<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
------------------------
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 1G5
(416) 364-2600
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
------------------------
COPY TO:
DENNIS J. FRIEDMAN, ESQ.
DAVID M. WILF, ESQ.
DAVID M. SCHWARTZBAUM, ESQ.
CHADBOURNE & PARKE
30 ROCKEFELLER PLAZA
NEW YORK, NY 10112
(212) 408-5100
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<PAGE> 2
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. 1. Capitalized terms not defined herein shall
have the meanings assigned thereto in the Statement.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT
COMPANY.
On August 3, 1995, Mr. Cronin cancelled the luncheon meeting with Mr. Braun
previously scheduled to be held on August 8, 1995.
ITEM 10. ADDITIONAL INFORMATION.
Multiple class action complaints have been filed against the Company, its
Board of Directors and its President and Chief Executive Officer, seeking, among
other items, declaratory and injunctive relief. Copies of these complaints are
attached hereto as exhibits and are incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(9) Press Release, dated August 2, 1995.
(g)(3) Complaint in Bernard Koff v. Theodore Dimitrou, Fred Canning,
William N. Lane, Neele E. Stearns, Jr., Robert J. Cronin, Darrel R.
Ewers, Richard F. Doyle, William E. Olson and Wallace Computer
Services, Inc., filed in Court of Chancery of the State of Delaware
in and for New Castle County on July 31, 1995.
(g)(4) Complaint in Kitty LaPerriere v. Wallace Computer Services, Inc.,
Theodore Dimitriou and Robert J. Cronin, filed in Court of Chancery
of the State of Delaware in and for New Castle County on August 1,
1995.
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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 3, 1995
FRDK, Inc.
By: /s/ JOSEPH M. DUANE
------------------------------------
Name: Joseph M. Duane
Title: President
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<S> <C>
(a)(9) Press Release, dated August 2, 1995.
(g)(3) Complaint in Bernard Koff v. Theodore Dimitrou, Fred Canning, William N. Lane,
Neele E. Stearns, Jr., Robert J. Cronin, Darrel R. Ewers, Richard F. Doyle, William
E. Olson and Wallace Computer Services, Inc., filed in Court of Chancery of the
State of Delaware in and for New Castle County on July 31, 1995.
(g)(4) Complaint in Kitty LaPerriere v. Wallace Computer Services, Inc., Theodore
Dimitriou and Robert J. Cronin, filed in Court of Chancery of the State of Delaware
in and for New Castle County on August 1, 1995.
</TABLE>
<PAGE> 1
PRESS RELEASE
Contact: Hilda Mackow,
Vice President of Communications
Moore Corporation (416) 364-2600
Lissa Perlman
Kekst & Company (212) 596-2655
MOORE CORPORATION COMMENCES CASH TENDER OFFER
FOR WALLACE COMPUTER SERVICES AT $56 PER SHARE
Toronto (August 2, 1995) -- Moore Corporation Limited, (TSE, NYSE, ME: MCL)
announced today that it has commenced its previously announced tender offer for
all of the outstanding shares of Wallace Computer Services (NYSE:WCS) for $56
(U.S.) cash per share, or a total of approximately $1.3 billion.
The offer and withdrawal rights will expire at 12:00 midnight, New York
City time on Tuesday, August 29, 1995, unless extended.
The offer is subject to certain conditions.
Lazard Freres & Co. LLC is the Dealer Manager for the Offer. MacKenzie
Partners, Inc. is the information agent.
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.
<PAGE> 1
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . X
BERNARD KOFF, :
:
Plaintiff, :
v. :
:
THEODORE DIMlTROU, FRED CANNING, : C.A. No. 14448
WILLIAM N. LANE, NEELE E. STEARNS, :
JR., ROBERT J. CRONlN, DARRELL R. :
EWERS, RICHARD F. DOYLE, WILLIAM :
E. OLSEN, and WALLACE COMPUTER :
SERVICES, INC., :
:
Defendants. :
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . X
CLASS ACTION COMPLAINT
Plaintiff, by and through his 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").
