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. 1)
___________________
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. 1 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 on November 22, 1994 (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 Pur-
chaser 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 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:
On November 30, 1994, the Company issued the press
release filed as an exhibit hereto and incorporated herein by
reference which announced that the Company had received a
letter from Japonica (a copy of which is included with the<PAGE>
press release) and that the Board will consider and respond to
such letter as soon as practicable.
Item 8. Additional Information to be Furnished.
(a)-(c) The description under "Antitrust" is hereby
amended and supplemented by adding the following information:
On November 24, 1994, the Commission of the European
Communities issued a Decision Letter, pursuant to Article
6(1)(b) of Council Regulation No. 4064/89 (the "Merger
Regulation"), declaring the proposed acquisition of the
Company, by an affiliate of KKR, compatible with the common
market and with the functioning of the EEA Agreement.
Item 9. Material to be Filed as Exhibits.
Exhibit 99.1** -- Letter of Intent dated September 11,
1994 between the Company and the
Partnership (incorporated by reference
to Exhibit 99 to the Company's Report
on Form 8-K, dated September 11,
1994).
Exhibit 99.2** -- Agreement and Plan of Merger, dated as
of September 23, 1994, among the
Partnership, the Purchaser and the
Company (incorporated by reference to
Exhibit 3 to the Company's Report on
Form 8-K, dated September 23, 1994
(the "September 23, 1994 8-K")).
Exhibit 99.3** -- Form of Amendment, dated as of
November 15, 1994, among the Pur-
chaser, the Partnership and the Com-
pany, to the Agreement and Plan of
Merger, dated as of September 23,
1994, among the Partnership, the
Purchaser and the Company.
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<PAGE>
Exhibit 99.4** -- Conditional Purchase/Stock Option
Agreement, dated as of September 23,
1994, among the Partnership, the
Purchaser and the Company (incorpo-
rated by reference to Exhibit 4 to the
September 23, 1994 8-K).
Exhibit 99.5** -- Confidentiality Agreement, dated Au-
gust 2, 1994, between KKR and the
Company.
Exhibit 99.6** -- Letter to Shareholders of the Company
dated November 22, 1994.*
Exhibit 99.7** -- Letter from P.B. Kazarian to F.J.
Tasco, dated May 24, 1994 (incorpo-
rated by reference to Exhibit 1 to the
Company's Report on Form 8-K, dated
October 5, 1994, regarding the back-
ground and reasons for entering into
the Merger Agreement and the Condi-
tional Purchase/Option Agreement (the
"October 5, 1994 8-K")).
Exhibit 99.8** -- Letter from P.B. Kazarian to F.J.
Tasco, dated June 5, 1994 (incorpo-
rated by reference to Exhibit 2 to the
October 5, 1994 8-K).
Exhibit 99.9** -- Letter from Japonica Partners to J.
Rosenfeld, dated June 8, 1994 (in-
corporated by reference to Exhibit 3
to the October 5, 1994 8-K).
Exhibit 99.10** -- Letter from F.J. Tasco to Japonica
Partners, dated June 13, 1994 (in-
corporated by reference to Exhibit 4
to the October 5, 1994 8-K).
Exhibit 99.11** -- Letter from P.B. Kazarian to J.
Rosenfeld, dated June 20, 1994 (in-
corporated by reference to Exhibit 5
to the October 5, 1994 8-K).
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<PAGE>
Exhibit 99.12** -- Letter from P.B. Kazarian to M. David-
Weill, dated June 24, 1994 (incorpo-
rated by reference to Exhibit 6 to the
October 5, 1994 8-K).
Exhibit 99.13** -- Letter from P.B. Kazarian to F.J.
Tasco, dated July 5, 1994 (incorpo-
rated by reference to Exhibit 7 to the
October 5, 1994 8-K).
Exhibit 99.14** -- Letter from P.B. Kazarian to F.J.
Tasco, dated July 14, 1994 (incorpo-
rated by reference to Exhibit 8 to the
October 5, 1994 8-K).
Exhibit 99.15** -- Letter from F.J. Tasco to P.B.
