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 / /
Filed by a party other than the registrant /X/
Check the appropriate box:
/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 14(a)-12
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(Name of Registrant as Specified in Charter)
THE COMMITTEE TO REVITALIZE DOMINION BRIDGE CORPORATION
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was
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paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY PROXY MATERIALS DATED
MAY 23, 1997 -- SUBJECT TO COMPLETION
THE COMMITTEE TO
REVITALIZE DOMINION BRIDGE CORPORATION
420 LEXINGTON AVENUE
SUITE 2860
NEW YORK, NEW YORK 10170
(212) 953-1010
June __, 1997
To the Stockholders of
Dominion Bridge Corporation:
In our view, the value of your investment in Dominion Bridge
Corporation is in jeopardy due to the poor performance and self-dealing of
current management. In recent weeks the Company reported a loss of approximately
$1.45 million for the first half of fiscal 1997, on top of an initial loss of
nearly $5.7 million in fiscal 1996. The 1996 loss was just restated by an
increase of nearly $4.3 million, FOR A TOTAL LOSS OF NEARLY $10 MILLION FOR
FISCAL 1996. For the past two years, the Company's gross profit margins have
been steadily declining while its administrative expenses and corporate overhead
have been increasing at a disproportionate rate.
As a result of these facts, the Company is faced with
dwindling cash and working capital necessary to operate the business. In spite
of this critical cash shortage, senior management has seen fit to pay themselves
cash bonuses aggregating $700,000 in the Company's most recent quarter.
Moreover, in order to gain an extension and forbearance of the bridge loan from
Bankers Trust, senior management undertook the sale of a portion of the
Company's shares of McConnell Dowell Corporation Limited, which is arguably the
Company's most profitable and valuable asset.
We believe that current management's poor performance has
contributed substantially to the precipitous drop in the Company's stock price:
from a high of $8-5/32 per share in fiscal 1995 to the current level of $1-1/2
per share, A DECLINE OF 80%.
The Company's senior executives, however, have personally
prospered over the last few years. The senior executives have received
exorbitant bonuses, and have also benefitted from the favorable downward
adjustment in the exercise price of their stock options, as well as from
substantial interest-free loans and other advances.
In sum, we believe that Dominion Bridge is poorly managed. The
stockholders of the Company need to reassert control over the management of the
Company before it is too late, by ousting the incumbent senior executive
management and replacing them with a new team
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of senior executives to manage the Company, to seek to restore profitability,
stop self-dealing and, ultimately, to improve the value of your investment. The
alternative -- maintaining the status quo -- is in our view a blueprint for
continued losses and the potentially disastrous deterioration of stockholders'
value.
In order to change the Company's senior executive management,
unfortunately stockholders cannot at this time propose or elect new nominees to
the current Board of Directors. However, a majority of stockholders, acting now
by written consent, can oust Messrs. Marengere, Matossian and Despres from their
executive positions as Chairman, President and Secretary, respectively, and
install the undersigned members of the Committee as the new senior executive
management team with authority to run the Company on a day-to-day basis. These
actions would be accomplished through the adoption by stockholders of the
Committee's proposals: implementing the new bylaws being proposed by the
Committee and the other stockholder resolutions set forth on the enclosed WHITE
written consent card.
If a majority of stockholders sign written consents to support
the Committee's solicitation, we believe that the current Board of Directors
would want to work with us to convince current senior executives to step aside
on an amicable basis. PLEASE SEND US YOUR WRITTEN CONSENT NOW IN ORDER TO HELP
ACHIEVE THIS OBJECTIVE.
The enclosed consent statement sets forth detailed information
about this consent solicitation. We urge you to read it in its entirety before
deciding whether to sign and return to us your written consent. We have set June
__, 1997 as the goal for the submission of written consents to the Committee;
however, we urge you to send us the WHITE written consent card as soon as
possible so that we can demonstrate to the Board of Directors that stockholders
strongly support the pressing need for a change.
Very truly yours,
THE COMMITTEE TO REVITALIZE
DOMINION BRIDGE CORPORATION
John D. Kuhns
Chairman
Kenneth W. Mariash
President and Chief Executive Officer
John M. Dutton
Secretary
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If your shares of Common Stock are held in the name of a bank or
brokerage firm, only that firm can execute a written consent card on
your behalf. Please contact the person responsible for your account and
instruct them to execute a WHITE written consent card as soon possible.
If you have questions or need assistance in voting your shares, please
contact the firm assisting us in the solicitation of written consents:
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
TOLL FREE: 1-800-223-2064
BANKS & BROKERS CALL: 212-440-9800
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PRELIMINARY PROXY MATERIALS DATED
MAY 23, 1997 -- SUBJECT TO COMPLETION
CONSENT SOLICITATION STATEMENT
OF
THE COMMITTEE TO REVITALIZE
DOMINION BRIDGE CORPORATION
This Consent Solicitation Statement (the "Consent Statement")
and the accompanying form of written consent are furnished by The Committee to
Revitalize Dominion Bridge Corporation (the "Committee") in connection with the
solicitation by the Committee of written consents from the holders of common
stock, $.001 par value per share (the "Common Stock"), of Dominion Bridge
Corporation, a Delaware corporation (the "Company"), to take the following
action (the "Proposal"), without a meeting of stockholders, as permitted by
Delaware law:
Remove the following officers: Mr. Michel L. Marengere as
Chairman of the Board and Chief Executive Officer, Mr. Nicolas
Matossian as President and Chief Operating Officer, and Mr.
Olivier Despres as Corporate Secretary; and elect Mr. John D.
Kuhns as Chairman, Mr. Kenneth W. Mariash as President and
Chief Executive Officer, and Mr. John M. Dutton as Secretary.
Those actions would take place immediately following the
implementation of stockholder resolutions to repeal the
Company's Bylaws (the "Old Bylaws") in their entirety and
approve and adopt new bylaws (the "New Bylaws") set forth as
Appendix A to this Consent Statement.
Approval of the Proposal requires the written consent of a
majority of the holders of Common Stock as of May 23, 1997 (the "Record Date").
Stockholders of record as of close of business on the Record Date will be
entitled to one vote for each share of Common Stock (the "Shares"). The
Committee has set June __, 1997 as the goal for the submission of written
consents; however, the last day for the submission of written consents to the
Company under Delaware law will be July 22, 1997. Based on publicly available
information filed by the Company with the Securities and Exchange Commission
(the "SEC") as of May 12, 1997, there were 29,003,648 shares of Common Stock
issued and outstanding.
This Consent Statement, the accompanying letter to
stockholders and the WHITE form of written consent are first being furnished to
stockholders on or about June __, 1997.
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REASONS FOR THE COMMITTEE'S SOLICITATION
INTRODUCTION
The Committee believes that the Company is being poorly
managed, that the current team of senior executives lacks the management
experience and ability to operate the Company profitably or for the objective of
maximizing stockholder value; and that the current team of senior executives has
been engaged in self-dealing to the detriment of stockholders. For example:
o The Company lost nearly $1.5 million for the first
half of fiscal 1997, despite approximately $5.5
million of extraordinary gains, including a $3
million pre-tax gain with respect to its sales of
shares of McConnell Dowell Corporation Limited
("McConnell Dowell") and $2.5 million of
non-operating income from the amortization of
negative good-will associated with the Company's
purchase of MIL Davie.
o The Company initially reported a loss of $5.7 million
for fiscal 1996. Just recently, the Company reported
that this loss would be restated by an increase of
nearly $4.3 million, for a total loss of nearly $10
million for fiscal 1996.
o In spite of the Company's poor operating performance
and dwindling cash reserves, senior management
received bonuses aggregating $700,000 in February
over the strenuous objections of the Company's
stockholders. Senior management also benefitted from
the favorable downward adjustment of the "strike
price" with respect to stock options to purchase
1,225,000 shares of Common Stock, from a range
between $3.25 to $4.13 to $2.00.
o With other alternatives available, senior executive
management nonetheless caused the Company to recently
sell a portion of its shares of McConnell Dowell,
which is arguably the Company's most profitable and
viable asset, in order to obtain an extension and
forbearance of a loan from Bankers Trust.
o Because of the deterioration of the Company's
operating performance, executive bonuses and bank
debt paydowns, the Company's cash and working capital
to operate the North American businesses has been all
but depleted.
o The price of the Common Stock has dropped from a high
of $8-5/32 in the first quarter of fiscal year 1995
to the present level of $1-1/2, a decline of 80% in
just over two years.
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o The Committee believes that through these and other
actions the Company's senior executives have received
over $5 million of cash and other benefits in the
past four years -- an amount which has undoubtedly
contributed to losses borne by stockholders during
that period.
In light of these events, the Committee believes that the
senior executive officers of the Company lack the ability and experience
necessary to successfully operate the Company.
The Company is primarily a diversified international
infrastructure concern, which requires expertise in engineering, procurement and
construction, as well as project finance. Neither Messrs. Marengere and
Matossian has a background in these areas. Under their control, the Company has
made several acquisitions but has failed to exploit their potential. For
instance, without proper financial controls and underwriting procedures, the
Company could agree to undertake major projects without a full evaluation of the
financial and business risks that could be attendant to such a commitment; only
after months or years into the project would the Company's true exposure be
known. The Committee believes that the recent and precipitous decline in the
Company's gross profit margin is one indication of management weakness in this
area.
Additionally, the Company's senior management has undertaken
various acts of self-dealing. Incredibly, the stockholders have had to
countenance not only these acts of self-dealing but have had to stand by while
senior management, at stockholders' expense, has devoted substantial time and
energy to defending itself, or certain executives individually, including Michel
Marengere and his wife, Micheline Prud'homme, a former vice-president and
director, in various lawsuits. This includes a stockholder derivative action
alleging interested and self-dealing transactions by Mr. Marengere and a class
action suit against the Company and Messrs. Marengere and Matossian,
individually, alleging that the Company issued misleading press releases and
reports to the SEC. The Committee believes that these and other litigation
matters distract the Company's management from concentrating their full-time
efforts on the operation of the Company's business and are a terrible waste of
corporate funds.