<PAGE> 2
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 Canning, William
N. Lane, 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).
2
<PAGE> 3
CLASS ACTION ALLEGATIONS
5. Plaintiff brings this action pursuant to Rule 23 of
the Rules of this Court, on behalf of himself 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:
3
<PAGE> 4
(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:
4
<PAGE> 5
(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.
5
<PAGE> 6
(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.
6
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(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, 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.
7
<PAGE> 8
8. In a July 30, 1985 letter to defendants Dimitrou
(Wallace's Chairman) and Cronin (Wallace's Chief Executive Officer and
President), Reto Bravn, 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 . . . "
9. According to Mr. Braun, Moore made its bid after "six
or seven attempts to discuss a possible acquisition since February, when
Wallace rejected a possible acquisition proposal.
10. 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."
8
<PAGE> 9
11. Moore appears to have the necessary financial
wherewithal to complete the transaction, with no debt and over $500 million in
cash on its books.
12. 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.
13. 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.
14. 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.
15. Plaintiff and the Class have no adequate remedy at
law.
9
<PAGE> 10
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 the representatives 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;
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(F) Awarding plaintiff costs and disbursements and reasonable allowances for
plaintiffs' counsel and experts' fees and expenses; and
(G) Granting such other and further relief as the Court
may deem just and proper.
Dated: July 31,1995
ROSENTHAL, MONHAIT, GROSS & GOODESS, P.A.
By:
--------------------
First Federal Plaza, Suite 214
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
ABBEY & ELLIS
212 East 39th Street
New York, New York 10016
(212)889-3700
11
<PAGE> 1
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . X
KITTY LaPERRIERE, :
:
Plaintiff, :
-against- :
:
WALLACE COMPUTER SERVICES INC., : C.A. No. 14449
THEODORE DIMITRIOU and :
ROBERT J. CRONlN, :
:
Defendants. :
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . X
CLASS ACTION COMPLAINT
Plaintiff, by her attorneys, for her Complaint alleges, upon
information and belief, except as to the allegations contained in paragraph 2,
which plaintiff alleges upon knowledge, as follows:
1. Plaintiff brings this action on behalf of herself and
all other shareholders of defendant Wallace Computer Services Inc. ("Wallace"
or the "Company") similarly situated (the "Class") for declaratory and
injunctive relief, and/or compensatory damages, arising from defendants' breach
of fiduciary duty to the shareholders of Wallace. As detailed herein,
defendants have acted contrary to the best interests of Wallace's public
shareholders by, among other things, failing to investigate and consider fully
offers by Moore Corporation Limited to purchase all outstanding shares of the
Company. Defendants have taken these unlawful actions in violation of their
fiduciary duties, for the purpose of entrenching themselves in managerial and
directorial positions.
<PAGE> 2
THE PARTIES
2. At all times relevant hereto, plaintiff Kitty
LaPerriere was an owner of Wallace common stock.
3. Defendant Wallace is a Delaware corporation with its
principal place of business located at 4600 West Roosevelt Road, Hillside,
Illinois. Wallace is a leading provider of computer services and supplies such
as business forms, commercial and promotional graphics printing, computer
labels, machine ribbons, computer hardware and software, computer accessories
and office products.
4. At all relevant times herein, defendant Theodore
Dimitriou ("Dimitriou") was the chairman of Wallace's Board of Directors. As
of November 9, 1994, Dimitriou owned or controlled less than 0.6% of Wallace
common stock. For the fiscal year ended July 31, 1994, Dimitriou received
total compensation from Wallace in the amount of approximately $519,546.
5. At all relevant times herein, defendant Robert J.
Cronin ("Cronin") was the President, Chief Executive Officer and a Director of
the Company. As of November 9, 1994, Cronin owned or controlled less than
0.25% of Wallace common stock. For the fiscal year ended July 31, 1994, Cronin
received total compensation from Wallace in the amount of approximately
$568,987.
