SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
(Amendment No. 2)
___________________
BORDEN, INC.
(Name of Subject Company)
BORDEN, INC.
(Name of Person(s) Filing Statement)
Common Stock, Par Value $.625 Per Share
(Title of Class of Securities)
099599102
(CUSIP Number of Class of Securities)
___________________
Allan L. Miller, Esq.
Senior Vice President, Chief Administrative Officer
and General Counsel
Borden, Inc.
180 East Broad Street
Columbus, Ohio 43215
(614) 225-4000
(Name, address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement)
___________________
With a copy to:
Andrew R. Brownstein, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000<PAGE>
This Amendment No. 2 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 of
Borden, Inc., a New Jersey corporation, filed with the
Securities and Exchange Commission (the "Commission") on
November 22, 1994, as amended by Amendment No. 1 filed with the
Commission on December 1, 1994 (as so amended, the "Schedule
14D-9"), with respect to the exchange offer made by Borden
Acquisition Corp., a New Jersey corporation (the "Purchaser"),
Whitehall Associates, L.P., a Delaware limited partnership (the
"Partnership"), and KKR Partners II, L.P., a Delaware limited
partnership (together with the Partnership, the "Common Stock
Partnerships"), to exchange shares, owned by the Purchaser or
its affiliates, of common stock, par value $.01 per share (the
"Holdings Common Stock"), of RJR Nabisco Holdings Corp., a
Delaware corporation ("Holdings"), for all outstanding Shares
and the associated preferred stock purchase rights (the
"Rights"), not already owned by the Purchaser or its
affiliates, upon the terms and subject to the conditions set
forth in the Offering Circular/Prospectus, dated November 22,
1994, and the related Letter of Transmittal. Under the terms
of the Exchange Offer, each Share accepted by the Purchaser in
accordance with the Exchange Offer shall be exchanged for that
number of fully paid and nonassessable shares of Holdings
Common Stock equal to the Exchange Ratio. The term "Exchange
Ratio" means the quotient (rounded to the nearest 1/100,000)
obtained by dividing (i) $14.25 by (ii) the average of the
average of the high and low sales prices of the Holdings Common
Stock as reported on the New York Stock Exchange (the "NYSE")
Composite Tape on each of the ten full consecutive trading days
ending immediately prior to the ten business day period ending
on the date of expiration of the Exchange Offer, including any
extension thereof (the "Valuation Period"), provided that the
Exchange Ratio shall not be less than 1.78125 or greater than
2.375.
Capitalized terms used and not defined herein shall
have the meanings assigned such terms in the Schedule 14D-9 as
heretofore amended and supplemented.
Item 4. The Solicitation or Recommendation.
(a)-(b) The description in the Schedule 14D-9 under
"Background and Reasons for the Board's Recommendation;
Opinions of Financial Advisors--Background--Events Subsequent
to Announcement of the KKR Transaction" is hereby amended and
supplemented by adding the following information:
-2-<PAGE>
On December 1, 1994, the Board met and reviewed the
letter received from Japonica on November 30, 1994 (the
"Japonica November 30 letter"). Following the conclusion of
such meeting, on behalf of the Board, a letter was sent to
Japonica. This letter advised Japonica that the Board's
objective is to maximize the value of the Company for its
shareholders and to do so the Board will pursue whatever
transaction the Board believes most likely to achieve its
objective. The Board's letter also noted that the Japonica
November 30, 1994 letter is silent on many important details,
given the complex nature of the transactions it describes.
Therefore, in view of the time factors involved in the
transaction involving the Common Stock Partnerships and the
Japonica proposal, the Board requested that Japonica meet with
the Board's representatives on Sunday, December 4, 1994, noting
that one of the Board's independent directors would chair the
meeting on the Board's behalf. The Board's letter stated that
the purpose of the meeting will be to obtain detailed
information about Japonica's plans in order to assist the Board
in its consideration of the proposal set forth in the Japonica
November 30 letter. In this connection, the Board's letter
requested that Japonica provide the Board with detailed
information on a number of questions raised in its review of
the Japonica November 30 letter. The Board's letter concluded
by requesting confirmation that Japonica would be willing to
meet on December 4, 1994, noting that if the date was not
convenient for Japonica, the Board will make every effort to
schedule something more convenient; the letter also requested
that if Japonica was unable to meet on such date, that Japonica
provide the Board with a written response to the Board's
questions on or before such date. Following the delivery of
the Board's letter to Japonica, it was publicly reported that a
Japonica spokesman had stated that Japonica would respond to
the Board's request as soon as practicable. The Board's letter
is included as an exhibit hereto and is incorporated herein by
this reference; the foregoing description of such letter is
qualified in its entirety by reference to such exhibit.
Item 8. Additional Information to be Furnished.
(b) The description under "Certain Legal
Proceedings" is hereby amended and supplemented by adding the
following information:
On November 30, 1994, a putative class action
captioned Petersen, et al. v. Borden, Inc., et al., Case No. 94
CIV 8648, was filed by purported shareholders of the Company in
the United States District for the Southern District of New
-3-<PAGE>
York against the Company, members of the Company's board of
directors, Holdings, members of Holdings' board of directors,
KKR, certain partners and executives of KKR, and the Company's
financial advisors, Lazard Freres and First Boston. The
complaint alleges, among other things, (1) violations of
Sections 14(e) and 20(a) of the Securities Exchange Act of
1934, as amended, by the Company, KKR and the Company's board
of directors; (2) violations of Section 11 of the Securities
Act of 1933, as amended, by Lazard Freres, First Boston and
certain officers and directors of Holdings and partners or
executives of KKR; and (3) breach of fiduciary duty by the
Company and the Company's board of directors, which breach of
fiduciary duty allegedly was aided and abetted by KKR. The
complaint seeks equitable relief, including, among other
things, a preliminary injunction and declaratory relief, as
well as money damages. A copy of the complaint is included as
an exhibit hereto and is incorporated herein by reference. In
addition, copies of the complaints in other actions filed
against the Company and its directors have been included as
exhibits to the Schedule 14D-9 and are incorporated herein by
reference.
Item 9. Material to be Filed as Exhibits.
The list of exhibits in the Schedule 14D-9 is hereby
amended and supplemented by adding the following exhibits:
Exhibit 99.79 -- Letter from F.J. Tasco
to P.B. Kazarian, dated
December 1, 1994.
Exhibit 99.80 -- Complaint filed in
Peterson, et al. v.
Borden, Inc., (S.D.N.Y.
Nov. 30, 1994).
-4-<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its
knowledge and belief, the undersigned certifies that the in-
formation set forth in this statement is true, complete and
correct.
BORDEN, INC.
Dated: December 2, 1994 By: /s/ Allan L. Miller
Name: Allan L. Miller
Title: Senior Vice President,
Chief Administrative
Officer and General Counsel
-5-<PAGE>
EXHIBIT INDEX
Exhibit Description Sequential Number
Exhibit 99.79 -- Letter from F.J. Tasco
to P.B. Kazarian, dated
December 1, 1994.
Exhibit 99.80 -- Complaint filed in
Peterson, et al. v.
Borden, Inc., (S.D.N.Y.
Nov. 30, 1994).
Exhibit 99.79
[LETTERHEAD OF BORDEN, INC.]
December 1, 1994
Mr. Paul B. Kazarian
Managing Partner
Japonica Partners
30 Kennedy Plaza
Providence, Rhode Island 02903
Dear Mr. Kazarian:
The Board of Directors of Borden, Inc. has reviewed your letter
dated November 30, 1994. As I am sure you appreciate, your
letter is silent on many important details, given the complex
nature of the transactions you describe. As we have advised
you previously, our objective is to maximize the value of
Borden for its shareholders and to do so we will pursue
whatever transaction we believe most likely to achieve our
objective.
In view of the time factors involved in the Whitehall
transaction and your proposal, we request that you meet with
the Board's representatives at 10:00 AM on Sunday, December 4,
1994, at Wachtell, Lipton, Rosen & Katz's offices, at 51 West
52nd Street, 28th floor. Dr. Wilbert J. LeMelle, one of our
independent directors, will chair the meeting on our behalf.
The purpose of the meeting will be to obtain detailed
information about your plans in order to assist the Board in
its consideration of your proposal.
In light of the complexity of your proposal, and to make the
meeting productive, you should provide us with detailed
information as to the following:
. What would happen in the near future to cause
all of Borden's shares to be worth $17 under
your plan, especially since you do not seem to
contemplate injecting new equity into the
Company and the Borden common stock will be
further burdened by the fixed charges of the
preferred stock you propose to issue;
. The basis for and assumptions underlying the
earnings per share forecasts of your plan,
which, notwithstanding preferred stock charges,
are at levels more than double earnings
estimates by Borden's management;<PAGE>
. How you would deal with the legal issues of
fraudulent conveyance and illegal dividend
payments in connection with the spin-offs your
proposal entails;
. How you would handle Borden's approximately $2.4
billion of outstanding indebtedness, more than
half of which would become prepayable as a
result of the split up of the Company you
propose;
. The sources of your financing and any material
contingencies with respect thereto;
. The dividend rate and other terms (assuming
current market conditions) that you think would
be necessary to cause the preferred stock you
would issue to trade at par; and
. The time period you think necessary to implement
the contemplated transactions (including
obtaining assurances as to the tax free status
thereof) and how you would propose to protect
Borden shareholders against possible adverse
developments in the interim period.
