GREEN A P INDUSTRIES INC
SC 14D9/A, 1998-03-10
STRUCTURAL CLAY PRODUCTS
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
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                                 SCHEDULE 14D-9
 
               SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
            SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
                               (AMENDMENT NO. 1)
 
                               ----------------
 
                          A.P. GREEN INDUSTRIES, INC.
                           (NAME OF SUBJECT COMPANY)
 
                          A.P. GREEN INDUSTRIES, INC.
                      (NAME OF PERSON(S) FILING STATEMENT)
 
                            COMMON STOCK, PAR VALUE
                                $1.00 PER SHARE
                         (TITLE OF CLASS OF SECURITIES)
 
                                   393059100
                     (CUSIP NUMBER OF CLASS OF SECURITIES)
 
                            MICHAEL B. COONEY, ESQ.
            SENIOR VICE PRESIDENT--LAW/ADMINISTRATION AND SECRETARY
                          A.P. GREEN INDUSTRIES, INC.
                                GREEN BOULEVARD
                             MEXICO, MISSOURI 65265
                                 (573) 473-3626
      (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
     NOTICE AND COMMUNICATION ON BEHALF OF THE PERSON(S) FILING STATEMENT)
 
                               ----------------
 
                                WITH A COPY TO:
 
                             ROBERT M. LAROSE, ESQ.
                                THOMPSON COBURN
                             ONE MERCANTILE CENTER
                           ST. LOUIS, MISSOURI 63101
                                 (314) 552-6000
 
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  This Amendment No. 1 amends and supplements the information set forth in the
Solicitation/Recommendation Statement Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934 on Schedule 14D-9 (the "Schedule 14D-9") filed
by A.P. Green Industries, Inc. (the "Company") on March 6, 1998 with respect
to shares of Common Stock, par value $1.00 per share, of the Company,
including the associated rights to purchase the Company's Series B Junior
Participating Preferred Stock issued pursuant to the Rights Agreement, dated
as of November 13, 1997, as amended by that certain First Amendment to Rights
Agreement, dated as of March 5, 1998, between the Company and Harris Trust and
Savings Bank, as Rights Agent. Unless otherwise indicated, the capitalized
terms used herein shall have the meanings specified in the Schedule 14D-9.
 
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
 
  Item 8 is hereby amended by adding thereto the following:
 
  On March 5, 1998, Paul Liebhard, an alleged stockholder of the Company (the
"Plaintiff"), filed a Class Action Complaint (the "Complaint") against Mack G.
Nichols, James M. Stolze, William F. Morrison, Daniel Toll, Paul Hummer II, P.
Jack O'Bryan and the Company in the Court of Chancery in the State of Delaware
in and for New Castle County (the "Liebhard Action"). Plaintiff purports to
bring the Liebhard Action on behalf of all common stockholders of the Company
(the "Class") and seeks the certification of Plaintiff as representative of
the Class. In the Liebhard Action, Plaintiff alleges that (i) the terms of the
Offer and the Merger are intrinsically unfair and inadequate from the
standpoint of the stockholders of the Company, (ii) the Board of Directors of
the Company failed to make an informed decision as to the Offer and the Merger
and (iii) the Board of Directors violated its fiduciary duties of care and
loyalty owed to the Company stockholders. The Liebhard Action seeks (i)
injunctive relief enjoining the Company and its Board of Directors from
proceeding with the Offer and the Merger, (ii) in the event that the Offer and
the Merger are consummated, the rescission of such transactions and rescissory
damages, (iii) compensatory damages and (iv) the Plaintiff's costs and
disbursements. The foregoing description of the Liebhard Action is qualified
in its entirety by reference to the copy of the Complaint, a copy of which is
attached hereto as Exhibit 6 and is incorporated herein by reference.
 
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
 
  Item 9 is hereby amended and supplemented by adding thereto the following:
 
Exhibit 6 Class Action Complaint in Paul Liebhard v. Mack G. Nichols, James M.
          Stolze, William F. Morrison, Daniel Toll, Paul Hummer II, P. Jack
          O'Bryan and A.P. Green Industries, Inc., filed in the Delaware Court
          of Chancery on March 5, 1998.
 
  After reasonable 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.
 