6. The defendants referred to in paragraphs 4 and 5,
above, are collectively referred to herein as the "Individual Defendants."
2
<PAGE> 3
CLASS ACTION ALLEGATIONS
7. Plaintiff brings this action pursuant to Rule 23 of
the Rules of this Court for declaratory, injunctive and other relief on his own
behalf and as a class action, on behalf of all common stockholders of Wallace
(except defendants herein and any person, firm, trust, corporation or other
entity related to or affiliated with any of the defendants) and their
successors in interest, who are being deprived of the opportunity to maximize
the value of their Wallace shares by the wrongful acts of the defendants
described herein.
8. This action is properly maintainable as a class
action for the following reasons:
9. The class of stockholders for whose benefit this
action is brought is so numerous that joinder of all Class members is
impracticable. There are more than 22 million shares of Wallace common stock
held by approximately 3,985 shareholders of record who are members of the
Class. The holders of these shares are geographically dispersed throughout the
United States. Wallace stock is listed and actively traded on the New York
Stock Exchange.
10. There are questions of law and fad which are common
to the members of the Class and which predominate over any questions affecting
any individual members. The common questions include, inter alia, the
following:
a. whether the defendants, in bad faith and for
improper motives, have prevented members of the Class from receiving the
maximum value achievable for their shares of Wallace common stock;
3
<PAGE> 4
b. whether the defendants have failed to consider,
in good faith, the adequacy of unsolicited offers for the Company, including
the adequacy of Moore's offers to purchase all outstanding Wallace shares;
c. whether the defendants have engaged in conduct
constituting unfair dealing to the detriment of the public stockholders of
Wallace; and
d. whether the defendants have breached their
fiduciary and common law duties owed by them to plaintiff and the other members
of the Class, including their duties of care and loyalty.
11. The claims of plaintiff are typical of the claims of
the other members of the Class, and plaintiff has no interests that are adverse
or antagonistic to the interests of the Class.
12. Plaintiff is committed to the vigorous prosecution of
this action and has retained competent counsel experienced in litigation of
this nature. Accordingly, plaintiff is an adequate representative of the Class
and will fairly and adequately protect the interests of the Class.
13. The prosecution of separate actions by individual
members of the Class would create a risk of inconsistent or varying
adjudications with respect to individual members
4
<PAGE> 5
of the Class, which would establish incompatible standards of conduct for the
party opposing the Class.
14. Defendants have acted and are about to act on grounds
generally applicable to the Class, thereby rendering final injunctive or
corresponding declaratory relief appropriate with respect to the Class as a
whole.
SUBSTANTIVE ALLEGATIONS
15. Wallace is one of the nation's largest manufacturers
and distributors of information management products, services and solutions.
These include paperwork systems and forms, labeling products and supplies,
direct mail printing, and leading edge electronic forms, products and forms
management services. The company has manufacturing, distribution and sales
facilities throughout the United States.
16. On or about February 24, 1995, Wallace was contacted
by representatives of Moore Corporation Limited ("Moore") seeking to discuss a
potential business combination between the two companies. Moore is the world's
largest supplier of business forms and related services for tracking inventory
and other corporate data, and is Wallace's chief competitor in those markets.
17. According to Moore, a business combination between
the two companies would provide cost savings as well as spreading products over
more customers and countries. As stated in a correspondence sent to Wallace by
Moore Chairman and Chief Executive Officer Reto Braun ("Braun"):
5
<PAGE> 6
We believe the combination of Moore's strengths with Wallace's
would accelerate our mutual efforts, creating a new entity
capable of providing the full spectrum of integrated products
and service offerings that today's customers demand on a
global basis. Together we would redefine the industry.
18. In spite of the attractive synergies offered by a
potential merger with Moore, as well as the substantial premiums that could be
obtained for Wallace's shareholders, Wallace's management, including the
Individual Defendants, flatly refused to participate in any discussion
concerning a business combination between the two companies. Undaunted,
Moore's management made six or seven additional attempts since the initial
overtures in February, 1995, to open up a dialogue with Wallace. Wallace,
however, refused to respond to these overtures.