The foregoing questions are not intended to limit the
discussion at the meeting but merely to give you guidance in
preparing for the meeting. You are, of course, invited to
present whatever other information you wish.
We would like to proceed as expeditiously as practicable given
the nature of the task before us, and we have scheduled the
meeting accordingly. We look forward to receiving promptly
your confirmation that we will meet on Sunday. Please contact
Allan Miller at our Columbus office in this regard. If Sunday
is not convenient for you, please advise us promptly and we
will make every effort to schedule something more convenient.
If you cannot meet on Sunday, we request that you provide us
with a written response to our questions on or before Sunday.
On behalf of the Board of Directors,
/s/ Frank J. Tasco
Frank J. Tasco
Chairman
Exhibit 99.80
UNITED STATES DISTRICT COURT
Southern District of New York
JAMES PETERSEN, SIDNEY GLICK,
BARBARA LUBIN, MARTIN H. OLESH, SUMMONS IN A CIVIL ACTION
PAMELA SKULSKY, MARTIN WEBER,
NORMAN WEISS, STELLA COHORSKY,
ABRAHAM JOSEPH, ROBERT WARING,
ROBERT STROUGO, THOMAS TASSONE,
MOISE KATZ, CHARLES MILLER,
WILLIAM STEINER, PAUL L. KOHNSTAMM,
JERRY KRIM, BERNARD STEPAK, DANIEL
MARCUS, KATHLEEN DWYER, PITTMAN
NEUROSURGICAL P.A. Defined Benefit
Plan U.T.D. 9/1/77 and R. Clinton
Pittman Trustee, MARGARET ALESSI, CASE NUMBER
JOSEPH RABINOVITS, ESTATE OF HENRY 94 CIV 8648
F. WANGER, GEORGE MAZETY, JEFFREY
E. KASSOWAY, TERRY STAPLES, ROBERT
LEWIS and ERICA HARTMAN,
Plaintiffs,
- against -
BORDEN, INC., ERVIN SHAMES, FRANK
J. TASCO, FREDERICK E. HENNIG,
WILBERT J. LEMELLE, ROBERT B.
LUCIANO, H. BARCLAY MORLEY, JOHN
E. SEXTON, PATRICIA CARRY STEWART,
RJR NABISCO HOLDINGS CORP., KOHLBERG
KRAVIS ROBERTS & CO., L.P., CHARLES
M. HARPER, STEPHEN R. WILSON, ROBERT S.
ROATH, H. JOHN GREENIAUS, JAMES W.
JOHNSTON, JAMES H. GREENE, JR., HENRY
R. KRAVIS, PAUL E. RAETHER, LAWRENCE
R. RICCIARDI, CLIFTON S. ROBBINS, GEORGE
R. ROBERTS, SCOTT M. STUART, MICHAEL
T. TOKARZ, JOHN T. CHAIN, JR., JOHN L.
CLENDENIN, JOHN G. MEDLIN, JR.,
ROZANNE L. RIDGWAY, LAZARD FRERES & CO.
and CS FIRST BOSTON GROUP, INC.,
Defendants.<PAGE>
TO: (Name and Address of Defendant)
Borden, Inc.
c/o Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(see attached list for additional defendants)
YOU ARE HEREBY SUMMONED and required to file with the Clerk of
this Court and serve upon plaintiffs's attorney (name and address)
See attached list.
an answer to the complaint which is herewith served upon you, within
20 days after service of this summons upon you, exclusive of the day
of service. If you fail to do so, judgment by default will be taken
against you for the relief demanded in the complaint.
Clerk Date
By Deputy Clerk<PAGE>
RETURN OF SERVICE
Service of the Summons and DATE
Complaint was made by me1
NAME OF SERVER TITLE
Check one box below to indicate appropriate method of service:
[ ] Served personally upon the defendant. Place where served:
[ ] Left copies thereof at the defendant's dwelling house or
usual place of abode with a person of suitable age and
discretion then residing therein.
Name of person with whom the summons and complaint were
left:
[ ] Other (specify):
STATEMENT OF SERVICE FEES
TRAVEL SERVICES TOTAL
DECLARATION OF SERVER
I declare under penalty of perjury under the laws of the United
States of America that the foregoing information contained in the
Retun of Service and Statement of Service Fees is true and correct.
Executed on
Date Signature of Server
Address of Server
_____________________
1 As to who may serve a summons see Rule 4 of the Federal
Rules of Civil Procedure<PAGE>
DEFENDANTS' ADDRESSES
Borden, Inc.
c/o Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000
(212) 403-2000
ERVIN SHAMES
FRANK J. TASCO
FREDERICK E. HENNIG
WILBERT J. LEMELLE
ROBERT B. LUCIANO
H. BARCLAY MORLEY
JOHN E. SEXTON
PATRICIA CARRY STEWART
c/o Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000
(212) 403-2000
RJR NABISCO HOLDINGS CORP.
1301 Avenue of the Americas
New York, New York.
CHARLES M. HARPER
STEPHEN R. WILSON
ROBERT S. ROATH
H. JOHN GREENIAUS
JAMES W. JOHNSTON
JAMES H. GREENE, JR.
HENRY R. KRAVIS
PAUL E. RAETHER
LAWRENCE R. RICCIARDI
CLIFTON S. ROBBINS
GEORGE R. ROBERTS
SCOTT M. STUART
MICHAEL T. TOKARZ
JOHN T. CHAIN, JR.
JOHN L. CLENDENIN
JOHN G. MEDLIN, JR.
ROZANNE L. RIDGWAY
c/o RJR NABISCO HOLDINGS CORP.
1301 Avenue of the Americas
New York, New York.<PAGE>
KOHLBERG KRAVIS ROBERTS & CO. L.P.
c/o Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Lazard Freres
1 Rockefeller Plaza
New York, New York
(212) 632-6000
Legal Department
31st Floor
CS FIRST BOSTON GROUP INC.
55 East 52nd Street
New York, New York 10022<PAGE>
PLAINTIFF(S) ADDRESS(ES)
JAMES PETERSEN
SIDNEY GLICK
BARBARA LUBIN
MARTIN H. OLESH
PAMELA SKULSKY
MARTIN WEBER
NORMAN WEISS
STELLA COHORSKY
ABRAHAM JOSEPH
ROBERT WARING
ROBERT STROUGO
THOMAS TASSONE
MOISE KATZ
CHARLES MILLER
WILLIAM STEINER
PAUL L. KOHNSTAMM
JERRY KRIM
BERNARD STEPAK
DANIEL MARCUS
KATHLEEN DWYER
PITTMAN NEUROSURGICAL P.A.
Defined Benefit Plan U.T.D. 9/1/77
and R. Clinton Pittman Trustee
MARGARET ALESSI
JOSEPH RABINOVITS
ESTATE OF HENRY F. WANGER
GEORGE MAZETY
JEFFREY E. KASSOWAY
TERRY STAPLES
ROBERT LEWIS and ERICA HARTMAN
c/o ABBEY & ELLIS
212 East 39th Street
New York, New York 10016
(212) 889-3700
New York County<PAGE>
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
JAMES PETERSEN, SIDNEY GLICK,
BARBARA LUBIN, MARTIN H. OLESH, PAMELA CLASS ACTION
SKULSKY, MARTIN WEBER, NORMAN COMPLAINT
WEISS, STELLA COHORSKY, ABRAHAM
JOSEPH, ROBERT WARING, ROBERT Civil Action No.
STROUGO, THOMAS TASSONE, MOISE
KATZ, CHARLES MILLER, WILLIAM
STEINER, PAUL L. KOHNSTAMM, JERRY JURY DEMAND
KRIM, BERNARD STEPAK, DANIEL
MARCUS, KATHLEEN DWYER, PITTMAN
NEUROSURGICAL P.A. Defined Benefit
Plan U.T.D. 9/1/77 and R. Clinton
Pittman Trustee, MARGARET ALESSI,
JOSEPH RABINOVITS, ESTATE OF HENRY
F. WANGER, GEORGE MAZETY, JEFFREY
E. KASSOWAY, TERRY STAPLES, ROBERT
LEWIS and ERICA HARTMAN,
Plaintiffs,
- against -
BORDEN, INC., ERVIN SHAMES, FRANK
J. TASCO, FREDERICK E. HENNIG,
WILBERT J. LEMELLE, ROBERT B.
LUCIANO, H. BARCLAY MORLEY, JOHN
E. SEXTON, PATRICIA CARRY STEWART,
RJR NABISCO HOLDINGS CORP., KOHLBERG
KRAVIS ROBERTS & CO., L.P., CHARLES
M. HARPER, STEPHEN R. WILSON, ROBERT
S. ROATH, H. JOHN GREENIAUS, JAMES W.
JOHNSTON, JAMES H. GREENE, JR., HENRY
R. KRAVIS, PAUL E. RAETHER, LAWRENCE
R. RICCIARDI, CLIFTON S. ROBBINS,
GEORGE R. ROBERTS, SCOTT M. STUART,
MICHAEL T. TOKARZ, JOHN T. CHAIN, JR.,
JOHN L. CLENDENIN, JOHN G. MEDLIN,
JR., ROZANNE L. RIDGWAY, LAZARD
FRERES & CO. and CS FIRST BOSTON
GROUP, INC.,
Defendants.
