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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
/X/ 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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THE COMMITTEE TO REVITALIZE
DOMINION BRIDGE CORPORATION
420 LEXINGTON AVENUE
SUITE 2860
NEW YORK, NEW YORK 10170
(212) 953-1010
June 23, 1997
TO THE STOCKHOLDERS OF
DOMINION BRIDGE CORPORATION:
MR. MARENGERE SAYS: TRUST ME, PROSPERITY
IS JUST AROUND THE CORNER
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 relating to "deemed dividends" from the issuance
of an ill- conceived preferred stock, 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.
THE COMMITTEE ASKS: WHOSE PROSPERITY DID
MR. MARENGERE HAVE IN MIND?
The reality is that 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 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
approximately $1-1/2 per share, A DECLINE OF 80%.
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At the same time, however, the Company's senior executives
have personally prospered: they 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.
MR. MARENGERE SAYS: THE COMMITTEE IS ENGAGED IN A
"CHEAP TAKEOVER" OF DOMINION BRIDGE
THE COMMITTEE'S RESPONSE: ITS TIME FOR STOCKHOLDERS TO
"TAKE BACK" CONTROL OF THEIR OWN COMPANY
We believe that the Company 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 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, further 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.
MR. MARENGERE SAYS: JOHN KUHNS CAN'T BE
TRUSTED TO BECOME CHAIRMAN OF DOMINION BRIDGE.
The Company is fighting tooth and nail -- at a projected cost
of more than $1 million of stockholders' money -- to personally attack John
Kuhns in order to distract stockholders from the real issues at stake in the
Committee's proposal. Let's consider the facts:
o MR. MARENGERE SAYS that under John Kuhns' leadership Catalyst Energy
went from "a high of $29 to a low of $3.75."
THE TRUTH: After the 1987 stock market crash, John Kuhns sold
Catalyst Energy for $11.25 per share, up from $5 when it went
public four years earlier. The total enterprise value of
Catalyst Energy as a public company during John Kuhns'
stewardship went from $30 million to $1 billion. These trends
are just the
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opposite of the Company's stock price performance under Mr.
Marengere's "leadership."
o MR. MARENGERE SAYS that Catalyst Energy tried to buy Stifel Financial
in a hostile transaction, and that Laidlaw suffered hugh losses.
THE TRUTH: Mr. Marengere's facts are all confused: Catalyst
Energy had nothing to do with Stifel Financial; rather,
Laidlaw and Stifel negotiated a friendly merger which was
called off by mutual agreement after the 1987 stock market
crash; thereafter, Laidlaw's various businesses were sold in
an orderly liquidation to the satisfaction of all major
creditors known at the time except its landlord.
o MR. MARENGERE WANTS YOU TO BELIEVE that New World Power was a failure.
THE TRUTH: John Kuhns was no longer the "pitcher of record"
when the substantial losses cited by Mr. Marengere arose. In
fact, these losses came from the write-down of assets under
the direction of the consultants brought in by the company's
lenders after John Kuhns stepped aside as CEO.
THE REAL TRUTH: Eight months ago Dominion Bridge agreed to
invest up to $2.5 million in New World Power, and become a
deeply involved in its management. Moreover, Dominion Bridge's
public statements highlighted New World Power as a
"cornerstone" of the strategy for expanding Dominion Bridge's
project development expertise.
o MR. MARENGERE WANTS YOU TO THINK that John Kuhns sold over $3 million
of his New World Power Stock in violation of SEC rules.
THE TRUTH: Those "sales" were usually gifts to his family,
church, alma mater and other charities -- not sales for cash.
In fact, John Kuhns personally invested $4 million on cash in
New World Power, which he lost alongside other stockholders
when the price declined.
o MR. MARENGERE WANTS YOU TO BELIEVE that the senior officers of the
Company "beneficially own" 3.8 million shares.
THE TRUTH: Two-thirds of Nicholas Matossian's 600,000 shares
are simply UNEXERCISED stock options. Similarly, 825,000 of
Michel Marengere's shares are also UNEXERCISED stock options.
And all but 7% of the 737,000 shares reported as "owned" by
the other officers and directors are also just UNEXERCISED
stock options.
