 1997
Dear Fellow Stockholders:
We, all the members of your Board of Directors, are writing to urge you
to once again reject the consent solicitation being conducted by the committee
calling itself "The Committee to Revitalize Dominion Bridge Corporation"
(hereinafter referred to as the "Committee" or the "Kuhns Group") and, whether
or not you have previously given the Committee your consent, to sign and return
the enclosed gold Revocation of Consent on behalf of the Board of Directors of
Dominion Bridge Corporation.
As further described below, the Board strongly opposes the Committee's
efforts to wrest control of your Company.
On August 19, 1997, time ran out on the Committee's first consent
solicitation. After waging a campaign of viscous personal attacks, scurrilous
and untrue rumor and innuendo and false promises of future shareholder value and
the prospects of implementing an unfunded and extraordinarily vague business
plan, the stockholders have spoken by flatly rejecting the Committee's proposal.
Not surprisingly, the Committees's terrorists tactics caused a major disruption
to the smooth operation of the Company's business by unnecessarily diverting
management's attention away from running the Company, raising unfounded concerns
amongst the Company's customers and suppliers and causing the needless
expenditure of hundreds of thousands of dollars to counter the Committee's
allegations.
Having successfully defeated the Committee, your Board of Directors and
senior management are once again one hundred percent focused on successfully
implementing their business plan, improving shareholder value and mending the
customer and supplier relations which were damaged by the Committee's smear
campaign. By initiating a second solicitation seeking stockholder approval for
an identical proposal, the Committee will further damage your Company, reduce
the value of your investment in the Company and require the needless expenditure
of precious human and capital resources. These self-serving and misguided
actions by a minority of dissident shareholders serve no legitimate corporate
purpose and, simply put, are a terrible waste of time and resources. The Board
strongly opposes the Committee's efforts and urges you NOT to sign any [WHITE]
consent card sent to you by the Committee and to sign and return the GOLD
Revocation of Consent Card enclosed herewith.
WHILE THE COMMITTEE HAS BEEN BUSY DISRUPTING THE COMPANY'S BUSINESS,
YOUR BOARD OF DIRECTORS AND SENIOR MANAGEMENT HAVE MADE SIGNIFICANT
STRIDES IN ITS EFFORTS TO ENHANCE SHAREHOLDER VALUE AND RETURN THE
COMPANY TO PROFITABILITY
Against this backdrop, over the past few months, your Board of
Directors and senior management have made significant accomplishments in
enhancing shareholder value and returning the Company to profitability. In this
regard, consider the following:
- - On June 19, 1997, the Company retained the investment banking firm of Legg
Mason Wood Walker, Incorporated ("Legg Mason") to explore strategic
alternatives to enhance shareholder value. Recognizing the need for
responsiveness on this matter, the Board also formed a special committee of
independent directors (the "Special Committee") charged with the exclusive
responsibility to work with and monitor the progress of Legg Mason. In its
initial report to the Board of Directors, Legg Mason recommended that the
Company seek a strategic investment partner or pursue a sale of the
Company. In this connection, a number of inquiries have been received which
are currently being analyzed and considered by both Legg Mason and the
Special Committee.
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- - After extensive negotiations, the Company has executed a letter of intent
with BNY Financial Corporation ("BNY") for a $40 million credit facility
which will be utilized to pay off the Company's existing facility with BT
Commercial Corporation and provide an additional $25 million in working
capital. The Company and its counsel are working around the clock to
finalize the voluminous definitive loan documents and expect to close this
facility in September.
- - Through improved efficiencies and continued integration of the Company's
subsidiaries, the Company recognized a net profit of $ 470,000 or $.02 per
share during the quarter ended June 30, 1997.
These recent accomplishments continue a trend of successes over the
past few years.
CURRENT MANAGEMENT HAS BUILT DOMINION
BRIDGE INTO A MAJOR INTERNATIONAL ENGINEERING, PROJECT
MANAGEMENT AND CONSTRUCTION FIRM. THESE OPERATIONAL
STRENGTHS SHOULD NOW BEGIN TO TRANSLATE INTO PROFITABILITY.
-- Under the leadership of its current senior management, Dominion Bridge
has become a major international provider of large scale engineering,
procurement, construction, steel fabrication and shipbuilding
services. Revenues have grown from $7 million in 1993 to $363 million
in 1996, and are on track to reach $600 million in fiscal 1997.
-- Through its strategy of acquisitions and internal growth, management
has increased the Company's asset base to more than $250 million and
employment to more than 6,500. In 1996, the Company acquired a
controlling stake in McConnell Dowell Corporation Limited ("McConnell
Dowell"), which is one of the premier engineering and construction
firms in Asia-Pacific. The combined strength and synergies of the
companies that Dominion Bridge has acquired have made Dominion Bridge
a global force.
-- Integration of the construction skills of Dominion Bridge Inc. with
the engineering experience of McDonnell Dowell and the project
management expertise of Davie Industries Inc. assures that there is no
job in the infrastructure industry that is too complex for Dominion
Bridge, whether onshore or offshore.
-- Dominion Bridge has grown significantly in size and scope while
maintaining a strong balance sheet that is currently free of long-term
debt and is investing available financial resources in the business.
The balance on a loan from BT Commercial Corporation has been reduced
from $30 million to $15 million and management has recently engaged
BNY to provide the Company with a $40 million line of credit, subject
to due diligence and customary closing conditions.
-- The Company has taken steps to improve profitability through stringent
cost controls and elimination of non-essential expenses. Management is
also implementing a comprehensive plan designed to achieve greater
efficiencies in marketing worldwide.
-- Having consolidated the 1996 acquisitions and instituted measures that
are expected to improve each business segment's internal operations,
Dominion Bridge is positioned to benefit from the synergies it has
created. Management's primary goal for 1997 and beyond is to begin
translating its new operational strengths into consistent long-term
profitability.
-- While the Company's stock price has suffered as management has
implemented its growth strategy, no one is more aware of the stock
price than the Company's senior officers, who beneficially own an
aggregate of 3,885,792 shares of the Company's Common Stock. Further
evidencing their commitment to the Company and confidence in its
existing business plan, on August 19, 1997 senior management and other
key employees exercised options at a premium to market price. This
provided the Company with approximately $4.8 million of cash to pay
needed expenses until the BNY line of credit is available. COMPARE
THIS STAKE IN THE COMPANY TO THE KUHNS GROUP, WHICH OWNS ONLY 2,000
SHARES OF DOMINION BRIDGE COMMON STOCK. Given their significant equity
stake in the Company, senior management is committed to enhancing
stockholder value and believes that they have in place the plan to do
so.