19. During this period, Wallace became wary of Moore's
efforts to discuss a business combination. Desperate to ensure that any
takeover attempt would not be successful despite the potential benefits to
Wallace's shareholders, the Company's Board enacted various measures to
strengthen its anti-takeover defenses. For example, in June, 1995, the
Company's Board adopted a rule that any business to be presented by a
stockholder at an annual meeting must be presented 60 days before the meeting.
Since the Company's next annual meeting is scheduled for November 1, 1995, this
provision was designed to make it extremely difficult for Moore to organize any
unsolicited takeover attempt in time for that meeting. In addition, the Board
adopted a "golden parachute" in which defendant Cronin would receive millions
of dollars if his job duties were changed as the result of a takeover.
6
<PAGE> 7
20. The adoption of these anti-takeover measures and the
"stonewalling" of Moore's efforts to discuss a business combination were
accomplished for no legitimate business purpose and were orchestrated by the
Individual Defendants and other members of the Company's management solely to
ensure that they could entrench themselves in their lucrative managerial and
directorial positions with the Company, to the detriment of its stockholders.
21. On July 30, 1995, as a result of Wallace's continued
failure to negotiate with Moore for a sale of the Company, Moore announced its
intention to bring its offer directly to Wallace's shareholders by commencing a
tender offer for all Wallace Shares at $56 per share in cash for a total
purchase price of approximately $1.3 billion. The $56 tender offer price
represents an 84% premium over Wallace's share price on February 24, 1995, when
Moore first contacted the Company regarding a business combination, and 42%
over its most recent 30-day average closing price. Moore stated that the
tender offer would be launched within a week and also announced that it would
attempt to nominate three directors to Wallace's Board at the Company's annual
shareholders meeting in November.
22. Also, on July 30, Moore sent a letter to Wallace
informing it of the tender offer and conveying Moore's continued willingness
and desire to meet with Wallace's management to discuss the possibility of a
mutually agreed upon transaction. The letter stated, in part:
As you know from our prior communications, the Board
of Directors and management of Moore Corporation believe the
combination of our two companies makes eminent business sense.
Unfortunately, your Board specifically rejected our proposal
to discuss a strategic
7
<PAGE> 8
business combination. We therefore felt we had no choice but
to proceed with an offer directly to your shareholders. We
continue to believe it is in the best interest of both
companies to move expeditiously toward a mutually-agreed
combination of our companies. . . .
In the interim, we have noted your favorable results
and our price reflects both your recent and anticipated
performance. We are confident that your shareholders will
find our offer compelling. . . .
We stand ready to meet with you and the Wallace Board
and management at any time to discuss any aspect of our
proposed combination so that you will share our confidence and
enthusiasm for this transaction -- a transaction that serves
the best interests of both of our companies and our
shareholders, employees, customers and communities.
23. The following day, on July 31, 1995, Moore filed a
lawsuit against Wallace and members of its management in the United States
District Court, District of Delaware, seeking an injunction to prevent the
Company from exercising its "poison pill". This shareholder rights plan is
triggered when anyone buys 20% or more of the Company's common stock and allows
the other shareholders to buy new common stock at half price, thus rendering a
tender offer prohibitively expensive. Moore thus asserts that Wallace "should
not be allowed to deprive the shareholders of the opportunity to decide upon
the merit of the offer." In addition, Moore alleges in its lawsuit, that
Wallace's Board created an unreasonable obstacle to Moore's offer when in June
it adopted the 60-day notification rule and golden parachute "in probable
response" to Moore's overtures regarding a merger with Wallace.
24. In reaction to the announcement of the tender offer,
the market price of Wallace shares surged $14 3/8 per share to close at $58 3/8
on July 31, 1995. This closing price, representing a $2 3/8 premium over the
tender offer price, has led analysts to conclude that the
8
<PAGE> 9
market expects a higher offer to surface, either from Moore or another bidder.