Kazarian, dated July 19, 1994 (in-
corporated by reference to Exhibit 9
to the October 5, 1994 8-K).
Exhibit 99.16** -- Letter from Japonica Partners to J.
Rosenfeld, dated July 26, 1994 (in-
corporated by reference to Exhibit 10
to the October 5, 1994 8-K).
Exhibit 99.17** -- Letter from Japonica Partners to F.J.
Tasco, dated July 26, 1994 (incorpo-
rated by reference to Exhibit 11 to
the October 5, 1994 8-K).
Exhibit 99.18** -- Letter from P.B. Kazarian to F.J.
Tasco, dated August 11, 1994 (incor-
porated by reference to Exhibit 12 to
the October 5, 1994 8-K).
Exhibit 99.19** -- Letter from P.B. Kazarian to F.J.
Tasco, dated August 19, 1994 (incor-
porated by reference to Exhibit 13 to
the October 5, 1994 8-K).
Exhibit 99.20** -- Letter from Japonica Partners to E.R.
Shames with attached list of questions
to management, dated September 7, 1994
(incorporated by reference to Exhibit
14 to the October 5, 1994 8-K).
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<PAGE>
Exhibit 99.21** -- Letter from P.B. Kazarian to F.J.
Tasco, dated September 13, 1994 (in-
corporated by reference to Exhibit 15
to the October 5, 1994 8-K).
Exhibit 99.22** -- Letter from A.L. Miller to P.B.
Kazarian, dated September 14, 1994
(incorporated by reference to Exhibit
16 to the October 5, 1994 8-K).
Exhibit 99.23** -- Letter from Japonica Partners to F.J.
Tasco, dated September 15, 1994 (in-
corporated by reference to Exhibit 17
to the October 5, 1994 8-K).
Exhibit 99.24** -- Letter from F.J. Tasco to P.B.
Kazarian with attached confidentiality
letter, dated September 16, 1994
(incorporated by reference to Exhibit
18 to the October 5, 1994 8-K).
Exhibit 99.25** -- Letter from Japonica Partners to F.J.
Tasco, dated September 17, 1994 (in-
corporated by reference to Exhibit 19
to the October 5, 1994 8-K).
Exhibit 99.26** -- Letter from F.J. Tasco to P.B.
Kazarian, dated September 19, 1994
(incorporated by reference to Exhibit
20 to the October 5, 1994 8-K).
Exhibit 99.27** -- Letter from Japonica Partners to F.J.
Tasco with "Dynamic Tension" and
"Management Principles" attachments,
dated September 21, 1994 (incorporated
by reference to Exhibit 21 to the
October 5, 1994 8-K).
Exhibit 99.28** -- Letter from Japonica Partners to the
Board, dated September 22, 1994 (in-
corporated by reference to Exhibit 22
to the October 5, 1994 8-K).
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<PAGE>
Exhibit 99.29** -- Letter from F.J. Tasco to P.B.
Kazarian, dated September 23, 1994
(incorporated by reference to Exhibit
23 to the October 5, 1994 8-K).
Exhibit 99.30** -- Letter from A.R. Brownstein to M.
Nussbaum, dated September 26, 1994
(incorporated by reference to Exhibit
24 to the October 5, 1994 8-K).
Exhibit 99.31** -- Letter from Japonica Partners to F.J.
Tasco, dated September 27, 1994 (in-
corporated by reference to Exhibit 25
to the October 5, 1994 8-K).
Exhibit 99.32** -- Letter from M. Nussbaum to M. Lipton,
dated October 5, 1994 (incorporated by
reference to Exhibit 26 to the October
5, 1994 8-K).
Exhibit 99.33** -- Letter from Japonica Partners to the
Board, dated October 5, 1994 (incor-
porated by reference to Exhibit 27 to
the October 5, 1994 8-K).
Exhibit 99.34** -- Letter from Japonica Partners to the
Board, dated October 18, 1994.
Exhibit 99.35** -- Letter from F.J. Tasco to P.B.
Kazarian, dated October 27, 1994.