-7-<PAGE>
Plaintiffs and all others similarly situated, by and
through their attorneys, allege upon personal knowledge as to
allegations concerning themselves and upon information and
belief as to all other matters as follows:
1. This class action is brought by plaintiffs,
shareholders of defendant Borden, Inc. ("Borden" or the "Com-
pany") for declaratory and injunctive relief, or, alterna-
tively, for monetary damages resulting from the individual
defendants' repeated breaches of the disclosure and fiduciary
duties owed by them, as directors of Borden, to plaintiffs, and
defendants Kohlberg Kravis Roberts & Co., L.P.'s ("KKR"), RJR
Nabisco Holdings Corp. ("RJR"), Lazard Freres & Co. ("Lazard")
and CS First Boston ("First Boston") knowing direct partici-
pation in and aiding and abetting of those breaches. The
breaches occurred, and are continuing, in connection with di-
rectors' decision to sell Borden and their abject failure to
carry out their fiduciary and disclosure duties to Borden
shareholders in the many respects hereinafter described.
SUMMARY OF THE COMPLAINT
2. Contrary to what the defendants are telling the
world about KKR's offer to pay $14.25 for every Borden share --
that it is a "premium of 22.6 percent" and that it is the "best
available alternative for Borden shareholders" -- the merger
agreement signed by Borden and KKR, in truth, does nothing more
-8-<PAGE>
than force Borden shareholders to pay KKR $65 million for the
privilege of assuming one half of KKR's tobacco liability in
exchange for selling their company on the cheap. Remarkably
for 1994, KKR, in true 1980s style, has conceived and executed
the first win/win tender offer. If the offer is successful,
and KKR obtains the tender of over 50% of the outstanding
shares of Borden, KKR earns $65 million and owns Borden. If
the offer is unsuccessful, and KKR receives less than 50% in
the tender offer, KKR earns $65 million and obtains effective
control of Borden by virtue of a 19.9% stock option and the 16%
of Borden KKR already owns. The offer is even more diabolical
in concealing the true nature of the "back end" the Borden
shareholders will receive following the merger. While a
"collar" protects the value of the securities to be received by
tendering shareholders, no such collar protects those Borden
shareholders who do not tender. Once the merger is consum-
mated, non-tendering shareholders will receive "the same num-
ber" of RJR shares offered in the exchange, but the value of
those shares is likely to be diminished as a result of both the
dilutive entry of millions of new, freely tradeable, RJR shares
into the marketplace, as well as the price depression in RJR
stock which will follow the sale of many of those newly
tradeable shares by former Borden shareholders who do not wish
to be shareholders of RJR.
-9-<PAGE>
2. With the willing collusion of the majority of
the Borden board of directors, KKR has obtained an agreement
that allows it to gain control of Borden at a discount to the
true value of the corporation win, lose, or draw -- and receive
$65 million for their trouble. In fact, the entire deal is
nothing more than a mosaic of violations of the federal secu-
rities laws and breaches of fiduciary duty.
3. The public filings of Borden and KKR failed to
properly disclose:
(a) that while non-tendering Borden shareholders
will receive the same number of RJR shares as those re-
ceived by tendering shareholders in the exchange offer,
the value of those shares is likely to be materially less.
Borden's sole disclosure on this issue states that "non-
tendering shareholders will receive the same consideration
for each Borden share as was paid in the exchange offer."
(emphasis added) This statement is materially misleading
because the value is likely to be less than the value of
the shares received in the exchange.
(b) that in evaluating whether the KKR proposal was
the best alternative for the company, the Board did not
take into account the results of the third quarter of 1994
-- the first up quarter in three years;
-10-<PAGE>
(c) the full details of why the executive in charge
of the Company and its restructuring refused to agree to
the KKR offer and abstained from all voting on the merger;
(d) the fact that KKR need only obtain the tender of
a mere 25% of Borden shares in order to reach the "Minimum
Condition" of the offer;
(e) the fact that if RJR stock drops by as little as
1/2 a point between November 22, and the undetermined date
upon which the exchange ratio will be set, Borden stock-
holders will receive not $14.25 per share, but materially
less -- and how much less is simply the product of how low
RJR stock goes, and how long the offer stays open;
(f) the fact that the value of the consideration to
be received by Borden pursuant to the Stock Option is
considerably less than the $300 million face value of the
RJR stock;
(g) that another bona fide bidder had made a pro-
posal for the company at significantly more per share than
the KKR bid;
(h) that Lazard and First Boston are in fact acting
as underwriters for this largest secondary offering in
history, and being compensated as such;
-11-<PAGE>
(i) that the consideration to be received by the
Borden shareholders in the offer is subject to enormous,
quantifiable risk as a result of the tobacco component of
RJR's business;
(j) that RJR's spin-off of 17% to 19% of its food
business in an initial public offering and the subsequent
absolute right of RJR to sell off the remaining 80% of
that business leaves tendering Borden shareholders with
the risk that they may be trading their shares in a pre-
eminent food business for shares in a tobacco business;
and,
(k) the full details of why RJR terminated the
agreement in principle relating to the Borden tender of-
fer, signed by RJR and KKR.
4. The Borden board has breached its fiduciary
duties to the stockholders by agreeing to a merger with KKR:
(a) while knowing of the interest of other qualified
and bona fide bidders for Borden, and without taking any
steps to inform themselves as to the actual amount that
such interested parties were willing to pay for Borden;
(b) without taking steps to inform themselves as to
the true value of Borden in a fair auction or other pro-
cess and thereby agreeing to sell the company for a price
-12-<PAGE>
which was at least more than $1.75 per share less than its
true value as measured against the bottom of the range of
value offered by a competing bidder;
(c) by entering into a merger agreement which con-
tains provisions designed not only to thwart, impede,
delay, and/or make prohibitively expensive bona fide
competing bids for Borden, but also to guarantee a "con-
centration of influence" and "significant influence" over
Borden by KKR, including:
(i) A lock up stock option (the "Stock Op-
tion"), which allows KKR to purchase 19.9% of
Borden's outstanding common stock (approximately
28,138,000 shares) at the favorable price of $11 per
share, payable in RJR stock, and permits KKR to ob-
tain over 33% of Borden's board seats if the KKR
offer is unsuccessful; and,
(ii) A disproportionate number of success fees
and "topping fees" which, in the aggregate, amount to
no less than $65 million -- $20 million of which has
already been paid to KKR.
(d) where the sole consideration to be paid to
Borden shareholders consists of shares of RJR which the
directors knew was in danger of severe decline due to (i)
-13-<PAGE>
the inherent risk of RJR's tobacco holdings; (ii) the
recent announcement of RJR's public offering of 17% - 20%
of its non-tobacco assets and the absolute right of RJR to
dispose of the remaining 80%; and, (iii) the dilutive
effect of the entry into the market of at least 109 mil-
lion and at most 354 million shares of freely tradable RJR
common shares;
(e) refusing to obtain an expert opinion on the
risks inherent in tobacco liability and the effect such
liability might have on the consideration to be received
by the Borden stockholders;
(f) refusing to and failing to meet, discuss, or
negotiate in good faith with known and identified bona
fide competing bidders for Borden who were willing to
offer, and did offer, to Borden and its stockholders fi-
nancial consideration and other terms which were sub-
stantially better than those offered by KKR;
(g) without taking steps to inform themselves in any
manner whatsoever whether Japonica Partners ("Japonica"),
was willing to pay more for Borden than KKR; and,
(h) making materially false and misleading state-
ments to Borden's shareholders with respect to the sale of
Borden to KKR.
-14-<PAGE>
5. Each of the Borden Director Defendants in their
actions and inaction were acting under the domination of
Borden's existing management, whose sole motivation is to de-
liver Borden to KKR in order to enrich themselves and secure
continuing employment with the merged entity.
THE JURISDICTION AND PARTIES
6. This is a class action which arises under Sec-
tion 14(e) of the Securities Exchange Act of 1934 ("1934 Act"),
15 U.S.C. 78n(e), Section 11 of the Securities Act of 1933 (the
"1933 Act"), 15 U.S.C. Paras. 77k and applicable principles of
common law. This Court has jurisdiction pursuant to Section 27
of the 1934 Act, Section 22 of the 1933 Act, 28 U.S.C.
Para. 1331, and principles of supplemental jurisdiction.
7. Venue is proper in this district pursuant to
Section 27 of the Exchange Act, 15 U.S.C. Sec. 78aa, and 288
U.S.C. Secs. 1391(b) and (c). A substantial part of the events
giving rise to the claims alleged herein occurred in this
district, including the dissemination of false and misleading
statements in connection with the tender offer for Borden.
8. In connection with the acts and conduct alleged
in this complaint, defendants, directly and indirectly, used
-15-<PAGE>
the means and instrumentalities of interstate commerce, in-
cluding the mails and telephone communication, and the fa-
cilities of the national securities markets, namely, the New
York Stock Exchange.
9. Plaintiffs herein are, and at all times relevant
to this action have been, owners of the shares of the common
stock of defendant Borden.
10. Defendant Borden is a New Jersey corporation
maintaining its principal place of business at 180 East Broad
Street, Columbus, Ohio 43215. Borden is engaged primarily in
manufacturing, processing, purchasing and distributing a broad
range of products, including a variety of consumer food prod-
ucts, consumer and industrial adhesives, and plastic films and
packaging.
11. The following defendants are, and at all times
relevant hereto, have been directors and officers of Borden
(collectively, the "Director Defendants").
