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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2)
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Wallace Computer Services Inc.
(Name of Subject Company)
FRDK, INC.
(Bidder)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS
(Title of Class of Securities)
932270101
(CUSIP Number of Class of Securities)
JOSEPH M. DUANE, ESQ.
FRDK, INC.
1 FIRST CANADIAN PLACE
TORONTO, ONTARIO, CANADA M5X 1GF
(416) 364-2600
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidder)
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COPY TO:
DENNIS J. FRIEDMAN, ESQ.
DAVID M. WILF, ESQ.
DAVID M. SCHWARTZBAUM, ESQ.
CHADBOURNE & PARKE LLP
30 ROCKEFELLER PLAZA
NEW YORK, NY 10112
(212) 408-5100
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<PAGE>
FRDK, Inc. hereby amends and supplements its Tender Offer
Statement on Schedule 14D-1 (the "Statement"), originally filed on August 2,
1995, with respect to its offer to purchase all outstanding shares of Common
Stock, par value $1.00 per share, of Wallace Computer Services, Inc., a Delaware
corporation, (together with the associated preferred stock purchase rights), as
set forth in this Amendment No. 2. Capitalized terms not defined herein shall
have the meanings assigned thereto in the Statement.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On August 4, 1995, Moore obtained on behalf of the Purchaser a
commitment (the "Commitment") from The Bank of Nova Scotia ("Scotiabank") for a
$1,100,000,000 revolving credit facility (the "Credit Facility"), on terms set
forth in Scotiabank's commitment letter dated August 3, 1995 (the "Commitment
Letter") and in the term sheet attached thereto (the "Term Sheet"), the proceeds
of which will be used (i) to finance, in part, the acquisition of up to all of
the outstanding Shares and pay expenses related to such acquisition (including
certain restructuring costs following that acquisition) and (ii) general
corporate purposes of Moore, the Purchaser and their direct and indirect
subsidiaries. Moore will guaranty the Purchaser's payment obligations under the
Credit Facility.
Under the Commitment Letter, the Commitment is subject to,
among other things, (i) the execution and delivery of satisfactory credit,
guaranty and other documentation (the "Credit Documents") incorporating the
structure, terms and conditions contained in the Commitment Letter and Term
Sheet and (b) the absence of facts, events or circumstances which come to the
attention of Scotiabank and which, in Scotiabank's good faith determination,
materially adversely affect Moore's or the Purchaser's financial condition,
operations or prospects. The Commitment will expire on August 25, 1995 if
definitive Credit Documents are not executed on or prior to such date.
Under the Commitment Letter, Scotiabank commits (i) to provide
the full amount of the Credit Facility (without regard to the success or failure
of Scotiabank's syndication efforts described therein), (ii) to use reasonable
commercial efforts to form a syndicate of other commercial banks (together with
Scotiabank, the "Lenders") that will, collectively, participate in the Credit
Facility, and (iii) to act as administrative, documentation and syndication
agent (collectively in such capacities the "Agent") for such syndicate of
Lenders.
The Term Sheet indicates that interest on the loans
outstanding under the Credit Facility will bear interest, at the Purchaser's
option, at either (i) Scotiabank's alternate base rate or (ii) Scotiabank's
reserve-adjusted LIBO rate plus 25.0 basis points. A commitment fee will be paid
with respect to the daily average unused portion of the Credit Facility
commitment amount (whether or not then available), in an amount equal to 7.0
basis points per annum. The commitment fee began to accrue on the date the
Commitment Letter was executed by Moore.
The Term Sheet states that the Credit Facility will mature on
the 364th day following the closing of the Credit Facility.
The Term Sheet provides that the Credit Documents will include
conditions precedent customary for the type of transaction proposed and others
to be reasonably specified by Scotiabank, including, without limitation: (i)
execution and delivery of satisfactory credit, guaranty and other related
documentation embodying the structure, terms and conditions contained in the
Commitment Letter and Term Sheet; (ii) for the first borrowing under the Credit
Facility, no material adverse change in the financial condition, operations, or
prospects of Moore on a consolidated basis since December 31, 1994; and for each
subsequent borrowing under the Credit Facility, no material adverse change in
the financial condition, operations, assets, business or properties of Moore on
a consolidated basis since December 31, 1994; (iii) receipt of closing
certificates, opinions of counsel, and related documentation customary for the
type of transaction proposed; (iv) no event of default or condition with which,
the giving of notice or the passage of time (or both) would constitute an event
of default shall have occurred and be continuing; and (v) compliance with all
applicable laws and regulations (including Regulations, G, T, U and X).
