SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
Amendment No. 1 to
SCHEDULE 14D-1/A
Tender Offer Statement
Pursuant to Section 14(d)(1)of the Securities Exchange Act of 1934
-------------------
GLOBAL MOTORSPORT GROUP, INC.
(Name of Subject Company)
-------------------
GOLDEN CYCLE, LLC
(Bidder)
-------------------
COMMON STOCK, PAR VALUE $.001 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
(Title of Class of Securities)
-------------------
378937106
(CUSIP Number of Class of Securities)
-------------------
ROGER GRASS
GOLDEN CYCLE, LLC
ONE WYNNEWOOD ROAD, SUITE 100
WYNNEWOOD, PA 19096
(610) 642-8600
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidder)
-------------------
COPY TO:
HERBERT HENRYSON II, ESQ.
WOLF, BLOCK, SCHORR AND SOLIS-COHEN LLP
111 SOUTH 15TH STREET
PHILADELPHIA, PA 19102
(215) 977-2000
<PAGE>
ITEM 10. ADDITIONAL INFORMATION.
Item 10(e) is hereby amended by adding the following:
On April 7, 1998, Purchaser commenced litigation against the Company in the
Court of Chancery of the State of Delaware seeking an order enjoining the
Company from improperly interfering with, and the Board of Directors of the
Company from breaching its fiduciary duties in connection with, the Reporting
Person's tender offer and consent solicitation. See Exhibit (i).
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated April 7, 1998.
(2) Letter of Transmittal with respect to the Shares and Rights.
(3) Letter, dated April 7, 1998, from Jefferies & Company, Inc. to
brokers, dealers, banks, trust companies and nominees.
(4) Letter to be sent by brokers, dealers, banks, trust companies and
nominees to their clients.
(5) Notice of Guaranteed Delivery.
(6) IRS Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(7) Press Release, dated April 6, 1998.
(8) Form of summary advertisement, dated April 7, 1998.
(b) None.
(c) Letter agreement, dated March 6, 1998, between Jeffries & Company,
Inc. and the Purchaser.
(d) None.
(e) Not applicable.
(f) None.
(g) Complaint filed by the Purchaser on April 2, 1998 in the Court of
Chancery of the State of Delaware.
(h) Complaint filed by the Purchaser on April 6, 1998 in the United
States District Court in and for the District of Delaware.
*(i) Complaint filed by the Purchaser on April 7, 1998 in the Court of
Chancery of the State of Delaware.
- -------------------
*Filed herewith.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: April 8, 1998
GOLDEN CYCLE, LLC
By: /s/ ROGER GRASS
---------------------------
Name: Roger Grass
Title: Vice President
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
- -------- ------------------------------------------------------------------
(a)(1) Offer to Purchase, dated April 7, 1998.
(2) Letter of Transmittal with respect to the Shares and Rights.
(3) Letter, dated April 7, 1998, from Jefferies & Company, Inc. to
brokers, dealers, banks, trust companies and nominees.
(4) Letter to be sent by brokers, dealers, banks, trust companies
and nominees to their clients.
(5) Notice of Guaranteed Delivery.
(6) IRS Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(7) Press Release, dated April 6, 1998.
(8) Form of summary advertisement, dated April 7, 1998.
(b) None.
(c) Letter agreement, dated March 6, 1998, between Jeffries &
Company, Inc. and the Purchaser.
(d) None.
(e) Not Applicable.
(f) None.
(g) Complaint filed by the Purchaser on April 2, 1998 in the Court
of Chancery of the State of Delaware.
(h) Complaint filed by the Purchaser on April 6, 1998 in the
United States District Court in and for the District of
Delaware.
*(i) Complaint filed by the Purchaser on April 7, 1998 in the
Court of Chancery of the State of Delaware.
- ------------------
* Filed herewith.