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AS OPPOSED TO THESE REAL SUCCESSES BY THE COMPANY'S MANAGEMENT AND ITS
TANGIBLE FUTURE PLANS, THE COMMITTEE'S BUSINESS PLAN PROPOSAL
IS EXTREMELY VAGUE, QUESTIONABLE
AND HAS NO SUBSTANCE
-- The Committee is, once again, attempting to wrest control of your
Company based on an extremely vague and questionable proposal that
calls for the Company to (i) acquire unknown start-up company First
Key Project Technologies, Inc. (ii) raise $45 million to acquire the
remaining minority interest in McConnell Dowell and (iii) assume and
carry a $75 million contingent liability over the next 18-24 months in
order to issue contingent value rights which cap shareholder value at
$2.50 per share.
-- The Committee's proposal raises numerous questions which are still
left unanswered:
-- Who is First Key Project Technologies, Inc.? The Committee's
consent materials confirm that First Key is a start-up company
with no track record and that the alleged $600 million dollar
backlog consists solely of one contract valued at $100 million.
Worse yet, the Company has been informed by industry sources that
the remainder of this so-called backlog is in the early stages of
development, there are no signed final agreements, no financing
is in place and the projects are located in Cuba. This would
pose an insurmountable problem because the Company, like all US
corporations, cannot trade directly or indirectly with Cuba.
-- Why would Dominion Bridge want to acquire a start-up company such
as First Key? Why is the Committee proposing an acquisition when
it criticized the Company's current management for its recent
successful acquisitions? How is the Committee raising the cash
necessary for the First Key acquisition? How can the Committee
justify the substantial dilution that would result from the
issuance of up to 6 million additional shares of common stock to
acquire an unknown start-up Company?
-- What are the Committee's true intentions with respect to
McConnell Dowell? In its prior solicitation, the Committee
initially called for the immediate acquisition of McConnell
Dowell and later characterized its plan as a "rationalization" of
the Company's investment in McConnell Dowell. In any event, how
exactly does the Committee propose to acquire the minority
interest in McConnell Dowell? Although the Committee finally
acknowledges the significant legal limitations imposed on such an
acquisition under Australian law, it provides no discussion of
how it intends to overcome these legal restrictions.
Additionally, how does the Committee propose to finance the
approximately US $45 million to acquire the minority interest in
McDonnell Dowell?
-- Like its wavering on the McConnell Dowell investment, the
Committee continues to send mixed signals with respect to its
plan to issue contingent value rights. Assuming that the
Committee now intends to issue such rights, how do the contingent
value rights benefit the Company and its stockholders? How does
the Committee propose to finance the $75 to $90 million liability
created by the issuance of the contingent value rights and where
is the back up financial guarantee for the rights? Why are the
contingent value rights necessary given the fact that since 1996,
the Company's stockholders have been protected by a rights plan,
which sets a higher minimum value than the contingent value
rights? Most importantly, how does the Committee intend to deal
with the devastating impact this will have on the Company's
ability to obtain the bonding necessary to successfully operate
the Company's business?
-- If the Committee is successful in its consent solicitation, how
will it finance the day to day operations of the Company given
the fact that a change in management is an event of default under
the Company's existing financing arrangements and that BNY has
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informed the Company that it would rescind its financing proposal
if the Kuhns Group were to take control of the Company?
Given the numerous questions left unanswered by the Committee's
proposal, it is clear that the proposal has no substance and provides
no value in the short term for the Company's stockholders.
THE KUHNS GROUP OFFERS A PLAN THAT IS NOT ONLY WITHOUT
SUBSTANCE, BUT ALSO CONTRARY TO THE FUNDAMENTAL
PRINCIPLES OF DELAWARE CORPORATE LAW.
-- The Kuhns Group is, once again, seeking to wrest control of your
Company from current management by (i) removing, without cause,
members of senior management; (ii) electing to positions of senior
management the members of the Committee; and (iii) amending the
Company's Bylaws to make it effectively impossible for the Board to
function and place the power of the Board in Kuhns.
-- This amounts to an unlawful divestiture of your Board's power and duty
to manage the business and affairs of the Company and is contrary to
the fundamental principle of applicable Delaware law that Delaware
corporations be managed by a board of directors. The Committee's
proposal would not only radically alter this traditional framework
but also thwart the Company's current management structure which, as
set forth in its Certificate of Incorporation, provides for board
governance.
-- In fact, one of the stated goals of the Committee is to "make it
functionally impossible for the Board of Directors to conduct business
on a regular basis." The members of the Committee hope that this will
force the current members of the Board to resign so that the Committee
can propose new nominees. Not surprisingly, the Committee has
indicated that the replacement director nominees could very well be
the members of the Committee. It is clear that the Committee desires
to control the Company with little Board oversight.
JOHN KUHNS, THE MAN SPEARHEADING THE COMMITTEE'S EFFORTS
TO TAKE CONTROL OF THE COMPANY,
HAS IN THE PAST LEFT A TRAIL OF SEC VIOLATIONS,
SELF-ENRICHMENT AND EXTRAORDINARY LOSSES FOR INVESTORS.
-- A 1984 New York Times article regarding Catalyst Energy Corporation
said that as President and Chief Executive Officer of that company,
Kuhns "alienated key investors and sent Catalyst's stock into a
tailspin." Catalyst's share price went from a high of $29 to a low of
$3.75.
-- In 1987, while an executive of Catalyst, Kuhns made a hostile bid for
a broker/dealer, Stifel Financial Corporation, which he later
abandoned. For this takeover effort, Kuhns has been called a
"corporate raider."
-- While the stockholders and creditors of companies with which Kuhns has
been associated have met with disastrous results, Kuhns has reaped
enormous personal benefits. According to SEC reports, during three
years as CEO of Catalyst, Kuhns received $1.3 million in salary,
bonuses and benefits. Additionally, Kuhns received $912,550 in
connection with the cancellation of options to purchase 274,600 shares
of Catalyst common stock. Kuhns repeated this performance with New
World Power Corporation, a company he founded in 1989. While he was
Chairman and Chief Executive Officer of New World Power, Kuhns took
salaries and benefits from 1993 to 1995 of $1.5 million and grants of
New World Power stock and options to purchase an additional 1.29
million shares. Most egregiously, Kuhns arranged for New World Power
to purchase and substantially renovate, at a cost of $2.5 million, a
house in Litchfield County, Connecticut for his office, which it
subsequently transferred to Kuhns as part of his severance package.
This occurred despite the fact that during Kuhns' tenure, New World
Power lost an aggregate of $65.3 million, including a stunning net
loss of $41.3 million on its 1995 operations based on revenues of only
$16.4 million.
-- In an attempt to justify such enormous personal benefits, Kuhns
states that he invested $4 million in New World Power. By contrast,
based on the Committee's consent materials, Kuhns has invested less
than $1,000 in the Company.