In summary, the Committee believes that the Company's senior
executive management has no interest in enhancing stockholder value and has no
intention (or perhaps lacks the capacity) to manage the Company for the benefit
of its stockholders. We also believe that senior management is acutely
interested in running the Company for its own benefit, even when its actions may
be to the detriment of stockholders. Accordingly, the Committee believes that
the only viable option for the Company's stockholders is to pursue the process
of replacing the current senior executive management team.
THE GOAL OF THE COMMITTEE
The Committee's goal in soliciting written consents through
this Consent Statement is to start the process of revitalizing the Company. The
Proposal for which approval is being sought is designed to enable stockholders
to remove Messrs. Marengere, Matossian and Despres
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as executive officers of the Company and replace them with Messrs. Kuhns,
Mariash and Dutton, with authority to run the Company on a day-to-day basis.
Furthermore, the New Bylaws are designed to help convince the current Board of
Directors to become more responsive to stockholders' interests and to work with
the Committee to convince current senior management to step aside on an amicable
basis. The Committee believes that with a new and more experienced senior
management team in place the Company will be able to better manage its assets,
negotiate with lenders and suppliers and, ultimately, restore the Company to
profitability.
WHY REPLACE THE OFFICERS, NOT THE BOARD OF DIRECTORS?
At this time, the Board of Directors cannot be removed, nor
can new directors be elected by stockholders. The General Corporation Law of the
State of Delaware (the "Delaware GCL"), and the Company's Restated Certificate
of Incorporation (the "Charter") effectively foreclose those actions. The
Charter establishes a classified board, with each class serving for a team of
three years. Therefore, replacing a majority of the Board of Directors could be
a two-year process. The Committee, however, believes that any delay --
especially two years -- is unthinkable and that it is imperative to act sooner.
Under Section 228(a) of the Delaware GCL, stockholders can act
by written consent in lieu of holding an annual or special meeting unless a
provision in a company's certificate of incorporation explicitly states
otherwise. The Company's Charter does not contain such a provision. While the
Old Bylaws purport to prohibit stockholder action by written consent, in the
absence of a corresponding charter provision, the restriction in the Old Bylaws
is superfluous and of no legal effect. See "Other Matters - Legal Proceeding."
By undertaking this consent solicitation and making the
Proposal, the Committee is seeking the benefit of the Delaware GCL to enable
stockholders to directly control certain aspects of the corporate governance of
the Company. The Proposal is designed to repeal the Old Bylaws and adopt the New
Bylaws. Under the New Bylaws, the stockholders would then have the power to
remove and elect the three senior executive officers of the Company. See "The
Proposal." These components of the Proposal are being presented as a single
matter for consideration by stockholders because the Committee is unwilling to
pursue the consent solicitation process unless all elements of the Proposal are
adopted.
If a majority of stockholders act by written consent to
support the Proposal, the Committee believes that the current Board of Directors
would want to work with the Committee to convince current senior executives to
step aside on an amicable basis. There can be no assurance in this regard,
however, in which case the New Bylaws would create impediments to smooth working
of the Board of Directors and would transfer to the new senior executive
officers nominated by the Committee authority to manage the Company on a
day-to-day basis. See "The Proposal -- Repealing the Old Bylaws and Adopting the
New Bylaws." Should the Proposal be adopted and enacted, the Committee would
periodically review the Company's corporate governance situation and might
recommend to stockholders changes to the Charter or the New Bylaws, including
adoption of new provisions or rescission.
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THE CASE AGAINST CURRENT MANAGEMENT
MANAGEMENT'S TRACK RECORD. Messrs. Marengere and Matossian
assumed their positions as the two most senior executives of the Company in
October 1993 and April 1994, respectively. Since then, the Company's revenues
have grown primarily through a succession of acquisitions of undervalued or
troubled assets and businesses. The Committee believes that this strategy, while
increasing the Company's revenues, when coupled with poor management, is a major
cause of the significant decline in stockholder value. Earnings (loss) per share
for the three and six months ended March 31, 1997 were $(.01) and $(.05),
despite $5.5 million in extraordinary and non-operating income items, as
compared to $.13 and $.25 for the same periods in fiscal 1996, respectively.
Similarly, earnings (loss) per share for fiscal year 1996, after the recent
restatement, was $(.54) as compared to $.14 for fiscal year 1995.
At the same time, the Company's gross profit margins have
declined by a precipitous 24.4% from fiscal years 1994 to 1996, to a level which
current senior management euphemistically calls "industry averages." The
Committee believes that those declines are not only symptomatic of the senior
management's lack of expertise in running a complex construction, procurement
and engineering company, including proper risk management, but, moreover, are
understated. For example, gross profit margins were inflated by including
millions of dollars of non-cash "negative goodwill" associated with the MIL
Davie transaction. It is not surprising that the Company has engaged three
different independent auditing firms in the past four fiscal years.
MANAGEMENT SELF-DEALING. In contrast to the diminution in
value suffered by the stockholders, Mr. Marengere and his affiliates have
personally benefited from his stewardship of the Company. For example:
o In fiscal year 1994, the Company advanced
approximately $1.73 million to Fidutech Technologies
Inc. and its affiliates, entities it admitted were
controlled by Mr. Marengere and another director of
the Company. A substantial portion of this advance,
$781,000, was recorded as an interest-free loan.
o In December 1994, a different corporate entity, Group
Fidutech International Inc. ("GFI"), which is also
controlled by Mr. Marengere and the same director,
bought Cdn. $2.7 million of preferred stock issued by
a subsidiary of the Company, which it subsequently
exchanged for 450,000 shares of Common Stock, at a
price of approximately $4.30 per share of Common
Stock. At that time, the high and low bid prices for
shares of Common Stock were approximately $7 3/4 and
$5 3/4, respectively, providing Mr. Marengere and his
fellow director of the Company with a paper gain of
approximately $1 million.
o In fiscal year 1995, the Company advanced $994,000 to
GFI.
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o The Company's balance sheet includes in the equity
section a subscription receivable of approximately
$1.82 million, all of which is owed by Mr. Marengere
and has been outstanding since fiscal year 1993.
Not surprisingly, stockholders of the Company brought a
derivative action against the Company, Mr. Marengere and two other individuals
alleging self-dealing. The settlement to this suit contemplates (i) the
repayment to the Company of the loans to affiliates of Mr. Marengere (which has
occurred); (ii) the guarantee by a company controlled by Mr. Marengere of
certain payments owed to the Company by the purchasers of a former subsidiary of
the Company; (iii) an agreement that no further interest-free loans may be made
to Mr. Marengere; (iv) an agreement that all future transactions not in the
ordinary course of business between the Company and Mr. Marengere be subject to
independent director approval; and (v) payment of the plaintiffs' attorney's
fees in the amount of $140,000.
MASSIVE DILUTION TO STOCKHOLDERS. Confirming the Committee's
view that the current senior executives lack any sophistication or expertise in
financial matters (other than their own), is the unfortunate story of the
Company's major external financings undertaken in fiscal year 1996:
o The Company raised a total of $54.2 million from a
private placement of the preferred stock by a
subsidiary and a bridge loan from Bankers Trust. The
costs of raising that capital: $4 million, or nearly
8%. This fact alone made these financings quite
expensive.
o The preferred stock was convertible by its terms into
Common Stock at a 12% to 15% DISCOUNT to market.
Amazingly, the Company's senior executives failed to
bargain for a minimum conversion price; consequently,
if the Company's stock price decreased the number of
shares issuable upon conversion could increase with
no theoretical limit.
o In fact, this is exactly what happened. Ultimately
the preferred stock was converted into nearly 11.7
million shares, which caused a 78% increase in the
number of shares of Common Stock outstanding from the
start of fiscal year 1996. This massive dilution to
holders of Common Stock arose because the preferred
stock had no minimum conversion price. In the
Committee's view this huge dilution, combined with
poor operating results, has helped cause the
substantial decline on the Company's stock price.
o The Bankers Trust bridge loan was used to finance the
acquisition of a controlling interest in McConnell
Dowell -- an Australian publicly-traded company.
Since that company still has minority, public
stockholders and pays no dividends, its profitability
adds no cash to the Company's coffers. Consequently,
given the losses in its other businesses, there is no
apparent financial support or cash flow for the
Bankers Trust bridge loan. Instead,
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the Company has had to resort to selling some of the
recently-acquired stock of McConnell Dowell to repay
Bankers Trust. Incredulously, senior management
states that this sell-down was always part of their
plan.
BACKGROUND OF THE COMMITTEE
Mr. John D. Kuhns, Chairman of the Committee, first met the
senior executives of the Company nearly one year ago when he was chairman of The
New World Power Corporation ("New World"), a publicly-traded company which Mr.
Kuhns had founded and was then a 10% stockholder. At the time, New World was in
the process of restructuring its debt agreements with its senior creditors. In
order to raise capital to complete a series of alternative energy projects then
under development by New World, the Company was one of the entities which was
introduced to New World by its financial advisor as a potential source of new
capital as well as engineering and construction expertise.
During the summer and fall of 1996, at the direction of New
World's board of directors, Mr. Kuhns led the negotiations for a joint venture
arrangement between New World and the Company pursuant to which those
alternative energy projects in New World's development portfolio would become
50% owned by the Company; in return, the Company would provide up to $2.5
million of funding, which was the estimated amount necessary to complete the
permits, planning, commitment letter and other development work needed to bring
those projects to the construction and permanent financing stage. At its option,
the Company could convert its investment in those jointly-owned development
projects into an equity interest of approximately 40% in New World. In addition,
the Company appointed one person to New World's board of directors, and one of
its executives became the acting CEO of New World. Furthermore, once the Company
converts its investment into equity of New World, it would also be entitled to
designate the chairman of New World.