12. Defendant Ervin Shames ("Shames") is, and at all
relevant times hereto has been, a director of Borden, and its
President and Chief Executive Officer.
13. Defendant Frank J. Tasco ("Tasco") is, and at
all times relevant hereto has been, Chairman of the Board of
Borden.
-16-<PAGE>
14. Defendants Frederick E. Hennig ("Hennig"),
Wilbert J. Lemelle ("Lemelle"), Robert P. Luciano ("Luciano"),
H. Barclay Morley ("Morley"), John E. Sexton ("Sexton") and
Patricia Carry Stewart ("Stewart") are, and at all times
relevant hereto have been, directors of Borden.
15. Defendant RJR is a Delaware corporation with its
principal place of business located at 1301 Avenue of the
Americas, New York, New York. RJR, through its wholly owned
subsidiary RJR Nabisco, Inc., is a global leader in the food
and tobacco industries.
16. Defendant KKR is a Delaware limited partnership
with its principal offices located at 9 West 57th Street, New
York, New York 10019. KKR is a "buyout firm" that owns a
substantial interest in, among others, RJR. According to an
April 11, 1994 proxy statement of RJR, KKR, through its
affiliate KKR Associates, owns 566,766,236 shares or 48.9% of
the RJR common stock outstanding. An affiliate of KKR,
Whitehall Associates, L.P., is the owner of Borden Acquisition
Corp., the offeror in the KKR tender offer. Whitehall
Associates is the beneficial owner of 16% of the outstanding
common stock of Borden.
-17-<PAGE>
17. The following defendants are officers and/or
directors of RJR and/or general or limited partners or
executives of KKR (collectively, the "KKR Defendants").
18. Defendant Charles M. Harper ("Harper") is, and
at all times relevant hereto has been, an RJR director, and is
its Chief Executive Officer and Chairman of the Board.
19. Defendant Stephen R. Wilson ("Wilson") is, and
at all times relevant hereto has been, Executive Vice President
and Chief Financial Officer of RJR.
20. Defendant Robert S. Roath ("Roath") is, and at
all times relevant hereto has been, Senior Vice President and
Controller of RJR.
21. Defendant H. John Greeniaus ("Greeniaus") is,
and at all times relevant hereto has been, a director of RJR
and is the Chairman and Chief Executive Officer of Nabisco
Foods Group.
22. Defendant James W. Johnston ("Johnston") is a
director of RJR and has served, at all times relevant hereto,
as Chairman and Chief Executive Officer of R.J. Reynolds
Tobacco Company.
-18-<PAGE>
23. Defendant James H. Greene, Jr. ("Greene") is,
and at all times relevant hereto has been, a director of RJR,
and a general partner of KKR and affiliated companies.
24. Defendant Henry R. Kravis ("Kravis") is, and at
all times relevant hereto has been, a director of RJR and a
general partner of KKR and affiliated companies.
25. Defendant Paul E. Raether ("Raether") is, and at
all times relevant hereto has been, a director of RJR and a
general partner of KKR and affiliated companies.
26. Defendant Lawrence R. Ricciardi ("Ricciardi")
is, and at all times relevant hereto has been, a director of
RJR and its President and General Counsel.
27. Defendant Clifton S. Robbins ("Robbins") is, and
at all times relevant hereto has been, a director of RJR and an
executive of KKR and a limited partner of a KKR affiliate.
28. Defendant George R. Roberts ("Roberts") is, and
at all times relevant hereto has been, a director of RJR and a
general partner of KKR and a KKR affiliate.
29. Defendant Scott M. Stuart ("Stuart") is, and at
all times relevant hereto has been, a director of RJR and an
executive of KKR and a limited partner of a KKR affiliate.
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30. Defendant Michael T. Tokarz ("Tokarz") is, and
at all times relevant hereto has been, a director of RJR and a
general partner of KKR and a KKR affiliate.
31. Defendants John T. Chain, Jr. ("Chain"), John L.
Clendenin ("Clendenin"), John G. Medlin, Jr. ("Medlin") and
Rozanne L. Ridgway ("Ridgway") are and at all times relevant
hereto have been directors of RJR.
32. Defendant Lazard is engaged in the business of,
among other things, investment banking and the rendering of
expert advice with respect to mergers and acquisitions.
Beginning in October, 1993, Lazard advised Borden with respect
to the consideration of certain transactions, including the
proposed Exchange Offer and Merger Agreement. Lazard acted as
an "underwriter" within the meaning of Section 11 of the 1933
Act in connection with the Exchange Offer.
33. Defendant First Boston is a Delaware corporation
with its principal executive offices located at Park Avenue
Plaza, New York, New York 10055. First Boston, through its
wholly owned subsidiaries, is engaged in, among other things,
investment banking and the rendering of expert advice with
respect to mergers and acquisitions. Beginning in September,
1993, First Boston provided financial advice to Borden in
connection with certain proposed transactions, including the
proposed Exchange Offer and Merger Agreement. First Boston
-20-<PAGE>
acted as an "underwriter" within the meaning of Section 11 of
the 1933 Act in connection with the Exchange Offer.
CLASS ACTION ALLEGATIONS
34. Plaintiffs bring this action on their own behalf
and as a class action pursuant to Rule 23 of the Federal Rules
of Civil Procedure, on behalf of all common stockholders of
Borden (except defendants herein and any person, firm, trust,
corporation, or other entity related to or affiliated with any
of the defendants and except for all persons seeking to buy
Borden as an entity, either by friendly or hostile means) who
are being deprived of the opportunity to maximize the value of
their Borden stock by the wrongful acts of the defendants
described herein (the "Class").
35. 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
141,814,967 shares of Borden common stock outstanding owned by
approximately 37,946 shareholders of record. The members of
the Class are scattered throughout the United States and are so
numerous as to make it impracticable to bring them all before
this Court.
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b. No unusual difficulties are likely to be
encountered in the management of this Class Action. The
likelihood of individual Class members prosecuting separate
claims is remote.
c. There are questions of law and fact which
are common to the Class and which predominate over the
questions affecting any individual Class member, including
whether the defendants have breached the fiduciary duties owed
by them to plaintiffs and members of the Class and the duties
of disclosure mandated by the federal securities laws by reason
of:
(i) disseminating or permitting the
dissemination of public false and misleading
statements concerning the sale of the Company to KKR;
and,
(ii) whether defendants' acts violate the
Securities Act of 1933 and the Securities and
Exchange Act of 1934 and the rules and regulations
promulgated thereunder;
(iii) engaging in plans and schemes to
unlawfully thwart offers and proposals from third
parties;
-22-<PAGE>
(iv) approving and causing Borden to
approve and agree to onerous "lock up" provisions
with KKR without any reasonable basis;
(v) failing to adequately inform
themselves prior to entering into a merger agreement
with KKR;
(vi) failing to conduct an auction of the
Company in order to maximize shareholder value; and
(vii) whether plaintiffs and the other
members of the Class will be irreparably damaged were
the transactions contemplated of herein consummated.
d. Plaintiffs are committed to prosecuting
this action and have retained competent counsel experienced in
litigation of this nature. The claims of plaintiffs 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. Plaintiffs are adequate representatives of the Class.
e. The prosecution of separate actions by
individual members of the Class would create the risk of
inconsistent or varying adjudication with respect to individual
members of the Class which would establish incompatible
standards of conduct for the parties opposing the Class.
-23-<PAGE>
f. Defendants have acted and are about to act
on grounds generally applicable to the Class, thereby making
appropriate final injunctive or corresponding rescissory relief
with respect to the Class as a whole.
36. For the reasons stated herein, a Class action is
superior to other available methods for the fair and efficient
adjudication of the claims asserted herein.
SUBSTANTIVE ALLEGATIONS
Background
37. Borden is a Fortune 500 company whose main
emphasis is the food business. Borden's food assets include
snacks, jams and jellies, pasta, dairy (including cheese) and
seafood. Through its Packaging and Industrial Products
Division Borden produces wallcoverings and packaging. In
addition, Borden has a large adhesive and resin business. The
largest division, and that for which Borden is best known, is
the dairy business. Between 1989 and 1992 Borden made numerous
acquisitions and saw its debt load rise while its earnings and
stock price fell. In September, 1993, Borden shares traded at
$19.875, a twelve month high. Prior to that, Borden's share
price had been in the $30 range.
-24-<PAGE>
Initial Overtures by KKR
38. In early 1993, at a time when Borden was
reevaluating its goals under a restructuring plan instituted in
1992, Borden received an unsolicited expression of interest
from KKR. Borden, having struggled for years to overcome
declining earnings and falling sales through various failed
restructuring plans, decided to enter into discussions with
KKR, at the initiation of KKR, in order to determine whether a
sale of the Company was a suitable alternative to restruc-
turing. Representatives of KKR met with management of the
Company and the Company's financial advisor, First Boston.
Prior to that meeting KKR neither signed a confidentiality
agreement, nor proffered evidence of firm financing. Following
those discussions, Borden informed KKR that it did not wish to
proceed with a sale of the Company. The Borden board had
apparently concluded to continue to try to revive the Company,
and remain independent. Despite the termination of those dis-
cussions, KKR remained interested in acquiring Borden.
