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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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MOORCO INTERNATIONAL INC.
(NAME OF SUBJECT COMPANY)
MII ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
FMC CORPORATION
(BIDDER)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
61559L10
(CUSIP NUMBER OF CLASS OF SECURITIES)
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ROBERT L. DAY, ESQ.
FMC CORPORATION
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
TELEPHONE: (312) 861-6000
(NAMES AND ADDRESSES AND TELEPHONE NUMBERS OF PERSONS AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
COPY TO:
GLEN E. HESS, P.C.
KIRKLAND & ELLIS
CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022-4675
TELEPHONE: (212) 446-4800
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MII Acquisition Corp., a Delaware corporation ("Purchaser") and FMC
Corporation, a Delaware corporation ("FMC"), hereby amend and supplement their
Tender Offer Statement on Schedule 14D-1, filed with the Securities and
Exchange Commission on May 5, 1995, with respect to Purchaser's offer to
purchase all of the outstanding shares of Common Stock, par value $0.01 per
share (the "Shares"), of Moorco International Inc., a Delaware corporation (the
"Company"), not presently owned by Parent, including the associated Preferred
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of November 8, 1994, between the Company and The Bank of New York, a
New York banking corporation, as Rights Agent, at a purchase price of $20.00
per Share and associated Right, net to the seller in cash.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. 11(a)(1), the Offer to Purchase dated May 5, 1995, is hereby
amended to correct the description of certain dates by deleting pages 22, 25
and 39 thereof and replacing such pages with the new pages 22, 25 and 39
attached hereto.
Item 11 is hereby amended by adding thereto the following exhibit:
<TABLE>
<S> <C>
11(g)(1) Complaint seeking Declaratory and Injunctive Relief filed in the Court
of Chancery in the State of Delaware on May 5, 1995.
</TABLE>
II-1
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SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT
THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
FMC Corporation
/s/ Robert L. Day, Esq.
By: _________________________________
Robert L. Day, Esq.
Secretary
MII Acquisition Corp.
/s/ Charlotte Mitchell Smith
By: _________________________________
Charlotte Mitchell Smith
Secretary
Dated: May 5, 1995
II-2
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EXHIBIT INDEX
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<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGES
------- ----------- ------------
<C> <S> <C>
11(a)(1) Offer to Purchase dated May 5, 1995.
Revised pages 22, 25 and 39.
11(g)(1) Complaint seeking Declaratory and Injunctive Relief
filed in the Court of Chancery in the State of
Delaware on May 5, 1995.
</TABLE>
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Gentlemen:
Based upon study and analysis of publicly available information, the
Management and Board of Directors of FMC have concluded that the
combination of Moorco and FMC would be in the long-term best interests of
the stockholders, employees and other constituencies of both companies. As
you know, FMC is one of the world's leading producers of chemicals and
machinery for industry, agriculture and government with an equity market
capitalization of approximately $2.2 billion. We believe that a combination
of the marketing resources, geographic reach and financial strength of our
Energy and Transportation Equipment Group with the complementary Moorco
product lines, customers and geographic markets would be well positioned in
today's global market place.
Importantly, FMC believes one of the key assets of Moorco is its
employees, and we look forward to building an organization in which
employees of both companies have expanded opportunities.
As authorized by FMC's Board of Directors at a special meeting today, we
hereby propose to acquire Moorco for approximately $223 million in a
negotiated merger transaction whereby your stockholders would receive $20
per share, in cash, for the 11.1 million outstanding shares. FMC has
adequate financial resources for the proposed transaction.
We believe that your stockholders will be enthusiastic about this
opportunity to realize immediately the long-term potential of their
investment in Moorco. The offer is 45 percent higher than the $13 3/4
closing price of Moorco's common stock on Friday, March 31. In addition,
our offer represents a multiple of 21.5x Moorco's latest twelve months' net
income. Consequently, FMC believes that its proposal is fair and that this
price represents a full valuation of Moorco. However, since this proposal
is based on public information, if Moorco can demonstrate additional value,
we would consider offering a higher price.