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-- Due to Kuhns' failure to make required SEC filings while at New World
Power, the SEC brought enforcement proceedings and a cease and desist
order under the securities laws enjoining Kuhns from violations of
Sections 13(d) and 16(a) of the Securities Exchange Act, and Rules
13d-1, 13d-2, 16a-2 and 16a-3 thereunder, following his failure to
file reports reflecting his sales of over $3,105,000 of New World
Power stock while its share price was falling.
-- Based on the Committee's Consent Materials, Messrs. Kuhns and Mariash
are "employed" by their own consulting firms and Mr. Dutton appears to
be unemployed. Nominating themselves to serve as the three senior
executives of a multi-million dollar international company and
engaging in this second vexatious consent solicitation, confirms that
this solicitation is nothing more than a self-serving exercise to
obtain high paying jobs in a company in which they have virtually no
equity interest.
-- The Committee is attempting to acquire the Company based on an
extremely vague and questionable business proposal, which would put
into control persons with a track record of wrecking companies and
violating the law without paying the Company's stockholders a single
dime. Moreover, the Committee has not put forth any viable plan for
enhancing stockholder value at Dominion Bridge.
YOUR BOARD UNANIMOUSLY OPPOSES THE KUHNS SOLICITATION. THE BOARD URGES YOU
NOT TO SIGN ANY [WHITE] CONSENT CARD SENT TO YOU BY HIS COMMITTEE.
IF YOU HAVE PREVIOUSLY SIGNED AND RETURNED THE [WHITE] CONSENT CARD YOU
HAVE EVERY RIGHT TO CHANGE YOUR MIND. WHETHER OR NOT YOU HAVE SIGNED THE [WHITE]
CONSENT CARD, THE BOARD URGES YOU TO SIGN, DATE AND MAIL THE ENCLOSED GOLD
REVOCATION OF CONSENT CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. ALTHOUGH
SUBMITTING A CONSENT REVOCATION WILL NOT HAVE ANY LEGAL EFFECT IF YOU HAVE NOT
SUBMITTED A CONSENT CARD, IT WILL HELP US KEEP TRACK OF THE PROGRESS OF THE
STOCKHOLDER VOTE. REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR REVOCATION OF
CONSENT IS IMPORTANT. PLEASE ACT TODAY.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER NOMINEE, WE
URGE YOU TO CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND DIRECT HIM OR
HER TO EXECUTE A GOLD REVOCATION OF CONSENT CARD ON YOUR BEHALF, VOTING AS
RECOMMENDED BY DOMINION BRIDGE CORPORATION'S BOARD OF DIRECTORS. YOU SHOULD ALSO
SIGN, DATE AND MAIL YOUR GOLD REVOCATION OF CONSENT CARD WHICH IS ENCLOSED
HEREWITH. PLEASE DO SO AT ONCE.
Thank you for your support.
Very truly yours,
The Board of Directors
Dominion Bridge Corporation
If you have any questions about giving your revocation of consent or require
assistance, please call:
Morrow & Co., Inc.
909 Third Avenue, 20th Floor
New York, New York 10022
1-800-662-5200
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PRELIMINARY COPY
September _____, 1997
REVOCATION OF CONSENT STATEMENT OF THE
BOARD OF DIRECTORS OF
DOMINION BRIDGE CORPORATION
IN OPPOSITION TO A CONSENT SOLICITATION
BY CERTAIN STOCKHOLDERS
This Revocation of Consent Statement is furnished by the Board of Directors
(the "Board") of Dominion Bridge Corporation, a Delaware corporation ("Dominion
Bridge" or the "Company"), to the holders of outstanding shares of the Company's
Common Stock, par value $.001 per share (the "Common Stock"), in connection with
the Board's opposition to the solicitation (the "Kuhns Solicitation") of written
stockholders' consents by a committee of John D. Kuhns, Kenneth W. Mariash and
John M. Dutton, who call themselves "The Committee to Revitalize Dominion Bridge
Corporation" and are referred to herein as the "Committee" or the "Kuhns Group."
The Company believes that the Kuhns Group is seeking to effect a cheap take-over
of the Company by (i) removing, without cause, members of senior management;
(ii) electing to positions of senior management the members of the Committee;
and (iii) amending the Company's By-Laws to make it effectively impossible for
the Board to function and place the power of the Board in Kuhns. Having recently
failed to achieve shareholder support sufficient to approve its proposals, this
solicitation represents the Committee's second attempt to illegally obtain
control of your Company. This statement and the enclosed GOLD Revocation of
Consent Card are first being mailed to stockholders on or about September ____,
1997.
THE BOARD UNANIMOUSLY OPPOSES THE KUHNS SOLICITATION. THE BOARD URGES YOU
NOT TO SIGN ANY [WHITE] CONSENT CARD SENT TO YOU BY HIS COMMITTEE.
IF YOU HAVE PREVIOUSLY SIGNED AND RETURNED THE WHITE CONSENT CARD YOU HAVE
EVERY RIGHT TO CHANGE YOUR MIND. WHETHER OR NOT YOU HAVE SIGNED THE WHITE
CONSENT CARD, THE BOARD URGES YOU TO SIGN, DATE AND MAIL THE ENCLOSED GOLD
REVOCATION OF CONSENT CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. ALTHOUGH
SUBMITTING A CONSENT REVOCATION WILL NOT HAVE ANY LEGAL EFFECT IF YOU HAVE NOT
SUBMITTED A CONSENT CARD, IT WILL HELP US KEEP TRACK OF THE PROGRESS OF THE
STOCKHOLDER VOTE. REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR REVOCATION OF
CONSENT IS IMPORTANT. PLEASE ACT TODAY.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER NOMINEE, WE
URGE YOU TO CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND DIRECT HIM OR
HER TO EXECUTE A GOLD REVOCATION OF CONSENT CARD ON YOUR BEHALF, VOTING AS
RECOMMENDED BY DOMINION BRIDGE CORPORATION'S BOARD OF DIRECTORS. YOU SHOULD ALSO
SIGN, DATE AND MAIL YOUR GOLD REVOCATION OF CONSENT CARD WHICH IS ENCLOSED
HEREWITH. PLEASE DO SO AT ONCE.
If you have any questions about giving your revocation of consent or
require assistance, please call:
Morrow & Co., Inc.