THE REAL TRUTH: For almost four years Mr. Marengere has owed
Dominion Bridge over $1.8 million for the purchase of his
stock, and on an INTEREST-FREE
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basis! He even had the audacity to include that obligation in
"Total Stockholders' Equity" in the Company's financial
statements, without footnote disclosure.
o MR. MARENGERE WANTS YOU TO BELIEVE that because John Kuhns stepped down
as chairman and a director of New World Power, he has a poor reputation
as a corporation executive.
THE TRUTH: The next day Mr. Marengere hired John Kuhns, and
ostensibly made him a Vice President of the Company and
President of its new financial advisory subsidiary, and agreed
to provide $1 million of funding to support it. With much
fanfare, this was done in order "to complement the Company's
engineering and construction abilities with financing
capability."
MR. MARENGERE WANTS YOU TO HELP KEEP HIM AND HIS COHORTS IN
OFFICE, SO THAT THEY CAN CONTINUE TO BENEFIT FROM THE
PERQUISITES OF POWER
THE REAL TRUTH: A stockholder lawsuit alleged that Mr.
Marengere used Dominion Bridge's money "to purchase and
furnish his house in Florida and to pay for the expenses that
he incurred in operating his private boat". To put this and
other claims to rest, Dominion Bridge used stockholders' money
to negotiate a settlement.
THE COMMITTEE URGES STOCKHOLDERS TO SEND IN THE WHITE WRITTEN
CONSENT CARD IN ORDER TO SEND CURRENT MANAGEMENT THIS
MESSAGE: "WE'RE SICK AND TIRED OF CURRENT MANAGEMENT, AND
WE'RE NOT GOING TO TAKE IT ANYMORE"
If a majority of stockholders sign written consents to support
the Committee's solicitation, stockholders will be able to replace senior
management and limit the current Board's ability to rubber-stamp the
mismanagement and self-dealing activities of the past few years. Hopefully, the
New Bylaws will force the current Board of Directors to resign, so that they can
then be replaced with new nominees who are more responsive to stockholders'
interests. 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 July
11, 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
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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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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. Each major component of
the New Bylaws is presented as a separate stockholder
resolution; however, adoption of any such resolution is
conditioned on obtaining sufficient stockholder consents to
adopt all of the resolutions being proposed by the Committee.
Approval of the Proposal requires the written consent of a
majority of the holders of Common Stock as of June 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 July 18, 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 August 19, 1997. Based on publicly available
information filed by the Company with the Securities and Exchange Commission
(the "SEC") as of June 23, 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 23, 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.
Consider the following facts:
o The Company lost nearly $1.5 million for the first
half of fiscal 1997, despite non-operating income
which included 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-cash income from the amortization of
negative goodwill 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 relating to "deemed dividends"
from the ill- fated preferred stock (in the
Committee's opinion, as described below), FOR A TOTAL
LOSS OF NEARLY $10 MILLION FOR FISCAL 1996.
o WHILE OTHER STOCKHOLDERS SUFFERED FROM THE DECLINE IN
THE COMPANY'S MARKET PRICE, SENIOR MANAGEMENT WAS
REWARDED: In spite of the Company's poor operating
performance and dwindling cash reserves, senior
management received bonuses aggregating $700,000 in
February 1997 over the strenuous objections of
stockholders, as expressed at the annual meeting and
in oral and written communications to the Company.
o 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
per share to $2.00.
o Senior executive management recently caused the
Company to 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 of a loan from Bankers Trust. Without this
extension, the Committee believes the loan would have
been declared to be in default.
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
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depleted. While the Company's balance sheet as of
March 31, 1997 shows $13.4 million of cash and
equivalents, all but $2.5 million of that amount is
unavailable for operations in North America: either
it is in Australia or it is restricted for use solely
by the Company's MIL Davie operation in accordance
with the agreement with an agency of the Quebec
government. Moreover, as of May 7, 1997 the Company
spent $5 million to paydown the Bankers Trust loan.
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 approximately $1- 1/2, A
DECLINE OF 80% IN JUST OVER TWO YEARS.