Our proposal is subject to the execution of a mutually satisfactory
merger agreement containing customary terms and conditions and the receipt
of required regulatory approvals. Our proposal is for the existing Moorco
business. However, as part of our negotiations, we are prepared to discuss
the status of your proposal for Daniel Industries. FMC is prepared to move
forward promptly to negotiate an agreement and to close a transaction. We
look forward to meeting with you, a committee of your Board, or Moorco's
full Board to discuss these matters further and to answer any questions
concerning our proposal and FMC.
Very truly yours,
FMC Corporation
Robert N. Burt
Chairman and Chief Executive Officer
Also on April 3, 1995, Mr. Burt placed a call to Mr. Tiner's office to
discuss the foregoing letter, but Mr. Tiner was unavailable for the call and
did not return the call.
On April 4, 1995, FMC issued a press release announcing that it had proposed
to acquire Moorco International (MRC) for approximately $223 million in a
negotiated merger transaction whereby Moorco stockholders would receive $20.00
per share in cash for the 11.1 million shares and disclosing the text of Mr.
Burt's letter to Mr. Wellin and Mr. Tiner.
On April 5, 1995, the Company issued a press release announcing that its
Board of Directors would evaluate the proposal from FMC and had retained
Salomon Brothers Inc as its financial advisor to assist with the evaluation.
The Company stated that it would not have any further comment until the Board
of Directors completed its evaluation. Mr. Tiner called Mr. Burt and confirmed
the information in the Company's press release. Mr. Tiner also committed to
calling Mr. Burt by April 11, 1995.
22
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Also on May 5, 1995, FMC commenced litigation in the Court of Chancery of the
State of Delaware against the Company and members of its Board of Directors
seeking, among other things, the following:
(a) A declaratory judgment that the defendants have breached their
fiduciary duties by delaying negotiations, refusing to negotiate actively
with FMC and threatening to exclude FMC from any process for the sale of
the Company;
(b) An order preliminarily and permanently enjoining the defendants to
carry out their fiduciary duties by
(i) promptly, actively and in good faith negotiating with FMC; and
(ii) not excluding FMC from any auction or other process that may be
instituted by the Company and that may lead to an extraordinary
transaction involving the Company.
(c) An order preliminarily and permanently enjoining the Company, the
defendant directors, the Company's officers, agents, servants, employees
and those persons who act in concert or participation with them who receive
actual notice thereof, from taking any action to effectuate the "flip-in,"
"flip-over" or other terms of the Rights Agreement and ordering the
defendant directors to redeem the Rights; and
(d) An order preliminarily and permanently enjoining the defendants from
bringing suit or litigation in any other forum based on or relating to the
facts alleged in the complaint.
FMC intends to file on May 8, 1995 with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the Department of Justice (the "Antitrust
Division") a Premerger Notification and Report Form under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), with respect to
the Offer. Accordingly, the waiting period under the HSR Act applicable to the
Offer will expire at 11:59 P.M., New York City time, on May 23, 1995, unless
prior to the expiration or termination of the waiting period, the FTC or the
Antitrust Division extends the waiting period by requesting additional
information from the Parent. If such a request is made, the waiting period
applicable to the Offer will expire on the tenth calendar day after the date of
substantial compliance by the Parent with such request. Thereafter, the waiting
period may only be extended by court order.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
Purpose of the Offer
The purpose of the Offer and the Proposed Merger is to acquire control of,
and the entire equity interest in, the Company. The Purchaser currently
intends, as soon as practicable following completion of the Offer, to propose
and seek to have the Company consummate the Proposed Merger. The purpose of the
Proposed Merger is to acquire all Shares not tendered and purchased pursuant to
the Offer or otherwise. Pursuant to the Proposed Merger, each then outstanding
Share (other than Shares owned by FMC or any of its wholly owned subsidiaries,
Shares held in the treasury of the Company, and Shares held by stockholders who
perfect appraisal rights under the Delaware Law) would be converted into the
right to receive cash in the same amount as received per Share in the Offer,
and the Company would become a wholly owned subsidiary of FMC.
Although the Purchaser will seek to have the Company consummate the Proposed
Merger as soon as practicable after consummation of the Offer, if the Board of
Directors of the Company opposes the Offer and the Proposed Merger, certain
terms of the Rights, the Delaware Law, the Company's Certificate and the
Company's Bylaws may affect the ability of the Purchaser to consummate the
Offer, to obtain control of the Company and to effect the Proposed Merger.