The Term Sheet provides that the Credit Documents will contain
representations and warranties customary for the type of transaction proposed
from both the Purchaser and Moore.
The Term Sheet also provides that the Credit Documents will
contain affirmative and negative covenants customary for the type of transaction
proposed, and these covenants are to be binding on both the Purchaser and Moore.
Under the Term Sheet, these covenants will include, without limitation,
restrictions on the incurrence of liens or other encumbrances by Moore and its
subsidiaries, other than liens or encumbrances covering (a) margin stock
(including the outstanding shares of the Company), (b) assets, the book value of
which does not exceed 10% in aggregate of the consolidated assets of Moore, and
(c) other exceptions to be negotiated.
The Term Sheet provides that the Credit Documents will include
financial covenants to consist of a specified maximum consolidated total debt to
total capitalization ratio (defined as total debt to the sum of total debt plus
book equity) of Moore not to exceed 55% (all accounting terms to be interpreted,
and all accounting determinations and computations to be made, in accordance
with Canadian generally accepted accounting principles, as conformed to U.S.
generally accepted accounting principles).
The Term Sheet also provides that the Credit Documents will
contain events of default customary for the type of transaction proposed and
others to be reasonably specified by Scotiabank, including without limitation
(i) a cross-default to other indebtedness of Moore or any of its subsidiaries,
with a principal amount in excess of U.S. $25,000,000 (other than inter-company
indebtedness where the relevant defaults have been waived by the holder of such
indebtedness), (ii) a change of control of the Purchaser (to be defined as the
failure of Moore to directly, or indirectly, own, free and clear of liens and
encumbrances, 100% of the issued and outstanding shares of capital stock of the
Purchaser, on a fully diluted basis), and (iii) a change of control of Moore (to
be defined as any person or group (within the meaning of Sections 13(d) and
14(d) under the Exchange Act, becoming the ultimate "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is exercisable immediately,
after the passage of time, upon the happening of an event or otherwise) directly
or indirectly, of shares representing more than 30% of the stock of Moore of any
class or kind ordinarily having the power to vote for the election of directors
of Moore, on a fully diluted basis.
The Term Sheet provides that the Credit Documents will contain
certain other customary provisions, including indemnification rights for
Lenders, assignment and participation rights for Lenders, expense payment
undertakings, waivers of jury trial, choice of law provisions and other terms
specified in the Term Sheet.
The Purchaser paid Scotiabank a customary up-front fee upon
acceptance of the Commitment. Moore has agreed to cause the Purchaser to pay
Scotiabank a customary annual agency fee.
The foregoing summary of the Commitment Letter does not
purport to be complete and is qualified in its entirety by reference to the
Commitment Letter and Term Sheet, copies of which are attached hereto as
exhibits.
ITEM 10. ADDITIONAL INFORMATION.
An additional class action complaint has been filed against
the Company and the Board of Directors of the Company, seeking, among other
items, declaratory and injunctive relief. A copy of this complaint is attached
hereto as an exhibit and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(10) Press Release, dated August 7, 1995.
(b)(1) Commitment Letter, dated August 3, 1995, from
The Bank of Nova Scotia to
Moore Corporation Limited.
(g)(5) Complaint in Robin K. Pittman v. Theodore Dimitrou,
Fred F. Canning, William N. Lane III, Neele E.
Stearns, Jr., Robert J. Cronin, Darrell R. Ewers,
Richard F. Doyle, William E. Olsen, and Wallace
Computer Services, Inc., filed in Court of Chancery
of the State of Delaware in and for New Castle
County on August 3, 1995.
<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: August 7, 1995
FRDK, Inc.
By: /s/ Joseph M. Duane
Name: Joseph M. Duane
Title: President
<PAGE>
EXHIBIT INDEX
(a)(10) Press Release, dated August 7, 1995.
(b)(1) Commitment Letter, dated August 3, 1995, from
The Bank of Nova Scotia to Moore Corporation
Limited.
(g)(5) Complaint in Robin K. Pittman v. Theodore Dimitrou,
Fred F. Canning, William N. Lane III, Neele E.