As of October 31, 1996 the agreements for that joint venture
were formally entered into. At the same time, Mr. Kuhns resigned as Chairman of
New World to return to investment banking on a full time basis. In November
1996, at the request of the Company's senior executives, Mr. Kuhns agreed to
devote a portion of his time to act as the Company's financial advisor for
project financings through Dominion Kuhns Brothers, Inc. ("DKB"), a newly-formed
company which would be up to 85% owned by the Company. While the terms of such
an arrangement were negotiated by the parties, over the next six months the
Company never executed the formal documentation for these agreements between
itself, DKB and Mr. Kuhns; also, it did not pay DKB or Mr. Kuhns the full
compensation or expenses agreed upon.
At the request of the Company's senior executives, among the
financial advisory tasks undertaken by Mr. Kuhns through DKB was finalizing the
permanent project financing for New World's Big Spring, Texas alternate energy
wind farm project, assisting in the sale of various New World assets to satisfy
its creditors, and negotiating with the Company's commercial bank lender for an
extension of the $30 million bridge loan from Bankers Trust which was due on
April 30, 1997. Through the course of those dealings, Mr. Kuhns realized that
the senior
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executive management of the Company had virtually no understanding of project
financing or the general contractor expertise which would be required to bring
the Big Spring, Texas project to fruition. He also learned, through discussions
with the Company's commercial bank lender, that the bank would only refinance
the bridge loan if the Company's senior executive management team modified their
responsibilities. Mr. Kuhns discussed these findings with the Company's senior
executives, who summarily declined to accept those views. Instead, in February
1997 they orally agreed to retain DKB to find an alternative funding source that
would become a major investor in the Company and restructure the bridge loan.
Based on that oral retention, Mr. Kuhns began discussions with major
stockholders of the Company and other potential investors to ascertain their
interest in participating in such a restructuring.
At the Company's annual meeting of stockholders, held on
February 28, 1997, in response to questions by stockholders as to the Company's
plans with respect to the bridge loan, the Company's chairman stated that the
retention of DKB as financial advisor, together with another firm as placement
agent, to handle the restructuring of the bridge loan was imminent. However, no
such retention agreement was signed; instead, the Company's chairman
independently arranged to sell a portion of the Company's shares in McConnell
Dowell (an Australian public company in which the Company then owned
approximately 78%) in order to raise the $10 million necessary to immediately
placate Bankers Trust and obtain forbearance on the repayment of the balance of
the bridge loan.
Once the sale of the McConnell Dowell shares became publicly
known in early March 1997, in response to pressure from stockholders the Company
retained the second investment banking firm as placement agent, but not DKB as
financial advisor, to assist it in restructuring the bridge loan and finding new
investors. Also at that time several stockholders (or their representatives)
called Mr. Kuhns on their own initiative to express their extreme displeasure
over what they perceived to be a very poor management decision. The tenor of
their comments was a loss of confidence in the ability of the senior executives
to manage the Company's business and create any value for stockholders. In
addition to expressing their frustration with the Company's deteriorating
financial performance and stock price, as well as questioning whether the
Company's senior executive management had any plan or strategy for protecting or
enhancing stockholders' value, those major stockholders (or their
representatives) asked Mr. Kuhns to explore whether the Company's senior
executives could be removed from office.
On May 6, 1997 Mr. Kuhns sent a letter to the Company's
chairman, formally severing any relationship between Mr. Kuhns, DKB and the
Company. That letter stated that the Company had never executed the agreements
negotiated by the parties to formalize the financial advisory relationship which
DKB was ostensibly formed to undertake, and had never paid Mr. Kuhns or DKB in
accordance with the terms agreed upon. Furthermore, Mr. Kuhns stated that the
Company had improperly listed him as a Vice President of the Company in its
public filings with the SEC as of September 30, 1996, that he had rejected this
designation at the time it first appeared in drafts of the Company's year-end
public filings, and had at the time advised the
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Company's legal counsel to withdraw his name from all such filings. The Company
has not responded to Mr. Kuhns' letter of May 6, 1997.
Thereafter, Mr. Kuhns formally organized the Committee with
Mr. Mariash, and they were later joined by Mr. Dutton. Mr. Mariash had been
introduced to Mr. Kuhns several months earlier by the Company's other investment
banking firm as a prospective investor to be part of a group of new investors
that were considering providing new financing to the Company, but only if an
experienced executive of Mr. Mariash's caliber became president of the Company.
Mr. Dutton was introduced to Mr. Kuhns in late 1996; with the concurrence of the
Company's senior executives Mr. Dutton was hired as an employee of DKB. Mr.
Dutton had also negotiated an employment and compensation arrangement with the
senior executives of the Company, but as was the case with Mr. Kuhns'
arrangement, it too was never executed. On May 12, 1997, Mr. Dutton sent the
Company's chairman a letter formally severing any relationship between them. The
Company has not responded to Mr. Dutton's letter.
Once the Committee began to form, Mr. Kuhns engaged in
discussions with legal counsel and certain major stockholders about the
viability of a strategy to oust the Company's senior executives. During the week
of May 11, 1997, Mr. Kuhns advised a small number of major stockholders that the
Committee was planning to launch this consent solicitation to seek to enact the
Proposal, and he requested their financial support. As of May 22, 1997,
approximately $100,000 had been contributed to the Committee by six stockholders
or other entities. See "Other Matters -- Participant Information." On May 23,
1997 Mr. Kuhns filed with the Company the first written consent for the
Proposal, thereby establishing that date as the record date for this consent
solicitation. Also on that date the Committee filed preliminary proxy materials
with the SEC and commenced a lawsuit in Federal district court in Wilmington,
Delaware. See "Other Matters -- Legal Proceeding."
THE PROPOSAL
CHANGING THE SENIOR MANAGEMENT TEAM
Under the Proposal, Messrs. Marengere, Matossian and Despres
would be removed as Chairman of the Board and Chief Executive Officer, President
and Chief Operating Officer, and Secretary, respectively, of the Company and
replaced by the Committee's nominees -- Messrs. Kuhns, Mariash and Dutton as
Chairman, President and Chief Executive Officer, and Secretary, respectively.
The Company may have an obligation to make substantial severance payments to
Messrs. Marengere and Matossian upon their removal from office. See "Other
Matters -- Employment Agreements with Messrs. Marengere and Matossian."
REPEALING THE OLD BYLAWS AND ADOPTING THE NEW BYLAWS
The Proposal contemplates repealing the Old Bylaws and
approving the New Bylaws as the procedural precedent means by which the
Company's senior management team will
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<PAGE>
be replaced. As summarized below, the New Bylaws would enhance the powers of the
Company's senior management team and its stockholders, while at the same time
limiting certain powers of the Board of Directors. In the event the Proposal is
approved and the current senior executives do not step aside on an amicable
basis, the New Bylaws would come into effect and the Committee would pursue all
available legal remedies to implement them. Any future amendments to the New
Bylaws would require the approval of stockholders, which the Committee
anticipates the Company would seek to obtain from time to time as circumstances
may dictate. The New Bylaws are set forth in their entirety in Appendix A to
this Consent Statement. The following discussion is qualified in its entirety by
reference to Appendix A. Set forth below is a comparison of key differences
between the Old Bylaws and the New Bylaws.
BYLAWS RELATING TO STOCKHOLDERS MEETINGS:
<TABLE>
<CAPTION>
OLD BYLAWS NEW BYLAWS
---------- ----------
STOCKHOLDER MEETINGS:
Place and Time:
<S> <C>
Determined by resolution of the Board of Determined only by the Chairman or
Directors, or as set by the Chief President
Executive Officer or the President
Special Meetings:
Called only by the Chief Executive Called either by the board of directors, the
Officer, the President, or at the request of Chairman, the President, or by stockholders
a majority of the Board of Directors owning at least 2% of the Common Stock
Place of Meetings:
Board of Directors may designate any The Chairman may designate any place,
place, either within or outside the State either within or outside the State of
of Delaware; if no designation is made, Delaware; if no designation is made, the
the annual or special meeting would be annual or special meeting would be held at
held at the principal executive office of the registered office of the Company in the
the Company State of Delaware
Action by Written Consent:
Purported denial of stockholders' right to Deleted
act by written consent
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
OLD BYLAWS NEW BYLAWS
---------- ----------
Stockholder Proposals:
<S> <C>
Stockholders wishing to propose business Deleted
for consideration by stockholders at the
annual meeting must submit detailed
information to the Company at least 75
days prior to the meeting
</TABLE>
The effect of these differences between the Old Bylaws and the
New Bylaws is to remove much of the discretion presently held by the Board of
Directors in setting the time and place of any meetings of stockholders. They
would also enable stockholders with a requisite percentage of shares of Common
Stock to request a special meeting of stockholders. Additionally, under the New
Bylaws, the section that placed restrictions on a stockholder's ability to have
a proposal raised at a stockholders meeting would be removed. Consistent with
the Delaware GCL and the Charter, the New Bylaws permit the requisite number of
stockholders to act by written consent in lieu of holding a meeting. The
Committee believes that stockholders should be permitted to request a special
meeting of stockholders. Under the New Bylaws, Board of Directors, Chairman of
the Board and the President would also have the right to call a special meeting
of stockholders.