Accordingly, the timing of the consummation of the Offer and
25
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takeover statutes. In 1987, however, in CTS Corp. v. Dynamics Corp. of America,
the Supreme Court of the United States held that the State of Indiana could, as
a matter of corporate law and, in particular, those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions. Subsequently, in TLX Acquisition Corp. v. Telex
Corp., a federal district court in Oklahoma ruled that the Oklahoma statutes
were unconstitutional insofar as they apply to corporations incorporated
outside Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee.
This decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated
Transactions Act and Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
The Purchaser has not attempted to comply with any state takeover statutes in
connection with the Offer or the Proposed Merger. The Purchaser reserves the
right to challenge the validity or applicability of any state law allegedly
applicable to the Offer or the Proposed Merger and nothing in this Offer to
Purchase nor any action taken in connection herewith is intended as a waiver of
that right. In the event that it is asserted that one or more takeover statutes
apply to the Offer or the Proposed Merger, and it is not determined by an
appropriate court that such statute or statutes do not apply or are invalid as
applied to the Offer or the Proposed Merger, as applicable, the Purchaser may
be required to file certain documents with, or receive approvals from, the
relevant state authorities, and the Purchaser might be unable to accept for
payment or purchase Shares tendered pursuant to the Offer or be delayed in
continuing or consummating the Offer. In such case, the Purchaser may not be
obligated to accept for purchase, or pay for, any Shares tendered. See Section
14.
Antitrust
Under the HSR Act, and the rules and regulations that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
until certain information and documentary material has been furnished for
review by the Antitrust Division and the FTC and certain waiting period
requirements have been satisfied. The acquisition of Shares pursuant to the
Offer is subject to such requirements. FMC intends to file on May 8, 1995, with
the FTC and the Antitrust Division a Premerger Notification and Report Form in
connection with the purchase of Shares pursuant to the Offer. Under the
provisions of the HSR Act applicable to the Offer, the purchase of Shares
pursuant to the offer may not be consummated until the expiration of a 15-
calendar day waiting period following the filing by FMC. Accordingly, the
waiting period under the HSR Act applicable to such purchases of Shares
pursuant to the Offer should expire at 11:59 p.m., New York City time, on May
23, 1995, unless such waiting period is earlier terminated by the FTC and the
Antitrust Division or extended by a request from the FTC or the Antitrust
Division for additional information or documentary material prior to the
expiration of the waiting period. If, however, either the FTC or the Antitrust
Division were to request additional information or documentary material from
FMC, the waiting period would expire at 11:59 p.m., New York City time, on the
tenth calendar day after the date of substantial compliance by FMC with such
request. Thereafter, the waiting period could be extended only by court order
or by agreement. If the acquisition of Shares is delayed pursuant to a request
by the FTC or the Antitrust Division for additional information or documentary
material pursuant to the HSR Act, the Offer may, but need not, be extended and,
in any event, the purchase of and payment for Shares will be deferred until 10
days after the request is substantially complied with, unless the 10-day
extended period expires on or before the date when the initial 15-day period
would otherwise have expired or unless the waiting period is sooner terminated
by the FTC and the Antitrust Division. See Section 2. Only one extension of
such waiting period pursuant to a request for additional information is
authorized by the HSR Act and the rules promulgated thereunder, except by court
order. Any such extension of the waiting period
39
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EXHIBIT 11(G)(1)
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
FMC CORPORATION and MII )
ACQUISITION CORP., )
)
Plaintiffs, )
)
v. ) Civil Action No. ________
)
MOORCO INTERNATIONAL INC., )
KEITH S. WELLIN, MICHAEL L. )
TINER, JAMES F. ATKINS, )
GEORGE A. CIOTTI, JEFFREY J. )
COLLINSON, JAMES E. DONLAN, )
CALVIN A. THOMPSON and )
WILLIAM D. WITTER, )
)
Defendants. )
COMPLAINT
---------
Plaintiffs FMC Corporation and MII Acquisition Corp. (collectively
"FMC"), by their undersigned attorneys, for their Complaint herein allege upon
knowledge as to themselves and their own actions and upon information and belief
as to all other matters, as follows:
SUMMARY OF THE ACTION
---------------------
1. FMC brings this action to obtain the judicial relief necessary to
allow the common stockholders of Moorco International Inc. ("Moorco") to accept
FMC's tender offer for all of the common stock of Moorco. On April 3, 1995 FMC
communicated to Moorco a proposal to acquire Moorco for approximately $223
million in a negotiated merger transaction which would provide the Moorco
shareholders with
<PAGE>
$20 per share, in cash, for all the outstanding common stock of Moorco (the "FMC
Proposal" or the "Proposal"). This proposed price represented an approximately
45% premium over the last closing market price prior to the Proposal. In
addition, FMC indicated a willingness to consider an even higher price if, based
upon information not publicly available, Moorco could demonstrate additional
value.
