SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Global Motorsport Group, Inc.
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(Name of Registrant as Specified in Its Charter)
Golden Cycle, LLC
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<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
GOLDEN CYCLE, LLC, a Pennsylvania )
limited liability company, )
Plaintiff, )
)
v. ) C.A. No. 16301
)
LIONEL M. ALLAN, JAMES J. KELLY, JR., )
JOSEPH F. KEENAN, JOSEPH PIAZZA, SR., )
GLOBAL MOTORSPORT GROUP, INC., )
STONINGTON ACQUISITION CORP. and )
GMG ACQUISITION CORP )
Defendants. )
THIRD AMENDED AND SUPPLEMENTED COMPLAINT
Golden Cycle, LLC ("Golden Cycle"), as and for its
Third Amended and Supplemented Complaint, alleges on knowledge
with respect to itself and its own acts, and upon information and
belief as to all other matters, as follows:
NATURE OF THE ACTION
1. For more than seven months Golden Cycle has
attempted to acquire Defendant Global Motorsport Group, Inc.
("Global") at a price substantially in excess of the company's
market value and has advised the company that it is continuing to
evaluate its position with the goal of maximizing stockholder
value. The Individual Defendants' response to Golden Cycle's
acquisition proposal has been stubborn obstructionism. While
professing they are attempting to maximize shareholder value, the
Individual Defendants' actions demonstrate their intent is to
fend off Golden Cycle's bid at any cost.
2. The Individual Defendants' blind obstructionism
has led them to sign a conditional tender offer/merger agreement
with Defendants Stonington Acquisition Corp. and<PAGE>
<PAGE>
GMG Acquisition Corp. (collectively, "Stonington") at $19.50 per
share without first approaching Golden Cycle to see whether it
would increase its offer. Stonington's proposal has several
material conditions including the obtainment of financing and the
execution of employment contracts with unidentified members of
senior management. Although the conditional $19.50 Stonington
offer is $.50 (less than 3%) more than Golden Cycle's then
pending fully-financed offer, the Individual Defendants have
effectively terminated the auction for Global through the
retention and adoption of defensive provisions including
substantial and preclusive lock-ups (valued at approximately $.77
per share) and a Poison Pill.
3. Demonstrating the seriousness of its interest in
acquiring Global, Golden Cycle subsequently increased its bid to
$20 per share. Unlike the Stonington bid, Golden Cycle's $20
offer has no financing contingency. It is conditioned, however,
on the invalidation of the auction ending lock-ups and Poison
Pill.
4. While alarming in that it disregards the interests
of stockholders, the Individual Defendants' conduct is consistent
with their pattern of behavior. Indeed, without ever meeting
with Golden Cycle or providing it with due diligence information
which would permit it to determine whether an even higher offer
is appropriate, over the past seven months the Individual
Defendants have signed three successive merger agreements, at
progressively lower prices, each with substantial and preclusive
lock-ups, all the while continuing to hide behind a formidable
array of takeover defenses. Two of the three contingent
agreements have fallen through and the third, the recent
agreement with Stonington, is priced below Golden Cycle's
current, fully financed $20 offer.
5. The Individual Defendants' conduct violates
fiduciary obligations to maximize stockholder value and to
investigate and evaluate Golden Cycle's offer independently<PAGE>
<PAGE>
and in good faith. Specifically, the Individual Defendants
violated their duties by, among other things:
(a) Agreeing to sell Global without obtaining the
highest price reasonably available;
(b) Accepting unreasonable and preclusive break-
up and expense fees as a condition to the proposed merger with
Stonington;
(c) Relinquishing to Stonington the power to
redeem or amend Global's Poison Pill; and
(d) Failing to exempt Golden Cycle offer from
Global's Poison Pill and the provisions of 8 Del. C. $203.
6. Through its participation in the above events,
Stonington has aided and abetted the Individual Defendants in the
foregoing breaches. Unless enjoined, the Defendants' illegal and
inequitable conduct will continue and the tender offer/merger
agreement with Stonington will be consummated.