<TABLE>
<CAPTION>
BYLAWS RELATING TO DIRECTORS:
-----------------------------
OLD BYLAWS NEW BYLAWS
---------- ----------
Number of Directors:
<S> <C>
Initially five, but thereafter as Initially eight (which is the current number of
established from time to time by a directors), but thereafter as established from
resolution of the Board of Directors time to time by the Chairman
Meetings and Notice:
Regular meetings may be held without Regular meetings, as determined by a resolution
notice as determined by a resolution of of the Board of Directors, shall be held on
the Board of Directors seven days notice, and only at the registered
office of the Company in the State of Delaware
Special meetings may be called at the Special meetings shall be called at the request
request of the Chief Executive Officer of a majority of the directors, or by the
or the President on 24 hours' notice, Chairman or the President, on at least 72 hours'
or at the request of a majority of the notice
directors
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
OLD BYLAWS NEW BYLAWS
---------- ----------
Quorum; Required Vote
<S> <C>
A majority of the directors constitutes The presence of all of the directors shall
a quorum, and the vote of a majority constitute a quorum, and the unanimous
of directors present would be the act affirmative vote of all of the directors would be
of the Board of Directors the act of the Board of Directors
Committees:
By resolution adopted by a majority of By resolution adopted by a unanimous
the directors, one or more committees affirmative vote of all directors, one or more
may be created committees may be designated
Each committee may consist of one or Each committee shall consist of at least two-
more directors, and the Board of thirds of the total number of directors (rounded
Directors may designate alternate up to the nearest whole number) plus one, and
members to replace absent or the Board of Directors cannot designate
disqualified members alternate members
Each committee shall keep regular The Secretary of the Company shall be given
minutes of its meetings notice and attend each meeting of any
committee to keep the regular minutes of its
meetings
The presence of a majority of the Committee meetings shall only be held at the
members of a committee would registered office of the Company in the State of
constitute a quorum; and the vote of a Delaware; the presence of all of the members of
majority of the members present shall a committee shall be necessary to constitute a
be the act of the committee quorum; and the unanimous affirmative vote of
all of the members present shall be the act of
the committee
Communications Equipment:
Board or committee members can Use of conference telephone or other
participate in a meeting through the communications equipment is not a permitted
use of conference telephone, and their means of participating at a meeting; personal
presence through that means shall attendance at Board of Directors and committee
constitute presence in person meetings shall be the only proper means for
directors to discharge their duties
Written Consent:
Directors can act by unanimous Neither the Board of Directors nor any
written consent in lieu of a meeting committee thereof may act by written consent
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
OLD BYLAWS NEW BYLAWS
---------- ----------
Compensation:
<S> <C>
Directors may receive compensation Directors shall not receive any compensation,
for acting as directors and for either for acting as such or for attending any
attending meetings; reimbursement of meetings; no reimbursement of expenses
expenses permitted
Director nominations:
In order for stockholders to nominate Deleted
directors at an annual meeting, they
must submit detailed information about
their proposed nominees at least 75
days prior to the meeting
</TABLE>
The Old Bylaws currently permit the directors and committees
to take action by unanimous written consent, thereby permitting action without
any formal meeting or discussion among the directors or committee members. The
New Bylaws would eliminate this method of taking corporate action, thereby
requiring a discussion of any proposal at a meeting. Additionally, the New
Bylaws would require all directors to physically attend the meetings.
The New Bylaws would also require that only the act of all the
members of the Board of Directors then in office at a meeting at which all are
present shall constitute the act of the Board of Directors; that is, unanimous
action of the full number of directors specified under the New Bylaws (which is
equal to the current number of directors serving) would be required for board
action. This provision would have the effect of permitting any director to
prevent the Board of Directors from taking action simply by not attending the
meeting or by attending and abstaining or voting nay.
The effect of the New Bylaws would be to empower any director,
whether an incumbent director or a director subsequently elected, to prevent any
Board of Directors action. A possible result of this provision is a deadlock on
the Board of Directors, thereby impairing or preventing the Company's ability to
act. Additionally, the absence of compensation or expenses incurred for service
as a director on the New Bylaws may act as a deterrent to present directors from
continuing to serve on the Board or from running for reelection when their terms
expire.
-13-
<PAGE>
BYLAWS RELATING TO OFFICERS:
<TABLE>
<CAPTION>
OLD BYLAWS NEW BYLAWS
---------- ----------
Number; Who Elects:
<S> <C>
The officers shall be a Chairman of The three senior officers - the Chairman, the
the Board, a Chief Executive Officer, President, and the Secretary - shall be
a President, one or more Vice elected solely by the stockholders; the
Presidents, a Secretary, a Treasurer, Chairman shall have the sole power to
and such other officers as may be appoint one or more Vice Presidents, a
deemed necessary by the Board of Secretary, a Treasurer and such other
Directors; all of the officers are officers as he may deem necessary or
elected by the Board of Directors desirable
Election; Term of Office:
Officers are elected annually by the The three senior officers shall be elected
Board of Directors; vacancies may be annually by the stockholders; vacancies may
filled by the Board of Directors be filled solely by the Chairman or, in the
event of a vacancy in such office, the
President
Removal:
Any officer or agent elected by the Any officer may be removed by the Board of
Directors may be removed Chairman or the stockholders by a majority
by the Board of Directors whenever in vote of the Common Stock whenever in their
its judgment the best interests of the judgment the best interests of the Company
Company would be served thereby would be served thereby
Vacancies:
Filled by the Board of Directors Filled solely by the Chairman
Compensation:
Fixed by the Board of Directors for all Fixed by the Chairman, except that the
officers Chairman's compensation shall also be
subject to ratification by stockholders no
later than the next annual meeting
Power to Manage the Company:
Vested in the Board of Directors, with The Chairman is delegated the full power to
the Chief Executive Officer having the manage the business and affairs of the
power to manage the business and Company to the fullest extent permitted by law
affairs of the Company
</TABLE>
-14-
<PAGE>
<TABLE>
<CAPTION>
OLD BYLAWS NEW BYLAWS
---------- ----------
<S> <C>
No comparable provisions The Chairman also has the duty to
investigate the propriety of any activities and
actions by former officers of the Company;
and to pursue such legal redress as may be
necessary or appropriate to recover any
monies or property of the Company which
may have been improperly spent, distributed
or received directly or indirectly by any
former officer
</TABLE>
The New Bylaws are designed to give the stockholders of the Company a
greater voice in its affairs and to provide the stockholders with a particularly
effective method of ensuring their confidence in the management of the Company.
The New Bylaws would also provide that if a vacancy occurred in an office, it
would be filled by the Chairman. The general effect of the New Bylaws would be
to permit the stockholders to call a special meeting and to elect a Chairman,
President and Secretary of their choosing. Additionally, the Chairman would set
each officer's compensation, with stockholders being asked to ratify the salary
of the Chairman at the next annual meeting after such compensation is fixed. The
members of the Committee intend to have the Chairman proposed by it (Mr. Kuhns)
delegate to the President and Chief Executive Officer proposed by it (Mr.
Mariash) virtually all of the day-to-day operating decisions in managing the
Company, including hiring and firing of executives, setting compensation, and
establishing and carrying out the Company's business plans and objectives.
BYLAWS RELATING TO THE POWER TO AMEND:
Article VI of the Old Bylaws provides:
ARTICLE VI
AMENDMENTS
THESE BYLAWS MAY BE AMENDED, ALTERED, OR
REPEALED AND NEW BYLAWS ADOPTED AT ANY
MEETING OF THE BOARD OR DIRECTORS BY A
MAJORITY VOTE. THE FACT THAT THE POWER TO
ADOPT, AMEND, ALTER, OR REPEAL THE BYLAWS
HAS BEEN CONFERRED UPON THE BOARD OF
DIRECTORS SHALL NOT DIVEST THE
STOCKHOLDERS OF THE SAME POWERS.
-15-
<PAGE>
Article VI of the New Bylaws provides:
ARTICLE VI
AMENDMENTS ONLY BY STOCKHOLDERS
THESE BYLAWS MAY BE AMENDED, ALTERED OR
REPEALED AND NEW BYLAWS ADOPTED AT ANY
MEETING OR BY WRITTEN CONSENT OF THE
STOCKHOLDERS BY A MAJORITY VOTE. THE
BOARD OF DIRECTORS SHALL NOT HAVE ANY
POWER TO ADOPT, AMEND, ALTER OR REPEAL
THESE BYLAWS UNLESS OTHERWISE EXPLICITLY
PROVIDED IN THE CERTIFICATE OF
INCORPORATION.
Section 109 of the Delaware GCL provides that in order for a
company's board of directors to have the power to adopt, amend or repeal bylaws,
an explicit statement to that effect must be included in the company's
certificate of incorporation. The certificate of incorporation of the Company
originally contained the empowering language required under Section 109; in a
subsequent amendment which was adopted by stockholders on July 24, 1989,
however, this language was deleted. Consequently, the Company's Board of
Directors lacks the legal authority to adopt, amend or repeal the Old Bylaws;
under the Delaware GCL that power now resides solely with the Company's
stockholders.
Consistent with Section 109 of the Delaware GCL, Article VI of
the New Bylaws is intended to state in simple but clear language that the Board
of Directors may not amend or repeal, or adopt or make any new bylaws
inconsistent with any New Bylaw or amendment to the New Bylaws adopted or
approved by the stockholders, until such time as the Charter is appropriately
amended. The Committee believes that such a clarification is in the best
interest of stockholders, particularly at a time when the interests of the Board
(which would continue to include Messrs. Marengere and Matossian) may be at odds
with those of the stockholders.
QUALIFICATIONS OF MESSRS. KUHNS, MARIASH AND DUTTON
John D. Kuhns, who is the Committee's nominee to become the
Company's Chairman, has been an investment banker and businessman in the
infrastructure industry throughout his career. He is 47 years old. Currently, he
is the president of Kuhns Brothers & Company, Inc. He has also founded and held
the position of Chief Executive Officer of two publicly-traded independent power
companies: Catalyst Energy Corporation (from 1981-1989) and The New World Power
Corporation (from 1989-1996). Mr. Kuhns began his business career at Salomon
Brothers, where he worked as an investment banker in publicly-owned utility
project finance. Mr. Kuhns has two graduate degrees, an MBA from Harvard
University and a MFA from the University of Chicago; he received a AB from
Georgetown University.