2. Subsequent to April 3, 1995, FMC repeatedly indicated its
willingness to negotiate with Moorco and respond to any questions about its
Proposal. Despite FMC's premium proposal and FMC's willingness to negotiate,
Moorco resolutely refused to negotiate with FMC unless FMC would agree to enter
into an overbroad, one-year "standstill" agreement that Moorco proffered to FMC.
The standstill agreement would have -- among other things -- precluded FMC from
making its proposal available to Moorco's shareholders through a tender offer or
a consent or proxy solicitation. In addition, Moorco (i) advised FMC that, if
FMC executed the standstill agreement, Moorco would undertake a "process" that
might lead to the sale of Moorco, (ii) threatened that, if FMC did not execute
the standstill agreement, FMC would be excluded from any such "process" as an
"outsider", and (iii) claimed that a one-year standstill was required because of
possible changes in the capital gains tax law, possible developments in a
pending lawsuit and possible improvements in Moorco's business. Although
Moorco's representatives indicated that they might agree to certain
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modifications in the proposed standstill, they did not provide any detailed
proposal or other assurance that Moorco's shareholders would have an opportunity
to accept a proposal from FMC.
3. In light of Moorco's continued insistence that FMC forego for an
unreasonably long period the ability to give Moorco's shareholders the right to
act upon an offer by FMC, on May 5, 1995, FMC commenced a tender offer for all
the outstanding common stock of Moorco at $20 per share in cash (the "Tender
Offer"). Neither the Tender Offer nor the FMC Proposal contain any financing
condition, and FMC has adequate financial resources for the FMC Proposal and the
Tender Offer. The Tender Offer is scheduled to close on Friday, June 2, 1995.
However, under its terms, the Tender Offer cannot close if Moorco's existing
Preferred Stock Purchase Rights (the "Poison Pill") are triggered by such
closing.
4. Moorco has threatened that it will exclude FMC from receiving
information (even though FMC is willing to sign a confidentiality agreement with
respect thereto) or otherwise participating as a bidder in any auction or other
process to maximize stockholder value that Moorco may determine to commence.
Moorco has stated that it has data demonstrating that the Moorco common stock is
more valuable than the $20 per share proposed by FMC but it has refused to
provide such data to FMC even though FMC has agreed to sign a confidentiality
agreement. This refusal has been Moorco's
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response to FMC's expressed willingness to consider offering Moorco shareholders
even more than $20 per share if supported by non-public information.
5. FMC seeks the following relief: (a) an injunction preliminarily
and permanently enjoining the enforcement or effectuation of the terms of the
Poison Pill or ordering its redemption by the Moorco Board of Directors to allow
the Moorco shareholders to accept the Tender Offer; (b) an injunction
preliminarily and permanently enjoining Moorco from excluding FMC from any
"auction" or other processes undertaken by Moorco for the purpose of any
extraordinary corporate transaction, (c) an injunction preliminarily and
permanently enjoining Moorco from effectuating any transaction, whether as an
alternative to the Tender Offer or not, that has the reasonably foreseeable
effect of precluding the shareholders from choosing between that transaction and
the Tender Offer; and (d) a declaration that Moorco is not reasonably justified
in excluding FMC from any auction process, refusing to negotiate with FMC and
demanding a one-year standstill agreement as a pre-condition to negotiation.
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THE PARTIES
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6. Plaintiff FMC Corporation is a corporation organized and existing
under the laws of the State of Delaware with its principal place of business at
200 E. Randolph Drive, Chicago, Illinois 60601. FMC Corporation is one of the
world's leading producers of chemicals and machinery for industry, government
and agriculture with annual sales of $4 billion in 1994 and net income of $173.4
million in 1994. On March 28, 1995, FMC acquired beneficial ownership of, and
currently beneficially owns, 100 shares of Moorco common stock.