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, in the Committee's view, 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
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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 as senior 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. 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. To the extent the current
Board of Directors is unwilling to work with the new management team, the New
Bylaws would make it functionally impossible for the Board of Directors to
conduct business on a regular basis. The Committee hopes that this will have the
effect of forcing the current Board of Directors to resign, so that they can be
replaced with new nominees who are more responsive to stockholders' interests.
At this time the Committee does not know who it would propose
for new directors if any members of the existing Board of Directors resign;
however, it is possible that the members of the Committee could be nominated.
The Committee is contemplating conducting a proxy solicitation to replace a
portion of the Board of Directors at the next annual meeting, which is
tentatively scheduled for February 1998.
The New Bylaws would make it functionally difficult for the
Board of Directors to conduct business on a regular basis, because all of its
members would have to meet in person in Delaware in order to conduct business.
This could have an adverse effect on the Company, because, for example, of the
potential delays in setting up such meetings and the fact that the Board may
wish to reverse any decisions made in the interim by the Company's officers, but
would be unable to do so on an expeditious basis. It may also make it difficult
to find or keep qualified and experienced persons to serve on the Board of
Directors.
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 except at
an annual meeting. 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
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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 Proceedings."
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, stockholders will thereby be able to replace current
senior management and, through various provisions of the New Bylaws, limit the
Board's ability to rubber-stamp the mismanagement and self-dealing activities of
the past few years. The Committee hopes that the New Bylaws will force the
current Board of Directors to resign, so that they can be replaced with new
nominees who are more responsive to stockholders' interests. 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 effectively
transfer to the new senior executive officers nominated by the Committee
authority to manage the Company on a day-to-day basis. THE NEW BYLAWS CONTAIN AN
AUTOMATIC "SUNSET" PROVISION FOR ITS KEY COMPONENTS UPON THE ELECTION BY
STOCKHOLDERS OF A MAJORITY OF NEW DIRECTORS. See "The Proposal -- Repealing the
Old Bylaws and Adopting the New Bylaws." The "Sunset" provision provides that,
after adoption of the New Bylaws, once stockholders elect a majority of the
Board the key components of the New Bylaws would automatically expire. This
provision was included in the New Bylaws to allay concerns that a stalemate
situation could continue indefinitely. Notwithstanding this provision, 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.
The replacement of the Company's officers would give rise to a
technical default under the Company's loan agreements. However, in the
Committee's opinion (based on discussions with financial institutions which
typically provide or arrange for debt financing), it should be able to either
promptly refinance that debt or negotiate a waiver.
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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 non-operating income and non-cash 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, while the Company's gross profit margins are presented
in accordance with generally accepted accounting principles, the Committee
believes they have been distorted by including millions of dollars of non-cash
"negative goodwill" associated with the MIL Davie transaction. It is not
surprising that given all of its acquisition activities 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 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.
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. This
advance has since been repaid.
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
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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. If Mr. Marengere and his
fellow director of the Company still held the stock,
at current prices the paper loss would be
approximately $1.2 million.
o In fiscal year 1995, the Company advanced $994,000 to
GFI.
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), stockholders should consider 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 sought to
negotiate but failed to obtain 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.
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<PAGE>
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 historically paid no dividends, its
profitability added no cash to the Company's coffers.
Consequently, given the losses in its other
businesses, historically there was no apparent
financial support or cash flow for the Bankers Trust
bridge loan. Instead, 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.
o The recently-announced plan for McConnell Dowell to
begin paying dividends is a classic case of "too
little too late." The Committee believes that
McConnell Dowell can better use its cash resources to
expand its business rather than to support the perks,
bonuses and general ineptitude of current management.
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, invested $4 million cash of his personal funds, 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
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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.
However, the Company claims that it paid Mr. Kuhns an aggregate of $96,241 in
connection with his services rendered during that period.
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 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. To date, this project has still
not been financed, nor has construction begun.
Mr. Kuhns 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 an extension of obligation to repay 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 (including
through telephone calls and letters to Mr. Marengere and the Board of Directors
by concerned 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 called Mr. Kuhns on their own initiative to express their
extreme displeasure
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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 stockholders asked Mr. Kuhns to explore
whether the Company's senior executives could be removed from office. See "Other
Matters -- Participant Information" for the names of those stockholders.