Exhibit 99.36** -- Opinion of Lazard Freres, dated Sep-
tember 22, 1994 (set forth as Annex A
to the Schedule 14D-9).*
Exhibit 99.37** -- Opinion of First Boston, dated Sep-
tember 22, 1994 (set forth as Annex B
to the Schedule 14D-9).*
Exhibit 99.38** -- Complaint filed in Kohnstamm v. Bor-
den, Inc. (N.J. Super. Ch. Div. Sept.
12, 1994)
Exhibit 99.39** -- Complaint filed in Hartman v. Borden,
Inc. (Ohio Ct. Common Pleas Sept. 12,
1994).
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<PAGE>
Exhibit 99.40** -- Complaint filed in Jaroslawicz v.
Borden, Inc. (Ohio Ct. Common Pleas
Sept. 22, 1994).
Exhibit 99.41** -- Complaint filed in Lubin v. Borden,
Inc. (N.J. Super. Ch. Div. Sept. 12,
1994).
Exhibit 99.42** -- Complaint filed in Weiss v. Borden,
Inc. (N.J. Super. Ch. Div. Sept. 12,
1994).
Exhibit 99.43** -- Complaint filed in Stepak v. Borden,
Inc. (N.J. Super. Ch. Div. Sept. 16,
1994).
Exhibit 99.44** -- Complaint filed in Strougo v. Borden,
Inc. (N.J. Super. Ch. Div. Sept. 13,
1994).
Exhibit 99.45** -- Complaint filed in Krim v. Borden,
Inc. (N.J. Super. Ch. Div. Sept. 14,
1994).
Exhibit 99.46** -- Complaint filed in Peterson v. Borden,
Inc. (N.J. Super. Ch. Div. Sept. 16,
1994).
Exhibit 99.47** -- Complaint filed in Marcus v. Borden,
Inc. (N.J. Super. Ch. Div. Sept. 22,
1994).
Exhibit 99.48** -- Complaint filed in Dwyer v. Borden,
Inc. (N.J. Super. Ch. Div. Sept. 23,
1994).
Exhibit 99.49** -- Complaint filed in Shingala v. Harper
(Del. Ch. Sept. 13, 1994).
Exhibit 99.50** -- Complaint filed in Pittman Neurosur-
gical v. Borden, Inc. (N.J. Super. Ch.
Div. Sept. 29, 1994).
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<PAGE>
Exhibit 99.51** -- 1994 Management Incentive Plan (in-
corporated by reference to Exhibit
10(iv) to the Company's Annual Report
on Form 10-K for the year ended
December 31, 1993 (the "1993 10-K")).
Exhibit 99.52** -- 1994 Stock Option Plan (incorporated
by reference to Exhibit 10(v) to the
1993 10-K).
Exhibit 99.53** -- Executive Family Survivor Protection
Plan as amended through December 9,
1993 (incorporated by reference to
Exhibit 10(vi) to the 1993 10-K).
Exhibit 99.54** -- Executives Excess Benefits Plan as
amended through December 9, 1993
(incorporated by reference to Exhibit
10(vii) to the 1993 10-K).
Exhibit 99.55** -- Executives Supplemental Pension Plan
as amended through December 9, 1993
(incorporated by reference to Exhibit
10(viii) to the 1993 10-K).
Exhibit 99.56** -- Advisory Directors Plan (incorporated
by reference to Exhibit 10(viii) to
the Company's Annual Report on Form
10-K for the year ending December 31,
1989 (the "1989 10-K")).
Exhibit 99.57** -- Advisory Directors Plan Trust Agree-
ment (incorporated by reference to
Exhibit 10(ix) to the Company's Annual
Report on Form 10-K for the year
ending December 31, 1988 (the "1988
10-K")).
Exhibit 99.58** -- Supplemental Benefit Trust Agreement,
as amended through December 9, 1993
(incorporated by reference to Exhibit
10(xi) to the 1993 10-K).
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<PAGE>
Exhibit 99.59** -- Form of Indemnification Letter
Agreements entered into with all Di-
rectors of the Company (incorporated
by reference to Exhibit 10(xii) to the
1988 10-K).