7. Plaintiff MII Acquisition Corp. is a corporation organized and
existing under the laws of the State of Delaware with its principal place of
business at 200 E. Randolph Drive, Chicago, Illinois 60601. MII Acquisition
Corp. is a newly formed, wholly-owned subsidiary of FMC Corporation.
8. Defendant Moorco is a corporation organized and existing under the
laws of the State of Delaware with its principal place of business located at
2800 Post Oak Blvd., Houston, Texas 77056. Moorco is a supplier of fluid
measurement and pressure control products for the petroleum, industrial process,
and electric power generation industries. Moorco's stock is listed and actively
traded on the New York Stock Exchange. For the fiscal year ending May 31, 1994,
Moorco had sales of approximately $210 million and net income of $14.3 million.
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9. Defendant Keith S. Wellin is the Chairman of the Board of
Directors and a director of Moorco. According to Moorco's Proxy Statement dated
August 12, 1994, Wellin beneficially owns approximately 5.1% of Moorco common
stock.
10. Defendant Michael L. Tiner is President, Chief Executive Officer,
and a director of Moorce.
11. Defendant William D. Witter is a director of Moorce. According
to Moorco's Proxy Statement dated August 12, 1994, Witter beneficially owns
approximately 7.4% of Moorco common stock.
12. Defendant James F. Atkins is a director of Moorco.
13. Defendant George A. Ciotti is a director of Moorco.
14. Defendant Jeffrey J. Collinson is a director of Moorco.
15. Defendant James E. Donlan is a director of Moorco.
16. Defendant Calvin A. Thompson is a director of Moorco.
FMC'S PROPOSAL AND THE DEFENDANTS' RESPONSE
-------------------------------------------
17. On April 3, 1995, FMC proposed to acquire Moorco in a negotiated
merger transaction whereby Moorco shareholders would receive $20.00 a share in
cash, or approximately $223 million in the aggregate. The FMC Proposal
represents approximately a 45% premium over the
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$13.75 closing price of Moorco's common stock on Friday, March 31, 1995.
Further, in a letter from Mr. Robert N. Burt, Chairman and Chief Executive
Officer of FMC, to Mr. Tiner, Moorco's President and Chief Executive Officer,
dated April 3, 1995, FMC stated that it would consider an even higher price, if
Moorco could demonstrate additional value.
18. The FMC Proposal presents Moorco shareholders with an outstanding
opportunity to maximize the value of their Moorco shares for the following
reasons:
(a) Moorco has struggled with declining earnings and revenues.
Moorco's sales for the nine months ended February 28, 1995 were $134,795,000
compared to $149,035,000 for the first nine-months of last year. For the nine
months ended February 1995, net income was $4,698,000 and earnings per share
were $0.40 compared to net income of $8,740,000 and earnings per share of $0.73
in the first nine-months of last year.
(b) The market showed great enthusiasm for the FMC Proposal upon
its disclosure on April 3, 1995. The market price of common shares of Moorco
immediately rose $7.75, from $13.75 at the close of trading on March 31, 1995 to
$21.375 at the close of trading on April 3, 1995.
(c) The FMC Proposal presents a possible opportunity to maximize
shareholder value even in excess of the $223 million through negotiation with
FMC.
19. On April 5, 1995, Moorco issued a press release announcing that
its Board of Directors would
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evaluate the proposal from FMC and had retained Salomon Brothers Inc. as its
financial advisor to assist with the evaluation. Despite the opportunity
represented by the FMC Proposal and despite FMC's willingness to negotiate, the
first meeting between FMC and Moorco did not occur until nearly two weeks later,
on April 18, 1995. This meeting was attended by Mr. Burt and Mr. Joseph H.
Netherland, General Manager of FMC's Energy and Transportation Group, and Mr.
Tiner and Mr. James J. Nelson, Vice President and General Counsel of Moorco.