-16-
<PAGE>
Kenneth W. Mariash, who is 49 years old and the Committee's
nominee to become the Company's President and Chief Executive Officer, has owned
several major businesses, including one of the largest construction and
engineering companies in Canada, Builder Contract Management, and its
development affiliate, Westform, which generated annual revenues of
approximately $100 million in the late 1970s. These companies are based in
Calgary, Alberta, Canada. He has also been an owner, buyer, commercial builder
and investor in real estate throughout North America and Canada since the 1960s,
primarily through his firm KWM Group.
Mr. Mariash has built large scale commercial and office
complexes. Additionally, he has arranged and managed financing and construction
for a variety of real estate ventures. For the past few years, Mr. Mariash and
KWM Group have been involved with institutional investors in recapitalizations
and debt restructurings of real estate properties across North America. Mr.
Mariash received an MBA and a Bachelor of Commerce degree from the University of
Alberta, a degree in Mathematics and Science from the University of
Saskatchewan, and a degree in Architecture from the University of British
Columbia.
John M. Dutton, who is the Committee's nominee to become the
Company's Secretary, has had a successful career as an investment banker and
senior financial and administrative officer. He is 55 years old. During 1994
through 1996, Mr. Dutton was a senior vice president and director of research
for Barban Securities Inc. and LH Friend, Weinress, Frankson & Presson, Inc.,
which are regional investment banking firms based in Los Angeles. From 1981 to
1993 he was the president and chief investment officer of Corsair Asset
Management Inc., a registered investment adviser with $120 million under
management. From 1975 to 1981 he was executive vice-president and a director of
American Medical International, Inc., a $1.5 billion hospital management
company. Mr. Dutton has an AB degree from Brown University and an MBA from the
Wharton Graduate School at the University of Pennsylvania.
OTHER MATTERS
THE COMMITTEE
The Committee was formed in May 1997 by and consists of
Messrs. Kuhns, Mariash and Dutton to make the Proposal and undertake this
consent solicitation. The Committee is an unincorporated business association
with its office at 420 Lexington Avenue, Suite 2860, New York, N.Y. 10170. Its
telephone number is (212) 953-1010. The Committee's officers are Messrs. Kuhns,
Mariash and Dutton. Other participants may include Henry Hermann, the executive
vice president of Kuhns Brothers & Company, Inc.
PARTICIPANT INFORMATION
Mr. Kuhns owns 100 shares of Common Stock; Mr. Mariash owns no
shares of Common Stock; Mr. Dutton owns 1,900 shares of Common Stock; Mr.
Hermann owns 45,000 shares of Common Stock; and the Committee owns 100 shares of
Common Stock. Collectively,
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<PAGE>
the Committee owns less than 1% of the Shares. No such participant or associate
owns any securities other than shares of Common Stock and no such participant or
associate owns any such shares of record but not beneficially.
The financing for the Committee's activities, including
conducting this consent solicitation and the legal proceedings described below,
is derived from concerned stockholders and other entities. As of May 22, 1997,
the Committee has raised approximately $100,000 from the following people or
entities, each of whom has contributed more than $500: Herbard Ltd., Polaris &
Partners, Theodore Allocca, Theodore Allocca, Jr., Glendale Management Property
#7, Alan Einbender and Henry Hermann. Based on discussions, the Committee
believes it can obtain at least an additional $200,000 of additional financing.
In the event further financing is required, the Committee
intends to request existing contributors and additional persons or entities (who
would probably also be stockholders of the Company) to donate monies to the
Committee. There are no agreements, arrangements or understandings between the
persons or entities who have provided financial support to the Committee, on the
one hand, and the Committee or any of the participants listed above, on the
other hand, except for the commitment to seek reimbursement from the Company.
Those persons or entities were advised about the Committee's plans and strategy;
however, no request for proxies was made, nor do other arrangements, contracts
or understandings exist for the purpose of financing the Committee or voting of
any Common Stock which may be beneficially owned by them.
LEGAL PROCEEDING
On May 23, 1997, the Committee commenced a lawsuit in Federal
district court in Wilmington, Delaware, seeking relief under the federal
securities laws relating to the dissemination by the Company of certain false
and misleading information in various public filings, and seeking a declaratory
judgment on the following issues:
First, that Article I, Section 10 of the Old Bylaws,
prohibiting stockholder action by written consent in lieu of a meeting, is
superfluous and has no legal effect because it contradicts Delaware law and is
not authorized by the Charter.
Second, that the election of directors at the Company's 1997
Annual Meeting should be voided, because Article I, Section 7 of the Old Bylaws
set forth complicated advance notice requirements in order for stockholders to
be able to propose nominees to the Board of Directors. Inasmuch as the Board of
Directors lacks the power under the Charter to adopt or amend the Old Bylaws,
through this provision the Company improperly restricted stockholders' ability
to nominate directors, thereby impairing the rights of stockholders.
-18-
<PAGE>
EMPLOYMENT AGREEMENTS WITH MESSRS. MARENGERE AND MATOSSIAN
Effective February 1, 1995, the Company entered into
three-year service agreements with Mr. Marengere as Chairman of the Board and
Chief Executive Officer and Mr. Matossian as President and Chief Operating
Officer. The following is a summary of those agreements, based on documents
filed by the Company with the SEC.
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
Securities Exchange Act of 1934, as amended (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 Mr. 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 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."
According to public filings with the SEC made by the Company,
if a "change in control" had occurred during fiscal year 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
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<PAGE>
for three-year terms ending January 31, 1998, they would also be entitled to
receive their base compensation during the terms of their respective agreements.
Both the Old Bylaws and New Bylaws provide that the removal of
an officer from his position shall not prejudice the contract rights, if any, of
the person being removed. The New Bylaws impose a duty on the Chairman to
investigate the propriety of any activities and actions by former officers, and
to pursue such legal redress as may be necessary or appropriate to recover any
monies or property of the Company which may have been improperly spent,
distributed or received directly or indirectly by any former officers or
directors of the Company. As disclosed in the Company's SEC filings, allegations
of self-dealing and other improprieties have been made against Mr. Marengere; if
the Proposal is adopted the Committee's nominees intend to fully investigate
those allegations before a determination can be made of the appropriate contract
rights of any former officers.
CERTAIN ADDITIONAL INFORMATION
The Company may file its consent statement to obtain revocations, and
it may contain additional information with respect to the Record Date, the
number of shares of Common Stock outstanding on the Record Date, the voting and
revocation of proxies, voting for the election of officers, the Company's
nominees for election of officers, the beneficial owners of more than 5% of the
Common Stock, the share ownership of directors and officers of the Company,
compensation of executive officers of the Company, performance of the Common
Stock and the date by which stockholder proposals intended to be submitted at
the Company's next annual stockholders' meeting must be received by the Company
for inclusion in its proxy statement for that meeting.
SOLICITATION OF WRITTEN CONSENTS
Written consents may be solicited by mail, advertisement, telephone,
telecopier or in person. Solicitations may be made by members of the Committee
or the participants noted above, none of whom will receive additional
compensation for such solicitations. The Committee is requesting banks,
brokerage firms and other custodians, nominees and fiduciaries to forward all of
its solicitation materials to the beneficial owners of the shares of Common
Stock they hold of record. The Committee will reimburse these record holders for
customary clerical and mailing expenses incurred by them in forwarding these
materials to their customers.
The Committee has retained Georgeson & Company Inc. ("Georgeson") for
solicitation and advisory services in connection with the solicitation, for
which Georgeson is to receive a fee of approximately $ , together with
reimbursement for its reasonable out-of-pocket expenses. The Committee has also
agreed to indemnify Georgeson against certain liabilities and expenses,
including liabilities and expenses under the federal securities laws. Georgeson
will solicit written consents from individuals, brokers, banks, bank nominees
and other institutional
-20-
<PAGE>
holders. It is anticipated that Georgeson will employ approximately persons to
solicit written consents from stockholders.
The entire expense of soliciting written consents to the Proposal is
being borne by the Committee. The Committee presently intends to seek
reimbursement for such expenses from the Company if the Proposal is adopted or
if the Committee's actions otherwise lead to a management change. Although no
precise estimate can be made at this time, the Committee anticipates that the
aggregate amount to be spent by the Committee could be up to $300,000, of which
approximately $85,000 has been incurred to date. This amount includes
expenditures for printing, postage, legal, public relations, soliciting and
related expenses.
CONSENT PROCEDURES
GENERAL; EFFECTIVENESS OF CONSENTS
The Company is a Delaware corporation and is, therefore,
subject to the Delaware GCL. Section 228 of the Delaware GCL provides that,
unless otherwise provided in the certificate of incorporation of a corporation,
any action required to be or that may be taken at meeting of stockholders may be
taken without a meeting, without prior notice and without a vote, if written
consents, setting forth the action so taken, are signed and delivered to the
corporation by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to take such action at a meeting
at which all shares entitled to vote thereon were present and voted. The Charter
of the Company does not prohibit stockholder action by written consent. See
"Other Matters -- Legal Proceeding."
The Proposal will become effective when the Committee submits
to the Company properly completed, unrevoked and effective WHITE written consent
cards (or other forms of consent) indicating consent to the Proposal, signed by
the holders of record on the Record Date of a majority of the Shares outstanding
as of the Record Date. Such consents must be delivered within 60 days of the
earliest dated consent delivered to the Company, which was May 23, 1997;
accordingly, this consent solicitation must be completed by July 22, 1997.
However, the Committee has established June __, 1997 as the goal for the
submission of written consents to the Committee. If the Proposal is adopted
pursuant to this consent solicitation, prompt notice will be given pursuant to
Section 228(d) of the Delaware GCL to stockholders who have not executed and
returned a WHITE consent card.