909 Third Avenue, 20th Floor
New York, New York 10022
1-800-662-5200
REASONS TO REJECT THE
KUHNS SOLICITATION
In furtherance of their goal of taking over the Company BASED ON UNFUNDED
PROMISES AND AN EXTREMELY VAGUE AND QUESTIONABLE BUSINESS PROPOSAL, the Kuhns
Group is, once again, seeking written consents of the Company's stockholders to
make it effectively impossible for your duly elected Board of Directors to
fulfill their responsibilities to the stockholders, to remove without cause the
existing senior management of the Company and to replace them with the members
of the Committee, notwithstanding that they have articulated a vague business
plan for the Company that provides no stockholder value, they have no meaningful
experience in the Company's businesses and they have no relationships with the
Company's suppliers, customers, financing sources or government agencies which
have been and are providing support to the Company. This solicitation is
identical to the Committee's first solicitation which was rejected by the
stockholders. The Committee's decision to ignore this mandate and commence this
second solicitation proves what the Company has been saying all along--that the
Committee is not acting on behalf of or in the interest of the Company's
stockholders, but rather for their own selfish needs. Accordingly, the Board
of Directors is asking stockholders not to provide their consent and is
soliciting from the Company's stockholders revocations of any consents that may
have been given.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY BELIEVES THAT THE KUHNS
GROUP PROPOSAL IS NOT IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS AND
URGES STOCKHOLDERS TO REJECT THE PROPOSAL. YOUR BOARD OF DIRECTORS THEREFORE
REQUESTS THAT YOU SIGN, DATE AND RETURN THE ENCLOSED GOLD REVOCATION OF CONSENT
CARD, WHETHER OR NOT YOU HAVE PREVIOUSLY SIGNED AND RETURNED THE [WHITE] CONSENT
CARD.
REASONS TO SUPPORT
THE BOARD OF DIRECTORS
The Board of Directors strongly believes that the arguments set forth by
the Kuhns Group are seriously flawed and misleading, and that the Kuhns Group's
proposal lacks any viable plan for the Company.
Furthermore, the Kuhns Group's attempts to take over Dominion Bridge would,
the Board believes, deprive the Dominion Bridge stockholders of the opportunity
to benefit from the progress now underway at Dominion Bridge.
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In furtherance of its commitment to increase long-term stockholder value,
the Board has retained the investment banking firm of Legg Mason Wood Walker,
Incorporated ("Legg Mason") to assist the Board in exploring strategic
alternatives to enhance stockholder value and formed a special committee of
independent directors charged with the responsibility to work with and monitor
the progress of Legg Mason. In its initial report to the Board, Legg Mason
recommended that the Company seek a strategic investment partner or pursue the
sale of the Company. Successful implementation of this strategy requires, among
other things, a responsive and nimble Board. The Committee's proposal would
paralyze your Board and unreasonably restrict the Board's ability to effectuate
its plan to increase value for all stockholders. Although the Board is committed
to enhancing stockholder value, as of the date of this statement, no transaction
has been identified and there can be no assurance that the Company's initiative
will result in a transaction.
As a further expression of their support for Legg Mason's recommendation
and confidence in the Company's current business plan, members of senior
management and other key employees recently exercised options to purchase
approximately 2.3 million shares of common stock at a premium to market. This
provided the Company with approximately $4.8 million of cash for use until the
BNY facility is available. Members of your Board and senior management now own
in excess of 3.8 million shares in the Company while members of the Committee
own just 2,000. Like their fellow stockholders, your Board of Directors and
senior management have a substantial interest in the value of the Company's
common stock, and believe that the Committee's proposal is detrimental to the
long term value of your investment in the Company.
The fruits of the Company's strategy are becoming more and more apparent
and hold, the Board believes, the potential to significantly improve future
performance. In fact, the Company reported a net profit of $470,000 or $.02 per
share for the quarter ended June 30, 1997. The Company has also executed a
letter of intent with BNY Financial Corporation ("BNY") for a $40 million line
of credit. The Company expects to close this financing in September. Now is not
the time to interrupt this strategy and the work of current management.
THEREFORE, THE BOARD URGES THAT STOCKHOLDERS NOT SUPPORT THE KUHNS GROUP
AND URGES STOCKHOLDERS TO REVOKE ANY CONSENT THAT MAY HAVE BEEN GIVEN.
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DESCRIPTION OF THE KUHNS GROUP PROPOSAL
As set forth in their consent materials (the "Consent Materials") filed
with the United States Securities and Exchange Commission (the "Commission"),
the Kuhns Group is seeking nothing less than a total and complete immobilization
of the Board in favor of Kuhns as Chairman. The proposed amendments to the
By-Laws contain no less than eleven (11) impractical, onerous and exceedingly
burdensome procedural mechanisms calculated to make effective Board action on
any issue a near impossibility. The Kuhns Group's proposal (the "Proposal")
expressly and unequivocally divests the Board of any authority to manage the
affairs of Dominion Bridge including the basic and fundamental right to appoint
its principal executive officers. By creating the office of "Chairman" with all
encompassing powers to appoint and remove any and all other officers and manage
the affairs of Dominion Bridge unchecked by its duly elected Board, the Kuhns
Group will have created a "super manager", a concept which is foreign to both
Delaware law and to well-managed public companies.
The Kuhns Group's proposal contains a number of substantive provisions
which effectively prohibit the Board from managing the business of Dominion
Bridge. Most disturbing is the Kuhns Group's proposal to delete Article 2
Section 1 of the existing Bylaws which provides in its entirety as follows:
General Powers. The business and affairs of the Corporation shall be
managed by or under the direction of the board of directors.
By eliminating this Bylaw, the Kuhns Group seeks to deprive Dominion
Bridge's duly elected Board of any express authority to manage the affairs of
Dominion Bridge Corporation which, the Company believes, violates the framework
for corporate governance established under Delaware law. In its place, the Kuhns
Group proposes to create the office of "Chairman" with unfettered authority to
perform the management function which is entrusted by statute to the Board.
Specific proposed amendments prohibit the Board from appointing any of the
officers of Dominion Bridge and empowers the stockholders to elect "three senior
officers." The most senior of these officers will be the "Chairman" who will
have the power to appoint, remove and determine the compensation for all other
officers. In a veiled attempt to classify the "Chairman" as a garden variety
officer, throughout its Consent Materials, the Kuhns Group characterizes the
"Chairman's" responsibilities as managing the "day-to-day" affairs of Dominion
Bridge. As explained herein, the "Chairman" is a virtual substitute for the
Board with powers and responsibilities beyond any corporate officer envisioned
by or contemplated within the Delaware law and beyond the reach of your duly
elected Board.
To insure that the Board does not interfere in any way with the appointment
of Dominion Bridge's officers and Kuhns' management of Dominion Bridge, the
Kuhns Group proposes to prohibit the Board from removing, filling any vacancies
or setting the compensation of any corporate officers.
In addition to depriving the Board of any role in managing the affairs of
Dominion Bridge on behalf of its stockholders, the Kuhns Group is seeking to
make it nearly impossible for the Board to take any legitimate corporate action.