7. Plaintiff seeks, among other things, declaratory
relief and an injunction order: (a) requiring Defendants to
give Golden Cycle access to all confidential information made
available to Stonington to enable Golden Cycle to evaluate
whether an even higher bid is appropriate; (b) invalidating the
break-up fees and expense reimbursements granted by Global to
Stonington to enable Golden Cycle to compete on an equal economic
footing; (c) redeeming Global's shareholder rights plan and
exempting Golden Cycle's offer from Delaware anti-takeover laws
(8 Del. C. $203); and (d) enjoining the proposed merger with
Stonington for 45 business days after delivery of due diligence
to give Golden Cycle a fair opportunity to present its best bid
to shareholders. Golden Cycle also seeks an Order declaring that
the Individual<PAGE>
<PAGE>
Defendants set an improper record date for Golden Cycle's
outstanding consent solicitation on the grounds Defendants
violated 8 Del. C. $213(b) by purporting to set a record date
more than ten days after the date of the resolution setting the
record date.
THE PARTIES
8. Defendant Global Motorsport Group, Inc. is a
Delaware corporation with its principal place of business in
California. Global is the largest independent supplier of
aftermarket parts and accessories, including replacement parts,
custom parts and apparel, for Harley-Davidson motorcycles.
Global distributes its own products as well as products supplied
by other recognized manufacturers.
9. The Individual Defendants comprise Global's four-
member Board of Directors (the "Board"). In addition, Defendant
Joseph F. Keenan is the Chairman of the Board, Defendant Joseph
Piazza, Sr., is the President and Chief Executive Officer,
Defendant James J. Kelly, Jr. is the Executive Vice President and
Chief Financial Officer, and Defendant Lionel M. Allan is the
company's "legal consultant."
10. Defendant Stonington Acquisition Corp. is a
Delaware corporation with its principal place of business in New
York. Defendant GMG Acquisition Corp. is a wholly owned
subsidiary of Stonington Acquisition Corp. and was created in
order to effectuate the proposed merger.
11. Plaintiff Golden Cycle is a Pennsylvania limited
liability company with its principal place of business in
Harrisburg, Pennsylvania. Golden Cycle is the record owner of
100 shares of Global common stock and the beneficial owner of
528,100 shares. Golden Cycle's stock holdings represent about
10.4% of Global's outstanding capital stock.<PAGE>
<PAGE>
12. The principals of Golden Cycle are Alexander Grass
and his son, Roger Grass. Alexander Grass was a founder of Rite
Aid Corporation, was its Chairman, President and Chief Executive
Officer until March 1995 and presently serves as a director and
Chairman of Rite Aid's Executive Committee. Alexander Grass also
has been a director of Hasbro, Inc., and the President, Chairman
and Chief Executive Officer of Super Rite Foods, Inc. Roger
Grass is Chairman of Biker's Depot, Inc., which owns and operates
superstores that sell aftermarket parts and accessories for
Harley-Davidson motorcycles.
GLOBAL'S LACKLUSTER PERFORMANCE
13. In the past decade, Harley-Davidson has
experienced a renaissance with increased demand for its
motorcycles and associated products. Global's stockholders have
not benefitted from that rebirth. Founded in 1970, Global has
never paid a dividend. While one of the Board's advisors stated
on October 5, 1998, that Global's stock had a near term value of
$20 per share, the stock closed as low as $11 during the first
quarter of 1998, at $14 15/16 the day before Golden Cycle
announced its interest in an acquisition and at $12.50 two days
after the advisor's announcement.
THE BOARD AMPLY REWARDS
ITSELF FOR ITS MEDIOCRE STEWARDSHIP
14. For stockholders, Global's performance has been
less than successful. For the Board and senior management,
however, Global is a source of great financial reward.
15. According to Global's September 1997 Proxy
Statement (the "1997 Proxy"), Defendant Kelly's 1997 salary and
bonus as CFO was about $140,000. He also received<PAGE>
<PAGE>
options to buy 32,250 shares of Global stock. Global has not
disclosed Defendant Piazza's compensation as CEO but, presumably,
it is greater than Defendant Kelly's.
16. Global's public disclosures indicate Defendants
Keenan and Allan are well compensated. According to the 1997
Proxy, non-management directors receive $20,000 per year plus
expenses. In addition, since 1992, Defendant Allan has acted as
a "legal consultant" to the company an arrangement pursuant to
which he receives $101,000 annually, including a $12,000 "office
allowance." Further, Defendant Keenan is being paid at least
$30,000 a year to serve as Global's chairman -- in addition to
the $20,000 he already receives as a "non-management director."