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 fully 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 Company's outside 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 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 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. On June 10, 1997 Mr.
Kuhns revoked that consent and filed a new written consent, thereby establishing
June 10, 1997 as the Record Date. This was done in order to avoid vexatious
litigation by the
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<PAGE>
Company, which claimed that Mr. Kuhns was not technically a stockholder on May
23. See "Other Matters -- Legal Proceedings." On June 23, 1997 Mr. Kuhns revoked
the June 10 consent and filed a new written consent, thereby establishing June
23 as the Record Date. This was done in order to reflect technical changes in
the New Bylaws and the form of written consent.
THE PROPOSAL
Each major component of the Proposal is being presented as a
separate stockholder resolution; however, adoption of any such resolution is
conditioned on obtaining sufficient stockholder consents to adopt all of the
resolutions comprising the Proposal. The Committee will not submit any consents
to the Company unless it receives consents sufficient to pass all of the
resolutions. ACCORDINGLY, STOCKHOLDERS WHO SUPPORT THE COMMITTEE'S OBJECTIVES
ARE URGED TO CONSENT TO ALL OF THE STOCKHOLDER RESOLUTIONS SET FORTH ON THE FORM
OF WRITTEN CONSENT.
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 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 opinion of Morris, Nichols, Arsht & Tunnell, special
Delaware counsel to the Committee, the provisions of the New Bylaws that give
stockholders the right to elect officers and which vest certain duties in such
officers are authorized by the Delaware GCL, are legal and valid under Delaware
law, and are not contrary to the general state law requirement that the
directors manage the Company. Furthermore, both the Old Bylaws and the New
Bylaws contain a severability clause which permits any invalid bylaw provision
to be stricken without impairing the legality of the remaining bylaw provision.
There is uncertainty regarding the validity of the New Bylaws, the ultimate
validity of which may need to be decided by a court. See "Other Matters -- Legal
Proceedings."
The statutory basis for the belief that the New Bylaws are
valid under state law is found primarily in Section 141(a) of the Delaware GCL.
This section provides that while a
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board has the statutory authority to manage the corporation, that power is
subject to other provisions of the Delaware GCL, including Section 142, which
permits the adoption of bylaws which govern the manner of electing officers and
the duties of such officers. Moreover, the New Bylaws do not involve the
delegation of duties which substantially limit the future options of directors,
inasmuch as the Board is not precluded from acting to countermand action taken
by officers under the New Bylaws. Finally, additional provisions of the Delaware
GCL authorize bylaws which regulate the manner in which directors may act.
It should be noted that the New Bylaws do not take away any of
the Board of Directors' powers to propose significant corporate actions, such as
a merger or sale of the Company, nor do they foreclose the Board of Directors
from countermanding or overriding any actions which may be taken by the
Chairman. Instead, the New Bylaws make it very difficult for the Board of
Directors to actually meet and take such action. Significantly, the New Bylaws
contain an automatic "sunset" provision: the key components would expire when a
majority of the directors currently in office are replaced or re-elected by
nominees elected by stockholders.
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.
OLD BYLAWS NEW BYLAWS
---------- ----------
STOCKHOLDER MEETINGS:
Place and Time:
Determined by resolution of the Board Determined only by the Chairman or
of 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
Officer, the President, or at the request of directors, the Chairman, the
a majority of the Board of Directors President, or by stockholders
owning at least 2% of the Common
Stock
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<PAGE>
OLD BYLAWS NEW BYLAWS
---------- ----------
Place of Meetings:
Board of Directors may designate any The Chairman may designate any
place, either within or outside the State place, either within or outside
of Delaware; if no designation is made, the State of Delaware; if no
the annual or special meeting would be designation is made, the annual or
held at the principal executive office of special meeting would be held at
the Company the registered office of in the
the Company State of Delaware
Action by Written Consent:
Purported denial of stockholders' right Deleted
to act by written consent
Stockholder Proposals:
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
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, the Board of Directors, the
Chairman and the President would also have the right to call a special meeting
of stockholders.
