Tender-Offer Statement — Third-Party Tender Offer — Schedule 14D-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D1 Borden Acquisition Corp. 6 48K
2: EX-11.(A)(1) Statement re: Computation of Earnings Per Share 133 731K
3: EX-11.(A)(2) Statement re: Computation of Earnings Per Share 14 69K
4: EX-11.(A)(3) Statement re: Computation of Earnings Per Share 2 20K
5: EX-11.(A)(4) Statement re: Computation of Earnings Per Share 3 24K
6: EX-11.(A)(5) Statement re: Computation of Earnings Per Share 3 23K
7: EX-11.(A)(6) Statement re: Computation of Earnings Per Share 5± 22K
8: EX-11.(A)(7) Statement re: Computation of Earnings Per Share 5 35K
9: EX-11.(A)(8) Statement re: Computation of Earnings Per Share 2 16K
10: EX-11.(C)(1) Statement re: Computation of Earnings Per Share 124 273K
11: EX-11.(C)(2) Statement re: Computation of Earnings Per Share 18 70K
12: EX-11.(C)(3) Statement re: Computation of Earnings Per Share 2 17K
13: EX-11.(C)(4) Statement re: Computation of Earnings Per Share 34 71K
14: EX-11.(G)(1) Statement re: Computation of Earnings Per Share 10 32K
23: EX-11.(G)(10) Statement re: Computation of Earnings Per Share 4 23K
24: EX-11.(G)(11) Statement re: Computation of Earnings Per Share 13 35K
25: EX-11.(G)(12) Statement re: Computation of Earnings Per Share 13 33K
26: EX-11.(G)(13) Statement re: Computation of Earnings Per Share 18 47K
27: EX-11.(G)(14) Statement re: Computation of Earnings Per Share 12 35K
28: EX-11.(G)(15) Statement re: Computation of Earnings Per Share 18 49K
29: EX-11.(G)(16) Statement re: Computation of Earnings Per Share 12 36K
30: EX-11.(G)(17) Statement re: Computation of Earnings Per Share 12 32K
31: EX-11.(G)(18) Statement re: Computation of Earnings Per Share 11 30K
32: EX-11.(G)(19) Statement re: Computation of Earnings Per Share 12 32K
15: EX-11.(G)(2) Statement re: Computation of Earnings Per Share 10 32K
33: EX-11.(G)(20) Statement re: Computation of Earnings Per Share 18 49K
34: EX-11.(G)(21) Statement re: Computation of Earnings Per Share 9 27K
35: EX-11.(G)(22) Statement re: Computation of Earnings Per Share 9 32K
16: EX-11.(G)(3) Statement re: Computation of Earnings Per Share 10 32K
17: EX-11.(G)(4) Statement re: Computation of Earnings Per Share 10 32K
18: EX-11.(G)(5) Statement re: Computation of Earnings Per Share 10 32K
19: EX-11.(G)(6) Statement re: Computation of Earnings Per Share 10 32K
20: EX-11.(G)(7) Statement re: Computation of Earnings Per Share 10 32K
21: EX-11.(G)(8) Statement re: Computation of Earnings Per Share 11 32K
22: EX-11.(G)(9) Statement re: Computation of Earnings Per Share 9 31K
EX-11.(G)(22) — Statement re: Computation of Earnings Per Share
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EXHIBIT 11(g)(22)
COURT OF COMMON PLEAS
FRANKLIN COUNTY, OHIO
-----------------------------------x
DAVID JAROSLAWICZ and GEORGE B. :
ALLEN, ISRAEL BOLLAG, and :
VIVIAN BOLLAG, : Case No. 94CVH09-6654
: ------------
Plaintiffs, :
:
-against- :
:
BORDEN, INC., ERVIN SHAMES, : CLASS ACTION COMPLAINT
FRANK TASCO, FREDERICK E. HENNIG, : ----------------------
WILBERT J. LEMELLE, ROBERT P. : (Jury Trial Demanded)
LUCIANO, H. BARCLAY MORLEY, :
JOHN E. SEXTON, and PATRICIA :
CARRY STEWART, :
180 East Broad Street :
Columbus, Ohio 43215 :
:
Defendants. :
:
-----------------------------------x
Plaintiffs, by their attorneys, allege upon information and belief, except
as to paragraph 1 which is alleged upon knowledge, as follows:
THE PARTIES
-----------
1. Plaintiffs are the owners of shares of the common stock of defendant
Borden, Inc. and have been the owners continuously of such shares since prior to
the wrongs complained of herein.
2. Defendant Borden, Inc. ("Borden" or the "Company") is a corporation
duly existing and organized under the laws of the State of New Jersey, with its
principal offices located in Columbus, Ohio. The Company manufactures, produces
and distributes a variety of consumer food products, including pastas and
sauces, snack food items, dairy products such as fluid milk and other products.