17. Rather than linking themselves economically to the
interests of stockholders, the Individual Defendants hold
virtually no common stock. As of the date of the 1997 Proxy,
Defendant Kelly owned fewer than 2,000 shares of stock.
Defendant Keenan held 2,500 shares. Defendant Allan and
Defendant Piazza held no shares.
THE TAKEOVER DEFENSES
18. The Board's performance and skimpy stock holdings
provide little assurance of continued incumbency. Moreover, the
company's equity is heavily concentrated in the hands of a few,
highly sophisticated investors. On information and belief, half
or more of the stock is held by ten institutional investors.
19. On November 13, 1996, the Board adopted a potent
takeover defense in the form of a stockholder rights plan (the
"Poison Pill"). The Poison Pill allows the Board to prevent the
consummation of any tender or exchange offer, even one providing
substantial benefits to Global's stockholders. The Board
declared a dividend of one common stock purchase right (a
"Right"), payable to each of Global's stockholders of record as
of December 13, 1996. Each<PAGE>
<PAGE>
Right entitles the holder to purchase one one-thousandth of a
share of Global's Series A Participating Preferred Stock, $0.001
par value, for each share of Global common stock held by the
Right holder for $80 per share (the "Purchase Price"), subject to
adjustment.
20. The Rights are exercisable on the earlier of 10
days (or such later date as may be determined by a majority of
the Board following: (i) a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person")
has acquired beneficial ownership of 15% or more of Global's
outstanding common stock, or (ii) the commencement of, or the
announcement of the intention to make, a tender offer or exchange
offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of Global's
outstanding common stock.
21. In the event a person becomes an Acquiring Person,
each holder of a Right (other than Rights exercised or
beneficially owned by the Acquiring Person) will be entitled to
receive on exercise a number of shares of Global common stock
having a market value of twice the Purchase Price. In the event
the holder does not exercise its Right and accept the common
stock and Global is acquired through a merger, the Right holder
would be entitled to receive, on exercise, shares of the
acquiring company's common stock equal to two times the Purchase
Price. Global's Board can redeem the Rights for $0.001 each, or
can amend the Poison Pill to make the Rights inapplicable to a
proposed acquisition, except that following the date a person
becomes an Acquiring Person, the Poison Pill may be redeemed only
by Continuing Directors.
22. Due to the prohibitive costs the Poison Pill
imposes on an Acquiring Person, any tender offer which triggers
the Rights cannot practically be consummated unless Global's
Board redeems or amends the Poison Pill or declares the tender
offer to be a Permitted <PAGE>
<PAGE>
Offer. Accordingly, the Individual Defendants can block any
proposed tender offer regardless of the interests of Global's
stockholders.
23. A second de facto poison pill adopted by the
Individual Defendants comes in the form of Stock Options which
have been granted in the last year. Through the end of 1997,
Global had never granted options which vested immediately. In
January and February 1998, however, the Individual Defendants
granted options to purchase 461,000 shares. Of that amount,
options to purchase 160,000 shares at $12.25 were granted to the
Individual Defendants, all of which were fully vested. These
recent options, coupled with the previously issued options, all
vest upon a change of control and increase the cost of acquiring
Global by millions of dollars. The increased cost of acquisition
created by the Stock Options serves as an additional takeover
defense for the company (the "Option Pill").
24. In addition to the Poison Pill and the Option
Pill, Global is subject to the anti-takeover provisions of 8 Del.
C. $203. As with the Poison Pill, the Board can exempt Golden
Cycle's offer from the effects of Section 203.
25. The actions of the Individual Defendants make it
clear they will not fairly consider the Global Cycle bid and
determine whether, in the interests of the stockholders, it
should be declared to be a Permitted Offer.
THE GOLDEN OFFER
26. On March 23, 1998, Golden Cycle delivered a letter
to Global offering to purchase all of Global common stock for $18
per share (the "18 Offer") a 23% premium over the market close
on the last previous trading day. In the letter, Golden Cycle
advised Global all terms of the $18 Offer, including price, were
negotiable. Golden Cycle requested access to<PAGE>
<PAGE>
Global's books and records in order to identify undisclosed value
Golden Cycle had not taken into account.