Exhibit 99.60** -- Form of Letter Agreement entered into
with all holders of stock appreciation
rights (incorporated by reference to
Exhibit 10(xiii) to the 1989 10-K).
Exhibit 99.61** -- Agreement with Mr. A.S. D'Amato,
Chairman and Chief Executive Officer
(incorporated by reference to Exhibit
10(i) to the Company's quarterly
report on Form 10-Q for the period
ended June 30, 1993 (the "June 30,
1993 10-Q")).
Exhibit 99.62** -- Amendment to Agreement with Mr. A.S.
D'Amato (incorporated by reference to
Exhibit 10(i) to the Company's quar-
terly report on Form 10-Q for the
period ended September 30, 1993).
Exhibit 99.63** -- Supplement to Agreement with Mr. A.S.
D'Amato (incorporated by reference to
Exhibit 10(xiv)(a) to the 1993 10-K).
Exhibit 99.64** -- Agreement with Mr. E.R. Shames,
President and Chief Operating Officer
(incorporated by reference to Exhibit
10(ii) to the June 30, 1993 10-Q).
Exhibit 99.65** -- Description of Amendment to Agreement
with Mr. E.R. Shames (incorporated by
reference to Exhibit 10(xiv)(e) to the
1993 10-K).
Exhibit 99.66** -- Agreement with Mr. R.J. Ventres,
Chairman of the Executive Committee of
the Board (incorporated by reference
to Exhibit 10(xvii)(b) to the Com-
pany's Annual Report on Form 10-K for
the year ended December 31, 1991).
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<PAGE>
Exhibit 99.67** -- Description of Amendment to Agreement
with Mr. R.J. Ventres (incorporated by
reference to Exhibit 10(xiv)(g) to the
1993 10-K).
Exhibit 99.68** -- Form of salary continuance arrangement
with Executive Officers (incorporated
by reference to Exhibit 10(ix)(c) to
the Company's Annual Report on Form
10-K for the year ended December 31,
1987).
Exhibit 99.69** -- Agreement with Mr. J.G. Hattinger
(incorporated by reference to Exhibit
10(xiv)(i) to the 1993 10-K).
Exhibit 99.70** -- Agreement with Mr. G.J. Waydo (in-
corporated by reference to Exhibit
10(xiv)(j) to the 1993 10-K).
Exhibit 99.71** -- Description of Amendment to Agreement
with Mr. E.R. Shames (incorporated by
reference to Exhibit 10(i) to the
Company's Quarterly Report on Form
10-Q for the quarter ended June 30,
1994 (the "June 30, 1994 10-Q").
Exhibit 99.72** -- Agreement with Mr. L.O. Doza dated
June 2, 1994 (incorporated by refer-
ence to Exhibit 10(ii) to the June 30,
1994 10-Q).
Exhibit 99.73** -- Supplement to Agreement with Mr. G.J.
Waydo dated May 4, 1994 (incorporated
by reference to Exhibit 10(iii) to the
June 30, 1994 10-Q).
Exhibit 99.74** -- Supplement to Agreement with Mr. G.J.
Waydo dated June 20, 1994 (incorpo-
rated by reference to Exhibit 10(iv)
to the June 30, 1994 10-Q).
Exhibit 99.75** -- Supplement to Agreement with Mr. G.J.
Waydo dated September 30, 1994.
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<PAGE>
Exhibit 99.76** -- Form of Indemnification Agreement,
dated as of October 4, 1994, among
Holdings, the Partnership, Purchaser
and the Company.
Exhibit 99.77** -- Joint Press Release of the Company and
KKR dated November 22, 1994.
Exhibit 99.78 -- Press Release of the Company, dated
November 30, 1994, including letter
from Japonica Partners to F.J. Tasco,
dated November 30, 1994
____________________
* Included with Schedule 14D-9 mailed to shareholders of
the Company.