3. As of April 22, 1994, there were approximately 141 million shares of
the Company's common stack outstanding held by over 40,000 shareholders of
record.
4. Defendant Ervin Shames ("Shames") is and at all times relevant hereto
has been President and Chief Executive Officer of the Company.
5. Defendant Frank Tasco ("Tasco") is and at all times relevant hereto
has been Chairman of the Board of the Company.
6. Defendants Frederick E. Hennig, Wilbert J. Lemelle, Robert P. Luciano,
H. Barclay Morley, John E. Sexton, and Patricia Carry Stewart are and at all
times relevant hereto have been members of the Board of the Company.
7. The Defendants referred to in paragraphs 5, 6, and 7 are collectively
referred to herein as the "Individual Defendants."
8. By reason of the above Individual Defendants' positions with the
Company as officers and/or directors, said individuals are in a fiduciary
relationship with Plaintiffs and the other public stockholders of Borden, and
owe Plaintiffs and the other members of the Class the highest obligations of
good faith, fair dealing, due care, loyalty and full, candid and adequate
disclosure.
CLASS ACTION ALLEGATIONS
------------------------
9. Plaintiffs bring this action on their own behalf and as a class action
on behalf of themselves and all Borden securities holders or their successors in
interest, similarly situated (the "Class"). Excluded from the Class are
Defendants herein and any
2
person, firm, trust, corporation, or other entity related to or
affiliated with any of the Defendants.
10. This action is properly maintainable as a class
action.
11. The Class is so numerous that joinder of all
members is impracticable.
12. There are questions of law and fact which are
common to the Class and which predominate over questions
affecting any individual Class members. The common questions
includes, inter alia, the following:
(a) whether Defendants have engaged in conduct
constituting unfair dealing to the detriment of the Class;
(b) whether the proposed merger is grossly unfair
to the Class;
(c) whether Defendants are engaging in self-
dealing to benefit themselves;
(d) whether Plaintiffs and the other members of
the Class would be irreparably damaged were the transactions
complained of herein consummated; and
(e) whether Defendants have breached, or aided
and abetted the breach of fiduciary and other common law duties
owed by them to Plaintiffs and the other members of the Class.
13. Plaintiffs are committed to prosecuting this
action and have retained competent counsel experienced in
litigation of this nature. The claims of Plaintiff are typical
of the claims of the other members of the Class and Plaintiffs
have the same interests as the other members of the Class.
Accordingly, Plaintiffs are
3
adequate representatives of the Class and will fairly and
adequately protect the interests of the Class.
14. Plaintiffs anticipate that there will be no difficulty
in the management of this litigation.
15. Defendants have acted on grounds generally applicable
to the Class with respect to the matters complained of herein,
thereby making appropriate the relief sought herein with respect
to the Class as a whole.
CLAIM FOR RELIEF
----------------
16. According to news reports on September 12, 1994,
Kohlberg Kravis Roberts & Co. ("KKR") and Defendant Borden have
agreed in principle to the acquisition of all of the outstanding
common stock of Borden by a KKR partnership in exchange for RJR
Nabisco Holdings Corp. common stock valued at $14.25 per Borden
share.
17. Plaintiffs seek to enjoin the consummation of the
imminent agreement between KKR and Borden whereby KKR would swap
RJR Nabisco Holding stock for all of the outstanding Borden
common stock. Pursuant to the proposed terms of the transaction,
KKR will also receive a warrant to buy an additional 10% of
Borden's shares. If the merger is not closed by September 23,
1994, KKR will buy 19.9% of Borden's outstanding shares.
18. The consideration proposed to be paid to Class members
is unconscionable and unfair and grossly inadequate because,
among other things:
(a) the intrinsic value of Borden's common stock is
materially in excess of the amount to be received by Borden
4
stockholders in the transaction giving due consideration to the
Company's strategic value, the recent market price of the
Company's stock (which has been as high as $38.375 per share),
and Borden's brand name recognition;
(b) the consideration agreed upon did not result from
an appropriate consideration of the value of Borden as there was
no opportunity to accurately ascertain Borden's value through
open bidding or a market check;
(c) many analysts believe that KKR has been, for some
time, trying without success to sell its excess RJR Nabisco
stock; consequently KKR is getting the better of the bargain
because it is unloading its poorly performing and relatively
undesirable RJR Nabisco stock in exchange for far more desirable
Borden stock.
19. The Individual Defendants have thus far failed to
announce any active auction or open bidding procedures best
calculated to maximize shareholder value.
20. Some analysts believe that certain subdivisions of
Borden could be sold for a greater value than the entire
consideration that KKR is paying to purchase Borden in its
entirety.