Stearns, Jr., Robert J. Cronin, Darrell R. Ewers,
Richard F. Doyle, William E. Olsen, and Wallace
Computer Services, Inc., filed in Court of Chancery
of the State of Delaware in and for New Castle
County on August 3, 1995.
Exhibit (a)(10)
Hilda Mackow
Vice President of Communications
Moore Corporation Limited
(416) 366-4740
Lissa Perlman
Kekst and Company
(212) 593-2655
MOORE CORPORATION SECURES FINANCIAL COMMITMENT
TORONTO (August 7, 1995) -- Moore Corporation Limited (TSE, ME, NYSE: MCL)
announced today that it has accepted a commitment letter from The Bank of Nova
Scotia to provide up to US$1.1 billion in financing. This financing together
with existing funds will be sufficient to fund Moore's previously announced
tender offer for all of the outstanding shares of Wallace Computer Services
(NYSE: WCS) at $56 per share in cash.
The Bank of Nova Scotia will act as lead agent and will syndicate the financing
to a select group of Canadian, U.S. and overseas co-agent and other
participating banks. Final documentation of the loan agreement will be completed
shortly.
###
Moore Corporation Limited is a global leader in delivering information handling
products and services that create efficiency and enhance competitiveness for
customers. Founded in Toronto in 1882, Moore has approximately 20,000 employees
and over 100 manufacturing facilities serving customers in 59 countries. Sales
in 1994 were US$2.4 billion.
Exhibit (b)(1)
Letterhead of Scotia Bank
The Bank of Nova Scotia
CONFIDENTIAL
August 3, 1995
Moore Corporation Limited
1 First Canadian Place
72nd Floor
Toronto, Ontario
Canada M5X 1GF
Attention: Mr. Stephen A. Holinski
Senior Vice President and
Chief Financial Officer
FRDK, Inc., or any other wholly-owned direct or
indirect subsidiary of MCL, which is designated by MCL
as the Borrower under the Revolving Facility.
Commitment Letter
Dear Sirs:
We understand that you (sometimes referred to as "MCL") are
interested in obtaining for your direct, wholly-owned subsidiary, FRDK, Inc., a
New York corporation (the "Borrower"), or any other wholly-owned direct or
indirect subsidiary of MCL, which is designated by MCL as the Borrower under the
Revolving Facility (as defined below), a commitment for a U.S.$1,100,000,000
revolving credit facility (the "Revolving Facility"), the proceeds of which will
be used (i) to finance in part the acquisition of up to all of the outstanding
stock of Wallace Computer Services, Inc. ("WCSI") and pay expenses related to
that acquisition (including certain restructuring costs following that
acquisition); and (ii) for general corporate purposes of MCL, the Borrower and
their direct and indirect subsidiaries.
The Bank of Nova Scotia ("Scotiabank") is pleased to commit
(i) to provide the full amount of the Revolving Facility (without regard to the
success or failure of Scotiabank's syndication efforts described herein), (ii)
to use reasonable commercial efforts to form a syndicate of other commercial
banks (together with Scotiabank, the "Lenders") that will, collectively,
participate in the Revolving Facility, and (iii) to act as administrative,
documentation and syndication agent (collectively in such capacities the
"Agent") for such syndicate of Lenders. Our commitments hereunder are subject to
(a) the terms and conditions set forth herein and in the term sheet annexed
hereto as Annex I (the "Term Sheet"), and (b) there being no facts, events or
circumstances, now existing or hereafter arising, which come to our attention
and which, in our good faith determination, materially adversely affect your or
the Borrower's financial condition, operations or prospects, in each of which
events we reserve the right to terminate our commitments hereunder (and
thereafter have no other or further obligations hereunder or in connection with
the Revolving Facility).