Exhibit (i)
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. ________
)
LIONEL M. ALLAN, JAMES J. KELLY, JR., )
JOSEPH F. KEENAN, JOSEPH PIAZZA, SR. and )
GLOBAL MOTORSPORT GROUP, INC., )
Defendants. )
COMPLAINT
Golden Cycle, LLC ("Golden Cycle"), as and for its 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. More than two weeks ago, Golden Cycle proposed in writing an acquisition
of Defendant Global Motorsport Group, Inc. ("Global") for a cash price
representing a significant premium over the company's market value and advised
the company that it was continuing to evaluate its position with the goal of
maximizing stockholder value. Since then, Golden Cycle repeatedly has sought
meetings with Global representatives to discuss its interest in an acquisition
and to explore whether information available to Global would justify a higher
price.
<PAGE>
Global's only direct response has been a derisive letter delivered a week
ago.
2. While Global publicly professes to be considering Golden Cycle's bid,
its actions demonstrate an intent to fend off the acquisition proposal at any
cost. In addition to hiding behind a formidable array of takeover defenses,
Global is illegally and inequitably interfering with the most basic of corporate
rights -- the stockholders' right to communicate with each other and to select
the fiduciaries empowered to represent their interests.
3. The Global Board's motivation is simple. Despite Global's lackluster
performance, the Individual Defendants have awarded themselves lucrative
salaries, fees, options and "consulting agreements." Those benefits have never
been fully or fairly disclosed to stockholders. To protect those benefits, the
Board is prepared to fight to the last dollar of stockholder value.
4. Faced with Defendants' demonstrated unwillingness to fairly consider its
offer, Golden Cycle is taking its bid directly to stockholders. This morning, it
commenced a $18 cash bid for all outstanding shares -- a 23% premium over the
closing price on the day before Golden Cycle announced its interest.
5. Defendants' conduct violates fiduciary obligations to further
stockholder interests by investigating and evaluating
<PAGE>
Golden Cycle's offer independently and in good faith. They are preventing
stockholders from considering the offer, and are improperly obstructing the
stockholders' right to replace the Board with directors focused on maximizing
stockholder value. Unless enjoined, the Defendants illegal and inequitable
conduct will continue.
6. Plaintiff seeks declaratory and injunctive relief: (i) preventing
Global and its Board from using the company's Poison Pill or other anti-takeover
devices to impede or delay Golden Cycle's all cash tender offer and its consent
solicitation; (ii) requiring Global and its Board to consider fairly Golden
Cycle's offer; and (iii) preventing Global's directors from breaching their
fiduciary duties to their stockholders in connection with Golden Cycle's offer.
The Parties
7. 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.
8. The Individual Defendants comprise Global's four-member Board of
Directors. 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."
9. 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
528,700 shares. Golden Cycle's stock holdings represent about 10.4% of Global's
outstanding capital stock.
10. 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.
<PAGE>
Global's Lackluster Performance
11. In the past decade, Harley-Davidson has experienced a renaissance with
increased demand for its motorcycles and associated products. Global's
stockholder have not benefited from that rebirth. Founded in 1970, Global has
never paid a dividend. While its stock closed as high as $20 1/4 in the first
quarter of 1997, it closed at $14 15/16 the day before Golden Cycle announced
its interest in an acquisition.
12. In September 1997, Global acquired competitor, Chrome Specialties Inc.,
of Fort Worth, Texas. According to published sources, Global paid an overly
generous price for Chrome Specialties -- $36 million cash, compared with annual
revenues of $35 million.
13. Despite the consolidation of Chrome Specialities, Global's performance
continues to flag. Although more than four months of Chrome Specialties' results
are incorporated in Global's financial statements for the year ended January 31,
1998, Global's revenues increased by only $14.2 million. Global's pre-tax income
plummeted from $13.0 million in the year ended January 31, 1997, to $4.4 million
in most recently completed fiscal year.
The Board Amply Rewards
Itself For Its Mediocre Stewardship
14. For stockholders, Global's performance has been less than successful.
For the Board, however, Global is a source of great financial reward.
<PAGE>
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 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. The Board also created a plan granting to
non-management directors options to acquire 2,500 shares each time they are
elected, which is annually.
