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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Dominion Bridge Corporation
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(Name of Registrant as Specified in Charter)
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
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PRELIMINARY COPY
[Letterhead of Dominion Bridge]
June 4, 1997
Dear Fellow Stockholders:
We, all the members of your Board of Directors, are writing to urge you
to reject the consent solicitation being conducted by the committee calling
itself "The Committee to Revitalize Dominion Bridge Corporation" (hereinafter
referred to as the "Committee" or the "Kuhns Group"). PLEASE DO NOT SIGN ANY
WHITE CONSENT CARD SENT TO YOU. You will shortly receive a green Revocation of
Consent on behalf of the Board of Directors of Dominion Bridge Corporation.
The Board strongly opposes the Committee's efforts to wrest control of
your Company for a number of reasons:
JOHN KUHNS, THE MAN SPEARHEADING THE COMMITTEE'S EFFORTS
TO TAKE CONTROL OF THE COMPANY,
HAS IN THE PAST LEFT A TRAIL OF SEC VIOLATIONS,
SELF ENRICHMENT AND EXTRAORDINARY LOSSES FOR INVESTORS.
- A 1984 New York Times article regarding Catalyst Energy
Corporation said that as President and Chief Executive Officer
of that company, Kuhns "alienated key investors and sent
Catalyst's stock into a tailspin." Catalyst's share price went
from a high of $29 to a low of $3.75.
- In 1987, while an executive of Catalyst, Kuhns made a hostile
bid for a broker/dealer, Stifel Financial Corporation, which
he later abandoned, earning a reputation as a "corporate
raider."
- Following his failed bid for Stifel, Kuhns acquired control of
a broker/dealer known, as Laidlaw, Adams & Peck, which suffered
such massive losses that in 1988, Kuhns abandoned Laidlaw with
unsatisfied judgments from customers and other creditors
amounting to over $2 million. Subsequently, Laidlaw had its
broker/dealer registration revoked for failure to make
required filings and to respond to administrative complaints.
- In 1989, following Kuhns' failures with Catalyst and Laidlaw,
Kuhns founded The New World Power Corporation. During his
tenure as Chairman and Chief Executive Officer, New World
Power raised $63.3 million of equity and $20 million of debt.
During the same period, New World Power lost an aggregate of
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$65.3 million, including a stunning net loss of $41.3 million
on its 1995 operations based on revenues of only $16.4
million. In May 1996, NASDAQ moved to discontinue New World
Power's listing on the NASDAQ National Market System due to
its failure to make required SEC filings. New World Power's
shares fell from a reverse-split adjusted basis of 65 to 3/8.
- Kuhns' history of delinquency with respect to New World Power
culminated in SEC enforcement proceedings and a cease and
desist order under the securities laws enjoining Kuhns from
violations of Sections 13(d) and 16(a) of the Securities
Exchange Act, and Rules 13d-1, 13d-2, 16a-2 and 16a-3
thereunder, following his failure to file reports reflecting
his sales of over $3,105,000 of New World Power stock while
its share price was falling.
- Kuhns was ultimately removed by the board of directors of New
World Power as CEO in April 1996 under pressure from that
company's principal stockholders and creditors. Subsequently,
he was not renominated to serve as a director of the Company
because, the Company believes, he had lost credibility with
the stockholders and creditors of New World Power.
- While the stockholders and creditors of companies with which
Kuhns has been associated have met with disastrous results,
Kuhns has reaped enormous personal benefits. According to SEC
reports, during three years as CEO of Catalyst, Kuhns received
$1.3 million in salary, bonuses and benefits. Additionally,
Kuhns received $912,550 in connection with the cancellation of
options to purchase 274,600 shares of Catalyst common stock.
Kuhns repeated this performance with New World Power, taking
salaries and benefits from 1993 to 1995 of $1.5 million,
grants of New World Power stock and options to purchase an
addition 1.29 million shares. Most egregiously, Kuhns arranged
for New World Power to purchase and substantially renovate a
house in Litchfield County, Connecticut for his office, which
it subsequently transferred to Kuhns as part of his severance
package.
- The Committee has NOT made an economic proposal to acquire the
Company, but is rather seeking a cheap takeover, one which
would put into control persons with a track record of wrecking
companies and violating the law without paying the Company's
shareholders a single dime. Moreover, the Committee has not
put forth any plan for enhancing stockholder value at Dominion
Bridge.