Because the Proposal will become effective only if executed
consents are returned by holders of record on the Record Date of a majority of
the Shares then outstanding, the following actions will have the same effect as
withholding consent to the Proposal: (a) failing to execute and return a WHITE
written consent card or (b) executing and returning a written consent marked
consent "WITHOUT CONSENT" or "ABSTAINS" as to each Proposal. If returned WHITE
written consent cards are executed and dated but not marked with respect to the
Proposal, the stockholder returning such card will be deemed to have consented
to the Proposal.
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<PAGE>
PROCEDURAL INSTRUCTIONS
If a stockholder is a record holder of Shares as of the close
of business on the Record Date, such stockholder may elect to consent to,
withhold consent to or abstain with respect to a Proposal by marking the
"CONSENTS", "WITHHOLDS CONSENT" or "ABSTAINS" box, as applicable, underneath the
Proposal on the accompanying WHITE written consent card and signing, dating and
returning it promptly in the enclosed postage-paid envelope.
UNDER THE DELAWARE GCL, ONLY STOCKHOLDERS OF RECORD ON THE
RECORD DATE ARE ELIGIBLE TO GIVE THEIR CONSENT TO THE PROPOSAL. THEREFORE, EACH
STOCKHOLDER IS URGED, EVEN IF SUCH STOCKHOLDER HAS SOLD ITS SHARES SUBSEQUENT TO
THE RECORD DATE, TO GRANT ITS CONSENT PURSUANT TO THE ENCLOSED WHITE WRITTEN
CONSENT CARD WITH RESPECT TO ALL SHARES HELD AS OF THE RECORD DATE. A
STOCKHOLDER'S FAILURE TO CONSENT MAY ADVERSELY AFFECT THOSE WHO CONTINUE TO BE
STOCKHOLDERS. IN ADDITION, ANY STOCKHOLDER OWNING SHARES BENEFICIALLY (BUT NOT
OF RECORD), SUCH AS A PERSON WHOSE OWNERSHIP OF SHARES IS THROUGH A BROKER, BANK
OR OTHER FINANCIAL INSTITUTION, SHOULD CONTACT THAT BROKER, BANK OR FINANCIAL
INSTITUTION WITH INSTRUCTIONS TO EXECUTE THE WHITE WRITTEN CONSENT CARD ON SUCH
STOCKHOLDER'S BEHALF OR TO HAVE THE BROKER, BANK OR FINANCIAL INSTITUTION'S
NOMINEE EXECUTE THE CONSENT. EACH STOCKHOLDER IS URGED TO ENSURE THAT THE RECORD
HOLDER OF SUCH STOCKHOLDER'S SHARES MARKS, SIGNS, DATES AND RETURNS THE ENCLOSED
WHITE WRITTEN CONSENT CARD AS SOON AS POSSIBLE. EACH STOCKHOLDER IS FURTHER
URGED TO CONFIRM IN WRITING ANY INSTRUCTIONS GIVEN AND PROVIDE A COPY THEREOF TO
THE COMMITTEE IN CARE OF GEORGESON & COMPANY INC., SO THAT THE COMMITTEE MAY
ALSO ATTEMPT TO ENSURE SUCH INSTRUCTIONS ARE FOLLOWED.
REVOCATION OF CONSENTS
Executed written consents may be revoked at any time, provided
that a written, dated revocation which clearly identifies the consent being
revoked is executed and delivered either to (a) the Committee in care of
Georgeson & Company Inc., Wall Street Plaza, New York, New York 10005, or (b)
the principal executive offices of the Company at 500 Notre Dame Street, 3rd
Floor, Lachine, Quebec, Canada H8S 2B2, prior to the time that the Proposal
becomes effective. A revocation may be in any written form validly signed by the
record holder as of the Record Date as long as it clearly states that the
written consent previously given is no longer effective. The Committee requests
that a copy of any revocation sent to the Company also be given to Georgeson &
Company Inc. at the above address so that the Committee may more accurately
determine if and when written consent to each Proposal has been received from
the holders of record on the Record Date of a majority of the Shares then
outstanding. THE COMMITTEE URGES YOU NOT TO SIGN ANY REVOCATION OF CONSENT CARD
WHICH MAY BE SENT TO YOU BY THE COMPANY. IF YOU HAVE DONE SO, YOU MAY REVOKE
THAT REVOCATION OF CONSENT BY DELIVERING A LATER DATED WHITE CONSENT CARD TO THE
COMMITTEE, C/O GEORGESON & COMPANY INC., OR TO THE SECRETARY OF THE COMPANY.
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<PAGE>
SCHEDULE I
INFORMATION CONCERNING CERTAIN PARTICIPANTS
The following table sets forth the name and the present principal
occupation or employment, and the name, principal business and address of any
corporation or other organization in which such employment is carried on, of
certain participants who may assist Georgeson in soliciting written consents
from the Company's stockholders. Unless otherwise indicated, the principal
business address of each participant is 420 Lexington Avenue, Suite 2860, New
York, New York 10170.
Name and Principal
Business Address Principal Occupation or Employment
- ---------------------------------- --------------------------------------------
John D. Kuhns..................... President, Kuhns Brothers & Company, Inc.
Kenneth W. Mariash................ President, KWM Group
John M. Dutton.................... Financial Executive, self-employed
Henry Hermann..................... Executive Vice President, Kuhns Brothers &
1901 North Akard Street Company, Inc.
Dallas, Texas 75201
<PAGE>
SCHEDULE II
SHARES HELD BY COMPANY'S MANAGEMENT AND 5% OR GREATER HOLDERS
As of January 29, 1997, the directors and executive officers of the
Company beneficially owned (within the meaning of the rules under Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
4,149,792 Shares (or approximately 13.3% of the Shares reported as outstanding
on such date). All of the foregoing information has been obtained from the
Company's proxy statement dated January 30, 1997.
Based on information obtained from the Company's proxy statement dated
January 30, 1997, the following table shows the only entities which owned more
than 5% of the outstanding Shares on January 29, 1997.
<TABLE>
<CAPTION>
Number of Shares
Owned Percentage of
Name and Address Beneficially and Outstanding
of Beneficial Owner of Record Shares (1)
- ---------------------------------------------- ----------------------------- --------------------------
<S> <C> <C>
Michel L. Marengere.........................
500 Rue Notre Dame
Lachine
Quebec, Canada HBS 282 2,484,792(2) 8.5
</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 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) Includes 1,659,792 shares held of record by Fidutech Technologies, Inc.
as to which Mr. Marengere has shared voting and 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. Also
includes 675,000 shares of Common Stock that may be issued pursuant to
stock options exercisable at $2.00 per share and 150,000 shares of
Common Stock which may be received upon the exercise of 75,000 unit
options granted under Mr. Marengere's service agreement.
Other than as set forth in the preceding paragraph, although the
Committee does not have any information that would indicate that any information
contained in this Consent Statement that has been taken from the Company's proxy
statement dated January 30, 1997 or any other document on file with the
Securities and Exchange Commission is inaccurate or incomplete, the Committee
does not take any responsibility for the accuracy or completeness of such
information.
<PAGE>
APPENDIX A
BYLAWS OF
DOMINION BRIDGE CORPORATION
ADOPTED BY STOCKHOLDERS
AS OF _________________, 1997
A Delaware Corporation
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year for the purpose of electing directors and
conducting such other proper business as may come before the meeting. The date,
time and place of the annual meeting may be determined as set by the Chairman or
the President of the Corporation.
Section 2. Special Meetings. Special meetings of stockholders, for any
purpose or purposes, may be called by either the Board of Directors, the
Chairman or the President, and shall be called by the Secretary or any Assistant
Secretary, if there be one, at the request in writing of a holder or holders of
at least 2% of the Common Stock. Such request shall state the purpose or
purposes of the proposed meeting. Upon receipt of such written request, the
Chairman or the President of the Corporation shall fix a date and time for such
meeting which such date shall be within ten business days of the proposed date
specified in the written request.
Section 3. Place of Meetings. The Chairman shall designate any place,
either within or without the State of Delaware, as the place of meeting for any
annual meeting or for any special meeting called in accordance with Article I,
Section 2. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the registered office of the Corporation
in the State of Delaware.
Section 4. Notice. Whenever stockholders are required or permitted to
take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each stockholder entitled to vote at such meeting not
less than 10 nor more than 60 days before the date of the meeting. All such
notices shall be delivered, either personally or by mail, by or at the direction
of the Chairman, President or the Secretary, and if mailed, such notice shall be
deemed to be delivered
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when deposited in the United States mail, postage prepaid, addressed to the
stockholder at his, her or its address as the same appears on the records of the
Corporation. Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except when the person attends for the express purpose
of objecting at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened.
Section 5. Quorum. The holders of the majority of the outstanding
shares of capital stock entitled to vote at a meeting, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders, except as otherwise provided by statute or by the Certificate of
Incorporation. If a quorum is not present, the holders of fifty percent of the
shares present in person or represented by proxy at the meeting, and entitled to
vote at the meeting, may adjourn the meeting to another time and/or place. When
a specified item of business requires a vote by a class or series (if the
Corporation shall then have outstanding shares of more than one class or series)
voting as a class, the holders of a majority of the shares of such class or
series shall constitute a quorum (as to such class or series) for the
transaction of such item of business.
Section 6. Waiver of Notice. Any stockholder, either before or after
any stockholders' meeting, may waive in writing notice of the meeting, and his
waiver shall be deemed the equivalent of giving notice. Attendance at a meeting
by a stockholder shall constitute a waiver of notice, except when the
stockholder attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
Section 7. Voting. Unless otherwise required by Delaware Corporation
Law, the Certificate of Incorporation or these Bylaws, any question brought
before any meeting of stockholders shall be decided by the vote of the holders
of a majority of the stock represented and entitled to vote thereat. Each
stockholder shall have one vote for each share of stock entitled to vote held of
record by such stockholder and a proportionate vote for each fractional share so
held, unless otherwise provided in the Certificate of Incorporation. The officer
of the Corporation presiding at a meeting of stockholders, in his discretion,
may require that any votes cast at such meeting shall be cast by written ballot.