17. In fact, the Board has funneled to certain of its members significant
undisclosed compensation in the form of "consulting agreements" concealed from
Global stockholders. Effective on January 1, 1997, Defendants Piazza was awarded
a $2,500 a week consulting contract. Since 1992, Defendant Allan has acted as a
"legal consultant" to the company an arrangement pursuant to which he has been
paid hundreds of thousands of dollars.
18. The concealment of the consulting arrangements creates the misleading
impression that Global's Board includes independent directors. In addition,
while the parties to such agreements have the economic benefits of a lucrative
employment
<PAGE>
contract, they presumably claim the perquisites to which "non-management"
directors are entitled.
19. 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, Mr. Kelly owned fewer than 2,000 shares of stock.
Mr. Keenan held 2,500 shares. Mr. Allan and Mr. Piazza held no shares.
20. The directors have granted themselves options. As of the date of the
1997 Proxy: Mr. Kelly held options to purchase 53,488 shares; Mr. Allan held
options for 10,071 shares; Mr. Piazza held options for 1,614 shares and Mr.
Keenan held options for 2,874 shares. The company also adopted a "Director
Option Plan," pursuant to which 50,000 share were reserved for options to be
granted to "non-employee directors."
<PAGE>
Management Disarray
21. Squabbling over concealed consulting benefits led last year to a coup
which has left the company rudderless. In March 1997, Global's outside auditors
questioned accounting treatments used by the company's CFO, Defendant Kelly,
which artificially inflated income. The Board was sufficiently concerned about
Defendant Kelly's performance to demand and obtain his resignation as an
officer, employee and director. Defendant Kelly was asked to remain in place
until a replacement was hired. By late October 1997, a replacement was found and
presented with a written employment offer.
22. Defendant Kelly retained his position by provoking the ouster of Global
co-founder, Chairman and CEO, Ignatius Panzica. Having concluded Defendant
Allan's involvement with the September 1997 Chrome Specialties acquisition
unnecessarily inflated the outside counsel fees, Mr. Panzica stated in Defendant
Kelly's presence that he intended to cancel Defendant Allan's consulting
contract. Defendant Kelly informed Defendant Allan of Mr. Panzica's intent.
23. Defendant's Allan and Kelly agreed to cooperate to force Mr. Panzica
out as an officer and director. By doing so, Defendant Allan preserved his
lucrative "consulting" contract and Defendant Kelly's termination as CFO was
rescinded. Defendant Piazza supported the move, in exchange for which he was
named to
<PAGE>
succeed Mr. Panzica as the Company's CEO. Defendant Keenan, a long-time
friend of Defendant Allan, also agreed to cooperate and was named Global's
Chairman. In a March 25 press release, the company euphemistically described the
reshuffle as a "restructuring [of] its operations and management."
24. The unseating of Mr. Panzica has left the company with little industry
experience at the highest level. The new Chairman, Defendant Keenan, is a lawyer
in private practice. While the CEO, Defendant Piazza, is a former officer of a
motorcycle parts and accessory distributor, he has had no active involvement in
the industry for years. Defendant Allen is also lawyer, working as a "legal
consultant" since leaving his law firm amidst allegations of improper billing
and cash diversions.
25. One of Defendant Piazza's early acts as CEO was to hire his son, Joseph
Piazza, Jr., to a senior sales position. The hiring prompted the resignation of
Global's Senior Vice President of Sales and Marketing, Daniel Stern.
The Takeover Defenses
26. 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.
<PAGE>
27. 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 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.
28. 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.
29. In the event a person becomes an Acquiring Person, each holder of a
Right (other than Rights exercised or
<PAGE>
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.
30. 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 Offer. Accordingly, the Individual Defendants
can block any proposed tender offer regardless of the interests of Global's
stockholders.
31. In addition to the Poison Pill, Global is subject to the anti-takeover
provisions of 8 Del. C. ss.203. As with the Poison Pill, the Board can exempt
Golden Cycle's offer from the effects of Section 203.
32. The actions of the Individual Defendants make it clear they will not
fairly consider the Global Cycle bid and
<PAGE>
determine whether, in the interests of the stockholders, it should be
declared to be a Permitted Offer.