As we discussed, it is the intent of Scotiabank to solicit
commitments to the Revolving Facility from the Lenders in an amount sufficient
to allow Scotiabank to achieve its desired hold level in the Revolving Facility
(although as noted above, the success or failure of our syndication effort will
not affect our commitment to lend on the terms and conditions set forth in this
Commitment Letter and Term Sheet). To that end, you agree to actively assist us,
in all commercially reasonable respects, in the syndication of the Revolving
Facility, which assistance will require, among other things, that you provide
all information reasonably available to you that we deem to be reasonably
necessary to successfully complete the syndication, including all the
information prepared by you or on your behalf relating to your and the
Borrower's respective assets, financial condition, operations, properties and
prospects, as we may deem to be reasonably necessary. In addition, you agree to
make certain members of your and the Borrower's management, as well as, to the
best of your ability, your and the Borrower's consultants and advisors,
available during regular business hours to answer questions regarding the
Revolving Facility, to review and assist in the preparation of the syndication
memorandum relating to the Revolving Facility, to meet with prospective Lenders
and to use your reasonable efforts to ensure that our syndication efforts
benefit from your lending relationships.
By your signature below you hereby indemnify and hold harmless
Scotiabank, each other Lender committing to participate in the Revolving
Facility and each of our and their respective affiliates, directors, officers,
agents and employees as set forth in Paragraphs 3 and 4 of the section entitled
"Miscellaneous" of the Term Sheet (which paragraphs are herein incorporated by
reference), whether or not definitive credit, guarantee and related
documentation (collectively, the "Credit Documentation") is ultimately executed
and delivered or the transactions contemplated hereby are consummated.
This Commitment Letter and the Term Sheet are delivered to you
with the understanding that neither this Commitment Letter, the Term Sheet, the
confidential fee letter dated the date hereof (the "Fee Letter") between you and
Scotiabank, nor the substance hereof or thereof, shall be disclosed to any third
party without our prior written consent, except to the Borrower and its or your
directors, officers and employees and to those in confidential relationship to
you or the Borrower, such as legal counsel, investment advisors, or accountants,
or as required by law or any court or governmental agency (and in each such
event of permitted disclosure you agree promptly to inform us) and except that
this Commitment Letter and the Term Sheet may be disclosed in the documentation
for the tender for the stock of WCSI. This Commitment Letter and the Term Sheet
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof and supersede any prior agreements, written or oral, with
respect thereto, including without limitation, the Commitment Letter, Term Sheet
and Fee Letter, each dated August 1, 1995, delivered to you by the Bank. THIS
COMMITMENT LETTER AND THE TERM SHEET SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. BOTH OF THE
UNDERSIGNED PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF OR IN CONNECTION WITH THIS COMMITMENT LETTER, THE TERM
SHEET AND ANY OTHER COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF EITHER OF THE UNDERSIGNED PARTIES IN CONNECTION
HEREWITH OR THEREWITH. IN NO EVENT SHALL ANY PARTY TO THIS COMMITMENT LETTER BE
LIABLE FOR CONSEQUENTIAL DAMAGES.
If you agree with the foregoing, please sign and return to us
the enclosed copy of this Commitment Letter and the Fee Letter no later than
5:00 p.m., New York time, on August 4, 1995. Our commitment will terminate at
such time unless (a) an executed copy of this Commitment Letter and the Fee
Letter, each signed by you, has been delivered to us, and (b) you have made all
payments required to be paid hereunder and thereunder; provided, however, that,
any term or provision hereof to the contrary notwithstanding (i) the two
immediately preceding paragraphs shall survive any termination of our commitment
pursuant to this paragraph, and (ii) our commitment hereunder will terminate at
5:00 p.m., New York time, on August 25, 1995 unless, on or prior to such time,
definitive Credit Documentation satisfactory to us and our counsel has been
executed and delivered by you, the Borrower and us (with the date of such
execution and delivery being referred to as the "Closing Date").
We look forward to working with you.
Very truly yours,
THE BANK OF NOVA SCOTIA
By:s/Nick Roustas
Title: Relationship Manager
Agreed to and Accepted
this 4th day of August, 1995 By:s/Michael G. Locke
Title: Vice President
MOORE CORPORATION LIMITED
By:s/Stephen A. Holinski
Title: Chief Financial Officer
By:s/Shoba Khetrapal
Title: Vice President and Treasurer
<PAGE>
ANNEX I
TERM SHEET
(Unless otherwise defined, terms used in this
Term Sheet have the meanings ascribed thereto in
the commitment letter dated August 3, 1995 (the
"Commitment Letter"), to which this Term
Sheet is annexed)
I. PARTIES
Borrower: FRDK, Inc., a New York corporation (the
"Borrower"), or any other wholly-owned direct or
indirect subsidiary of MCL, which is designated
by MCL as the Borrower under the Revolving
Facility.