** Previously filed.<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 1, 1994 By: /s/ Allan L. Miller
Name: Allan L. Miller
Title: Senior Vice President,
Chief Administrative
Officer and General Counsel
EXHIBIT INDEX
Exhibit Description Sequential Number
Exhibit 99.78 -- Press Release of the
Company, dated November
30, 1994, including letter
from Japonica Partners to
F.J. Tasco, dated
November 30, 1994
Exhibit 99.78
CONTACT: Nick Iammartino Jim Fingeroth/Fred Spar
Borden, Inc. Kekst and Company
614-225-4485 212-593-2655
BORDEN STATEMENT ON JAPONICA LETTER
COLUMBUS, OHIO, November 30, 1994 -- Borden, Inc., announced
this evening that it has received the attached letter from
Japonica Partners. Borden stated that its Board of Directors
will consider and respond to the document as soon as
practicable.
(letter attached)
# # #<PAGE>
[Letterhead of JAPONICA PARTNERS]
November 30, 1994
Frank J. Tasco
Director
Borden, Inc.
277 Park Avenue
New York, NY 10172
Dear Mr. Tasco:
Japonica Partners is pleased to make the definitive
proposal you have requested. Under our $2.4 billion proposal,
Borden, Inc. shareholders would receive cash and securities
valued at $17.00 per share, at 19% premium over the stated
value of the KKR/Lazard proposal and a 43% premium over the
trading price on the day preceding the announcement of the KKR/
Lazard proposal.
The greatest potential for an increase in shareholder
wealth will come from unleashing the value contained within the
company. Shareholders who desire to participate in Borden,
Inc.'s recovery will be provided the opportunity to do so
through a tax advantaged transaction in which a substantial
portion of the consideration would be realized without the
recognition of gain. Our proposal provides the resources for
those shareholders wishing to divest their common equity in-
vestment in Borden, Inc. at $17.00 per share (a minority in our
view).
Shareholders Participate in Borden, Inc.'s Recovery
Borden, Inc. would spin off its packaged foods divi-
sion ("Borden Foods") and dairy business ("Borden Nutrition")
through a stock dividend consisting of one share each of Borden
Foods and Borden Nutrition per share of Borden, Inc. As a
result, continuing shareholders of Borden, Inc. would have
shares of three independent public companies with an aggregate<PAGE>
Page 2
Frank J. Tasco
November 30, 1994
initial value of $17.00 per share (see the two attached com-
parisons of the values in our proposal with the KKR/Lazard pro-
posal). We believe that the value of these shares will in-
crease to between $22.00 and $25.00 per share, based on our
earnings projections for 1995 of $1.41 per share and $2.03 per
share for 1996 (see attached EPS chart). We are confident that
these results can be achieved through effective execution of
1990's business practices, such as best in class use of Effi-
cient Consumer Response, a refocus of company resources towards
value-added products and a movement away from the current com-
modity mentality.
Shareholders Desiring to Divest their Common Equity Positions
Concurrent with the spin-off, Japonica is prepared to
make an initial cash investment of $430 million to purchase
common equity. This cash, together with an additional $240
million in Borden, Inc. preferred stock, priced to trade at
par, would be used to repurchase 30% of Borden, Inc.'s cur-
rently outstanding shares at $17.00 a share.
For our $430 million investment, Japonica would re-
ceive shares in the three public companies in varying percent-
ages, priced on the same basis used for the valuation to
Borden, Inc. shareholders (an aggregate of $17.00 per share).
The allocation of Japonica's investment will be weighted toward
the units requiring the greatest turnaround. Japonica would
also receive warrants to acquire 10% of Borden, Inc. at an
exercise price of $17.00 per share, i.e., an incentive compa-
rable to that which was to be provided to RJR Nabisco in the
agreement in principle relating to its proposed equity infusion
which was subsequently withdrawn unilaterally by RJR/KKR.
Continued Control by Borden, Inc. Shareholders
Consistent with Japonica's philosophy of responsive-
ness to the interests of shareholders, Japonica's representa-
tion on the boards of Borden, Inc. and its constituent compa-
nies will be in appropriate proportion to its equity ownership
in each company. Recommendations for additional directors will
be actively solicited from shareholders. Japonica Partners'
willingness to limit the extent of its control is in response
to the desire of Borden, Inc.'s shareholders to continue to
possess the potential to participate in control premiums real-
ized from a future change in control once the basic shareholder
values are restored.<PAGE>
Page 3
Frank J. Tasco
November 30, 1994
As should be obvious, the bulk of the $2.4 billion
comes from the recovery opportunities of the three separate
public companies. Our relatively modest initial equity in-
vestment is intended to accommodate what we believe to be cur-
rent shareholders' desire to share in Borden, Inc.'s recovery.