The Consent Materials propose the following procedural amendments governing the
internal operating procedures of the Board:
1. Unanimous attendance required for a quorum;
2. Unanimous vote to effectuate any Board action;
3. Meetings may only be held in Delaware at Dominion Bridge's registered
office;
4. Elimination of the Board's right to act by written consent;
5. Prohibiting the compensation of, and the reimbursement of expenses
incurred by directors;
6. Prohibiting telephonic Board meetings;
7. Setting the number of directors at eight and thereafter, as
established by the "Chairman;"
8. Requiring seven days notice for regular meetings;
9. Requiring unanimous Board consent to form a Board committee;
10. Requiring committees to consist of at least two-thirds of the total
number of directors; and
8
<PAGE> 10
11. Requiring unanimous attendance for quorum and unanimous vote to
effectuate any action of any Board committee and requiring that all
committee meetings be held at Dominion Bridge's registered office in
Delaware.
Reflecting the global scale of its operations, the Company has directors in
Asia, Europe and North America. These provisions serve no legitimate purpose
other than to thwart any reasonable effort by the Board to fulfill their
fiduciary duties on behalf of the stockholders of Dominion Bridge. For example,
the simple task of approving a single resolution, no matter how inconsequential,
would entail the expenditure of substantial non-reimbursable expenses by every
director, cross-country, international, transatlantic and transpacific travel,
seven days written notice and the retention of facilities in Wilmington,
Delaware.
The flexibility provided by the current Bylaws is not only typical of most
public companies, it allows your Board to quickly and efficiently respond to
issues as they arise. Given the general nature of the Company's global
construction business and current pressing issues, including the retention of
Legg Mason and closing of the BNY facility, this flexibility is absolutely
necessary in order to properly manage your Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS REJECT THE KUHNS GROUP PROPOSAL.
LEGAL PROCEEDINGS
On May 23, 1997, the Kuhns Group commenced a lawsuit against the Company in
Federal District Court in Wilmington, Delaware seeking a declaration that it
should be permitted to solicit written consents from the Company's stockholders
without violating federal securities laws and that the Company's Second Amended
and Restated By-laws, particularly those provisions relating to the
stockholder's right to take action by written consent and requiring advance
notice of stockholders in order to submit a nominee to serve on the Company's
Board of Directors, are invalid. The Committee alleges that the description of
these provisions appearing in certain public filings, including the Company's
1997 Proxy Statement, render the election of directors at the Company's 1997
Annual Meeting void. With the exception of its claim that stockholders have the
right to act by written consent, the Company believes that all claims asserted
by the Kuhns Group are entirely without merit and is vigorously defending this
matter. In that regard, on June 4, 1997 the Company filed its answer
affirmatively denying the factual allegations and legal theories of the
Committee along with a nine (9) count counterclaim. The counterclaim seeks
declaratory and injunctive relief against the Committee for its illegal and
improper consent solicitation in contravention of Delaware law and its violation
of federal securities laws by disseminating materially false and misleading
information to stockholders. The Company is also seeking damages for the
Committee's unjustified and tortuous interference with the Company's contractual
and prospective relations and its conspiracy to harm the Company's business and
prospects. At this time, discovery is proceeding on both the Committee's claim
and the Company's counterclaim.
On June 2, 1997, the Company filed a complaint against Kuhns Group member
John M. Dutton in the United States District Court for the District of Delaware
seeking a preliminary and permanent injunction against Mr. Dutton, and all other
persons acting in concert with him, to prevent Mr. Dutton from continuing to
disseminate material non-public information about the Company in furtherance of
his conspiracy to illegally obtain control of the Company. During his
eight-month tenure with the Company, Mr. Dutton maintained a position of trust
and was privy to proprietary and confidential non-public information about the
Company, its financial prospects, prospective projects and strategic business
plans. Upon his resignation from the Company on May 12, 1997, Mr. Dutton took
his laptop computer, which contained numerous confidential files, and illegally
retained other confidential documents including financial statements and
stockholder lists. The Company believes that he has been disseminating this
confidential nonpublic information in his efforts to illegally gain control of
the Company and jeopardize the Company's current and potential contractual
relationships. The Company is seeking injunctive and monetary relief based on
Mr. Dutton's breaches of his fiduciary and common law duties to the Company and
his misappropriation and misuse of confidential information. Although discovery
has not been completed, Mr. Dutton has filed a motion for summary judgment with
respect to all of the Company's claims. This motion has been opposed by the
Company and is currently pending before the court.
On June 3, 1997, Kuhns filed a suit in equity against the Company in the
Court of Chancery of the State of Delaware to compel the Company to provide
Kuhns with a list of the Company's stockholders as of May 23, 1997. Since Kuhns
was not a stockholder of record on May 23, under Delaware law, he had no right
to the Company's stockholder list. The Company further objected to Kuhns'
request on equitable grounds inasmuch as Kuhns or those persons acting in
concert with him have illegally obtained and retained various corporate records
of the Company, including portions of its stockholder list, and that he is
seeking the list for the improper purpose of furthering his illegal solicitation
of stockholder consents. Kuhns subsequently filed a request for the stockholder
list as of June 10, 1997, a date on which he was a record holder. On the basis
of his subsequent demand, on June 18, 1997, the Company entered into a
stipulation of settlement with Kuhns pursuant to which the Company agreed to
produce the stockholder list and related materials.
9
<PAGE> 11
THE CONSENT PROCEDURE
The record date for determination of the stockholders of the Company
entitled to execute, withhold or revoke consents relating to the Kuhns
Solicitation is the close of business on August 20, 1997 (the "Record Date").
Under Delaware law, unrevoked consents from the holders of record of a majority
of the outstanding shares of Common Stock on the Record Date are necessary for
the Company's stockholders to act by written consent to (i) remove, without
cause, certain members of the senior management, (ii) replace them with the
members of the Kuhns Group and (iii) amend the Company's By-Laws as proposed by
the Committee. As of the Record Date, there were 31,432,648 shares of Common
Stock outstanding, each entitled to one vote per share.
Under Section 228 of the Delaware General Corporation Law, all consents
will expire unless valid, unrevoked consents representing a majority of the
outstanding shares of Common Stock of the Company are delivered to the Company
within 60 days of the earliest-dated consent. A consent signed by Kuhns was
filed with the registered agent of the Company in Delaware on August 20, 1997
establishing the Record Date and October 19, 1997 as the expiration date.
The Company believes that the operation of the Proposal violates Delaware
corporate law because, among other things, it divests your elected Board of
responsibilities for managing the affairs of the Company.
Section 141 of the Delaware General Corporation Law ("DGCL") sets forth the
fundamental principle that the business and affairs of Delaware corporations are
to be managed by a board of directors and that any deviations from this mandate
must be expressly set forth in the DGCL or the certificate of incorporation. A
board carries out these duties by, among other things, delegating authority to
the officers of the corporation. As described herein, the proposed by-law
amendments are designed to prevent your elected Board from managing the affairs
of the Company and vests such power in Kuhns thereby turning this basic
principle of corporate governance established by the DGCL on its head by
inverting the relative positions of the Board and the officers.