Administrative,
Documentation and
Syndication Agent: The Bank of Nova Scotia ("Scotiabank")
Lenders: Scotiabank and a group of commercial banks
(collectively, the "Lenders") as may be
acceptable to Scotiabank and the Borrower (such
consent not to be unreasonably withheld or
delayed).
Guarantor: Moore Corporation Limited, an Ontario
corporation ("MCL").
II. THE REVOLVING FACILITY
Closing Date: No later than August 25, 1995.
Revolving Facility
Description: U.S.$1,100,000,000 in senior financing will
be provided to the Borrower, in the form of a
revolving credit facility (the "Revolving
Facility") pursuant to which revolving credit
loans ("Loans") may be borrowed, prepaid and
reborrowed from time to time prior to the
Revolving Facility Commitment Termination Date
set forth below.
Revolving Facility
Commitment Amount: U.S.$1,100,000,000.
Revolving Facility
Commitment Termina-
tion Date: 364 days from the Closing Date.
Final Maturity For
All Loans: 364 days from the Closing Date.
Purpose: 1. To finance, in part, the acquisition of
up to all of the outstanding stock of Wallace
Computer Services, Inc. ("WCSI") and pay
expenses related to that acquisition (including
certain restructuring costs following that
acquisition).
2. General corporate purposes of MCL, the
Borrower and their direct and indirect
subsidiaries.
III. TERMS APPLICABLE TO
THE REVOLVING FACILITY
Interest Rate: At the Borrower's option, the Loans will bear
interest at either (i) Scotiabank's alternate
base rate (referred to as "Base Rate Loans"),
(ii) Scotiabank's reserve-adjusted LIBO rate
(referred to as "LIBO Rate Loans") plus, in the
case of this clause (ii) only, 25.0 basis
points.
Interest Payment
Dates: Interest periods for LIBO Rate Loans shall
be, at the Borrower's option, one, two, three or
six months. No interest period may extend beyond
the Revolving Facility Commitment Termination
Date. Interest on LIBO Rate Loans shall be
payable on the last business day of the
applicable interest period for such Loans and,
if earlier, the three month anniversary
following the commencement of such interest
period. Interest on Base Rate Loans shall be
payable quarterly in arrears. In each case,
interest will be payable on the Revolving
Facility Commitment Termination Date.
Optional Prepayments: Outstanding Loans are voluntarily payable
without penalty; provided, however, that LIBO
rate breakage costs, if any, shall be for the
account of the Borrower.
Commitment Fee: Commencing on the date on which the
Commitment Letter is executed and delivered by
MCL, a non-refundable commitment fee in the
amount of 7.0 basis points per annum will accrue
on the daily average unused portion of the
Revolving Facility Commitment Amount (whether or
not then available), payable on the Closing Date
(or upon cancellation, by the Borrower, of the
Revolving Facility), and, thereafter, quarterly
in arrears and on the Revolving Facility
Commitment Termination Date.
Guaranty: An unconditional irrevocable guaranty of
payment by the Borrower when due, shall be
delivered by MCL, in favor of the Lenders.
Conditions Precedent: Customary for the type of transaction
proposed and others to be reasonably specified
by Scotiabank, including, without limitation,
the following:
1. Execution and delivery of satisfactory
credit, guaranty and other related documentation
embodying the structure, terms and conditions
contained in the Commitment Letter and herein.
2. For the first borrowing under the Revolving
Facility, no material adverse change in the
financial condition, operations, or prospects of
MCL on a consolidated basis since December 31,
1994; and for each subsequent borrowing under
the Revolving Facility, no material adverse
change in the financial condition, operations,
assets, business or properties of MCL on a
consolidated basis since December 31, 1994.
3. Receipt of closing certificates, opinions of
counsel, and related documentation customary for
the type of transaction proposed.
4. No event of default or condition with which,
the giving of notice or the passage of time (or
both) would constitute an event of default shall
have occurred and be continuing.
5. Compliance with all applicable laws and
regulations (including Regulations, G, T, U and
X).
Representations and
Warranties: Customary for the type of transaction
proposed from both the Borrower and MCL.
Affirmative Covenants: Customary for the type of transaction
proposed binding on both the Borrower and MCL.