27. Several days later, having received no response to
the $18 Offer, Golden Cycle initiated a consent solicitation to
replace the Board with individuals committed to maximizing
shareholder value and a tender offer to purchase all of Global's
outstanding stock for $18 per share.
THE BOARD DECIDES TO SELL BUT
ESTABLISHES AN UNEVEN PLAYING FIELD
28. In response to the $18 Offer and Golden Cycle's
consent solicitation and tender offer, Global determined it would
an alternative transaction, supposedly on which would maximize
shareholder value. As stated by Defendant Kelly: "It's my
understanding ... that we have a fiduciary responsibility to
maximize value for the shareholders.... [W]e have a fiduciary
responsibility for all the shareholders to explore the
alternatives and maximizing shareholder at a fair price was our
responsibility." (Apr. 23, 1998 Dep. at 56) When describing the
Board's instructions to Global's investment banker, Defendant
Keenan gave similar testimony: "we instructed Cleary Gull to go
about examining the alternatives, trying to arrange and see if
there was a sale of the company possible, to look at any avenue
that would help us maximize the value to shareholders." (May 22,
1998 Tr. Trans. at 100)
29. Although the Individual Defendants committed
themselves to maximizing shareholder value, they refuse to
fulfill the obligations that accompany such a decision and remain
unwilling to consider seriously and fairly an acquisition by
Golden Cycle. Indeed, the Individual Defendants' conduct
demonstrates they have no intention of working to obtain the
highest price, but, rather, that their goal is to enter a
transaction with any entity other than Golden Cycle.
<PAGE>
<PAGE>
30. The Individual Defendants refused Golden Cycle's
$18 Offer claiming, among other things, they needed more time to
evaluate proposals submitted by alternate bidders. On May 21,
1998, two months after plaintiff submitted the $18 Offer,
Defendant Keenan testified that the Board was still in the
preliminary stages of the bidding process. Information was still
being provided to potential bidders, the first party to initiate
due diligence had begun its review a mere nine days before, some
bidders still had to begin due diligence, no deadline had been
set for suitors to submit bids and the Board had not received any
proposals from any bidders.
31. Despite the fact the bidding process was in its
infancy, approximately twenty-four hours after Defendant Keenan
testified Global had not received any proposals, the Board signed
a letter of intent with Fremont Partners pursuant to which
Fremont would purchase all of Global's outstanding stock for $23
per share (the "$23 Conditional Proposal"). Fremont's non-
binding bid was expressly conditioned on Fremont obtaining
financing and performing a due diligence review. Although the
$23 Conditional Offer was not binding on Fremont, the Individual
Defendants granted Fremont a $500,000 expense reimbursement and a
$5.0 million break-up fee. The letter of intent also contained a
no-shop provision which required Global to cease discussions
regarding a potential acquisition with any third parties and
precluded the Board from negotiating with any new bidders. Thus,
while the letter of intent was completely non-binding as to
Fremont, Global was bound by the break-up fee, expense
reimbursement and no-shop provisions regardless of whether
Fremont acquired Global.
32. The fallacy of the Board's hasty, precipitous
decision to enter the letter of intent was demonstrated in late
June when Fremont lowered its bid to $21.75 for 94% of Global's
outstanding shares (the "21.75 Conditional Offer"). Fremont's
new bid, which had a blended value of approximately $20.50 per
share, still contained a financing contingency. Without any<PAGE>
<PAGE>
negotiations with Golden Cycle, the Board accepted the $21.75
Conditional Offer and again agreed to onerous and unreasonable
break-up and expense fees of $3.5 million and $1.0 million,
respectively. Ultimately, Fremont was unable to find acceptable
financing and lowered its bid again, this time to $18.25 per
share. The Board rejected this offer, and after paying Fremont
the $1.0 million expense fee, broke off dealings with Fremont on
September 28, 1998.
KEENAN'S FALSE PROMISE
33. The same day Global terminated its relationship
with Fremont, Defendant Keenan requested that Roger Grass, Golden
Cycle's Vice President, participate in a conference call with
securities analysts. During that call Defendant Keenan
represented that Golden Cycle would be permitted to conduct due
diligence and that such review would not be conditioned on Golden
Cycle entering any form of standstill agreement.