The Golden Offer
33. On March 23, 1998, Golden Cycle delivered a letter to Global offering
to purchase all of Global common stock for $18 per share (the "Proposal") -- a
26% premium over the market close on the last previous trading day. In the
letter, Golden Cycle advised Global all terms of the Proposal, including price,
were negotiable. Golden Cycle requested access to Global's books and records in
order to identify undisclosed value Golden Cycle had not taken into account.
34. The March 23 letter expressed Golden Cycle's commitment to pursuing a
negotiated transaction, but advised that if Global's Board "do[es] not wish to
proceed with negotiations or to provide us with an opportunity to conduct due
diligence so that we can determine if there is greater value in the company, we
will consider attempting to seek control of the Board of Directors through a
consent solicitation which would elect directors committed to selling the
company for the highest price reasonably available." To prepare for such a
possibility, Golden Cycle disclosed its intent to file with the Securities and
Exchange Commission ("SEC") preliminary materials for soliciting written
consents.
<PAGE>
35. Hoping to promote a constructive dialogue, Golden Cycle President
Alexander Grass called Global's CEO, Defendant Piazza, the day the letter was
transmitted. Defendant Piazza did not take the call, and to date has made no
effort to contact Mr. Grass.
36. On March 24, Golden Cycle filed its preliminary proxy materials. Golden
Cycle intends to begin soliciting proxies as soon as its materials are cleared
by the SEC.
Defendants' Obstructionism
37. Since March 23, Alexander Grass made several attempts to establish
communications with Global, through letters and personal telephone calls.
Global's initial response was silence, punctuated by hostility. No response was
directed to Golden Cycle during the week following transmission of the proposal.
Its only comment came indirectly, in a March 25 press release disclosing the
disappointing results for the quarter and fiscal year ended January 31, 1998.
Buried in the narrative, Global stated it would undertake "an analysis" of the
Proposal but that "[t]he Company is not for sale and has not invited the Golden
Cycle proposal or any other proposal. It should not be assumed that any
transaction will occur."
38. On March 27, Alexander Grass wrote again to Mr. Piazza to
express disappointment over Global's failure to respond. Four days later, on
March 31, Global sent its only
<PAGE>
direct response to date in the form of a letter from Defendant Keenan to
Alexander Grass. Pointedly, the letter was faxed with a cover sheet of Global's
counsel, Gibson, Dunn & Crutcher. The invective-filled letter describes Golden
Cycle as failing to treat its offer "as a serious proposal," and accuses it of
attempting to "bull[y]" the Global Board. Further, Defendant Keenan wrote:
Your letter of March 27, 1998 states that you are "extremely
disappointed" that Mr. Piazza has not responded to your letter of
March 23. Let me assure you that your disappointment pales in
comparison to my disappointment that with absolutely no prior
discussion between you and any representative of the Company, you
faxed Mr. Piazza a letter ... and then filed materials with the
Securities and Exchange Commission ... calling for the removal of the
entire Board. Then on Wednesday, March 25, 1998, you arranged for Cede
& Company to send us a demand to open up the Company's books and
records to you.
Defendant Keenan went on to state Global had retained "the investment
banking firm of Cleary, Gull ... to assist in evaluating your proposal."
Defendant Keenan also represented that if the Board decides to "consider
proposals for the sale of the Company, I can so no reason why we would not offer
you the same opportunity to obtain information, evaluate the Company and compete
with any other bidders that might surface."
39. Apparently fueled by Defendant Keenan's "dissapointment," Defendants
have attempted to disrupt the Golden
<PAGE>
Cycle offer at any cost. In numerous ways, Defendants have manipulated the
corporate machinery to obstruct the Consent Solicitation and Golden Cycle's
acquisition bid. The Defendant's inequitable actions include the following:
A. The Board purported to set a record date for the Consent
Solicitation intended to impede Golden Cycle's ability to gather consents.