Persons holding stock in a fiduciary capacity shall be entitled to vote
the shares so held. Persons whose stock is pledged shall be entitled to vote,
unless in the transfer by the pledgor on the books of the Corporation he has
expressly empowered the pledgee to vote thereon, in which case only the pledgee,
or his proxy, may represent such stock and vote thereon.
If shares having voting power stand of record in the names of two or
more persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety, or otherwise, or if two or more
persons have the same fiduciary relationship respecting the same shares, unless
the Secretary of the Corporation is given written notice to the contrary and is
furnished with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to voting shall
have the following effect: (i) if only one votes, his act binds all; (ii) if
more than one vote, the act of the majority
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so voting binds all; and (iii) if more than one vote, but the vote is evenly
split on any particular matter, each fraction may vote the securities in
question proportionately, or any person voting the shares or a beneficiary, if
any, may apply to the Court of Chancery or any court of competent jurisdiction
in the State of Delaware to appoint an additional person to act with the persons
so voting the shares. The shares shall then be voted as determined by a majority
of such persons and the person appointed by the Court. If a tenancy is held in
unequal interests, a majority or even-split for the purpose of this subsection
shall be a majority or even-split in interest.
Section 8. Proxies. A stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy. No proxy shall be or acted upon after three (3) years from its date,
unless the proxy provides for a longer period.
Section 9. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The lists shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder of the Corporation who is
present.
Section 10. Stock Ledger. The stock ledger of the Corporation shall be
maintained by the Secretary of the Corporation and shall be the only evidence as
to who are the stockholders entitled to examine the stock ledger, the list
required by Section 9 of this Article I or the books of the Corporation, or to
vote in person or by proxy at any meeting of stockholders.
ARTICLE II
DIRECTORS
Section 1. Number Election and Term of Office. Except as otherwise
fixed by or pursuant to provisions of the Certificate of Incorporation relating
to the rights of the holders of any class or series of stock having a preference
over the Common Stock and as to dividends or upon liquidation to elect
additional directors under specified circumstances, the number of directors of
the Corporation which shall constitute the board as of the date these Bylaws
shall be eight. Thereafter, the number of directors shall be established from
time to time by the Chairman. The directors, other than those who may be elected
by the holders of any class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation, shall be classified, with
respect to the time for which they severally hold office, into three classes,
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<PAGE>
of one director in each class, one class to be originally elected for a term
expiring at the annual meeting of stockholders to be held in fiscal year 1995,
another class to be originally elected for a term expiring at the annual meeting
of stockholders to be held in fiscal year 1996, and another class to be
originally elected for a term expiring at the annual meeting of stockholders to
be held in fiscal year 1997, with each class to hold office until its successor
is elected and qualified. At each annual meeting of the stockholders of the
Corporation after fiscal year 1995, the successors of the class of directors
whose term expires at that meeting shall be elected to hold office for a term
expiring at the annual meeting of stockholders held in the third year following
the year of their election. The directors shall be elected by a plurality of the
votes of the shares present in person or represented by proxy at the meeting and
entitled to vote in the election of directors.
Directors need not be stockholders.
Section 2. Removal and Resignation. Subject to the rights of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation to elect directors under specified circumstances, any director
may be removed from office only for cause and only by the affirmative vote of
the holders of a majority of the combined voting power of the then outstanding
shares of stock entitled to vote generally in the election of directors, voting
together as a single class. Any director may resign at any time upon written
notice to the Secretary of the Corporation.
Section 3. Vacancies. Any vacancies in the board of directors for any
reason, and directorships resulting from any increase in the number of
directors, may be filled by the board of directors, although less than a quorum,
and any directors so chosen shall hold office until the next election of the
class for which such directors shall have been chosen and until their successors
shall be elected any qualified.
Section 4. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this Bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 5. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors shall be held as may be determined by
resolution of the board upon seven days' notice and only at the registered
office of the Corporation in the State of Delaware. Special meetings of the
board of directors shall be called by or at the request of a majority of the
Board of Directors, by the Chairman or the President, on at least 72 hours'
notice to each director, either personally, by telephone, by mail, or by
facsimile.
Section 6. Quorum, Required Vote and Adjournment. The total number of
directors shall constitute a quorum for the transaction of business. The
unanimous affirmative vote of directors present at a meeting at which a quorum
is present shall be the act of the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
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Section 7. Committees. The board of directors may, by resolution passed
by a unanimous affirmative vote of the total number of directors, designate one
or more committees, each committee to consist of at least two-thirds of the
total number of directors (rounded up to the nearest whole number) plus one,
which to the extent provided in such resolution or these Bylaws shall have and
may exercise the powers of the board of directors in the management and affairs
of the Corporation except as otherwise limited by law. The board of directors
shall not designate any directors as alternate members of any committee, to
replace any absent or disqualified member at any meeting of the committee. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors. The Secretary of
the Corporation shall be given notice and attend each meeting of any such
committee keep regular minutes of its meetings and report the same to the board
of directors when required.
Section 8. Committee Rules. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings only at the
registered office of the Corporation in the State of Delaware. The presence of
all of the members of the committee shall be necessary to constitute a quorum.
The unanimous affirmative vote of all of the members present at a meeting at
which a quorum is present shall be the act of a committee.
Section 9. Communications Equipment. Members of the board of directors
or any committee thereof shall not participate in or act at any meeting of such
board or committee through the use of a conference telephone or other
communications equipment. Personal attendance at any such meeting shall be the
only proper means for directors to discharge their duties.
Section 10. Waiver of Notice and Presumption of Assent. Any member of
the board of directors or any committee thereof who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except when
such member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the Secretary of the Corporation before the adjournment thereof. Such right
to dissent shall not apply to any member who voted in favor of such action.
Section 11. No Action by Written Consent. No action required or
permitted to be taken at any meeting of the board of directors, or of any
committee thereof, can be taken by written consent. No action can be taken at
any meeting of the board of directors, or of any committee thereof, unless the
Secretary of the Corporation is present to record the minutes thereof.
Section 12. No Compensation. The directors shall not be paid any of
their expenses of attendance at any meeting of the board of directors, and shall
not be paid any salary (be it cash or other property or any combination thereof)
for attendance at any meeting of the board of directors or otherwise compensated
for their services as directors. Members of special or standing
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committees shall similarly not be allowed any compensation or payment for
attending committee meetings. Nothing in this Section 12 shall preclude any
officer of the Corporation who is also a director from receiving regular
compensation as an employee.
ARTICLE III
OFFICERS
Section 1. Number. The three senior officers of the Corporation shall
be elected solely by the stockholders, and shall consist of a Chairman, a
President and a Secretary. The Chairman shall have the sole power to appoint one
or more Vice Presidents, a Treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the Chairman. Any number of
offices may be held by the same person, except that no person may simultaneously
hold the office of President and Secretary. In his or her discretion, the
Chairman may choose not to fill any office for any period that he or she may
deem advisable.
Section 2. Election and Term of Office. The three senior officers of
the Corporation shall be elected annually by the stockholders at the annual
meeting of stockholders. The Chairman shall appoint other officers to serve for
such terms as he or she deems desirable. Vacancies may be filled or new offices
created and filled solely by the Chairman or, in the event of a vacancy in that
office, by the President. Each officer shall hold office until a successor is
duly elected and qualified or until his or her earlier death, resignation or
removal as hereinafter provided.
Section 3. Removal. Any officer of the Corporation may be removed
either by the Chairman or the stockholders (by a vote of the majority of the
outstanding shares of Common Stock), whenever in their judgment the best
interests of the Corporation would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled only
by the Chairman for the unexpired portion of the term.
Section 5. Compensation. Compensation of all officers shall be fixed by
the Chairman, except that (i) the compensation of the Chairman shall also be
subject to ratification by stockholders no later than the next annual meeting
after such compensation is fixed and (ii) no officer shall be prevented from
receiving such compensation by virtue of his or her also being a director of the
Corporation.
Section 6. Chairman. The Chairman shall preside at all meetings of the
stockholders and board of directors at which he or she is present. He or she
shall present to the annual meeting of stockholders a report of business of the
Corporation for the preceding fiscal year and shall
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perform such other duties as, from time to time, may be assigned to him by the
Board of Directors.
Subject to such duties as are required by law to be executed solely by
the board of directors, the Chairman shall have general charge of the business,
affairs and property of the Corporation and control over its officers, agents
and employees; and shall see that all orders and resolutions of the board of
directors are carried into effect. The Chairman or his designee shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the Corporation.
The Chairman shall be delegated the responsibility for the management
of the business and affairs of the Corporation to the fullest extent permitted
by law, have such additional powers and perform such other duties as may be
assigned by the board of directors or as may be provided in these Bylaws,
including the following: the Chairman shall have the power and authority to
execute, without specific prior Board approval, all contracts, agreements and
obligations of the Corporation that arise in the ordinary course of business of
the Corporation which do not involve liabilities to the Corporation in an amount
in excess of five million dollars ($5,000,000); and to the fullest extend
permitted by law all loan agreements and related documentation with financial
institutions regardless of the amount. The Chairman shall also have the duty to
investigate the propriety of any activities and actions by former officers or
directors of the Corporation; and to pursue such legal redress as may be
necessary or appropriate to recover any monies or property of the Corporation
which may have been improperly spent, distributed or received directly or
indirectly by any former officers or directors of the Corporation.