Negative Covenants: Customary for the type of transaction
proposed and binding on both the Borrower and
MCL, including, without limitation, as follows:
1. Restricting the incurrence of liens or other
encumbrances by MCL and its subsidiaries, other
than (a) margin stock (including the outstanding
shares of WCSI), (b) assets, the book value of
which does not exceed 10% in aggregate of the
consolidated assets of MCL, and (c) other
exceptions to be negotiated.
Financial Covenants: Financial covenants to consist of:
1. A maximum consolidated total debt to total
capitalization ratio (defined as total debt to
the sum of total debt plus book equity) of MCL
not to exceed 55% (all accounting terms to be
interpreted, and all accounting determinations
and computations to be made, in accordance with
Canadian generally accepted accounting
principles, as conformed to U.S. generally
accepted accounting principles).
Events of Default: Customary for the type of transaction
proposed and others to be reasonably specified
by Scotiabank, including, without limitation,
(i) a cross-default to other indebtedness of MCL
or any of its subsidiaries, with a principal
amount in excess of U.S.$25,000,000 (other than
inter-company indebtedness where the relevant
defaults have been waived by the holder of such
indebtedness), (ii) a change of control of the
Borrower (to be defined as the failure of MCL to
directly, or indirectly, own, free and clear of
liens and encumbrances, 100% of the issued and
outstanding shares of capital stock of the
Borrower, on a fully diluted basis), and (iii) a
change of control of MCL (to be defined as any
person or group (within the meaning of Sections
13(d) and 14(d) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"),
becoming the ultimate "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all
securities that such person has the right to
acquire, whether such right is exercisable
immediately, after the passage of time, upon the
happening of an event or otherwise) directly or
indirectly, of shares representing more than 30%
of the stock of MCL of any class or kind
ordinarily having the power to vote for the
election of directors of MCL, on a fully diluted
basis.
Miscellaneous: Customary provisions to be included, together
with others to be reasonably specified by
Scotiabank, including, without limitation, the
following:
1. Customary indemnity and capital adequacy
provisions, including but not limited to
compensation in respect of taxes (including
gross-up provisions for withholding taxes) and
decreased profitability resulting from U.S. or
foreign capital adequacy requirements,
guidelines or policies or their interpretation
or application, and any other customary yield
and increased costs protection deemed necessary
by the Lenders to provide customary protection.
2. The Lenders will be permitted to assign and
participate Loans, notes and commitments. Any
assignments would be by novation and would
require the Agent's and the Borrower's consent
(not to be unreasonably withheld or delayed).
Participations shall not require the consent of
the Borrower or the Agent, shall be subject to
customary restrictions on voting and other
matters, and will have the same benefits as the
Lenders with regard to increased costs, capital
adequacy, etc. (provided that in no event will
the Borrower be obligated to pay more than it
would have been obligated to pay absent such
participations), and provision of information on
MCL and the Borrower.
3. Joint and several indemnification by MCL and
the Borrower of Scotiabank, each of the Lenders
and each of their respective affiliates,
directors, officers, agents and employees
(collectively, the "Indemnified Parties") from
and against any losses, claims, damages,
liabilities or other reasonable expenses which
arise out of or in connection with the Revolving
Facility, the Commitment Letter, this Term Sheet
or the Credit Documentation, including those
which may arise from or in connection with any
action, suit or proceeding (whether or not any
Indemnified Party is a party or is subject
thereto), subject to the customary exceptions.
4. MCL and the Borrower jointly and severally
agree to pay all of Scotiabank's fees and other
reasonable out-of-pocket expenses (including the
reasonable fees and out-of-pocket expenses of
Scotiabank's legal counsel) arising out of or in
connection with the Revolving Facility, the
Commitment Letter, this Term Sheet or the Credit
Documentation, including any such fees and
expenses which may arise from or in connection
with any action, suit or proceeding (whether or
not an Indemnified Party is a party or is
subject thereto).
5. Waiver of jury trial.
6. New York governing law; consent to New York
jurisdiction; judgment currency provisions;
appointment of New York process agent; waiver of
immunity.
This Term Sheet is intended as an outline only and does not purport to summarize
all the conditions, covenants, representations, warranties and other provisions
which would be contained in the definitive Credit Documentation. Scotiabank's
commitment will be subject to negotiation and execution of definitive Credit
Documentation in form and substance satisfactory to Scotiabank and the Lenders
and its counsel.