20. At the meeting on April 18, 1995 FMC provided Moorco with
additional information regarding FMC and the FMC Proposal and repeated FMC's
willingness to enter into negotiations regarding the FMC Proposal. At this
meeting, Mr. Burt referred to the common interests of both companies, as
evidenced by FMC previously visiting a Moorco plant to explore a cooperative
relationship with Moorco. However, Mr. Tiner declined to enter into any
substantive negotiations and committed only that he would present the additional
FMC information to a meeting of the Moorco Board of Directors, which was yet
unscheduled. Mr. Burt called Mr. Tiner on April 19 and told him that FMC was
willing to consider various items raised by Mr. Tiner at the April 18 meeting if
Moorco would supply related information.
21. On May 1, 1995, Mr. Burt met again with Mr. Tiner. The meeting
was requested by Mr. Tiner to report the Moorco Board of Directors' response to
the FMC Proposal.
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Moorco proffered to FMC a proposed "confidentiality/ standstill agreement,"
which Moorco demanded FMC execute before Moorco would consider either engaging
in negotiations with FMC or providing FMC certain confidential information. The
standstill agreement contained provisions, inter alia, precluding FMC or others
with which FMC might associate from:
a) seeking, offering, proposing or requesting permission to acquire
any asset of Moorco or any security issued by Moorco for one year;
b) seeking representation on Moorco's board of directors or from
soliciting any proxy or consent with respect to any securities of Moorco for one
year;
c) entering into any discussion to do any of the foregoing for one
year;
d) disclosing at any time before or after expiration of one year to
Moorco stockholders any information about Moorco received by FMC even if
disclosure of such information would be required to inform Moorco's stockholders
fully regarding a tender offer or other transaction proposed by FMC; and
e) initiating for one year any contact with any officer, director or
employee of Moorco regarding Moorco's operations, assets, prospects or finances.
The standstill agreement also required FMC for one year, to inform Moorco
promptly of any approach by any third party concerning FMC or such third party
participating in any
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<PAGE>
transaction involving the assets of Moorco or securities issued by Moorco.
22. The standstill agreement demanded by Moorco as a pre-condition to
negotiations and the production of non-public information is overbroad,
unreasonable, and designed to prevent, rather than encourage, offers for Moorco.
On the evening of May 1, 1995 and subsequently, FMC's representatives
communicated FMC's willingness to enter into a confidentiality agreement,
including an agreement with a reasonable thirty-day "standstill" period, but FMC
was not and is not willing to stand still for one year. In response, Moorco
claimed that a one-year standstill was "carefully chosen" for several reasons,
including the possibility of a reduction in the capital gains tax and possible
favorable developments in certain litigation. Moorco's representatives also
asserted that Moorco had the right to exclude FMC from participating in any sale
process and thus keep Moorco's shareholders from being able to accept any FMC
proposal because FMC purportedly had obtained confidential information about
Moorco improperly during certain visits by FMC personnel to Moorco plants.
23. Moorco's representatives also threatened that, if Moorco
instituted a "process" leading to the potential sale of Moorco or some other
extraordinary transaction, FMC would be excluded from any such "process" as an
"outsider," unless FMC capitulated to the demanded standstill agreement.
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24. In subsequent discussions on May 2 and May 3, 1995, FMC's
representatives suggested to Moorco's representatives the possibility of FMC
agreeing to a 45-day standstill and repeated the desire of FMC to negotiate with
Moorco. Moorco's representatives nevertheless repeated the demand for a one-
year standstill period and, although suggesting several modifications to the
proposed agreement, failed to agree that Moorco's stockholders would have a
reasonable opportunity to accept an offer by FMC. Moorco's representatives
reiterated the threat to exclude FMC from any process for the sale of Moorco.
25. Moorco's demand for the one-year standstill agreement as a pre-
condition to negotiation or participation in any "process" for the sale of
Moorco is unreasonable and the justifications offered by Moorco do not withstand
scrutiny. Given the past performance of Moorco and the attractiveness of the
FMC Proposal, it is not in the best interests of the Moorco shareholders to
delay consideration of the FMC Proposal for one year or to preclude FMC from
pursuing an offer for Moorco absent the consent of Moorco's directors.
THE POISON PILL
---------------
26. On November 8, 1994, Moorco announced that its Board of Directors
had adopted a shareholders rights plan (the "Poison Pill"). The plan (with a
15% trigger) entails a distribution of one right for each outstanding
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share of Moorco common stock. Each right will entitle the holder to buy one
one-hundredth (1/100th) of a share of a new series of junior participating
preferred stock at an exercise price of $65 per share. Each one one-hundredth
of a share of junior participating preferred stock will be essentially the
economic equivalent of one share of Moorco common stock. The rights will attach
to and trade with Moorco common stock and will not be exercisable until a person
or group acquires 15% of Moorco's common stock or commences a tender offer that
would result in ownership of 15% of Moorco's common stock.