This cornerstone of corporate governance has been consistently cited and
recognized in the decisions of Delaware and other courts. In fact, almost every
landmark decision by Delaware courts regarding the DGCL contains express
reference to and is based, in part, on the fundamental principle that the board
has a fiduciary duty to manage the business and affairs of Delaware
corporations. See, for example Paramount Communications, Inc. v. QVC Network,
Inc., 637 A.2d 34, 41-42 (Del. 1993), Paramount Communications, Inc. v. Time,
Inc., 571 A.2d 1140, 1154 (Del. 1989), Unocal Corporation v. Mesa Petroleum,
Inc., 493 A.2d 946 (Del. 1985) and Aronson v. Lewis, 473 A.2d 805, 812 (Del.
1984). In addition, courts interpreting Delaware law routinely invalidate
extreme infringements on a board's inherent authority to manage Delaware
corporations that are purportedly effected outside of the certificate of
incorporation. See, for example Lehrman v. Cohen, 222 A.2d 800, 808 (Del. 1966)
and Abercrombie v. Davis, 123 A.2d 893 (Del. Ch. 1960).
Based on opinions of its counsel, the Company firmly believes that the
Committee's proposal to radically alter the fundamental framework of corporate
governance by placing the power of the entire Board in Kuhns and articulating
its plan to seek additional stockholder action in the future as circumstances
require without, at the very least, amending the Company's certificate of
incorporation, violates applicable Delaware law. The question of the legality of
the proposed by-law amendments is presently pending before the Federal District
Court for the District of Delaware, but has not been decided. Ultimately, the
question of the legality of the by-law amendments is expected to be determined
by the courts and even if sufficient consents are obtained, the Board will take
no action pursuant to the consents until a final decision has been rendered.
A stockholder may revoke any previously signed consent by signing, dating
and returning to the Company a GOLD Revocation of Consent Card. A consent may
also be revoked by delivery of a written revocation of consent to the Committee.
Stockholders are urged, however, to deliver all revocations of consents to
Morrow & Co., Inc., 909 Third Avenue, 20th Floor, New York, New York 10022
(Facsimile No. 212-754-8300). The Company requests that if a revocation is
instead delivered to the Committee, a photostatic copy of the revocation also be
delivered to the Company, c/o Morrow & Co., Inc., at the address set forth
above, so that the Company will be aware of all revocations. Any revocation of
consent may itself be revoked at any time by signing, dating and returning to
the Committee a subsequently dated [white] consent card sent to you by the
Committee, or by delivery of a written revocation of such revocation of consent
to the Company or the Committee.
The Company will retain an independent inspector of elections in connection
with the Kuhns Solicitation.
Only stockholders as of the Record Date are eligible to execute, withhold
or revoke consents in connection with this solicitation. Persons owning Common
Stock beneficially (but not of record), such as persons whose ownership of
Common Stock is through a broker, bank or other financial institution, should
contact such broker, bank or financial institution and instruct such person to
execute the GOLD revocation card on their behalf or to have such broker's,
bank's or financial institution's nominee (such as Cede & Co.) execute such a
revocation card.
10
<PAGE> 12
If you have any questions concerning this Revocation of Consent Statement
or need assistance in executing the enclosed GOLD revocation card, please
contact Morrow & Co., Inc., 909 Third Avenue, 20th Floor, New York, New York
10022 (Telephone No. 1-800-662-5200).
Carefully review this Revocation of Consent Statement. YOUR RESPONSE IS
IMPORTANT. You are urged not to sign any [white] consent cards. Instead, reject
the Committee's solicitation efforts by promptly completing, signing, dating and
mailing the enclosed GOLD revocation card. Please be aware that if you sign a
white card but do not check any of the boxes thereon, you will be deemed to have
consented to the Kuhns Group's proposals.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of September 9, 1997, certain
information concerning the stock ownership of all persons known by the Company
to own beneficially more than 5% of the Company's outstanding Common Stock,
based upon filings with the Securities and Exchange Commission, as well as the
beneficial ownership of such Common Stock, as of such date, of all executive
officers and directors, individually and as a group.
<TABLE>
<CAPTION>
PERCENTAGE
SHARES OWNED OF
BENEFICIALLY OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER AND OF RECORD SHARES(1)
- ------------------------------------ ------------- ---------
<S> <C> <C>
Michel L. Marengere 6,547,260(2) 20.8%
500 Rue Notre Dame
Lachine Quebec, Canada H8S 2B2
Rene Amyot -- --
523 Cote Ste. Anne
Ste. Anne de Beaupre
Sante-Foy
Quebec, Canada G0A 3C0
Nicolas Matossian 6,547,260(3) 20.8%
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Reynald Lemieux 26,000(4) (5)
1340 Duquet
Sillery
Quebec, Canada G1S 1A9
Louis Berlinquet 25,000(6) (5)
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Peter P. Gil 25,000(6) (5)
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Andrew Choa 25,000(6) (5)
3801-4 Edinburgh Tower
The Landmark
16 Queens Road
Hong Kong
Ladislas O. Rice 25,000(6) (5)
19 Redington Road
London, England NW3 7QX
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
PERCENTAGE
SHARES OWNED OF
BENEFICIALLY OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER AND OF RECORD SHARES(1)
- ------------------------------------ ------------- ---------
<S> <C> <C>
Robert Chartier 20,000 (7) (3)
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
J. Arthur Gelinas 20,000 (8) (3)
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Olivier Despres - -
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Douglas Gerard 6,547,260 (9) 20.8%
C/O Deer Parke Capital Management LLC
650 Dundee Road, Suite 640
Northbrook, Illinois 60062
Leonard Feldman 6,547,260 (9) 20.8%
C/O Deer Parke Capital Management LLC
650 Dundee Road, Suite 640
Northbrook, Illinois 60062
All Directors and Officers as a group (11 persons)
6,547,260 20.8%
</TABLE>
(1) Except as otherwise indicated, percentages are presented after rounding to
the nearest tenth and include the total number of shares outstanding and
the number of shares which each person has the right to acquire, within 60
days through the exercise of options, pursuant to Item 403 of Regulation
S-K and Rule 13d-3(d)(1), promulgated under the Securities and Exchange Act
of 1934, as amended (the "Exchange Act"). Percentages for the total of all
persons and the total of all officers and directors include all outstanding
shares and all shares which such persons have the right to acquire within
60 days.
(2) As a manager of Dominion Park, LLC which is the record owner of 4,490,100
shares of Common Stock and holds a proxy with respect to the voting of an
additional 2,057,160 shares, Mr. Marengere has shared voting power over
these shares and is deemed to beneficially own such shares. Also includes
1,659,792 shares held of record by Fidutech Technologies, Inc. as to which
Mr. Marengere has shared investment power. Mr. Marengere is the sole
stockholder of Gestion Edinov Inc. and Services M.L. Marengere, Inc. which
own, in the aggregate, 75% of Fidutech.