                                          A. P. GREEN INDUSTRIES, INC.
 
                                                  /s/ Michael B. Cooney
                                          By: _________________________________
                                          Name:Michael B. Cooney
                                          Title: Senior Vice President-
                                                 Law/Administration and
                                                 Secretary
 
Dated: March 10, 1998     
 
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                                 EXHIBIT INDEX
 
<TABLE>    
 <C>       <S>
 Exhibit 6 Class Action Complaint in Paul Liebhard v. Mack G. Nichols, James M.
           Stolze, William F. Morrison, Daniel Toll, Paul Hummer II, P. Jack
           O'Bryan and A.P. Green Industries, Inc., filed in the Delaware Court
           of Chancery on March 5, 1998.
</TABLE>     
 
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                                                                      EXHIBIT 6
 
               IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
                         IN AND FOR NEW CASTLE COUNTY
 
PAUL LIEBHARD,
 
Plaintiff,
 
v.
 
 
                                     C.A. No. 16220
MACK G. NICHOLS, JAMES M. STOLZE,
WILLIAM F. MORRISON, DANIEL TOLL,
PAUL HUMMER II, P. JACK O'BRYAN, and
A.P. GREEN INDUSTRIES, INC.,
 
Defendants.
 
                            CLASS ACTION COMPLAINT
 
  Plaintiff alleges upon information and belief, except for paragraph 1
hereof, which is alleged upon knowledge, as follows:
 
    1. Plaintiff has been the owner of the common stock of A.P. Green
  Industries, Inc. ("Green" or the "Company") since prior to the transaction
  herein complained of and continuously to date.
 
    2. Green is a corporation duly organized and existing under the laws of
  the State of Delaware. The Company mines, processes, makes and distributes
  specialty minerals and mineral based products.
 
    3. Global Industrial Technologies, Inc. ("Global") is a Delaware
  corporation based in Dallas, Texas and is engaged in the mining and
  processing of minerals and makes refractory products. Global also
  manufactures pneumatic and electric tools, flanges and mining equipment.
 
    4. Defendants Mack G. Nichols, James M. Stolze, William F. Morrison,
  Daniel Toll, Paul Hummer, II and P. Jack O'Bryan constitute Green's Board
  of Directors.
 
    5. The individual Defendants are in a fiduciary relationship with
  Plaintiff and the other public stockholders of Green and owe them the
  highest obligations of good faith and fair dealing.
 
                           CLASS ACTION ALLEGATIONS
 
    6. Plaintiff brings this action on his own behalf and as a class action,
  pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all
  common stockholders of the Company (except the defendants herein and any
  person, firm, trust, corporation, or other entity related to or affiliated
  with any of the defendants) and their successors in interest, who are or
  will be threatened with injury arising from defendants' actions as more
  fully described herein.
 
    7. This action is properly maintainable as a class action because:
 
      (a) The class is so numerous that joinder of all members is
    impracticable. As of March 21, 1997, there were approximately 8,024,000
    shares of Green common stock outstanding owned by hundreds, if not
    thousands, of record and beneficial holders;
 
      (b) There are questions of law and fact which are common to the class
    including, inter alia, the following: (i) whether defendants have
    breached their fiduciary and other common law duties owed by them to
    plaintiff and the members of the class; and (ii) whether the class is
    entitled to injunctive relief or damages as a result of the wrongful
    conduct committed by defendants.     
 
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      (c) Plaintiff is committed to prosecuting this action and has
    retained competent counsel experienced in litigation of this nature.
    The claims of the plaintiff are typical of the claims of other members
    of the class and plaintiff has the same interests as the other members
    of the class. Plaintiff will fairly and adequately represent the class.
 
      (d) Defendants have acted in a manner which affects plaintiff and all
    members of the class alike, thereby making appropriate injunctive
    relief and/or corresponding declaratory relief with respect to the
    class as a whole.
 
      (e) The prosecution of separate actions by individual members of the
    Class would create a risk of inconsistent or varying adjudications with
    respect to individual members of the Class, which would establish
    incompatible standards of conduct for defendants, or adjudications with
    respect to individual members of the Class which would, as a practical
    matter, be dispositive of the interests of other members or
    substantially impair or impede their ability to protect their
    interests.
 
                            SUBSTANTIVE ALLEGATIONS
 
    8. On March 4, 1998, Green and Global announced that they had entered
  into a definitive merger agreement whereby Global will acquire Green in a
  transaction valued at $195 million. Under the terms of the transaction as
  presently proposed, Global will commence a cash tender offer for all of
  Green's outstanding common shares at a price of $22 per share. Shares of
  Green not tendered will be converted by merger into the right to receive
  $22 per share.
 