By contrast to Kuhn's record, look at the record of the current
management of Dominion Bridge:
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THE CURRENT MANAGEMENT HAS BUILT DOMINION
BRIDGE INTO A MAJOR INTERNATIONAL ENGINEERING, PROJECT
MANAGEMENT AND CONSTRUCTION FIRM. THESE
OPERATIONAL STRENGTHS SHOULD NOW BEGIN TO TRANSLATE INTO PROFITABILITY.
- Under the leadership of its current senior management,
Dominion Bridge has become a major international provider of
large scale engineering, procurement, construction, steel
fabrication and shipbuilding services. Revenues have grown
from $7 million in 1993 to $363 million in 1996, and are on
track to reach $600 million in fiscal 1997.
- Through its strategy of acquisitions and internal growth,
management has increased the Company's asset base to more than
$250 million and employment to more than 6,500. In 1996, the
Company acquired a controlling stake in McConnell Dowell
Corporation, which is one of the premier engineering and
construction firms in Asia-Pacific. The combined strength and
synergies of the companies that Dominion Bridge has acquired
have made Dominion Bridge a global force.
- Integration of the construction skills of Dominion Bridge Inc.
with the engineering experience of McDonnell Dowell and the
project management expertise of Davie Industries Inc. assures
that there is no job in the infrastructure industry that is
too complex for Dominion Bridge, whether onshore or offshore.
- Dominion Bridge has grown significantly in size and scope
while maintaining a strong balance sheet that is currently
free of long-term debt and is investing available financial
resources in the business. The balance on a loan from Bankers
Trust Co. has been reduced from $30 million to $15 million
and management has recently engaged a major international bank
to provide the Company with a $25 million line of credit,
subject to due diligence and customary closing conditions.
- The Company has taken steps to improve profitability through
stringent cost controls and elimination of non-essential
expenses. Management is also implementing a comprehensive plan
designed to achieve greater efficiencies in marketing
worldwide.
- Having consolidated the 1996 acquisitions and instituted
measures that are expected to improve each business segment's
internal operations, Dominion Bridge is positioned to benefit
from the synergies it has created. Management's
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primary goal for 1997 is to begin translating its new
operational strengths into consistent long-term profitability.
- While the Company's stock price has suffered as management
has implemented its growth strategy, no one is more aware of
the stock price than the Company's senior officers, who
beneficially own an aggregate of 3,821,792 shares of the
Company's Common Stock. COMPARE THIS STAKE IN THE COMPANY TO
THE KUHNS GROUP, WHICH OWNS ONLY 2,000 SHARES OF DOMINION
BRIDGE COMMON STOCK. Given their significant equity stake in
the Company, senior management is committed to enhancing
stockholder value and believes that they have in place the
plan to do so.
AS OPPOSED TO THESE REAL SUCCESSES BY
THE COMPANY'S MANAGEMENT AND ITS TANGIBLE FUTURE PLANS,
WHAT DOES THE KUHNS GROUP HAVE TO OFFER?
The Kuhns Group is seeking to wrest control of your Company from
current management by (i) removing, without cause, members of senior management;
(ii) electing to positions of senior management the members of the Committee;
and (iii) amending the Company's By-Laws to make it effectively impossible for
the Board to function and thereby place the power of the Board in Kuhns.
YOUR BOARD UNANIMOUSLY OPPOSES THE KUHNS SOLICITATION. THE BOARD URGES
YOU NOT TO SIGN ANY WHITE CONSENT CARD SENT TO YOU BY HIS COMMITTEE.
IF YOU HAVE PREVIOUSLY SIGNED AND RETURNED THE WHITE CONSENT CARD YOU
HAVE EVERY RIGHT TO CHANGE YOUR MIND. YOU WILL SOON BE RECEIVING A GREEN
REVOCATION CARD. PLEASE WAIT UNTIL RECEIVING THAT CARD BEFORE TAKING ANY
ACTION.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER
NOMINEE, WE URGE YOU TO CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND
DIRECT HIM OR HER NOT TO EXECUTE A CONSENT CARD ON YOUR BEHALF.
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Thank you for your support.
Very truly yours,
The Board of Directors
Dominion Bridge Corporation
If you have any questions about the revocation of consent process or
require assistance, please call:
Morrow & Co., Inc.
909 Third Avenue, 29th Floor
New York, New York 10022
1-800-662-5200