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<PAGE>
BYLAWS RELATING TO DIRECTORS:
OLD BYLAWS NEW BYLAWS
---------- ----------
Number of Directors:
Initially five, but thereafter as Initially eight (which is the
established from time to time by a current number of directors), but
resolution of the Board of Directors thereafter as established from
time to time by the Chairman
Meetings and Notice:
Regular meetings may be held without Regular meetings, as determined by
notice as determined by a resolution a resolution of the Board of
of the Board of Directors Directors shall be held on 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
request of the Chief Executive Officer at the request of a majority of
or the President on 24 hours' notice, the directors, or by the Chairman
or at the request of a majority of the or the President, on at least 72
directors hours' notice
Quorum; Required Vote
A majority of the directors constitutes The presence of all of the
a quorum, and the vote of a majority directors shall constitute a
of directors present would be the act quorum, and the unanimous
of the Board of Directors affirmative vote of all of the
directors would be the act of the
Board of Directors
Committees:
By resolution adopted by a majority of By resolution adopted by a
the directors, one or more committees unanimous affirmative vote of all
may be created directors, one or more committees
may be designated
Each committee may consist of one or Each committee shall consist of at
more directors, and the Board of least two-thirds of the total
Directors may designate alternate number of directors (rounded up to
members to replace absent or the nearest whole number) plus
disqualified members one, and the Board of Directors
cannot designate alternate members
Each committee shall keep regular The Secretary of the Company shall
minutes of its meetings be given notice and attend each
meeting of any committee to keep
the regular minutes of its
meetings
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<PAGE>
OLD BYLAWS NEW BYLAWS
---------- ----------
The presence of a majority of the Committee meetings shall only be
members of a committee would held at the Delaware; the presence
constitute a quorum; and the vote of a of all of the members of Delaware;
majority of the members present shall the presence of all of the members
be the act of the committee of a committee shall be necessary
to constitute a 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
participate in a meeting through the other communications equipment is
use of conference telephone, and their not a permitted means of
presence through that means shall participating at a meeting;
constitute presence in person personal attendance at Board of
Directors and committee 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
written consent in lieu of a meeting any committee thereof may act by
written consent
Compensation:
Directors may receive compensation Directors shall not receive any
for acting as directors and for compensation, either for acting as
attending meetings; reimbursement of such or for attending any
expenses permitted meetings; no reimbursement of
expenses
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
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
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<PAGE>
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.
BYLAWS RELATING TO OFFICERS:
OLD BYLAWS NEW BYLAWS
---------- ----------
Number; Who Elects:
The officers shall be a Chairman of The three senior officers - the
the Board, a Chief Executive Officer, Chairman, the President, and the
a President, one or more Vice Secretary - shall be elected
Presidents, a Secretary, a Treasurer, solely by the stockholders; the
and such other officers as may be Chairman shall have the sole power
deemed necessary by the Board of to appoint one or more Vice
Directors; all of the officers are Presidents, a Secretary, a
elected by the Board of Directors Treasurer and such other officers
as he may deem necessary or
desirable
Election; Term of Office:
Officers are elected annually by the The three senior officers shall be
Board of Directors; vacancies may be elected annually by the
filled by the Board of Directors stockholders; vacancies may 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
by the Board of Directors whenever in majority vote of the Common Stock
its judgment the best interests of the whenever in their judgment the
Company would be served thereby best interests of the Company
would be served thereby
Vacancies:
Filled by the Board of Directors Filled solely by the Chairman
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OLD BYLAWS NEW BYLAWS
---------- ----------
Compensation:
Fixed by the Board of Directors for all Fixed by the Chairman, except that
officers the 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
the Chief Executive Officer having the power to manage the business and
power to manage the business and affairs of the Company to the
affairs of the Company fullest extent permitted by law
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
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.
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<PAGE>
BYLAWS RELATING TO THE POWER TO AMEND; SUNSET PROVISION:
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.
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.
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<PAGE>
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.
Sunset Provision: No comparable Article in the Old Bylaws.