(3) As a manager of Dominion Park, LLC which is the record owner of 4,490,100
shares of Common Stock and holds a proxy with respect to the voting of an
additional 2,057,160 shares, Mr. Matossian has shared voting power over
these shares and is deemed to beneficially own such shares. Also includes
240,000 shares held of record by Greyhorse Resources (Canada) Ltd. as to
which Mr. Matossian has sole investment power. Mr. Matossian is the sole
director, officer and shareholder of Greyhorse.
(4) Includes 25,000 shares of Common Stock that may be issued pursuant to stock
options exercisable at $2.00.
(5) Less than 1%.
(6) Consists of shares of Common Stock that may be issued pursuant to stock
options exercisable at $2.00.
(7) Represents shares held of record by Mr. Chartier over which he has sole
investment power. These shares are subject to a proxy which vests Dominion
Park with sole voting power.
(8) Represents shares held of record by Mr. Gelinas over which he has sole
investment power. These shares are subject to a proxy which vests Dominion
Park with sole voting power.
(9) As managers of Dominion Park, LLC which is the record owner of 4,490,100
shares of common stock and holds a proxy with respect to an additional
2,057,160 shares, Messrs. Gerard and Feldman have shared voting power over
these shares and are deemed to beneficially own such shares.
SOLICITATION OF REVOCATIONS
COST AND METHOD
The cost of the solicitation of revocations of consent will be borne by the
Company. It is estimated that the Company spent $500,000 in opposing the
Committee's first consent solicitation. The Company estimates that the total
expenditures relating to the Committee's current solicitation (other than
salaries and wages of officers and
12
<PAGE> 14
employees, but including costs of litigation related to the solicitation) will
be approximately $300,000, of which approximately $20,000 has been spent as
of the date hereof. In addition to solicitation by mail, directors, officers and
other employees of the Company may, without additional compensation, solicit
revocations by mail, in person or by telecommunication.
The Company has retained Morrow & Co., Inc. ("Morrow"), professional
consent revocation solicitors, at an estimated fee of $200,000 plus reasonable
out-of-pocket expenses, to assist in the solicitation of revocations. The
Company will reimburse brokerage houses, banks, custodians and other nominees
and fiduciaries for out-of-pocket expenses incurred in forwarding the Company's
consent revocation materials to, and obtaining instructions relating to such
materials from, beneficial owners of Common Stock. Morrow has advised the
Company that approximately 40 employees of Morrow will be involved in the
solicitation by Morrow on behalf of the Company.
PARTICIPANTS IN THE SOLICITATION
Under applicable regulations of the SEC, each of the directors of the
Company, executive officer Olivier Despres and Deere Park Equities LLC ("Deere
Park") may be deemed to be a "participant" in the Company's solicitation of
revocations of consent. The business address of each director, Mr. Despres and
Deere Park is provided above under "Security Ownership of Certain Beneficial
Owners and Management."
The following is a listing of transactions in Common Stock by the Company's
participants during the last two years: (1) On August 19, 1997, Messrs.
Marengere, Matossian, Amyot and Despres entered into an agreement with Deere
Parke which involves the transfer of 1,500,000 shares of common stock acquired
upon the exercise of options and the grant of a proxy with respect to 1,909,792
shares to a newly formed partnership or similar entity. Deere Park agreed to
transfer 2,110,000 shares to this newly formed entity. This entity will have the
power to vote 6,547,260 shares of common stock, or 20.8% of the outstanding
shares. Pursuant to this agreement, Messrs. Marengere and Matossian will have
shared voting power over all of 6,547,260 shares, (2) On March 31, 1997 Rene
Amyot acquired 1,000 shares of Common Stock in open market transactions at a
purchase price of $1.625 per share; (3) On April 15, 1997 Reynald Lemieux
acquired 1,000 shares of Common Stock in open market transactions at a purchase
price of $1.7875 per share; (4) on March 13 and June 18, 1997 Nicolas Matossian
acquired 25,000 and 50,000 shares of Common Stock in open market transactions at
a purchase prices of $1.875 and $1.1875 per share, respectively; and (5) Deere
Parke transactions. Information about the present stock ownership interest of
the Company's other participants is provided in "Security Ownership of Certain
Beneficial Owners and Management."
OTHER CONTRACTS, ARRANGEMENTS AND UNDERSTANDINGS WITH PARTICIPANTS
SERVICE AGREEMENTS
Effective February 1, 1995, the Company entered into three-year service
agreements with Michel L. Marengere as Chairman and Chief Executive Officer and
Nicolas Matossian as President and Chief Operating Officer.
The service agreements with Messrs. Marengere and Matossian (individually
an "executive") contain "change in control" language which provides the
executive with certain benefits, including payment to the executive in the
amount of three times his base compensation, if the executive is terminated for
"good reason," as that term is defined in the service agreements, following a
change in control of the Company. The service agreements provide that a "change
in control" shall mean a change in control of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A, as in
effect on the date thereof, promulgated under the Exchange Act; provided,
however, that, without limitation, such a change in control shall be deemed to
have occurred if (A) any "Person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), except for Michel L. Marengere, or a company
controlled by him, is or becomes the beneficial owner, directly or indirectly,
of securities of the Company representing 10% or more of the combined voting
power of the Company's then outstanding securities; (B) there occurs a contested
proxy solicitation of the Company's stockholders that results in the contesting
party obtaining the ability to vote securities representing 20% or more of the
combined voting power of the Company's then outstanding securities; (C) there
occurs a sale, exchange, transfer or other disposition of substantially all of
the assets of the Company to another entity, except to an entity controlled
directly or indirectly by the Company, or a merger, consolidation or other
reorganization of the Company in which the Company is not the surviving entity,
or a plan of liquidation or dissolution of the Company other than pursuant to
bankruptcy or insolvency laws is adopted; or (D) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by the Company's
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period. Notwithstanding the foregoing, a "change in control" shall not be deemed
to have occurred for purposes of the service agreements (i) in the event of a
sale, exchange, transfer or other disposition of substantially all of the assets
of the Company, or a merger, consolidation or other reorganization involving the
Company and the executive, alone or with other officers of the Company, or any
entity in which an executive (alone or with other officers) has, directly
13
<PAGE> 15
or indirectly, at least a 25% equity or ownership interest or (ii) in a
transaction otherwise commonly referred to as a "management leveraged buy-out."
If a "change in control" had occurred as of the end of the Company's last
fiscal year ("Fiscal 1996"), Messrs. Marengere and Matossian would have been
entitled to receive $1,080,000 and $720,000, respectively, based on their base
compensations pursuant to their respective service agreements. In addition,
since their service agreements are for three year terms ending January 31, 1998
they would also be entitled to receive their base compensation during the terms
of their respective service agreements.