The 1993 Restructuring Plan
39. Having decided to forego a sale of the company,
the Borden board decided to replace management and pursue a
more vigorous restructuring. To that end, the Company hired
Ervin Shames as President and Chief Operating Officer in June
1993. Shames was hired for his expertise in the food business
-25-<PAGE>
and given the mandate to review the assets of the Company and
identify which assets to retain and which to divest in an
effort to restructure the Company. To assist Mr. Shames, the
Company hired the consulting firm of Booz Allen & Hamilton,
Inc. ("Booz Allen") and the investment bank, First Boston.
Borden also retained the law firm of Wachtell, Lipton, Rosen &
Katz as special counsel to the Company and retained Lazard, to
help the Company analyze its "strategic alternatives."
40. In the fall of 1993, Mr Shames and his advisors
presented the Borden board with a new plan for restructuring
the Company. The plan called for major divestitures, including
the sale of the North American snacks business, its seafood
business, its jams and jellies business, and other businesses
which, in the aggregate, amounted to approximately 20% of the
Company's projected sales for 1993.
The Board Hedges Its Bets
41. Despite having been told by the Company that it
was not interested in a transaction with KKR, KKR continued to
express an interest in acquiring Borden throughout 1993, and
was even able to obtain non-public information about the 1993
restructuring plan. In December 1993, the Borden board, aware
that two unsolicited inquiries regarding the sale of the
company had been received, one from KKR and one from Hanson PLC
("Hanson"), instructed Lazard to make limited inquiries of
-26-<PAGE>
potential buyers, including KKR. KKR, together with Lazard,
then brought the possibility of a transaction with Borden to
the attention of RJR, a company controlled by KKR. The talks
with RJR did not however, produce a proposed transaction. Just
as in the earlier discussion, no confidentiality agreement was
signed, nor was evidence of financing proffered before
substantive meetings were held.
42. On December 9, 1993, Lazard informed the board
that Hanson had surfaced and was interested in acquiring all of
the Company. At a board meeting, the board decided to continue
the 1993 restructuring plan as its primary goal, but also to
pursue discussions with Hanson. Those discussions resulted in
a proposal for Hanson to acquire the Company's Packaging and
Industrial Products Division and make a concurrent investment
in the remaining food businesses. The board rejected this
proposal and in January of 1994, the board approved the 1993
restructuring plan. Despite early problems reaching the goals
set by the 1993 plan through the first half of 1994, in the
third quarter of 1994 Borden reported its first positive
results in three years, with sales rising by 3.9%. During the
course of implementing the 1993 restructuring plan, but prior
to the results for the third quarter, the board decided to
revisit the idea of selling the Company as an alterative to
seeing the restructuring through.
-27-<PAGE>
Borden Is Up For Sale
43. On May 24, 1994, in response to public
disclosures that Borden might be up for sale, Japonica Partners
("Japonica"), a company headed by former a Goldman Sachs
investment banker, Paul Kazarian ("Kazarian"), wrote to Borden
and expressed an interest in entering into a transaction with
the Company and seeking a meeting to discuss the possible
transaction. Kazarian, the former chairman of Sunbeam-Oster,
Inc., which was acquired by Kazarian with some $660 million in
financing, is a well known turnaround expert. Kazarian
recently turned around the consumer products company, Allegheny
International. Kazarian's May 24 letter, and subsequent
letters, went unanswered. It was not, in fact, until the
middle of June, that Borden responded to Kazarian's letters,
and informed him that his attention should be directed to
Lazard. Japonica attempted to reach Lazard and after some time
during which its calls were not returned, Japonica's overtures
were rebuffed.
44. On July 5, 1994, Kazarian wrote to Tasco, the
Chairman of Borden, expressing continued interest in making a
proposal and relaying Lazard's less than up-beat appraisal of
the Company's situation. That letter, as well, went
unanswered. Lazard and Tasco continued to refuse to have
substantive discussions with Japonica and took the position
-28-<PAGE>
that Japonica was avoiding answering questions regarding the
proposed source of funds for the transaction Japonica was
proposing. Japonica, for its part, denied that any questions
relating to financing were posed by Lazard, and continued to
seek a meeting to discuss its proposal.
45. On July 26, the Borden board met and instructed
Lazard to pursue discussions with KKR. The board did not
consider pursuing discussions with Japonica, nor did it
consider seeking proposals from any other party, including the
previous potential purchaser, Hanson. The board concluded that
"given the publicity concerning the Company's efforts to find a
buyer in late 1993 and the lack of inquiries, the Board
determined that it was reasonable to conclude that no other
bidder was interested." Thus, the board relied solely on the
negative results of a limited, 6 month long, market canvass as
the basis for pursuing discussions with only their suitor of
choice -- KKR. Indeed, at the time of the 1993 market check,
the stock of Borden was trading in the high twenties, ten
points higher than July -- making Borden a more attractive
target in July 1994 than in December of 1993.
46. On July 27, 1994, the Company announced its
results for the second quarter of 1994. Net income continued
to decline, to $.08 per share, compared to $.22 per share in
the same period of 1993. Net sales, however, rose 1.3% against
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the same comparable period one year earlier. The results were,
however, below the expectations set in the 1993 restructuring
plan and caused the Company to reconsider, once again, its
restructuring goals. In order to further its restructuring
plans, the Company obtained a $1.4 billion, 2 1/2 year
financing facility from a syndicate of banks lead by Citibank
and Credit Suisse. The Company also began to develop a new
1994 restructuring plan which called for a divestiture of the
majority of the dairy business, the main drain on the Company's
earnings and cash, as well as the sale of two profitable assets
of the Packaging and Industrial Products Division in order to
generate cash to reduce debt. Working with its advisors, the
board authorized management to finalize the details of the
proposed 1994 plan with a view toward its formal approval in
early September 1994.
Borden Rebuffs Japonica and Embraces KKR
47. Aware of the news regarding the latest
restructuring plan, Japonica continued to seek a meeting with
Borden. Its overtures were again met with silence from Borden.
Notwithstanding Borden's continued refusal to meet with
Japonica, on August 3, 1994, a confidentiality agreement was
signed with KKR pursuant to which KKR was provided with
nonpublic information concerning the Company, including
projections. KKR then proposed exploring a transaction with
-30-<PAGE>
Borden, the consideration for which would be securities owned
by partnerships controlled by KKR. On August 16, KKR, through
Lazard, communicated to Borden a proposal to acquire Borden
using KKR controlled RJR stock as the consideration. On August
18, the board was informed at a formal meeting that KKR would
require further due diligence before it could proffer a
definitive proposal.
48. Over the objections of Shames, the board
determined to shift its emphasis from the restructuring to the
pursuit of a premium transaction with KKR. Shames stressed
that the 1994 plan was achievable and would, in the long run,
maximize shareholder value and, in the event the board chose to
sell, make the Company more saleable. Management was directed
to complete the plans for the new restructuring, but Lazard was
directed to pursue a transaction with KKR. The board never
directed Lazard to enter into substantive discussions with
Japonica to evaluate whether a higher offer could be obtained
in that transaction, nor was Japonica allowed access to
nonpublic information concerning the Company.
49. On September 7, the board met once again and was
informed of the state of negotiations with KKR. KKR agreed to
offer $14.25 of RJR stock per Borden share and agreed on a
collar, whereby the shareholders of Borden would reap the
benefit if RJR stock rose about $8 per share and would bear the
-31-<PAGE>
burden if the stock fell below $6 per share. The likelihood of
RJR stock reaching the upside of the collar was, however,
remote as RJR had not traded in this range in 1994, and in fact
traded near or below $6 throughout 1994. KKR also agreed not
to profit from the 19.9% stock option in the event a topping
bid was made by a third party. KKR, however, insisted on
receiving a $20 million up front "fee," a topping fee of $50
million, and expense reimbursement of up to $15 million. Once
again Shames stated his belief that the restructuring plan was
the best alternative for the Company. Over Shames objections,
the board voted to allow management to proceed with the KKR
negotiations.
50. On September 11, 1994, the board authorized the
Company to enter into an agreement in principle with KKR. The
agreement called for KKR to exchange RJR stock worth $14.25 for
each share of Borden stock so long as RJR stock trades between
$6 and $8 per share. The agreement also called for the
immediate payment of a $20 million fee to KKR, a 19.9% stock
option at $11 per share, payable in RJR stock and a $50 million
topping fee. The agreement was announced on September 12. At
the same time, RJR announced that following KKR's successful
acquisition of Borden, RJR would issue Borden $500 million of
newly issued common shares in exchange for newly issued Borden
common shares representing a 20% interest in Borden and a
warrant to acquire an additional 10% of Borden shares. The RJR
-32-<PAGE>
minority interest was an integral part of the transaction
agreed to by the Borden board.
51. In the face of these announcements, Japonica
continued to write to Borden and attempted obtain information
and a substantive meeting. In response to Japonica's repeated
requests, the Company finally forwarded a form confidentiality
agreement for Japonica's signature and on September 17, Borden
finally relented and agreed to a meeting with Japonica on
September 21. At that meeting, and by letter, Japonica
proposed paying between $16 and $18 per share in a combination
of cash and securities. Japonica went on to outline its past
abilities to arrange financing in transactions of comparable
size and gave assurances that such could be arranged in the
present transaction. Unbeknownst to Japonica, Lazard, with
whom Japonica was meeting, had shortly before entered into a
new fee arrangement with Borden, whereby Lazard would receive
$3 million in fees upon the execution of the Merger Agreement
with KKR and an additional $7 million in fees in the event that
KKR acquired at least 50.1% of the outstanding shares of
Borden. First Boston entered into an identical agreement on
September 22. Thus, the investment bankers had no incentive
whatsoever to present a bona fide proposal by Japonica to the
Borden board. Indeed, these fees, far from being the usual
"success fees" paid to financial advisors for producing a
premium transaction, are, in fact, underwriting fees -- paid to
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Lazard and First Boston in exchange for bringing KKR's
secondary offering to market through the Borden shareholders.