21. On September 13, 1994, the New York Times reported that
--------------
"most agreed that Borden was being bought at a firesale price,"
and that KKR "believes that Borden, at its current price, is
incredibly cheap, as well as a good way for Kohlberg, Kravis to
reduce its disappointing investment in RJR Nabisco." The report
further stated that "[a]lmost all Borden holders will be selling
at a loss if this deal goes through."
5
22. Borden shareholders will, if the transaction is consum-
mated, be deprived of the opportunity for substantial gains which
the Company may realize.
23. In announcing the transaction, the Defendants have
failed to disclose among other things the full extent of the
growth and value potential of Borden and the expected increase in
its profitability.
24. The Defendants have not, in accordance with their
fiduciary duties:
(a) acted independently so that the interests
of Borden's public shareholders would be protected;
(b) adequately ensured that no conflicts of interest
exist or if such conflicts exist to ensure that all conflicts
would be resolved in the best interests of Borden's public
shareholders; and
(c) taken all appropriate steps, including conducting
an active auction, to enhance Borden's value and attractiveness
as a merger acquisition, restructuring or recapitalization
candidate.
25. Because the Individual Defendants dominate and control
the business and corporate affairs of Borden, and are in
possession of private corporate information concerning Borden's
assets, businesses and future prospects, there exists an
imbalance and disparity of knowledge and economic power between
them and the public stockholders of Borden which makes it
inherently unfair for them to pursue any proposed transaction
wherein they will reap
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disproportionate benefits to the exclusion of other means of
maximizing stockholder value.
26. By reason of the foregoing acts, practices and course
of conduct, the Defendants have failed to exercise ordinary care
and diligence in the exercise of their fiduciary obligations
toward Plaintiffs and the other Borden public stockholders.
27. As a result of the actions of Defendants, Plaintiffs
and the other members of the Class have been and will be damaged
in that they have not and will not receive their fair proportion
of the value of Borden's assets and businesses and will be
prevented from obtaining appropriate consideration for their
shares of Borden's common stock.
28. Unless enjoined by this Court, the Defendants will
continue to breach their fiduciary duties owed to Plaintiffs and
the other members of the Class, and may consummate the proposed
transaction which will exclude the Class from its fair
proportionate share of Borden's valuable assets and businesses,
and/or benefit them in the unfair manner complained of herein,
all to the irreparable harm of the Class, as aforesaid.
29. Plaintiffs and the Class have no adequate remedy at
law.
WHEREFORE, Plaintiffs demand judgment, as follows:
A. Declaring this to be a proper class action;
B. Ordering Defendants to carry out their fiduciary
duties to Plaintiffs and the other members of the Class,
including those of due care and candor;
C. Rescinding any transactions effected by the
Defendants in an unfair manner and for an unfair price and in the
7
event such transactions are consummated prior to trial, awarding
rescissory damages;
D. Enjoining the complained of transaction or any
related transactions;
E. Ordering Defendants, jointly and severally, to account
to Plaintiffs and the Class all damages suffered and to be
suffered by them as a result of the acts and transactions alleged
herein;
F. Ordering Defendants, jointly and severally, to pay
to Plaintiffs and the Class for all profits realized and to be
realized by them as a result of the transactions complained of
and pending such accounting to hold such profits in a
constructive trust for the benefit of Plaintiffs and the other
members of the Class;
G. Awarding Plaintiffs the costs and disbursements of
the action, including allowance for Plaintiff's reasonable
attorneys' and experts' fees; and
H. Granting such other and further relief as may be
just and proper in the premises.
Dated: September 22, 1994
MICHAEL J. HARDESTY CO., L.P.A.
/s/ Michael J. Hardesty
______________________________
Michael J. Hardesty (0009771)
1335 Dublin Road
Suite 200A
Dublin, OH 43215
(614) 481-3587
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STRAUSS & TROY
/s/ Richard S. Wayne
_________________________
Richard S. Wayne (0022390)
2100 PNC Center
201 E. 5th Street
Cincinnati, OH 45202
(513) 621-2120
Attorneys for Plaintiffs
OF COUNSEL:
SAVETT, FRUTKIN, PODELL & RYAN, P.C.
330 Walnut Street, Suite 508
Philadelphia, PA 19106
(215) 923-5400
ZWERLING, SCHACHTER & ZWERLING
Robert S. Schachter
767 Third Avenue
New York, NY 10017-2023
(212) 223-3900
LEVIN FISHBEIN SEDRAN & BERMAN
320 Walnut Street, Suite 600
Philadelphia, PA 19106
(215) 592-1500
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Dates Referenced Herein and Documents Incorporated by Reference
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