34. On September 29, 1998, the Individual Defendants
provided Golden Cycle with a draft agreement which outlined the
terms under which Golden Cycle would be entitled to conduct due
diligence. Contrary to Defendant Keenan's representation, the
proposed agreement contained a standstill provision. After days
of negotiations, the Individual Defendants agreed to give Golden
Cycle limited, dated information without a standstill, but
refused to allow Golden Cycle to interview management or review
information in a data room that was open to other bidders. The
Individual Defendants took the position that interviews and
additional data would be made available only if Golden Cycle
proposed a bid in excess of $18 which was acceptable to the
Board. This proposal was unacceptable to Golden Cycle, a 10.4%
stockholder and the only party with an outstanding offer at the
time. It is particularly unacceptable given that the Global's
stock was trading below $14 at the time. Given the Individual
Defendants' obstructionist conduct and their refusal to provide
due diligence on reasonable terms, Golden Cycle determined that
the<PAGE>
<PAGE>
Individual Defendants were so stubbornly apposed to a transaction
with Golden Cycle that they would never find a Golden Cycle offer
"acceptable."
GOLDEN CYCLE'S $19 OFFER
35. Having unsuccessfully attempted to begin
negotiations with the Board and having concluded the Board would
never approve a transaction with it, Golden Cycle decided to
again take its proposal directly to Global's stockholders. On
October 27, 1998, Golden Cycle announced that it was offering to
purchase 99% of Global's outstanding stock for $19 per share (the
"$19 Offer") and that it would commence a consent solicitation
(the "Consent Solicitation") to replace the Board with nominees
who are committed to dismantling the company's takeover defenses
and enabling Golden Cycle's bid to compete in the market place
with any alternative.
36. Golden Cycle's $19 Offer was fully financed and
contained no material contingencies or lock-ups. The intent
behind the offer and the Consent Solicitation was to replace the
Board with new directors who would create a level playing field
to promote the sale of Global and the maximization of shareholder
value. Stonington was aware of the $19 Offer through publicity
and its contacts with Global.
37. Despite the renewed higher offer, the Individual
Defendants made no effort to initiate negotiations with Golden
Cycle regarding due diligence or the terms of the new offer.
Global's inaction stands in stark contrast to its October 29
press release which emphasized that the Board was "committed to
maximizing shareholder value."
38. On October 29, Global also announced that its
Board had fixed November 10 as the record date for determining
the stockholders entitled to execute written consents in
connection with the Consent Solicitation. The setting of the
record date on November 10 more than ten days after October 29
violates 8 Del. C. $ 213(b) which precludes a board from
setting<PAGE>
<PAGE>
a record date more than ten days after the date upon which the
resolution fixing the record date is adopted.
THE PROPOSED MERGER
39. On November 9, 1998, Global announced that it had
entered into a definitive merger agreement with Stonington. The
proposed merger will take the form of a tender offer for all
outstanding shares at $19.50 cash followed by a cash merger for
the remaining shares at the same price (the "$19.50 Conditional
Offer").
40. The $19.50 Conditional Offer is remarkably similar
to the two failed Fremont transactions in that it is conditioned
on Stonington obtaining financing and includes onerous break-up
fees of $3.0 million and expense fees of $1.0 million
(collectively, the "Break-Up Fees"), a no-shop provision (the
"No-Shop"). The No-Shop precludes the Individual Directors from
negotiating with third parties unless the third party signs a
confidentiality and standstill agreement similar to that signed
by Stonington. Given Golden Cycle's repeated rejection of a
standstill provision, the Individual Defendants and Stonington
knew that this was a condition that was unacceptable to Golden
Cycle.
41. The terms of the $19.50 Conditional Offer
agreement also preclude Global from redeeming the Rights,
amending the Poison Pill or exempting any person from the
provisions of the Poison Pill without Stonington's consent (the
"Pill Lock-Up"). As a result of the Pill Lock-Up, Stonington,
not the Individual Defendants, has the ability to determine
whether an acquisition should be deemed to be exempt from the
provisions of the Poison Pill. Of course, Stonington has an
interest in seeing that no other acquisition proposals are deemed
exempt so that its $19.50 Conditional Offer will not face
competition.