Borden Accepts KKR's Offer
52. On September 22, the board met and considered
the merger agreement (the "Merger Agreement") and the
Conditional Purchase/Option Agreement (the "Option Agreement").
Once again, with Shames abstaining, the board voted in favor of
the KKR transaction and on September 23, a joint press release
was issued detailing the Merger Agreement and the Option
Agreement. The Director Defendants approved the Merger
Agreement after only limited deliberation and consideration
during part of a single day, and without seeking information
concerning any other offers, even though they knew that other
bona fide offerors, such as Japonica, existed and were
interested in acquiring Borden.
53. The consideration to be received by Borden's
shareholders and agreed to by the Director Defendants was
grossly inadequate in that it was only slightly more than the
nine-year low for the price of Borden shares. Under the terms
of the Merger Agreement, the consideration will be common stock
of RJR valued at $14.25 provided that no more than 2.375 RJR
shares and no fewer than 1.78125 RJR shares will be exchanged
for each Borden share. Thus, although the consideration
purportedly has an imputed value of $14.25, if RJR stock falls
-34-<PAGE>
below $6 per share, the Borden shares will be exchanged for
less than that amount. Most important, the Merger Agreement
does not require termination of the transaction if the price of
the RJR stock falls below this collar.
54. In accepting this price for Borden shares, the
board failed to make any inquiry into what the value of the RJR
stock to be received by the Borden shareholders would be at the
time the shareholders actually receive it. The board failed to
ask its advisors to render an opinion as to the effect of the
entry into the freely tradable market for those shares of no
less than 109 million to 145 million RJR shares as a
consequence of the exchange offer. In addition, the board
failed to evaluate the risk of liability stemming from RJR's
tobacco interests. The Board did not require the two financial
advisors to opine on such risk -- indeed, the board accepted
the excuses of Lazard and First Boston that their expertise did
not extend into that area. Moreover, the board did not retain
an advisor whose expertise would allow such expert to opine on
the risk of tobacco liability and its potential effect on the
consideration to be received by Borden shareholders.
55. The Merger Agreement also contains other
material terms which disadvantage Borden's shareholders and
were intended to thwart and impede any other competing bid: (i)
the payment of a $20 million fee, in cash, to KKR upon
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execution of the letter of intent; (ii) the guarantee of
reimbursement of expenses up to $15 million; (iii) the payment
of a $50 million topping fee; and (iv) the payment of an ad-
ditional $30 million fee, in cash, in the event that KKR
acquires over 50% of the outstanding shares of Borden.
56. In addition, the Merger Agreement coerces the
Borden shareholders to tender into the offer in order to avoid
losing value on the "back-end" of the transaction. In a
variation of the classic "coercive two-tier tender offer",
which offers cash on the front end and securities of
indeterminate value on the back-end (after the merger has been
consummated) and thus compels shareholders to rush to tender in
order to get the "certain" consideration, here, the Borden
shares of non-tendering (back-end) shareholders will "be
converted into the right to receive that number of fully paid,
and non-assessable shares of [RJR] common stock equal to the
final exchange ratio" as set in the exchange offer. The
coercive element is that while a "collar" protects the value of
the securities to be received by tendering shareholders, no
such collar protects those Borden shareholders who do not
tender. Once the merger is consummated, non-tendering
shareholders will merely receive "the same number" of RJR
shares offered in the exchange, but the value of those shares
is likely to be diminished as a result of both of the dilutive
entry of millions of new, freely tradeable, RJR shares into the
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marketplace, as well as the price depression in RJR stock which
will follow the sale of many of those newly tradeable shares by
former Borden shareholders who do not wish to be shareholders
of RJR. The prospect of losing value in this way will serve to
compel Borden shareholders to tender into the exchange offer.
57. The Stock Option Agreement also contains
material terms which disadvantage Borden shareholders in the
event that the Merger is not consummated. These terms like the
aforementioned, are designed to coerce Borden shareholders into
tendering into the offer. If the Merger is not consummated,
KKR will control, in addition to the shares of Borden already
owned, the number of shares acquired in the exchange offer and
the option shares pursuant to the Stock Option Agreement by
which Borden has granted to KKR the irrevocable right to
purchase 19.9% of the outstanding shares of Borden at $11 per
share, payable in RJR stock. Despite the statements by the
defendants that the option payment would give Borden $300
million in liquid assets, which could be used to pay down debt
-- the real value of the RJR stock will be far less. The
underwriting fees alone required to bring the stock to market
would depress the price far below that level, even without
taking into account the dilutive effect of the entry into the
market of that amount of freely tradable RJR stock.
-37-<PAGE>
58. Indeed, the Option becomes mandatory in the
event that KKR acquires more than 41% of Borden shares
(including the 16% of Borden shares already owned by KKR) but
less than 50%. In addition, Borden has agreed that in the
event KKR acquires no less than 19.9% of the outstanding shares
of Borden, KKR has the right to control 33 1/3% of the seats on
the Borden board. The net effect of the Stock Option Agreement
is thus to allow KKR to obtain virtual control of Borden even
if it acquires not one share in the exchange offer, and
absolute control if a mere 25% of Borden shareholders tender
into the offer. The coercive effect of the Option is therefore
manifest -- with 16% of Borden shares in hand, and an
additional 19.9% guaranteed to it, KKR need only obtain that
25% to insure complete control of Borden. The Borden board has
contracted away control of the Company in favor of KKR no
matter what -- a virtual majority squeeze-out. In the face of
these devices (which were designed and intended to lock up the
deal in favor of the board's favored suitor) Japonica has thus
far been deterred from making a competing offer for the
Company.
Post Agreement Events
59. On October 25, RJR announced that its was unable
to reach a definitive agreement with KKR regarding a minority
position in Borden, ostensibly over "certain accounting
-38-<PAGE>
issues." Coincidentally, a mere three days later, RJR
announced that its Nabisco subsidiary was selling 51 million
shares of its Class A common stock in an Initial Public
Offering amounting to between 17.4% and 19.5% of Nabisco's
common equity, with the remaining equity interest residing in
the Class B common stock which will be retained by RJR. Borden
was informed of Nabisco's intentions prior to the announcement
and the filing of the registration statement. As part of the
registration statement, Nabisco has stated that RJR "has
informed Nabisco that its current intent is to continue to hold
all of the Class B common stock . . . However, [RJR] has no
agreement with Nabisco not to sell or distribute such shares,
and there can be no assurance concerning the period of time
during which [RJR] will maintain its beneficial ownership of
Common Stock."
60. This development exposes Borden shareholders to
the very real risk that RJR will, in future, sell the remainder
of its Nabisco holdings, fully separating the tobacco interests
of RJR from the food interests of Nabisco. To Borden's
shareholders, this means that they are being coerced into
accepting a security in a combined food and tobacco business,
which could in the very near future become a security in an
exclusively tobacco business -- with all the risks that entails
- a fact which was has not been disclosed by the defendants.
-39-<PAGE>
61. Neither the Borden board, nor its advisors,
analyzed the effect of the Nabisco spin-off and the failure of
KKR to secure RJR as a minority owner of the merged company.
These two events are likely to have a significant effect on the
consideration to be received by the Borden shareholders in the
exchange offer.
62. In addition, the 1994 restructuring, as Shames
had predicted, began to bear fruit. On October 25, 1994,
management reported the third quarter results for the Company.
Despite a net loss of $.92 cents per share (including charges
of $52.2 million for the KKR fees and expenses) the Company
posted gains in sales of 3.9%. But for the pretax charges, the
Company would have earned $.12 per share. The board failed to
give adequate consideration to the nascent success of Mr.
Shames' restructuring plan in giving final approval to the
exchange offer. Indeed, it has been widely reported that KKR
will undertake to continue the 1994 restructuring plan and will
sell off the dairy business and certain assets of the Products
division following the acquisition of control of Borden.
63. After having expended countless hours, millions
of shareholder dollars, and enormous management energies on
numerous restructurings, the board, faced with the possibility
of real success, simply cut and ran. The board, in a blatant
abdication of its fiduciary duties, whether from fatigue or
-40-<PAGE>
lack of will, decided to have done with the problem of turning
around the Company and turned over the store to KKR at a
grossly inadequate price. As one investor noted "The board of
directors of Borden is the same board that let this company
deteriorate over the last couple of years. They just agreed to
this transaction and walked away from the problem." In
addition, the Merger Agreement secures for certain members of
the board and management of the Company continued employment
with the merged entity and a guarantee of option payments in
excess of $2 million, thus revealing the self interest in
entrenchment and enrichment of the Director Defendants.
64. Following the announcement of the Merger
Agreement the Company has been contacted by various entities
seeking to explore an alternative transaction. All have been
met with inattention by the board and its advisors. One
investment banker for Borden was quoted, anonymously, as saying
they were told "not to waste their time" trying to find a
superior transaction for the Borden shareholders.