Article VII of the New Bylaws contains an automatic "sunset" provision, as
follows:
ARTICLE VII
CHANGE IN MAJORITY OF THE BOARD
NOTWITHSTANDING ANY PROVISION TO THE CONTRARY SET
FORTH IN ANY OTHER ARTICLE OF THESE BYLAWS, AT ANY
TIME FOLLOWING THE ADOPTION OF THIS ARTICLE VII, AT
SUCH TIME AS A MAJORITY OF THE DIRECTORS OF THE
CORPORATION HAVE BEEN ELECTED BY THE STOCKHOLDERS AT
ANNUAL AND/OR SPECIAL MEETING(S), AND/OR BY WRITTEN
CONSENT AT A TIME OR TIMES FOLLOWING THE ADOPTION OF
THIS ARTICLE VII, (1) A MAJORITY OF THE TOTAL NUMBER
OF DIRECTORS OR THE MEMBERS OF ANY COMMITTEE THEREOF
SHALL CONSTITUTE A QUORUM OF THE BOARD OR SUCH
COMMITTEE AND THE AFFIRMATIVE VOTE OF A MAJORITY OF
THE DIRECTORS PRESENT AT ANY MEETING OF THE BOARD OR
ANY SUCH COMMITTEE SHALL CONSTITUTE THE ACT OF THE
BOARD OR SUCH COMMITTEE WITH RESPECT TO ANY MATTER
EXCEPT AS OTHERWISE PROVIDED BY LAW, (2) THE BOARD
OF DIRECTORS OR ANY COMMITTEE THEREOF MAY ACT BY
WRITTEN CONSENT PURSUANT TO SECTION 141(f) OF THE
DELAWARE GENERAL CORPORATION LAW AND THE BOARD OF
DIRECTORS OR ANY COMMITTEE THEREOF MAY HOLD MEETINGS
WITHIN OR WITHOUT THE STATE OF DELAWARE AND, AT SUCH
MEETING, ANY DIRECTOR OR COMMITTEE MEMBER MAY
PARTICIPATE BY MEANS OF CONFERENCE TELEPHONE OR
SIMILAR COMMUNICATIONS EQUIPMENT BY MEANS OF WHICH
ALL PERSONS PARTICIPATING IN THE MEETING CAN HEAR
EACH OTHER, (3) DIRECTORS
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<PAGE>
MAY BE PAID COMPENSATION AS DETERMINED BY THE BOARD
OF DIRECTORS, (4) ANY DUTY OTHERWISE DELEGATED TO
ANY OFFICER OF THE CORPORATION PURSUANT TO THESE
BYLAWS MAY, BY RESOLUTION OF THE BOARD OF DIRECTORS,
BE REMOVED FROM SUCH OFFICER AND, IF SUCH RESOLUTION
FURTHER SO PROVIDES, DELEGATED TO ANY OTHER OFFICER,
(5) THE CHAIRMAN'S COMPENSATION SHALL NOT BE SUBJECT
TO RATIFICATION BY STOCKHOLDERS AND (6) COMMITTEES
MAY CONSIST OF ONE OR MORE DIRECTORS.
Article VII of the New Bylaws is intended to make clear that
upon the election by the stockholders of a majority of the directors of the
Company, the newly-constituted Board of Directors will be released from the
special restrictions contained in the New Bylaws.
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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,
and since November 1996, he has been 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 an AB from Georgetown University. In June 1995, Mr. Kuhns consented to
the issuance of an order by the Securities and Exchange Commission, pursuant to
which Mr. Kuhns was ordered to timely file reports required by certain of the
reporting requirements of the Securities Exchange Act of 1934, as amended, and
certain of the rules promulgated thereunder. The order found that Mr. Kuhns had
failed to timely file Forms 3, 4 and 5 for his holdings of The New World Power
Corporation and a Form 3 for Photocomm, Inc. These filings are required to be
made by officers, directors and significant stockholders in order to timely
notify the public of purchases, sales or other dispositions of stock and ensure
compliance with the "short swing" profit rules under Section 16(b) of the
Securities Exchange Act of 1934, as amended.
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. For more than the past five years, 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.