<PAGE>
<PAGE>
THE BOARD FAILED TO FULFILL ITS DUTIES
42. By meeting and sharing confidential information
with bidders, by entering two conditional merger agreements with
Fremont, and by repeatedly stating the Board's objective was to
maximize shareholder value, the Individual Defendants initiated
an active biding process designed to sell control of Global. As
a result, the Individual Defendants had a duty to pursue the
transaction yielding the highest value reasonably available and
to negotiate with all qualified bidders to that end. The Board's
refusal to provide due diligence materials to Golden Cycle and
its decision to approve the $19.50 Conditional Offer without
first contacting Golden Cycle to discuss whether Global would
enhance its fully-financed bid violated those duties.
43. The Break-Up Fees and No-Shop were showstoppers
designed not to induce a higher bid and promote the auction, but
to preclude Golden Cycle from competing with the $19.50
Contingent Offer. At the time the Board agreed to the Break-Up
Fees and No-Shop, it had received a $19 fully financed bid from
Golden Cycle. In order to obtain a highly conditional $.50
increase, the Board granted lock-ups worth $.77 per share and
gave away its authority to entertain a higher offer. Any
arguable benefit from the $.50 increase is wholly out of
proportion to the lock-ups granted.
44. The unreasonableness of the $19.50 Conditional
Offer and its roadblocks becomes particularly obvious when
compared to Golden Cycle's $19 Offer: the $19 Offer is full
financed, the $19.50 Conditional Offer is not; Golden Cycle never
requested any lock-ups, the $19.50 Conditional Offer contains the
Break-Up Fees and the No-Shop; and the $19 Offer proposed a
process whereby all interested bidders could inspect Global's
books to present their best bid; the $19.50 Conditional Offer
precludes potential suitors from inspecting Global's on
acceptable terms. Because the $19.50 Conditional Offer, Break-Up
Fees, and No-Shop were<PAGE>
<PAGE>
designed to end, not promote the auction of Global, their
adoption violated the fiduciary duties the Individual Defendants
owe to Global's stockholders.
45. The Individual Defendants have a fiduciary
obligation to manage the business and affairs of Global in a
manner that is in the best interests of Global's shareholders.
By approving the Pill Lock-Up and thereby agreeing not to redeem
the Rights, amend the Poison Pill or exempt any person from the
provisions of the Poison Pill without Stonington's consent, the
Individual Defendants have abdicated and violated their duties as
directors of Global.
46. Stonington is and was aware of the Individual
Defendants' fiduciary duties to Global's stockholders and that
the Individual Defendants' conduct described above violated those
duties. In particular, it knew that Golden Cycle would not sign
a confidentiality and standstill agreement similar to the one
Stonington executed in April, 1998, the adoption of the Break-Up
Fees and No Shop provision were showstoppers designed to end the
auction over Global and the adoption of the Pill Lock-Up was an
improper abdication of fiduciary responsibility.
GOLDEN CYCLE'S $20 OFFER
47. On November 12, 1998, Golden Cycle increased its
offer to $20 per share (the "$20 Offer"). Golden' Cycle's new
offer is fully financed and is conditioned only on the
elimination of the Break-Up Fees and Golden Cycle's nominees
being elected to the Board and entering an agreement with Golden
Cycle.
48. There is no question Golden Cycle's $20 Offer is
fair from a financial perspective to Global's stockholders and
that it the highest outstanding offer. Nevertheless, the Board
has refused to even negotiate with Golden Cycle, let alone accept
the $20 Offer, terminate the $19.50 Conditional Offer, eliminate
the Break-Up Fee and No-Shop, or exempt the $20 Offer<PAGE>
<PAGE>
from the Poison Pill or $ 203. The Individual Defendants'
refusal to take these steps denies Global's stockholders the
opportunity to achieve maximum value for their shares and
constitutes a violation of fiduciary duty.
49. The submission of the $20 Offer a mere three days
after the Individual Defendants announced the $19.50 Contingent
Offer demonstrates that the auction for Global was not completed
on November 9. Indeed, the $20 Offer makes clear that by
refusing to negotiate with Golden Cycle the Board violated its
duties by failing to obtain the highest value reasonably
available for shareholders.