On April 1, Global announced the Board had approved a March 30 record date
for stockholders entitled to express consents. In doing so, the Board knew
or should have known that the period for SEC comments on Golden Cycle's
preliminary proxy materials had not run and that Golden Cycle could not
begin solicitations for at least several business days. The selection of
the record date was calculated to maximize the amount of trading before the
solicitation began. In that way, the Defendants could maximize the number
of stockholders with the economic incentive to give a consent, but without
the power to do so.
B. The Board's vote to set the record date must have been on or before
March 30. Nevertheless, the Board did not announce its action until April 1
-- at least two days later. Investors who acquired shares in the interim
did so without the knowledge that they
<PAGE>
would not be entitled to express consents as of the Board's selected record
date. As a result, they were deprived of notice that they might need to
demand proxies to express consents.
C. On March 25, Golden Cycle arranged for the delivery on its behalf
of a demand for a stockholder list to be used to communicate about the
Consent Solicitation, among other things. Although it is obligated to
produce the list, Global has refused to do so. As a result, Golden Cycle
has been forced to seek judicial intervention from this Court. Once more,
the resulting delay is calculated to interfere with Golden Cycle's Consent
Solicitation.
D. Under the federal securities laws, Global was required to contact
fiduciaries holding stock for beneficial holders as promptly as possible
after setting the record date and request beneficial holder lists. It did
not do so, but delayed even after issuing the April 1 press release. Once
Global obtains the lists, it will be obligated to produce them to Golden
Cycle pursuant to the inspection demand. By delaying its request for the
lists, Global has delayed its receipt of the lists and, thereby, the date
on which they will have to be provided to Golden Cycle.
<PAGE>
E. On or about April 2, 1998, Global contacted at least one Global
record holder who holds shares as a fiduciary for beneficial holders and
informed the record holder that April 3 was the record date for the Consent
Solicitation. The communication of a false record date can be expected to
result in creation of incorrect beneficial holders lists, further delays in
Golden Cycle's receipt of correct lists, confusion in the market about the
Consent Solicitation, and the execution of consents for which Global will
undoubtedly assert challenges. Global's violation of federal law in its
dealings with fiduciary holders is the subject of a lawsuit commenced
yesterday in federal court.
F. On Thursday, April 2, Global commenced litigation against Golden
Cycle and its principals in the United States District Court in the
Northern District of California. The litigation apparently was commenced
for purposes of public relations. Golden Cycle learned of it through a
Global press release issued on April 6, and it has yet to be served. The
claims are legally baseless, premised largely on fatuous claims that the
preliminary proxy materials would be false and misleading if eventually
used to solicit consents.
<PAGE>
G. On information and belief, Global has prepared information packages
and presentations which are being circulated to potential competing
bidders, but not to Golden Cycle. Providing such information contravenes
Defendant Keenan's representations to Golden Cycle that a "level playing
field" will be maintained among bidders.
40. The Defendants' continued refusal to deal with Golden Cycle in a manner
consistent with their fiduciary obligations is particularly palpable given its
retention of Cleary Gull as its financial advisor. Cleary Gull assisted Golden
Cycle in purchasing more than 3.6% of Global's outstanding shares at prices
significantly less than $18, and offered to sell it restricted shares
representing an additional 3.3% of the total outstanding at the lower price. It
also sought to serve as Golden Cycle's financial advisor with respect to its
interest in Global. Under the circumstances, Cleary Gull should require very
little time to advise the Individual Defendants that the $18 cash offer is fair.
41. Having concluded the Individual Defendants will not consider Golden
Cycle's offer independently or in good faith, Golden Cycle commenced today a
Tender Offer of all outstanding shares at the $18 cash price. The Tender Offer
is all cash, non-coercive and represents a significant premium over market.
Under
<PAGE>
the circumstances, the Global Board has a fiduciary obligation to exempt
the Tender Offer from the anti-takeover provisions of the Poison Pill and
Section 203.
Irreparable Injury
42. Global's use of or reliance upon the Poison Pill and other defensive
measures to obstruct Golden Cycle's Tender Offer and Consent Solicitation will
hinder and prevent Golden Cycle from exercising its fundamental rights under
Delaware law, including, but not limited to, the right to conduct a consent
solicitation. The failure of the Individual Defendants even to consider, much
less act upon, Golden Cycle's proposal makes it impossible for Global's
stockholders to have an accurate assessment of Golden Cycle's Proposed Tender
Offer. Golden Cycle's resulting injury will not be compensable in money damages
and plaintiff has no adequate remedy at law.