Pursuant to the Company's 1995 Stock Option Plan (the "1995 Plan"),
nonqualified and incentive stock options and limited stock appreciation rights
may be granted to each of the named executive officers. Under the 1995 Plan,
upon a "change in control" of the Company, as defined in the 1995 Plan (which is
defined in essentially the same manner as in the service agreements), optionees
are entitled, upon approval by the Compensation Committee, to receive, upon
surrender of the related stock option and exercise of any limited stock
appreciation right, cash in an amount equal to the difference between the
exercise price per share of Common Stock under the option and the fair market
value of a share of Common Stock.
If a change in control had occurred on September 30, 1996, based on a
market price of $2.00 per share on that date, no payment would have been
required to be made.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of September 30, 1996, a subscription receivable in the aggregate amount
of $1,824,000 was owed to the Company by Mr. Marengere or his affiliates. During
Fiscal 1996, Mr. Marengere was indebted to the Company in maximum amount of
$781,000. This outstanding debt has been satisfied in full. During Fiscal 1994,
the Company advanced $1,734,000 to a stockholder, Fidutech Technologies, Inc.
and its affiliates ("Fidutech"), which are controlled by Messrs. Marengere and
Amyot. As of July 1, 1994, $1,155,000 of this amount was assumed by the acquirer
of Edinov. The balance of $579,000 was non-interest bearing and has been paid in
full. In connection with the Settlement of a derivative action brought against
the Company and Messrs. Marengere and Amyot, Messrs. Marengere and Amyot have
agreed to cause Fidutech to guarantee the payment of the assumed debt.
During Fiscal 1996, the Company paid $80,418 in fees to Rene Amyot, a
director, for consulting and legal services provided to the Company.
OTHER AGREEMENTS
Except as otherwise set forth in this Revocation of Consent Statement, to
the best of the Company's knowledge, (i) no participant referred to above is, or
was within the past year, a party to any contract, arrangement or understanding
with any person with respect to any shares of Common Stock, and (ii) neither any
of the participants referred to above nor any of their respective associates has
any arrangement or understanding with any person with respect to any future
employment by the Company or its affiliates, or with respect to any future
transaction as to which the Company or any of its affiliates will or may be a
party.
14
<PAGE> 16
1998 STOCKHOLDER PROPOSALS
In order for stockholder proposals for the 1998 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's proxy statement, they
must be received by the Company as its principal office in Lachine, Quebec, on
or before October 2, 1997.
We appreciate your support and encouragement.
On Behalf of the Board of Directors,
Olivier Despres
Secretary
IMPORTANT
The Board of Directors urges you NOT to return any [WHITE] consent card
solicited from you. If you have previously returned any such consent card you
have every right to change your vote. Simply sign, date and mail the enclosed
GOLD Revocation of Consent Card in the postage-paid envelope provided, whether
or not you previously returned the white consent card.
If your Shares are held in "Street" name at a brokerage firm, custodian
bank or other nominee and you wish to support your current Board of Directors,
you must either (a) sign and date the GOLD Revocation of Consent Card and mail
it in the envelope provided to you by such organization, or (b) call the person
responsible for your account at that organization and instruct that person to
execute and mail a GOLD Revocation of Consent Card representing your shares.
For additional information or assistance, please call Morrow & Co., Inc.,
our soliciting agent, toll free at 1-800-662-5200. Morrow & Co., Inc.'s address
is 909 Third Avenue, 20th Floor, New York, NY 10022.
15
<PAGE> 17
PRELIMINARY COPY
REVOCATION OF CONSENT
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
DOMINION BRIDGE CORPORATION
The undersigned, a holder of shares of Common Stock, par value $.001 per
share (the "Common Stock"), of Dominion Bridge Corporation (the "Company"),
acting with respect to all shares of Common Stock held by the undersigned at the
close of business on August 20, 1997, hereby acts as follows concerning the
proposals of the Committee to Revitalize Dominion Bridge Corporation (the
"Committee") set forth below.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY URGES YOU TO EXECUTE THE "YES,
REVOKE MY CONSENT" BOX.
PROPOSAL OF THE COMMITTEE
RESOLVED, that the Bylaws of the Company are hereby repealed in their
entirety.
RESOLVED, that the Bylaws included as Appendix A to the Consent
Statement dated September ___, 1997 of the Committee to Revitalize
Dominion Bridge Corporation contained in Article I (relating to
Stockholders) are approved and adopted.
RESOLVED, that the Bylaws included as Appendix A to the Consent
Statement dated September ____, 1997 of the Committee to Revitalize
Dominion Bridge Corporation contained in Article II (relating to
Directors) are approved and adopted.
RESOLVED, that the Bylaws included as Appendix A to the Consent
Statement dated September _____, 1997 of the Committee to Revitalize
Dominion Bridge Corporation contained in Article III (relating to
Officers), Article IV (Certificates of Stock) and Article V (General
Provisions) are approved and adopted.
RESOLVED, that the Bylaws included as Appendix A to the Consent
Statement dated September ____, 1997 of the Committee to Revitalize
Dominion Bridge Corporation contained in Article VI (relating to the
<PAGE> 18
Power to Amend) and Article VII (relating to the Sunset Provision) are
approved and adopted.
RESOLVED, that in accordance with Article III, Section 3 of the Bylaws
and in the best interests of the Company, Michel L. Marengere, Nicolas
Matossian and Olivier Despres are hereby removed as Chairman and Chief
Executive Officer, President and Chief Operating Officer, and Vice
President and Corporate Secretary, respectively.
RESOLVED, that in accordance with Article III, Section 2 of the
Bylaws, John D. Kuhns, Kenneth W. Mariash and John M. Dutton are
hereby elected Chairman, President and Secretary, respectively.
/ / YES, REVOKE MY CONSENT / / NO, DO NOT REVOKE MY CONSENT
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY URGES YOU TO EXECUTE THE "YES,
REVOKE MY CONSENT" BOX.
UNLESS OTHERWISE INDICATED ABOVE, THIS REVOCATION CARD REVOKES ALL
PRIOR CONSENTS GIVEN WITH RESPECT TO THE PROPOSAL SET FORTH HEREIN.
UNLESS YOU SPECIFY OTHERWISE, BY SIGNING AND DELIVERING THIS REVOCATION
CARD TO THE COMPANY, YOU WILL BE DEEMED TO HAVE REVOKED CONSENT TO ALL OF THE
PROPOSALS SET FORTH HEREIN.
Dated: _________________________, 1997
___________________________________________________________
Signature (Title, if any)
___________________________________________________________
Signature (if held jointly)
Please sign exactly as your name appears hereon. Persons
signing as Executors, Administrators, Trustees, etc. give full
title as such. Joint owners should both sign.