    9. By entering into the agreement with Global, the Green Board has
  initiated a process to sell the Company which imposes heightened fiduciary
  responsibilities and required enhanced scrutiny by the Court. However, the
  terms of the proposed transaction were not the result of an auction process
  or active market check; they were arrived at without a full and thorough
  investigation by the Individual Defendants; and they are intrinsically
  unfair and inadequate from the standpoint of the Green shareholders.
 
    10. The Individual Defendants failed to make an informed decision, as no
  market check of the Company's value was obtained. In agreeing to the
  merger, the Individual Defendants failed to properly inform themselves of
  Green's highest transnational value.
 
    11. The Individual Defendants have violated the fiduciary duties owed to
  the public shareholders of Green. The Individual Defendants' agreement to
  the terms of the transaction, its timing, and the failure to auction the
  Company and invite other bidders, and defendants' failure to provide a
  market check demonstrate a clear absence of the exercise of due care and of
  loyalty to Green's public shareholders.
 
    12. The Individual Defendants' fiduciary obligations under these
  circumstances require them to:
 
      (a) Undertake an appropriate evaluation of Green's net worth as a
    merger/acquisition candidate; and
 
      (b) Engage in a meaningful market check with third parties in an
    attempt to obtain the best value for Green's public shareholders.
 
    13. The Individual Defendants have breached their fiduciary duties by
  reason of the acts and transactions complained of herein, including their
  decision to merge with Global without making the requisite effort to obtain
  the best offer possible.
 
    14. Plaintiff and other members of the Class have been and will be
  damaged in that they have not and will not receive their fair proportion of
  the value of Green's assets and business, and will be prevented from
  obtaining fair and adequate consideration for their shares of Green common
  stock.
 
    15. The consideration to be paid to class members in the proposed merger
  is unfair and inadequate because, among other things:
 
      (a) The intrinsic value of Green's common stock is materially in
    excess of the amount offered for those securities in the merger giving
    due consideration to the anticipated operating results, net asset
    value, cash flow, and profitability of the Company;     
 
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      (b) The merger price is not the result of an appropriate
    consideration of the value of Green because the Green Board approved
    the proposed merger without undertaking steps to accurately ascertain
    Green's value through open bidding or at least a "market check
    mechanism", and
 
      (c) By entering into the agreement with Global, the Individual
    Defendants have allowed the price of Green stock to be capped, thereby
    depriving plaintiff and the Class of the opportunity to realize any
    increase in the value of Green stock.
 
    16. By reason of the foregoing, each member of the Class will suffer
  irreparable injury and damages absent injunctive relief by this Court.
 
    17. Plaintiff and other members of the Class have no adequate remedy at
  law. WHEREFORE, plaintiff and members of the Class demand judgment against
  defendants as follows:
 
      a. Declaring that this action is properly maintainable as a class
    action and certifying plaintiff as the representative of the Class;
 
      b. Preliminarily and permanently enjoining defendants and their
    counsel, agents, employees and all persons acting under, in concert
    with, or for them, from proceeding with, consummating, or closing the
    proposed transaction;
 
      c. In the event that the proposed transaction is consummated,
    rescinding it and setting it aside, or awarding rescissory damages to
    the Class;
 
      d. Awarding compensatory damages against defendants, individually and
    severally, in an amount to be determined at trial, together with pre-
    judgment and post-judgment interest;
 
      e. Awarding plaintiff his costs and disbursements including
    reasonable allowances for fees and expenses of plaintiff's counsel and
    experts; and
 
      f. Granting plaintiff and the Class such other and further relief as
    the Court may deem just and proper.
 
Dated: March 5, 1998
 
                                          ROSENTHAL, MONHAIT, GROSS & GODDESS,
                                           P.A.
 
                                          By: _________________________________
                                            Suite 1401, Mellon Bank Center
                                            P.O. Box 1070
                                            Wilmington, DE 19899-1070
                                            (302) 656-4433
                                            Attorneys for Plaintiff
 
OF COUNSEL:
 
BERNSTEIN LIEBHARD & LIFSHITZ
274 Madison Avenue
New York, NY 10016
(212) 779-1414     
 
 
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