Section 7. President. The President shall, in the absence or disability
of the Chairman, act with all of the powers and be subject to all the
restrictions of the Chairman. The President shall also perform such other duties
and have such other powers as the Chairman or these Bylaws may, from time to
time, prescribe. In addition, the President shall be the chief executive officer
of the Corporation and, subject to the power of the Chairman and, as may be
required by law, the board of directors, shall have the general responsibility
for the management of the business and affairs of the Corporation and shall
perform all duties and have all powers that are commonly incident to the office
of chief executive.
Section 8. Vice Presidents. The Vice President, if any, or if there
shall be more than one, the Vice Presidents in the order determined by the
Chairman shall in the absence or disability of the President, act with all of
the powers and be subject to all the restrictions of the President. The Vice
Presidents shall also perform such other duties and have such other powers as
the Chairman or these Bylaws may, from time to time, prescribe.
Section 9. The Secretary and Assistant Secretaries. The Secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that
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purpose. Under the Chairman's supervision, the Secretary shall give, or cause to
be given, all notices required to be given by these Bylaws or by law; shall have
such powers and perform such duties as the Chairman or these Bylaws may, from
time to time, prescribe; and shall have custody of the corporate seal of the
Corporation. The Secretary, or an Assistant Secretary, shall have authority to
affix the corporate seal to any instrument requiring it and when so affixed, it
may be attested by his or her signature or by the signature of such Assistant
Secretary. The board of directors may give general authority to any other
officer to affix the seal of the Corporation and to attest the affixing by his
or her signature. The Assistant Secretary, or if there be more than one, the
Assistant Secretaries in the order determined by the Chairman, shall, in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary and shall perform such other duties and have such other
powers as the Chairman, the President or Secretary may, from time to time,
prescribe.
Section 10. The Treasurer and Assistant Treasurer. The Treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the Corporation as may be ordered by the Chairman; shall cause
the funds of the Corporation to be disbursed when such disbursements have been
duly authorized, taking proper vouchers for such disbursements; and shall render
to the Chairman and the board of directors, at its regular meeting or when the
board of directors so requires, an account of the Corporation; and shall have
such powers and perform such duties as the Chairman, the President or these
Bylaws may, from time to time, prescribe. If required by the Chairman, the
Treasurer shall give the Corporation a bond (which shall be rendered every six
years) in such sums and with such surety or sureties as shall be satisfactory to
the Chairman for the faithful performance of the duties of the office of
Treasurer and for the restoration to the Corporation, in case of death,
resignation, retirement, or removal from office, of all books, papers, vouchers,
money, and other property of whatever kind in the possession or under the
control of the Treasurer belonging to the Corporation. The Assistant Treasurer,
or if there shall be more than one, the Assistant Treasurers in the order
determined by the Chairman, shall in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer. The Assistant
Treasurers shall perform such other duties and have such other powers as the
Chairman, the President or Treasurer may, from time to time, prescribe.
Section 11. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these Bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by the Chairman.
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ARTICLE IV
CERTIFICATES OF STOCK
Section 1. Form. Every holder of stock in the Corporation shall be
entitled to have a certificate, signed by, or in the name of the Corporation by
the Chief Executive officer, the President or a Vice President and the Secretary
or an Assistant Secretary of the Corporation, certifying the number of shares
owned by such holder in the Corporation. If such a certificate is countersigned
(1) by a transfer agent or an assistant transfer agent other than the
Corporation or its employee or (2) by a registrar, other than the Corporation or
its employee, the signature of any such Chairman, President, Vice President,
Secretary, or Assistant Secretary may be facsimiles. In case any officer or
officers who have signed, or whose facsimile signature or signatures have been
used on, any such certificate or certificates shall cease to be such officer or
officers of the Corporation whether because of death, resignation or otherwise
before such certificate or certificates have been delivered by the Corporation,
such certificate or certificates may nevertheless be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures have been used thereon had not ceased to
be such officer or officers of the Corporation. All certificates for shares
shall be consecutively numbered or otherwise identified. The name of the person
to whom the shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the Corporation. Shares of stock
of the Corporation shall only be transferred on the books of the Corporation by
the holder of record thereof or by such holder's attorney duly authorized in
writing, upon surrender to the Corporation of the certificate or certificates
for such shares endorsed by the appropriate person or persons, with such
evidence of the authenticity of such endorsement, transfer, authorization, and
other matters as the Corporation may reasonably require, and accompanied by all
necessary stock transfer stamps. In that event, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate or certificates, and record the transaction on its books.
The board of directors may appoint a bank or trust company organized under the
laws of the United States or Canada or any state or province thereof to act as
its transfer agent or registrar, or both in connection with the transfer of any
class or series of securities of the Corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the Corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the Corporation a bond
sufficient to indemnify the Corporation against any claim that may be made
against the Corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.
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Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the Corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed by the board of
directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be the close of business on the next
day preceding the day on which notice is given, or if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
Section 4. Fixing a Record Date for Other Purposes. In order that the
Corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts the
resolution relating thereto.
Section 5. Registered Stockholders. Prior to the surrender to the
Corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the Corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The Corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof.
Section 6. Subscriptions for Stock. Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full at
such time, or in such installments and at such times, as shall be determined by
the board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the Corporation may proceed to collect the
amount due in the same manner as any debt due the Corporation.
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ARTICLE V
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the Certificate of
Incorporation. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other
orders for the payment of money by or to the Corporation and all notes and other
evidences of indebtedness issued in the name of the Corporation shall be signed
by such officer or officers, agent or agents of the Corporation, and in such
manner, as shall be determined by the Chairman or the President.
Section 3. Contracts. The Chairman may, to the fullest extent permitted
by law, authorize any officer or officers, or any agent or agents, of the
Corporation to enter into any contract or to execute and deliver any instrument
in the name of and on behalf of the Corporation, and such authority may be
general or confined to specific instances.
Section 4. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the board of directors.
Section 5. Corporate Seal. The board of directors shall provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the Corporation and the words "Corporate Seal, Delaware".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 6. Voting Securities Owned By Corporation. Voting securities in
any other corporation held by the Corporation shall be voted by the Chairman or
President, unless the board of directors specifically confers authority to vote
with respect thereto, which authority may be general or confined to specific
instances, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.
Section 7. Inspection of Books and Records. Any stockholder of record,
in person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the Corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's
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<PAGE>
interest as a stockholder. In every instance where an attorney or other agent
shall be the person who seeks the right to inspection, the demand under oath
shall be accompanied by a power of attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the Corporation at its registered
office in the State of Delaware or at its principal place of business.
Section 8. Executive Offices. The executive offices of the Corporation
shall be located in New York City, or such other location as shall be determined
by the Chairman from time to time. The executive offices of the Corporation's
operating subsidiaries shall be located in such foreign and domestic locations
which are conducive to the efficient operation of their respective businesses,
as shall be determined by the Chairman.
Section 9. Section Headings. Section headings in these Bylaws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision of
these Bylaws is or becomes inconsistent with any provision of the Certificate of
Incorporation, the General Corporation Law of the State of Delaware or any other
applicable law, the provision of these Bylaws shall not be given any effect to
the extent of such inconsistency but shall otherwise be given full force and
effect.
ARTICLE VI
AMENDMENTS ONLY BY STOCKHOLDERS
THESE BYLAWS MAY BE AMENDED, ALTERED, OR REPEALED AND NEW
BYLAWS ADOPTED AT ANY MEETING OR BY WRITTEN CONSENT OF THE
STOCKHOLDERS BY A MAJORITY VOTE. THE BOARD OF DIRECTORS SHALL
NOT HAVE ANY POWER TO ADOPT, AMEND, ALTER OR REPEAL THESE BYLAWS
UNLESS OTHERWISE EXPLICITLY PROVIDED IN THE CERTIFICATE OF
INCORPORATION.
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<PAGE>
CONSENT CARD
CONSENT BY STOCKHOLDERS OF DOMINION BRIDGE
CORPORATION TO ACTION WITHOUT A MEETING
THIS CONSENT IS SOLICITED BY THE COMMITTEE TO REVITALIZE DOMINION
BRIDGE CORPORATION
The undersigned, a stockholder of record of Dominion Bridge
Corporation (the "Company") hereby consents, pursuant to Section 228 of the
Delaware General Corporation Law, with respect to all shares of Common Stock,
par value $.001 per share, of the Company which the undersigned is entitled to
vote in all capacities, to the following action without a meeting, without prior
notice and without a vote:
RESOLVED, that the Bylaws of the Company are hereby
repealed in their entirety; and it is further
RESOLVED, that the Bylaws included as Appendix A to
the Consent Statement dated May __, 1997 of the
Committee to Revitalize Dominion Bridge
Corporation, are approved and adopted as and for
the Company's Bylaws (the "Bylaws"); and it is
further
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.
_____ CONSENT _________ CONSENT WITHHELD ___________ ABSTAINS
INSTRUCTIONS: To consent or withhold consent to, or abstain from, the foregoing
resolutions check the appropriate box above.
--------------------------
<PAGE>
If no box is marked with respect to each of the above
resolutions, the undersigned will be deemed to consent to such resolutions.
(This Consent card is continued on the reverse side. Please mark, sign and date
this Consent card on the reverse side before returning the Consent card in the
enclosed envelope.)
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this
shareholder action on the date set forth below.
Date:
-------------------------------------------------
Signature of Stockholder
-------------------------------------------------
Signature (if held jointly)
------------------------------------------------
Name and Title of Representative (if applicable)
IMPORTANT NOTE TO STOCKHOLDERS: Please sign
exactly as your shares are registered. Joint
owners should both sign. When signing as
executor, trustee, administrator, guardian,
officer of a corporation, attorney-in-fact or in
any other fiduciary or representative capacity,
please give your full name. This consent, when
executed, will vote all shares held in all
capacities. BE SURE TO DATE THIS CONSENT CARD.
**THIS IS YOUR CONSENT CARD**