27. If any person becomes a 15% stockholder, the rights not held by
the 15% stockholder "flip in" and become rights to buy shares of Moorco common
stock at a 50% discount. After a "flip in" event and prior to a person becoming
the beneficial owner of 50% or more of the Company's common stock, the Board of
Directors may, in lieu of allowing the rights to be exercised, issue one share
of common stock in exchange for all or any pro rata portion of the rights. In
the event Moorco is merged and its common stock is exchanged or converted, the
new rights "flip over" and require that provision be made so as to entitle the
holders to buy shares of the acquiring party's common stock at 50% discount.
28. Moorco stated, on November 8, 1994, that the shareholder rights
plan becomes effective if any person acquires 15% of the Company, and is
designed to require
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prospective buyers to negotiate with Moorco's Board. As a consequence, by
implementing the Poison Pill, the defendants have assumed a heightened duty to
the Moorco shareholders. The refusal to negotiate with FMC except on terms
harmful to the Moorco shareholders is a violation of such duty.
29. The practical effect of the Poison Pill is to preclude FMC from
consummating its offer to purchase Moorco's shares at a substantial premium.
IRREPARABLE INJURY
------------------
30. If the FMC Proposal and/or the Tender Offer are impeded by the
breaches of duty described herein and by Moorco's refusal to redeem the Poison
Pill, FMC and the Moorco shareholders will lose the opportunity represented by
FMC's Proposal and FMC's Tender Offer. FMC and the Moorco shareholders will
lose forever the opportunity to have the FMC Proposal and Tender Offer fairly
considered by the Moorco directors and stockholders. FMC will lose the
irreplaceable opportunity to create a new combined FMC/Moorco entity with unique
business strengths. The Moorco shareholders will lose the opportunity to sell
their shares at a generous premium over the market price. Damages for these
losses cannot readily be calculated and, in any event, could not compensate for
the unique loss that would have been suffered by FMC.
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<PAGE>
COUNT I
-------
(Improper Efforts To Impede Or Block
The FMC Proposal And The Tender Offer)
31. FMC repeats and realleges each of the allegations of the preceding
paragraphs as if fully set forth herein.
32. Moorco has attempted to utilize its proposed one-year standstill
agreement not for legitimate purposes consistent with the interests of the
Moorco shareholders, but unreasonably to prevent or delay and impede the FMC
Proposal and any possible tender offer by FMC, including the Tender Offer.
Rather than seeking to delay the FMC Proposal and create additional obstacles to
that Proposal, Moorco should be acting to facilitate FMC's ability to offer a
higher price for Moorco by negotiating with FMC and providing additional
information to FMC. The demanded one-year standstill agreement is a defensive
reaction that is not a reasonable response to any threat posed either by the FMC
Proposal or by the FMC Tender Offer. The purported reasons Moorco gave for the
standstill agreement do not provide a legitimate or lawful basis for Moorco's
actions to prevent or delay and impede the FMC Proposal and the FMC Tender Offer
and are contrary to the interests of the Moorco shareholders.
33. The directors of Moorco adopted a Poison Pill ostensibly for the
purpose of compelling any potential acquiror of Moorco to negotiate with the
Board of Directors
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of Moorco before completing an acquisition. In the present case, however, FMC
is ready and willing to negotiate with the Board of Directors of Moorco.
Nevertheless, Moorco's Board refuses to engage in such negotiations without
attaching conditions that would prevent FMC from proceeding with its Tender
Offer or otherwise giving Moorco shareholders any opportunity to benefit from
FMC's Proposal. Despite over 30 days having elapsed since FMC's Proposal and
despite FMC's willingness to accept a thirty-day standstill, Moorco makes a
claim that a one-year standstill is required as a pre-condition to any
negotiations with FMC or any process to maximize stockholder value. From these
facts, it is apparent that Moorco intends to utilize any means at its disposal,
including the Poison Pill, to preclude FMC from acquiring Moorco without regard
to FMC's willingness to negotiate with Moorco or the adverse consequences to
Moorco's shareholders.