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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, all of which were
purchased on May 5, 1997; Mr. Mariash owns no shares of Common Stock; Mr. Dutton
owns 1,900 shares of Common Stock, of which, 1,000 shares were purchased on each
of November 28, 1997 and January 22, 1996 and 100 of which were transferred to
the Committee on June 4, 1997; Mr. Hermann owns 45,000 shares of Common Stock,
which were purchased on the following dates in the following amounts: 5,000
shares on October 7, 1996, 10,000 shares on October 23, 1996, 10,000 shares on
October 30, 1996 and 20,000 shares on January 2, 1997; and the Committee owns
100 shares of Common Stock, the acquisition of which is described above.
Collectively, 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 June 10, 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.
Although these people or entities are
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"participants" under the proxy rules, the Committee does not know the amount of
Common Stock owned by them. However, based on publicly available information the
Committee believes that no such person or entity owns 5% or more of the Common
Stock. In an effort to avoid even the appearance of any "group" under the
federal securities laws, the Committee has steadfastly avoided any discussion of
their share ownership or their intentions with respect to owning, disposing or
voting any of their Common Stock.
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 PROCEEDINGS
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.
The Company, in its answer, admitted that stockholders do have
the right to act by written consent. The Company denied all other allegations
and has raised various counterclaims, including ones relating to the validity of
the New Bylaws under the Delaware GCL. On June 5, 1997, the Court denied the
Company's motion for expedited discovery.
On June 2, 1997, the Company commenced a lawsuit against a
member of the Committee, John M. Dutton, in federal district court in
Wilmington, Delaware. In this action the Company seeks injunctive relief and
monetary damages against Mr. Dutton for alleged breach of
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his fiduciary and common law duties to the Company and his alleged
misappropriation and misuse of confidential information. Mr. Dutton has
vigorously denied any wrongdoing and that he has any material non-public
information of the Company. Additionally, Mr. Dutton's letter to the Company
dated May 12, 1997 specifically offered to return any materials in his
possession that belonged to the Company, but the Company never requested
materials until it filed this lawsuit. Currently pending in this lawsuit is the
Company's motion for a preliminary injunction enjoining Mr. Dutton from
allegedly continuing to disseminate the alleged non-public confidential
information of the Company.
On June 3, 1997, John D. Kuhns, a member of the Committee,
commenced a lawsuit against the Company in the Court of Chancery of the State of
Delaware in New Castle County. By this action, Mr. Kuhns seeks relief pursuant
to Section 220 of the Delaware GCL compelling the Company to provide certain
materials identifying and relating to the stockholders of the Company for
purposes of inspection and copying. Before commencing litigation, Mr. Kuhns made
a formal demand for these materials, to which the Company failed to comply. Mr.
Kuhns seeks these materials to enable him to communicate with his fellow
stockholders of the Company on matters relating to their mutual interests as
stockholders including, without limitation, the solicitation of written consents
for the Proposal. Just prior to the hearing date of June 19, 1997 to decide this
matter, the Company conceded the validity of this lawsuit and agreed to furnish
the information requested.
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,
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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 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
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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 $50,000, 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 holders. It is anticipated that Georgeson will employ
approximately 20 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
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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 June 20, 1997;
accordingly, this consent solicitation must be completed by August 19, 1997.
However, the Committee has established July 18, 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.
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
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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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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 May 23, 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")) 3,821,792
Shares (or approximately 12.4% of the Shares reported as outstanding on such
date). All of the foregoing information has been obtained from the Company's
preliminary proxy statement dated June 4, 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.
Number of Shares
Owned Percentage of
Name and Address Beneficially and Outstanding
of Beneficial Owner of Record Shares (1)
- -------------------------- ----------------- ------------------
Michel L. Marengere.......
500 Rue Notre Dame
Lachine
Quebec, Canada HBS 282 2,484,792(2) 8.5
- ---------------------
(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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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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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.