While Japonica's ownership is smaller than our historical
investments, it is a reflection of appropriate financing for
the 1990's. Accordingly, we do not anticipate excessively
leveraging our investment.
Next Steps
We wish to meet with the Board of Directors in New
York on December 6th after the close of the market. We are
making arrangements for appropriate facilities. At this meet-
ing, we would be prepared to respond to questions you may have
as to our proposal. In order to assure appropriate shareholder
input at this meeting, we would suggest that representatives of
your more substantial institutional shareholders be invited to
participate.
We believe that your fiduciary duties as directors
mandate that you take steps to provide Borden, Inc. sharehold-
ers with a fair opportunity to select between our proposal and
the KKR/Lazard proposal. Toward that end, we would urge you to
call a special meeting of Borden, Inc. shareholders. As you
know, Borden, Inc. shareholders holding 10% of Borden, Inc.'s
stock have the right under New Jersey law to petition a New
Jersey court to call a special meeting of shareholders. The
ability to call a special meeting is also held by you, indi-
vidually, as Chairman of the Board, and by Ervin Shames, as
Chief Executive Officer who abstained from the vote on the KKR/
Lazard proposal. If the board would prefer that shareholders
act independently to call a meeting, we are willing to consider
providing appropriate assistance to facilitate such a meeting.
We are firmly convinced that after you have reviewed
our proposal and met with us, the board may wish to withdraw
its recommendation in favor of the KKR-Lazard proposal, and
allow shareholders to decide between the two transactions in a<PAGE>
Page 4
Frank J. Tasco
November 30, 1994
non-coercive manner. We look forward to our discussions and to
our role in enhancing shareholder value as a proactive white
knight.
Sincerely,
/s/ JAPONICA PARTNERS
JAPONICA PARTNERS
cc: Board of Directors<PAGE>
JAPONICA PARTNERS PROPOSAL TO REBUILD BORDEN
Proposal Comparison
Japonica KKR-Lazard
Rebuild Proposal Buyout Proposal
Initial Value - Per Share $17.00 $14.25 Stated Value
Total Value $2.4 Billion $2.0 Billion
Premium over KKR-Lazard 19.3% N.A.
Strategic Plan Major Investment "Control" in 100%
& Rebuilding Stock Swap & Reportedly
Break-up
Medium of Exchange Cash & Borden RJR Holdings Stock
Securities
Equity Ownership 3 Borden Publicly RJR Holdings with 20%
Traded Companies of Nabisco Foods Sold
Participation in Borden Yes None (30% Withdrawn)
Recovery
Tax Treatment, Excluding Predominantly Taxable
Cash Non-Taxable
Corporate Governance No Change of KKR Control
Control
Cash Fees & Expenses Nominal Approximately $100 to
$150 Million<PAGE>
JAPONICA PARTNERS PROPOSAL TO REBUILD BORDEN
Summary Comparison
Japonica Rebuild Proposal KKR-Lazard Buyout Proposal
$17.00 $14.25
A graphic with bar graph, to the A graphic with bar graph
left showing, the following text with one box containing
in boxes in a column: the depiction of what
appears to be a cigarette.
"Borden Foods $9.65
Borden, Inc. $5.00
Borden Nutrition $2.35"
to the right of this column is
another column with the following
text:
"Cash & Preferred $17.00"
Superimposed on these two columns
is a circle with the depiction of
what appears to be a lighted
cigarette in it and a diagonal
line across the circle.<PAGE>
JAPONICA PARTNERS PROPOSAL TO REBUILD BORDEN
EPS Estimates - Japonica Plan vs. Management's
A graphic showing the following data:
Management's Plan Japonica Plan
1994 $0.38
1995 $0.75 $1.41
1996 $0.81 $2.03
1997 $1.10 $2.58
1998 $1.21 $2.90