COUNT I
(Violations of Sections 14(e) and 20(a)
of the Securities and Exchange Act of 1934
and Against Defendants Borden,
KKR and the Director Defendants)
65. Plaintiffs repeat and reallege the allegations
in paragraphs 1 through 64 of this complaint.
-41-<PAGE>
66. In connection with the KKR tender offer, Borden
filed its Form 14D-9, Solicitation/Recommendation Statement
pursuant to Section 14(d)(4) of the 1934 Act. In connection
with the offer, KKR has also filed a Form 14D-1 pursuant to the
1934 Act. Both the 14D-9 and the 14D-1 are materially false
and misleading for the following reasons:
a. Borden's Form 14D-9 misleadingly represents
that non-tendering Borden shareholders will receive
the "same consideration" as was paid in the exchange.
b. They falsely represent that in evaluating
whether the KKR proposal was the best alternative for
the company, the Board considered the results of the
third quarter of 1994.
c. They fail to reveal the full details of why
the executive in charge of the Company and its
restructuring refused to agree to the KKR offer and
abstained from all voting on the merger.
d. They fail to state the fact that KKR need
only actually obtain the tender of a mere 25% of
Borden shares in order to reach the "Minimum
Condition" of the offer.
-42-<PAGE>
e. They omit to disclose the fact that if RJR
stock drops by as little as $.50 per share between
November 22, and the undetermined date upon which the
exchange ratio will be set, Borden stockholders will
receive not $14.25 per share, but materially less.
In fact, as of the filing of this complaint, RJR
stock is trading within 1/8 of a point of the collar.
f. They falsely stated that the value of the
consideration to be received by Borden pursuant to
the Stock Option is $300 million.
g. They falsely stated that no other bona fide
bidder made a proposal for the company at
significantly more per share than the KKR bid.
h. They failed to disclose that Lazard and
First Boston are in fact acting as underwriters for
the largest secondary offering in history, and being
compensated as such.
i. They falsely stated that the consideration
to be received by the Borden shareholders in the
offer is subject to "unknowable" risk as a result of
the tobacco component of RJR's business when the risk
can be quantified.
-43-<PAGE>
j. They fail to disclose that RJR's spin-off
of 17% to 19% of its food business in an initial
public offering and the subsequent absolute right of
RJR to sell of the remaining 80% of that business
leaves tendering Borden shareholders with the risk
that they may be trading their shares in a preeminent
food business for shares in a tobacco business.
k. They falsely stated that RJR terminated the
agreement in principle relating to the Borden tender
offer, signed by RJR and KKR over accounting issues.
67. The 14D-9 and 14D-1 are communications to Borden
shareholders intended to solicit the tender of shares into the
KKR tender offer and to effectuate the merger to which the
Director Defendants committed the Company.
68. Section 14(e) provides, in pertinent part, as
follows:
It shall be unlawful for any person to make
any untrue statement of a material fact or
omit to state any material fact necessary
in order to make the statements made, in
light of the circumstances under which they
are made, not misleading, it shall be
unlawful for any person to make any untrue
statement of material fact or omit to state
any material fact necessary in order to
make the statements made, in light of the
circumstances under which they are made,
not misleading, or to engage in any
fraudulent, deceptive, or manipulative acts
or practices, in connection with any tender
-44-<PAGE>
offer or request or invitation for tenders,
or any solicitation of security holders in
opposition to or in favor of any such
offer, request, or invitation.
69. In disseminating the 14D-9 and 14D-1, the
individual defendants intentionally, or with reckless
disregard, misrepresented and omitted material facts, as set
forth above. The individual defendants purpose in doing so was
to disseminate communications which would induce Borden
shareholders to tender their shares in the tender offer and
thereby effectuate the merger.
70. The 14D-9 was disseminated by the Director
Defendants on behalf of Borden. Thus, these defendants, who
constitute the majority of the board of Borden and controlled
the Company, participated in the violation of Section 14(e) and
are liable for such violations under Section 20(a) of the 1934
Act.
71. Defendant KKR knew that the 14D-9 and the 14D-1
contained false and misleading statements and omissions and
that the solicitations were intended to induce Borden
shareholders to tender their shares to KKR, thereby benefitting
KKR at the expense of plaintiffs and the Class.
72. As a result of the actions of the defendants,
plaintiffs and other members of the Class have been, and will
be, damaged in that they will have been provided with the false
-45-<PAGE>
and misleading solicitations and their decision to tender
shares to defendant KKR will be influenced by the materially
false and misleading 14D-9 and 14D-1.
73. Plaintiffs and the Class have no adequate remedy
at law.
COUNT II
(Violations of Section 11 of the
Securities Act of 1933 Against Lazard,
First Boston and the KKR Defendants)
74. Plaintiffs repeat and reallege the allegations
in paragraphs 1 through 64 of this complaint.
75. Pursuant to Section 11 of the Securities Act of
1933, the Class is entitled to injunctive relief "[i]n case any
part of the registration statement, when such part became
effective, contained an untrue statement of a material fact
required to be stated therein or necessary to make the
statements therein not misleading . . . ." Alternatively, the
Class is entitled to recover damages, jointly and severally
from defendants, as follows:
a. RJR as the Registrant;
b. the KKR Defendants who are directors of RJR
as signatories to the Registration Statement, and/or
directors and officers of RJR; and,
-46-<PAGE>
c. Lazard and First Boston as Underwriters for
the offering.
76. Pursuant to a Registration Rights Agreement
between KKR and RJR, RJR filed a registration statement
pursuant to the 1933 Act in relation to the KKR tender offer,
and incorporates an offering circular and prospectus (the
"Offering Materials"). The offering materials were declared
effective on November 22, 1994. Said offering materials
contained untrue statements of material facts and omitted facts
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
Those untrue statements are as follows:
a. the Offering Materials falsely state that
no other bidder made a proposal for the company at
significantly more per share than the KKR bid; and
b. the Offering Materials falsely state that
Lazard and First Boston are acting solely as
financial advisors to Borden when, in fact, they are
acting as underwriters for this largest secondary
offering in history, and being compensated as such.
77. As a direct and proximate result of the
defendants wrongful conduct, plaintiffs and the Class will
-47-<PAGE>
suffer irreparable harm in connection with the offering of RJR
common stock and have no adequate remedy at law.
78. The KKR Defendants, Lazard and First Boston were
responsible for the materially false and misleading contents of
the Offering Materials.
79. Plaintiffs and members of the Class have been
solicited to accept the securities issued pursuant to the
Offering Materials and are without knowledge of the materially
false statements and omissions alleged herein.
80. Neither the named plaintiff nor any member of
the Class seeks to recover for purchases of RJR securities
after RJR had made generally available to security holders an
earnings statement covering a period of at least twelve months
beginning after the effective date of the Registration
Statement and Prospectus.
81. This action was commenced within one year from
when plaintiffs and other Class members were solicited to
accept issued pursuant to the registration, and within the time
provided in the appropriate statute of limitations.
82. Plaintiffs do not allege in this Section II
claim that the defendants, or any of them, were guilty of
scienter, that is, of any scheme to defraud or of any
-48-<PAGE>
misrepresentations or omissions that were made intentionally or
recklessly.
COUNT III
(Breach of Fiduciary Duty Against Defendants
Borden, the Director Defendants and KKR)
83. Plaintiffs repeat and reallege the allegations
in paragraphs 1 through 64 of this complaint.
84. By the acts described above and in breach of
their fiduciary duties to plaintiffs and the other members of
the Class, the Director Defendants are unfairly attempting to
influence plaintiffs and other members of the Class to tender
their Borden shares to KKR in order to benefit defendants. The
Director Defendants were and are under a duty:
a. to fully inform themselves before taking,
or agreeing to refrain from taking, action;
b. to elicit, promote, consider, and evaluate
reasonable and bona fide offers for the Company;1
c. to act in the interest of the equity owners
of the Company;
d. not to erect unreasonable barriers to
superior offers for the Company;
-49-<PAGE>
e. not to act in their own personal self-
interest or in the personal interest of other board
members;
f. to maximize shareholder value;
g. to obtain the best financial and other
terms when the Company, or control of the Company, is
for sale or the Company's independent existence will
be materially altered by a transaction;
h. to establish a process designed to obtain
the highest possible price for the Company; to assure
that a "level playing field" exists when more than
one bidder for the Company emerges, and not to favor
one bidder over another during the "auction" process
unless it is designed to assure and is reasonably
related to achieving the best possible price;
i. to act with complete candor in
communications with the shareholders and to ensure
that their statements are true and complete in all
material respects and are not materially misleading;
and
j. to act in accordance with their fundamental
duties of care and loyalty.