COUNT I
(for interference with the corporate franchise)
43. Plaintiff repeats and realleges the allegations of the Complaint as if
fully set forth here.
44. Delaware law recognizes the corporate franchise as a fundamental
stockholder right. The right to solicit and to express consents is an important
part of that right.
45. As part of an effort to entrench themselves in office, Defendants have
improperly and inequitably interfered with the corporate franchise by, among
other things:
<PAGE>
(i) purporting to set a premature record date for the Consent Solicitation;
(ii) delaying the announcement of its claimed designation of the record date;
(iii) interfering with Golden Cycle's right to a stocklist and to inspect
corporate books and records; (iv) delaying requests to fiduciary holders for
beneficial holder lists; and (v) misinforming record holders about the purported
record date.
46. Plaintiff has no adequate remedy at law.
COUNT II
(for breach of fiduciary duty)
47. Plaintiff repeats and realleges the allegations of the Complaint as if
fully set forth here.
48. The Individual Defendants bear fiduciary obligations to Global's
stockholders, including Golden Cycle. The Individual Defendants are violating
those duties to entrench themselves in office by, among other things:
obstructing the Consent Solicitation; using corporate assets to bring baseless
litigation against Golden Cycle and its principals; failing to consider Golden
Cycle's $18 cash offer independently and in good faith; refusing to exempt
Golden Cycle's $18 cash offer from the Poison Pill and from ss.203; and failing
to maintain a level playing field in connection with Golden Cycle's $18 cash
offer.
49. As fiduciaries, Defendants also owe a duty of candor to Global's
stockholders, including Golden Cycle. Defendants have violated that duty by,
among other things:
<PAGE>
concealing significant payments to various of the Individual Defendants;
creating and failing to correct a materially false and misleading impression
that Defendants Allan and Keenan are "independent" and "non-management"
directors; falsely claiming to be considering Golden Cycle's $18 cash offer;
misrepresenting the purported record date; and representing a "level playing
field" would be maintained regarding Golden Cycle's offer.
50. Plaintiff has no adequate remedy at law.
COUNT III
(for fraud)
51. Plaintiff repeats and realleges the allegations of the Complaint as if
fully set forth here.
52. As alleged above, Defendants have disseminated materially false and
misleading statements about their compensation, their independence, the Consent
Solicitation, and the $18 cash offer. Defendants made such statements with
knowledge of their falsity or with reckless disregard as to whether or not they
are false, and with the expectation that Global's stockholders would rely on the
false and misleading statements. The stockholders have relied.
53. 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:
<PAGE>
A. Temporarily, preliminarily and permanently enjoining Global and the
Individual Defendants:
(i) against employing any devices or taking any steps that would
interfere with the Consent Solicitation or would interfere with, or to
limit the power of, directors elected pursuant to the Consent
Solicitation to execute fully their fiduciary duties;
(ii) against taking any action that would interfere with the or the
Tender Offer, or entering into any agreement or arrangement or using any
device that would interfere with, restrict or that would have the effect
of restricting consummation of the Tender Offer;
(iii) against making any false or misleading statements in connection
with the Consent Solicitation or the Tender Offer;
(iv) compelling the redemption of the Poison Pill or the exemption of
the Tender Offer from its anti-takeover effects;
(v) compelling the exemption of the Tender Offer from the anti-takeover
effects of 8 Del. C. ss.203; and
<PAGE>
(vi) compelling the dissemination of curative disclosures.
B. Declaring the Defendants to have breached their fiduciary duties.
C. Declaring the purported March 30 Record Date to be void and without
effect;
D. Granting plaintiff and Global's stockholders damages for all incidental
injuries suffered as a result of defendants' unlawful conduct.
E. Awarding plaintiff the costs and disbursements of this action, including
attorneys' fees.
F. 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: April 7, 1998