For example, Burnham Securities analyst David Liebowitz was reported as saying
"given the way the stock opened this morning, clearly there are a goodly number
of investors who suspect a higher bid is in the offing." Similarly, Martin
McDevitt, an analyst at Cleary Gull Reiland & McDevitt Inc., stated "people
seem to be thinking another offer may be coming, so we'll just have to wait and
see."
CAUSE OF ACTION AGAINST ALL DEFENDANTS
25. As described above, Wallace's management, which as of
the date of the company's last proxy statement collectively owned or controlled
only 1.2% of Wallace's outstanding stock, has shown a pattern of entrenchment
and failure to consider in good-faith Moore's offers to purchase the Company
which may be in the best interests of Wallace's public shareholders.
Accordingly, there is a substantial likelihood that, in the absence of this
Court's intervention, the defendants will continue this pattern and refuse to
consider in good faith Moore's tender offer and other acquisition offers that
may arise. By virtue of these acts and conduct, the defendants are carrying
out a preconceived plan to prevent the sale of the Company to any party,
including Moore, in violation of their fiduciary duties and to the detriment of
Wallace's public shareholders. As a result, the public common stockholders of
Wallace will be wrongfully deprived of their ability to avail themselves of the
substantial premium included in Moore's tender offer, and other acquisition
otters which may materialize, thereby depriving them of the maximum value that
can be achieved for their shares.
26. The primary objective of defendants' plan to thwart
acquisition offers for the Company is to entrench themselves in managerial and
directorial positions, to the detriment
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<PAGE> 10
of Wallace's shareholders. Indeed, by their actions, defendants have acted in
a manner to prevent the shareholders of Wallace from availing themselves of
offers for their stock which are substantially higher than its recent market
price.
27. The defendants have committed further breaches of
their fiduciary duty to the public stockholders of Wallace, by (i) failing to
undertake an adequate evaluation of Wallace's worth as a potential merger or
acquisition candidate; (ii) failing to give adequate consideration to the offer
for Wallace submitted by Moore; (iii) considering and/or adopting extreme and
unreasonable measures to prevent the sale of the Company; and/or (iv) failing
to act so that the interests of the public stockholders of Wallace were
protected.
28. Unless enjoined by this Court, defendants will
continue to breach fiduciary duties owed to plaintiff and the other members of
the Class, and aid and abet such breaches, and will not only prevent Wallace's
shareholders from selling their shares to Moore for a fair and adequate price,
but also will prevent other parties from making offers to acquire Wallace, all
to the irreparable harm of the Class.
29. Plaintiff and the other members of the Class have no
adequate remedy at law.
WHEREFORE, plaintiff demands judgment and relief in his favor and in
favor of the Class and against defendants, as follows:
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<PAGE> 11
A. Declaring that this action be certified as a
proper class action and certifying plaintiff as Class representative;
B. Declaring that the defendants and each of
them have committed a gross abuse of trust and have breached their fiduciary
duties to plaintiff and other members of the Class;
C. Ordering that the defendants take appropriate
measures to assure that the Moore tender offer and any other offers for the
acquisition of Wallace are considered and evaluated by Wallace management
adequately and in good faith in order to maximize shareholder value;
D. Preliminarily and permanently enjoining the
defendants from exercising Wallace's shareholder rights plan or adopting other
extreme and unreasonable measures to prevent the sale of the Company;
E. Awarding compensatory damages in an amount to
be determined upon the proof submitted to the Court;
F. Awarding the costs and disbursements of this
action;
G. Awarding plaintiffs counsel fees; and
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H. Awarding such other and further relief which
the Court may deem just and proper.
Dated: August 1, 1995
ROSENTHAL, MONHALT, GROSS & GOODESS, P.A.
By:
-------------------
First Federal Plaza, Suite 214
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
BERNSTEIN LITOWITZ BERGER
& GROSSMANN
Vincent R. Cappucci
Henry A. Diamond
1285 Avenue of the Americas
New York, New York 10019
(212) 554-1400
12