Exhibit (g)(5)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
---------------------------------------------------------x
ROBIN K. PITTMAN, :
Plaintiff, : C.A. No. 14454
v. :
THEODORE DIMITROU, FRED F. CANNING, :
WILLIAM N. LANE, III, NEELE E.STEARNS,
JR., ROBERT J. CRONIN, DARRELL R. :
EWERS, RICHARD F. DOYLE, WILLIAM E.
OLSEN, and WALLACE COMPUTER SERVICES, INC., :
Defendants.
:
---------------------------------------------------------x
CLASS ACTION COMPLAINT
Plaintiff, by and through her attorneys, alleges as follows:
THE PARTIES
1. Plaintiff is and has been at all relevant times the owner of shares
of common stock of Wallace Computer Services, Inc. ("Wallace" or the "Company").
2. Wallace is a corporation organized and existing under the laws of
the State of Delaware with its principal executive offices at 4600 West
Roosevelt Road, Hillside, Illinois. Wallace markets computer services and
supplies, business forms, labels, machines, ribbons and software. Wallace Press
does commercial printing. It also has a direct mail division.
3. Defendants Theodore Dimitrou, Fred F. Canning, William N. Lane,
III, Neele Stearns, Jr., Robert J. Cronin, Darrell R. Ewers, Richard F. Doyle
and William E. Olsen are and have been, at all relevant times, Wallace
directors.
4. The defendants named in Paragraph 3 above ("Individual
Defendants"), as directors and/or officers of Wallace, owe fiduciary duties of
good faith, loyalty, fair dealing, due care, and candor to plaintiff and the
other members of the Class (as defined below).
CLASS ACTION ALLEGATIONS
5. Plaintiff brings this action pursuant to Rule 23 of the Rules of
this Court, on behalf of herself and all other shareholders of the Company
(except the defendants herein and any persons, firms, trusts, corporations, or
other entities related to or affiliated with them) and their successors in
interest, who are or will be harmed by reason of the conduct of defendants
described herein (the "Class").
6. This action is properly maintainable as a class action for the
following reasons:
(a) The Class is so numerous that joinder of all members is
impracticable. There are approximately 22.5 million shares of Wallace's common
stock outstanding. There are over 3,900 holders of record of Wallace stock who
are members of the Class.
(b) Members of the Class are scattered throughout the United
States and are so numerous that it is impracticable to bring them all before
this Court.
(c) There are questions of law and fact which are common to the
Class and which predominate over questions affecting any individual class
member. The common questions include, inter alia, the following:
(i) Whether defendants have breached or are breaching their
fiduciary duties to the Class; and
(ii) Whether plaintiff and the other members of the Class
would be irreparably damaged if defendants do not appropriately consider the
Moore Corporation bid described herein, and any and all other courses available
for the Wallace shareholders' benefit.
(d) The claims of plaintiff are typical of the claims of the
other members of the Class in that all members of the Class will be injured by
defendants' actions.
(e) Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. Plaintiff
is an adequate representative of the Class.
(f) The prosecution of separate actions by individual members of
the Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to individual
members of the Class which would as a practical matter be dispositive of the
interests of the other members not parties to the adjudications or substantially
impair or impede their ability to protect their interests.
(g) The defendants have acted, or refused to act, on grounds
generally applicable to, and causing injury to, the Class and, therefore,
preliminary and final injunctive relief on behalf of the Class as a whole is
appropriate.
SUBSTANTIVE ALLEGATIONS
7. On or about July 30, 1995, Moore Corp. announced a $1.3 billion, or
$56 per share hostile takeover bid for Wallace, through its wholly owned
subsidiary FRDK, Inc. The all-cash tender offer represents a 27% premium over
Wallace's $44 closing price on July 28, 1995, the last trading day before the
Offer. According to Moore, its bid represents a 42% premium over Wallace's
average trading price for the past 30 days and an 84% premium over the Wallace
stock price on February 24, 1995, the day when Moore initially contacted Wallace
to discuss a transaction.