IRREPARABLE INJURY
50. Global's use of or reliance upon the Poison Pill
and other defensive measures to obstruct Golden Cycle's $20 offer
and the Consent Solicitation is hindering and preventing Golden
Cycle from exercising its fundamental rights under Delaware law,
including, but not limited to, the right to conduct a consent
solicitation. The Individual Defendants' conduct makes it
impossible for Global's stockholders to choose between a fully-
financed at $20 bid and a contingent $19.50 bid or to sell their
shares for maximum value. Moreover, the Individual Defendants
have prematurely terminated the auction for Global before even
negotiating with a qualified bidder. Given that the auction was
not permitted to run its course and given that all bidders were
not treated equally, it is impossible to know the exact price
which could have been bid for Global. Golden Cycle's resulting
injury, and the injury to Global's stockholders, will not be
compensable in money damages and plaintiff has no adequate remedy
at law.
<PAGE>
<PAGE>
COUNT I
(Injunctive Relief for Breach of Fiduciary Duty)
51. Plaintiff repeats and realleges the allegations of
the Complaint as if fully set forth here.
52. The Individual Defendants bear fiduciary
obligations to Global's stockholders, including Golden Cycle.
The Individual Defendants are violating those duties by, among
other things: accepting and approving the $19.50 Conditional
Offer without entering negotiations with Golden Cycle; accepting
and approving the $19.50 Conditional Offer over Golden Cycle's
$20 Offer; accepting and approving the Break-Up Fee, the No-Shop,
and the Pill Lock-Up; failing to consider Golden Cycle's $20
Offer independently and in good faith; refusing to exempt the $20
Offer from the Poison Pill and from $ 203; failing to maintain a
level playing field between bidders; and manipulating the record
date for the Consent Solicitation.
53. Plaintiff has no adequate remedy at law.
COUNT II
(Duty to Conduct Sale on a Level Playing Field)
54. Plaintiff repeats and realleges the allegations of
the Complaint as if fully set forth here.
55. The Individual Defendants initiated a bidding
process designed to sell Global and maximize shareholder value.
The Individual Defendants have a duty to conduct the auction in a
manner that is fair to all bidders so that maximum shareholder
value is obtained. By refusing to share the same confidential
information with Golden Cycle that they shared with Stonington
and other suitors, the Individual Defendants have created a
uneven playing field and are violating their fiduciary duties.
56. Plaintiff has no adequate remedy at law.
<PAGE>
<PAGE>
COUNT III
(Aiding and Abetting)
57. Plaintiff repeats and realleges the allegations of
the Complaint as if fully set forth here.
58. Stonington, with knowledge of the breaches of
fiduciary duties alleged herein on the part of Global and the
Individual Defendants, substantially assisted in the breaches by
executing the $19.50 Conditional Offer and accepting the Break-Up
Fee, the No-Shop and the Pill Lock-Up, thereby aiding and
abetting Global and the Individual Defendants in such breaches.
59. Plaintiff has no adequate remedy at law.
WHEREFORE, Plaintiff Golden Cycle LLC respectfully
requests that this Court enter judgment against all Defendants,
and all persons in active concert or participation with them, as
follows:
(A) Temporarily, preliminarily and permanently
enjoining Global, the Individual Defendants and Stonington:
(i) from agreeing to sell Global without
obtaining the highest price available;
(ii) from consummating the $19.50 Conditional
Offer for 45 days after Golden Cycle
receives due diligence so that Golden Cycle
will have a fair opportunity to present its
best bid to shareholders;
(iii) compelling the redemption of the Break-Up
Fee, the No-Shop and the Pill Lock-Up;
(iv) compelling the redemption of the Poison
Pill or the exemption of the $20 Offer from
its anti-takeover effects; and
(v) compelling the exemption of the $20 Offer
from the anti-takeover effects of 8 Del. C.
$203.
<PAGE>
<PAGE>
B. Declaring the Defendants to have breached their
fiduciary duties.
C. Declaring that Stonington aided and abetted the
Individual Defendants' breaches of duty;
D. Declaring the purported November 10 record date to
be void and without effect;
E. Granting plaintiff and Global's stockholders
damages for all incidental injuries suffered as a result of
defendants' unlawful conduct.
F. Awarding plaintiff the costs and disbursements of
this action, including attorneys' fees.
G. Granting plaintiff such other and further relief
as the Court deems just and proper.
WOLF, BLOCK, SCHORR and SOLIS-COHEN LLP
BY:
--------------------------------
David J. Margules
Todd C. Schiltz
One Rodney Square
920 King Street, Suite 300
Wilmington, DE 19801
(302) 777-5860
DATE: November , 1998