ARTICLE VII
CHANGE IN MAJORITY OF THE BOARD
NOTWITHSTANDING ANY PROVISION TO THE CONTRARY SET FORTH IN ANY OTHER
ARTICLE OF THESE BYLAWS, AT ANY TIME FOLLOWING THE ADOPTION OF THIS ARTICLE VII,
AT SUCH TIME AS A MAJORITY OF THE DIRECTORS OF THE CORPORATION HAVE BEEN ELECTED
BY THE STOCKHOLDERS AT ANNUAL AND/OR SPECIAL MEETING(S) AND/OR BY WRITTEN
CONSENT AT A TIME OR
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TIMES FOLLOWING THE ADOPTION OF THIS ARTICLE VII, (1) A MAJORITY OF THE TOTAL
NUMBER OF DIRECTORS OR THE MEMBERS OF ANY COMMITTEE THEREOF SHALL CONSTITUTE A
QUORUM OF THE BOARD OR SUCH COMMITTEE AND THE AFFIRMATIVE VOTE OF A MAJORITY OF
THE DIRECTORS PRESENT AT ANY MEETING OF THE BOARD OR ANY SUCH COMMITTEE SHALL
CONSTITUTE THE ACT OF THE BOARD OR SUCH COMMITTEE WITH RESPECT TO ANY MATTER
EXCEPT AS OTHERWISE PROVIDED BY LAW, (2) THE BOARD OF DIRECTORS OR ANY COMMITTEE
THEREOF MAY ACT BY WRITTEN CONSENT PURSUANT TO SECTION 141(f) OF THE DELAWARE
GENERAL CORPORATION LAW AND THE BOARD OF DIRECTORS OR ANY COMMITTEE THEREOF MAY
HOLD MEETINGS WITHIN OR WITHOUT THE STATE OF DELAWARE AND, AT SUCH MEETING, ANY
DIRECTOR OR COMMITTEE MEMBER MAY PARTICIPATE BY MEANS OF CONFERENCE TELEPHONE OR
SIMILAR COMMUNICATIONS EQUIPMENT BY MEANS OF WHICH ALL PERSONS PARTICIPATING IN
THE MEETING CAN HEAR EACH OTHER, (3) DIRECTORS MAY BE PAID COMPENSATION AS
DETERMINED BY THE BOARD OF DIRECTORS, (4) ANY DUTY OTHERWISE DELEGATED TO ANY
OFFICER OF THE CORPORATION PURSUANT TO THESE BYLAWS MAY, BY RESOLUTION OF THE
BOARD OF DIRECTORS, BE REMOVED FROM SUCH OFFICER AND, IF SUCH RESOLUTION FURTHER
SO PROVIDES, DELEGATED TO ANY OTHER OFFICER, (5) THE CHAIRMAN'S COMPENSATION
SHALL NOT BE SUBJECT TO RATIFICATION BY STOCKHOLDERS AND (6) COMMITTEES MAY
CONSIST OF ONE OR MORE DIRECTORS.
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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.
______CONSENT ____________ CONSENT WITHHELD ________ABSTAINS
BYLAW RESOLUTIONS
RESOLVED, that the Bylaws included as Appendix A to the
Consent Statement dated June 23, 1997 of the Committee to
Revitalize Dominion Bridge Corporation contained in Article I
(relating to Stockholders).
______CONSENT ____________ CONSENT WITHHELD ________ABSTAINS
RESOLVED, that the Bylaws included as Appendix A to the
Consent Statement dated June 23, 1997 of the Committee to
Revitalize Dominion Bridge Corporation contained in Article II
(relating to Directors).
______CONSENT ____________ CONSENT WITHHELD ________ABSTAINS
RESOLVED, that the Bylaws included as Appendix A to the
Consent Statement dated June 23, 1997 of the Committee to
Revitalize Dominion Bridge Corporation contained in Article
III (relating to Officers), Article IV (Certificates of Stock)
and Article V (General Provisions) are approved and adopted.
______CONSENT ____________ CONSENT WITHHELD ________ABSTAINS
<PAGE>
RESOLVED, that the Bylaws included as Appendix A to the
Consent Statement dated June 23, 1997 of the Committee to
Revitalize Dominion Bridge Corporation contained in Article VI
(relating to the Power to Amend) and Article VII (relating to
the Sunset Provision) are approved and adopted.
______CONSENT ____________ CONSENT WITHHELD ________ABSTAINS
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.
______CONSENT ____________ CONSENT WITHHELD ________ABSTAINS
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.
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**