8. According to Moore, in February 1995, Moore attempted to initiate
discussions with Wallace regarding a possible business combination between Moore
and Wallace. In response, defendant Cronin, the President and CEO of Wallace,
advised Mr. Reto Braun, Chairman of Moore, that Wallace's Board of Directors had
considered Moore's proposal, was not interested in any such combination and
would not pursue the matter further. All efforts by Moore to engage in further
discussions with Wallace concerning a possible business combination with Moore
since that time have been rebuffed by Wallace.
9. In addition to its expressing its opposition to Moore's overtures,
the Individual Defendants have taken specific steps since Moore's initial
approach in February 1995 to create additional obstacles to any merger. Under a
Bylaw provision purportedly adopted in June 1995, and publicly disclosed only
two weeks ago, any business to be raised by a stockholder at the annual meeting
must now be presented sixty (60) days before the meeting. Also, the Individual
Defendants approved a "golden parachute" employment contract with defendant
Cronin, which among other things, provides that defendant Cronin will receive
millions of dollars from Wallace, including reimbursement of tax penalties, in
the event of a takeover and a change in his job duties. Such contract is
purportedly retroactive to January 1995.
10. In a July 30, 1995 letter to defendants Dimitrou (Wallace's
Chairman) and Cronin (Wallace's Chief Executive Officer and President), Reto
Braun, Moore's president and Chief Executive Officer, wrote: "We are confident
that your shareholders will find our offer compelling." The July 30, 1995 letter
also stated:
...unfortunately your board specifically rejected our proposal to
discuss a strategic business combination. We therefore felt we had no
choice but to proceed with an offer directly to your shareholders.
The letter continued on to say that "We stand ready to meet with you and the
Wallace Board at any time to discuss any aspect of our proposed combination..."
11. Moore, a market leader in business forms which provides
database-management services and business services asserts that the combination
of it and Wallace will provide savings and spread products over more customers,
resulting in a "perfect fit."
12. Moore appears to have the necessary financial wherewithal to
complete the transaction, with no debt and over $500 million in cash on its
books. On July 31, 1995 Moore filed a lawsuit in United States District Court
for the District of Delaware against Wallace and the Individual Defendants
seeking, inter alia, injunctive relief to prevent defendants from thwarting
Moore's offer to acquire Wallace.
13. The Individual Defendants have breached and are continuing to
breach their fiduciary duties of due care to Wallace stockholders by failing to
take all reasonable steps to maximize shareholder value. These defendants have
rebuffed Moore's requests to discuss a potential transaction since February 24,
1995, despite numerous invitations by Moore to have such discussions. These
invitations were not made public until Moore's July 30, 1995 announcement.
14. As members of the Wallace Board of Directors, the Individual
Defendants owe to Wallace stockholders certain fiduciary duties, including the
highest obligations of due care, good faith, loyalty, candor and the duty to
maximize shareholder value. Their failure to even enter into discussions with
Moore or any other person or entity who wishes to offer Wallace a means by which
to maximize shareholder value is clear evidence that they are not acting in the
best interests of their stockholders.
15. As a result of the foregoing, Wallace and the Individual
Defendants have breached their fiduciary duties of good faith, fair dealing,
loyalty and candor, and have failed to maximize shareholder value owed to
plaintiff and the Class.
16. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff prays for judgment and relief as follows:
(A) Declaring that this lawsuit is properly maintainable as a class
action and certifying plaintiff as a representative of the Class;
(B) Ordering defendants to carry out their fiduciary duties to
plaintiff and the other members of the Class, including those of due care,
candor and loyalty;
(C) Requiring defendants and their counsel, agents, employees and all
persons acting under, in concert with, or for them, to enter into discussions
with Moore, or any other person or entity which could lead to a transaction
which would serve to maximize shareholder value;
(D) Enjoining defendants from enacting or implementing a poison pill
or other techniques to defend against the Moore offer, or any other offer, until
such offer has been fully explored;
(E) Awarding compensatory damages against defendants individually and
severally in an amount to be determined at trial, together with prejudgment
interest at the maximum rate allowable by law;
(F) Awarding plaintiff costs and disbursements and reasonable
allowances for plaintiff's counsel and experts' fees and expenses; and
(G) Granting such other and further relief as the Court may deem just
and proper.
Dated: August 3, 1995
ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.
By:
First Federal Plaza,
Suite 214
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
SAVETT FRUTKIN PODELL & RYAN, P.C.,
Suite 508
320 Walnut Street
Philadelphia, PA 19106
(215) 923-5400