-50-<PAGE>
85. In connection with the conduct described herein,
the Director Defendants violated each of the fiduciary duties
identified in Paragraph 84 above. In summary, the breaches
consisted of agreeing to the merger with KKR:
a. while knowing of the interest of other
qualified and bona fide bidders for Borden but
failing to take any steps to inform themselves as to
the actual amount that such interested parties were
willing to pay for Borden;
b. without taking steps to inform themselves
as to the true value of Borden in a fair auction or
other process thereby agreeing to sell the Company
for a price and which was at least more than $1.75
per share less than its true value;
c. by entering into a merger agreement which
contains provisions designed not only to thwart,
impede, delay, and/or make prohibitively expensive
bona fide competing bids for Borden, but also to
guarantee a "concentration of influence" and
"significant influence" over Borden by KKR,
including:
(i) A lock up stock option (the "Stock
Option"), which allows KKR to purchase 19.9% of
-51-<PAGE>
Borden's outstanding common stock (approximately
28,138,000 shares) at the favorable price of $11
per share, payable in RJR stock, and thus
permits KKR to obtain over 33% of Borden's board
seats if the KKR offer is unsuccessful; and,
(ii) A disproportionate numbers of success
fees and "topping fees" which, in the aggregate,
amount to no less than $65 million -- $20
million of which has already been paid to KKR;
d. where the sole consideration to be paid to
Borden shareholders consists of shares of RJR which
the directors knew was in danger of severe decline
due to: (i) the inherent risk of RJR's tobacco
holdings; (ii) the recent announcement of RJR's
public offering of 17% - 20% of its non-tobacco
assets and the absolute right of RJR to dispose of
the remaining 80%; and (iii) the dilutive effect of
the entry into the market of at least 109 million and
at most 354 million shares of freely tradable RJR
common shares;
e. refusing to obtain an expert opinion on the
risks inherent in tobacco liability and the effect
such liability might have on the consideration to be
received by the Borden stockholders;
-52-<PAGE>
f. refusing to and failing to meet, discuss,
or negotiate in good faith with known and identified
bona fide competing bidders for Borden who were
willing to offer, and did offer, to Borden and its
stockholders financial consideration and other terms
which were substantially better than those offered by
KKR;
g. without taking steps to inform themselves
in any manner whatsoever whether Japonica Partners
("Japonica"), was willing to pay more for Borden than
KKR; and
h. making materially false and misleading
statements to Borden's shareholders with respect to
the sale of Borden to KKR.
86. If the breaches of fiduciary duty described
herein are permitted to continue and are not remedied through
the equitable powers of this Court, the shareholders of Borden
will lose control of, and their equity interest in, the Company
through a transaction designed and entered into not to benefit
the shareholders, but the Director Defendants, management and
KKR. Unless the transaction is enjoined, the shareholders will
forever lose the opportunity to have the value of their Company
arrived at through competitive bidding on a level playing field
-53-<PAGE>
and the opportunity that other bidders may come forward and
construct a transaction that is financially superior to that
offered by KKR. Damages for the losses suffered by plaintiffs
and the Class are not readily or easily calculable and cannot,
in any case, compensate them for special losses involved in the
structuring of a sale of their Company as they only have one
company to sell and once disposed of it will be forever gone.
87. Plaintiffs have no adequate remedy at law.
WHEREFORE, Plaintiffs demand judgment and preliminary
and permanent relief, including injunctive relief, in their
favor and in favor of the Class and against the defendants as
follows:
A. Declaring that this action is properly
maintainable as a class action under Rule 23 of the Federal
Rules of Civil Procedure.
B. Declaring and decreeing that the KKR Merger
Agreement and Stock Option Agreement were entered into in
breach of the fiduciary duties of the Director Defendants and
is therefore unlawful and unenforceable.
C. Enjoining defendants from proceeding with the
Merger Agreement and Stock Option Agreement.
-54-<PAGE>
D. Enjoining defendants from consummating the
acquisition of Borden, or a business combination with a third
party, unless and until the Company adopts and implements a
procedure or process, such as an auction, to obtain the highest
possible price for the Company.
E. Invalidating as unlawful and in breach of the
fiduciary duties of the Director Defendants the Stock Option
Agreement and the topping fee and expense reimbursement
provisions of the Merger Agreement.
F. Invalidating as unlawful and in breach of the
fiduciary duties of the Director Defendants the payment of the
$20 million initial fee paid to KKR on or about September 12,
1994 and directing its return to Borden.
G. Invalidating as unlawful and in breach of the
fiduciary duties of the Director Defendants the agreement to
pay an additional $30 million to KKR in the event KKR acquires
more than 50% of the outstanding common stock of Borden.
H. Declaring that the defendants have violated
Sections 14(e) and 20(a) of the 1934 Act.
I. Declaring that defendants RJR, the RJR
directors, Lazard and First Boston have violated Section 11 of
the 1933 Act.
-55-<PAGE>
J. Rescinding, to the extent already implemented,
the Merger Agreement or any terms thereof.
K. Requiring defendants to publicly disseminate a
communication, in a form deemed appropriate by the Court,
retracting and correcting the false and misleading statements
contained the in the 14D-9 and 14D-1 and supplying the material
information omitted therefrom.
L. Enjoining the complained of transaction or any
related transactions.
M. Ordering defendants, jointly and severally, to
pay to plaintiffs and the Class all damages suffered and to be
suffered by them as a result of the acts and transactions
alleged herein.
N. Awarding plaintiffs the costs and disbursements
of the action, including allowance for plaintiffs reasonable
attorneys' and experts' fees; and
O. Granting such other relief as may be just and
proper in the premises.
-56-<PAGE>
JURY DEMAND
Trial by jury demanded.
Dated: November 30, 1994
Respectfully submitted,
ABBEY & ELLIS
By:/s/ Mark Gardy
Arthur N. Abbey, Esq. (AA-8074)
Mark C. Gardy, Esq. (MG-0338)
Seth Lapidow, Esq. (SL-7033)
212 East 39th Street
New York, New York 10016
(212) 889-3700
Joseph Weiss, Esq.
Joseph D. Cohen, Esq.
LAW OFFICES OF JOSEPH H. WEISS
319 Fifth Avenue
New York, New York 10016
(212) 532-4171
Stanley Wolfe, Esq.
Stephen Ramos, Esq.
Genna C. Driscoll, Esq.
BERGER & MONTAGUE
1622 Locust Street
Philadelphia, PA 19103
(215) 875-3000
Daniel Krasner, Esq.
Lawrence P. Kolker, Esq.
WOLF, HALDENSTEIN, ADLER
FREEMAN & HERZ
270 Madison Avenue
New York, NY 10016
(212) 545-4600
-57-<PAGE>
CHARLES PIVEN, ESQ.
The Legg Mason Tower
111 South Calvert Street
Suite 2700
Baltimore, Maryland 21202
(410) 332-0030
STULL, STULL & BRODY
6 East 45th Street
New York, NY 10017
(212) 687-7230
MILBERG WEISS BERSHAD HYNES
& LERACH
One Pennsylvania Plaza
49th Floor
New York, New York 10119
(212) 594-5300
KAUFMAN, MALCHMANN, KIRBY
& SQUIRE
919 Third Avenue
New York, NY 10022
(212) 371-6600
WECHSLER, SKIRNICK, HARWOOD
HALEBIAN & FEFFER
555 Madison Avenue
New York, New York 10022
(212) 935-7400
GARWIN, BRONZAFT GERSTEIN
& FISHER
1501 Broadway
Suite 1416
New York, NY 10036
(212) 398-0055
A. ARNOLD GERSHON, ESQ.
295 Madison Avenue
New York, New York 10017
(212) 684-3033
-58-<PAGE>
ZACKARY STARR, ESQ.
275 Madison Avenue
New York, New York 10016
(212) 808-5533
ELWOOD S. SIMON AND ASSOCIATES
Bloomfield Center
1533 N. Woodward Avenue
Suite 315
Bloomfield Hills, MI 48304
(810) 646-9730
KOHN, NAST & GRAF, P.C.
2400 One Reading Center
1101 Market Street
Philadelphia, PA 19107
(215) 238-1700
SIROTA & SIROTA
747 Third Avenue
New York, New York 10017
(212) 759-5555
Curtis V. Trinko, Esq.
LAW OFFICES OF
CURTIS V. TRINKO
310 Madison Avenue
14th Floor
New York, NY 10017
(212) 490-9550
Sam Sporn, Esq.
SCHOENGOLD & SPORN
233 Broadway
New York, New York 10279
(212) 964-0046
Harold Obstfeld, Esq.
SILVERMAN, HARNES OBSTFELD
& HARNES
750 Lexington Avenue
New York, New York 10022
(212) 754-2333
-59-<PAGE>
Lynda Grant, Esq.
GOODKIND, LABATON, RUDOFF
& SUCHAROW
100 Park Avenue
New York, NY 10017
(212) 907-0700
Frederic S. Fox, Esq.
KAPLAN, KILSHEIMER & FOX
685 Third Avenue
New York, New York 10017
I. Stephen Rabin, Esq.
RABIN & GARLAND
275 Madison Avenue
34th Floor
New York, New York 10016
(212) 682-1818
- and -
Kenneth A. Elan, Esq.
291 Broadway
Suite 1501
New York, New York 10007
(212) 619-0261
(212) 267-7464
Frank Morris, Esq.
MORRIS AND MORRIS
1105 North Market Street
Suite 1600
Wilmington, DE 19801
(302) 426-0400
Alfred G. Yates, Jr.
ALFRED G. YATES LAW FIRM
519 Allegheny Building
429 Forbes Avenue
Pittsburgh, PA 15219
(412) 391-5164
-60-<PAGE>
Amy M. Riel, Esq.
GOLSTEIN TILL LITE & REIKEN
744 Broad Street, Suite 800
Newark, New Jersey 07102
(201) 623-3000
Miles M. Tepper, Esq.
LAW OFFICES OF MILES M. TEPPER
7 Becker Farm Road
Roseland, New Jersey 07068
(201) 740-1881
Co-Liaison Counsel
-61-