34. The utilization of the Poison Pill to preclude the Tender Offer is
unreasonable in that:
(a) The Tender Offer does not represent any threat to the Moorco
shareholders, and those shareholders are capable of making a fully informed and
voluntary decision with respect to the Tender Offer;
(b) The Poison Pill is being utilized not for the purpose of
negotiating with FMC, but for the purpose of precluding the Tender Offer without
regard to its
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adequacy or the rights of the Moorco shareholders to make their own choice; and
(c) The Poison Pill is being utilized not for the purpose of searching
for an alternative to the Tender Offer that will provide real value in excess of
the value of the Tender Offer, but for the purpose of thwarting or delaying the
Tender Offer.
35. FMC is without an adequate remedy at law.
COUNT II
--------
(Exclusion Of FMC As A Bidder)
36. FMC repeats and realleges each of the allegations of the preceding
paragraphs as if fully set forth herein.
37. Moorco has advised FMC that it may institute a "process" leading
either to the sale of Moorco or to another extraordinary transaction and that
Moorco will exclude FMC from that process unless FMC executes the one-year
standstill agreement. Further, Moorco has refused to negotiate with FMC unless
FMC executes the one-year standstill agreement.
38. Moorco's refusal to negotiate and its threatened exclusion of FMC
from any sale process are not reasonably related to the best interests of the
Moorco shareholders and are not calculated to produce the highest offer for the
Moorco common stock. In effect, the only reason that Moorco refuses to
negotiate with FMC and the only reason that FMC is being excluded is that FMC
declines
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to relinquish its right to make a non-consensual tender offer or to solicit
consents or proxies from Moorco's shareholders. However, FMC's refusal to
restrict its ability to take its proposals directly to Moorco's shareholders
does not justify the actions of Moorco. Moorco should be acting to facilitate a
higher offer by FMC, both by negotiating with FMC and by providing confidential
information to FMC. Moorco should pursue this course of action regardless of
whether FMC retains its ability to proceed with an offer on a nonconsensual
basis or otherwise.
39. The reasons put forth by Moorco for the one-year standstill
agreement do not provide a legitimate or lawful basis for Moorco's actions to
prevent or delay and impede the FMC Proposal and the FMC Tender Offer, and
Moorco's actions are contrary to the interests of the Moorco shareholders.
40. FMC is without an adequate remedy at law.
WHEREFORE, plaintiff demands judgment and preliminary and permanent
relief, including injunctive and declarative relief, in its favor as follows:
(a) A declaratory judgment that the defendants have breached their
fiduciary duties by delaying negotiations, refusing to negotiate actively with
FMC and threatening to exclude FMC from any process for the sale of Moorco;
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(b) An order preliminarily and permanently
enjoining the defendants to carry out their fiduciary duties by
(i) promptly, actively and in good faith negotiating with FMC; and
(ii) not excluding FMC from any auction or other process that may
be instituted by Moorco and that may lead to an extraordinary transaction
involving Moorco.
(c) An order preliminarily and permanently enjoining Moorco, the
defendant directors, Moorco's officers, agents, servants, employees and those
persons who act in concert or participation with them who receive actual notice
thereof, from taking any action to effectuate the "flip-in," "flip-over" or
other terms of the Poison Pill and ordering the defendant directors to redeem
the Poison Pill;
(d) An order preliminarily and permanently enjoining the defendants
from bringing suit or litigation in any other forum based on or relating to the
facts alleged in this Complaint;
(e) An award to FMC of the costs and disbursements of this action,
including reasonable attorneys' and experts' fees; and
(f) Granting such other and further relief as this Court may deem just
and proper.
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YOUNG, CONAWAY, STARGATT & TAYLOR
[SIGNATURE OF DAVID C. MCBRIDE]
___________________________________
David C. McBride
Josy W. Ingersoll
Jan R. Jurden
Martin S. Lessner
11th Floor, Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899-0391
(302) 571-6639
Attorneys for Plaintiffs
OF COUNSEL:
Donald G. Kempf, Jr.
Robert J. Kopecky
Jean Reed Haynes
KIRKLAND & ELLIS
Citicorp Center
153 East 53rd. St.
New York, NY 10022
(212) 446-4800
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