-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BW9a1OO1I1CbIJCvEC3UuUtuRMSttghNCdZNkYgdiJ3dMJ9/ar+9+v17WCn0M0P7 x+s2O6jOuZlRCJQUskUbLQ== 0000912057-97-025851.txt : 19970804 0000912057-97-025851.hdr.sgml : 19970804 ACCESSION NUMBER: 0000912057-97-025851 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970801 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KERR GROUP INC CENTRAL INDEX KEY: 0000055454 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 950898810 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-34081 FILM NUMBER: 97650411 BUSINESS ADDRESS: STREET 1: 500 NEW HOLLAND AVE CITY: LANCASTER STATE: PA ZIP: 17602 BUSINESS PHONE: 3105562200 MAIL ADDRESS: STREET 1: 1840 CENTURY PARK EAST CITY: LOS ANGELES STATE: CA ZIP: 90067 FORMER COMPANY: FORMER CONFORMED NAME: KERR GLASS MANUFACTURING CORP DATE OF NAME CHANGE: 19920518 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KERR GROUP INC CENTRAL INDEX KEY: 0000055454 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 950898810 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-34081 FILM NUMBER: 97650412 BUSINESS ADDRESS: STREET 1: 500 NEW HOLLAND AVE CITY: LANCASTER STATE: PA ZIP: 17602 BUSINESS PHONE: 3105562200 MAIL ADDRESS: STREET 1: 1840 CENTURY PARK EAST CITY: LOS ANGELES STATE: CA ZIP: 90067 FORMER COMPANY: FORMER CONFORMED NAME: KERR GLASS MANUFACTURING CORP DATE OF NAME CHANGE: 19920518 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KERR ACQUISTION CORP CENTRAL INDEX KEY: 0001041988 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 50 FREMONT STREET SUITE 3700 CITY: SAN FRANCISCO STATE: CA ZIP: 94105 MAIL ADDRESS: STREET 1: 50 FREMONT STREET SUITE 3700 CITY: SAN FRANCISCO STATE: CA ZIP: 94105 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KERR ACQUISTION CORP CENTRAL INDEX KEY: 0001041988 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 50 FREMONT STREET SUITE 3700 CITY: SAN FRANCISCO STATE: CA ZIP: 94105 MAIL ADDRESS: STREET 1: 50 FREMONT STREET SUITE 3700 CITY: SAN FRANCISCO STATE: CA ZIP: 94105 SC 14D1/A 1 SC 14D1/A - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-1/A (AMENDMENT NO. 2) TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SCHEDULE 13D/A (AMENDMENT NO. 2) UNDER THE SECURITIES EXCHANGE ACT OF 1934 ------------------------ KERR GROUP, INC. (Name of Subject Company) KERR ACQUISITION CORPORATION FREMONT ACQUISITION COMPANY, LLC (Bidders) COMMON STOCK, PAR VALUE $0.50 PER SHARE (AND ASSOCIATED PURCHASE RIGHTS) $1.70 CLASS B CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D, PAR VALUE $0.50 PER SHARE (Title of Class of Securities) 492376108 AND 492376207 (CUSIP Number of Class of Securities) GILBERT H. LAMPHERE PRESIDENT FREMONT ACQUISITION COMPANY, LLC C/O THE FREMONT GROUP 50 FREMONT STREET SUITE 3700 SAN FRANCISCO, CALIFORNIA 94105 (415) 284-8500 (Name, Address and Telephone Number of Person authorized to Receive Notices and Communications on Behalf of Bidder) ------------------------ COPY TO: KENTON J. KING, ESQ. Skadden, Arps, Slate, Meagher & Flom LLP Four Embarcadero Center, Suite 3800 San Francisco, California 94111 (415) 984-6400 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- This Amendment No. 2 amends and supplements the Tender Offer statement on Schedule 14D-1/13D (the "Schedule 14D-1/13D") filed with the Securities and Exchange Commission on July 8, 1997 by Kerr Acquisition Corporation (the "Purchaser") and Fremont Acquisition Company, LLC ("Fremont"), relating to the offer by the Purchaser to purchase (i) all of the issued and outstanding shares of common stock, par value $0.50 per share, including the associated rights to purchase shares of preferred stock (the "Rights" and, together with common stock, the "Common Stock") issued pursuant to the Rights Agreement, dated as of July 25, 1995, between Kerr Group, Inc., a Delaware corporation (the "Company") and BankBoston, N.A. (formerly The First Bank of Boston), as Rights Agent, as amended, and (ii) all of the issued and outstanding shares of $1.70 Class B Cumulative Convertible Preferred Stock Series D, par value $0.50 per share (the "Series D Preferred Shares"), of the Company, for $5.40 per share of Common Stock and $12.50 per share of Series D Preferred Share, in each case net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 8, 1997 (the "Offer to Purchase"), a copy of which is attached to the Schedule 14D-1/13D as Exhibit (a)(1), and the related Letters of Transmittal, copies of which are attached to the Schedule 14D-1/13D as Exhibits (a)(2) and (a)(3). This filing also constitutes Amendment No. 2 to the Schedule 13D originally filed pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, on behalf of each of the Purchaser, Fremont, Fremont Partners, L.P., FP Advisors, L.L.C., Fremont Group, L.L.C. and Fremont Investors, Inc. Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in the Offer to Purchase and the Schedule 14D-1/13D. ITEM 4. SOURCES AND AMOUNT OF FUNDS OF OTHER CONSIDERATION Items (a)-(b) The information set forth in "Section 10--Source of Amount of Funds" of the Offer to Purchase is hereby amended and supplemented by adding the following: It is currently contemplated that of the $44.7 million in equity contributions from Fremont, approximately 80.165%, 16.529% and 3.306% will be obtained through the sale of equity interests to, respectively, Fremont Partners, Fremont Offshore Partners, L.P., a Cayman Islands Exempted Limited Partnership ("Fremont Offshore") and Fremont Partners Side-by-Side, a Delaware limited partnership ("Fremont Side-by-Side"). The Investment General Partner of Fremont Offshore is FP Advisors, and the sole General Partner of Fremont Side-by-Side is Fremont Group. Fremont Partners, Fremont Offshore and Fremont Side-By-Side together have committed capital of approximately $605 million available to be drawn upon from time to time upon notice to the limited partners of each of such partnerships. Fremont Partners, Fremont Offshore and Fremont Side-By-Side have entered into an operating agreement with respect to the formation and operation of Fremont pursuant to which Fremont Partners is designated the sole Managing Member of Fremont. As sole Managing Member of Fremont, Fremont Partners has the authority on behalf of Fremont, without the further approval of the other members of Fremont, to take all actions that are consistent with the business purposes of Fremont, as determined from time to time by all members. Fremont Partners has guaranteed the performance of all obligations of Fremont and the Purchaser pursuant to the Merger Agreement. The obligations of Fremont and the Purchaser under the Merger Agreement are not subject to any financing condition. It is currently contemplated that the offer of equity interests in Fremont or the Company to key management of the Company and/or entities related to management, if any such equity interests are offered, would take place only following the consummation of the Offer. If the Bridge Facility is utilized, each of Fremont Offshore and Fremont Side-By-Side may participate together with Fremont Partners in the Bridge Facility on a pro rata basis equal to the respective equity contributions contemplated to be made by each of Fremont Partners, Fremont Offshore and Fremont Side-By-Side in Fremont as described in the immediately preceding paragraph. 2 ITEM 10. ADDITIONAL INFORMATION Items (b)-(c) The information set forth in "Section 14--Conditions of the Offer" of the Offer to Purchase is hereby amended by replacing subparts (ii) and (iii) with the following: (ii) if the Minimum Condition has not been satisfied prior to the Expiration Date, or (iii) at any time after the date of the Merger Agreement and prior to the Expiration Date, any of the following conditions exist: Item 10(e) is hereby amended by replacing such Section (e) in its entirety with the following: On July 30, 1997, a purported holder of Series D Preferred Shares filed a complaint entitled DR. ALAN LATIES VS. KERR GROUP, INC., ET AL., Civil Action No. 15825-NC, against the Company and its directors (the "Defendants") in the Court of Chancery of the State of Delaware in and for New Castle County. The complaint seeks certification of the action as a class action and declaratory judgment that the acquisition is unfair to the holders of Series D Preferred Shares. In addition, the complaint seeks an order (i) enjoining the Defendants and any entities acting in concert with them from taking any action to consummate any of the transactions contemplated by the Merger Agreement; (ii) awarding plaintiff and the class damages against Defendants jointly and severally and directing Defendants to account to the Class for their profits; and (iii) awarding costs and expenses to plaintiff including reasonable attorneys' fees. The Defendants believe that the suit is without merit and intend to defend the suit vigorously. On August 1, 1997, the Pension Benefit Guaranty Corporation ("PBGC") published a Notice of Determination to terminate the Kerr Group, Inc. Retirement Income Plan (the "Plan"). According to the Notice, the PBGC intends to apply to the United Staes District Court for the Eastern District of Pennsylvania for an order terminating the Plan and appointing the PBGC statutory trustee of the Plan. Item 10(f) The information set forth in "Section 8--Certain Information Concerning the Company" of the Offer to Purchase is hereby amended by deleting therefrom the following: "NONE OF FREMONT, THE PURCHASER, THE COMPANY AND THEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES ASSUMES ANY RESPONSIBILITY FOR THE VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF THE PROJECTIONS." ITEM 11. MATERIALS TO BE FILED AS EXHIBITS Item 11 is hereby amended and supplemented by adding thereto the following Exhibits: (a)(14) Complaint entitled DR. ALAN LATIES VS. KERR GROUP, INC., ET AL. Civil Action No. 15825-NC. (a)(15) Press Release issued by the Company, dated August 1, 1997. (a)(16) Notice of Determination issued by the Pension Benefit Guaranty Corporation, dated August 1, 1997. 3 EXHIBIT LIST
EXHIBIT NUMBER EXHIBIT - --------- -------------------------------------------------------------------------------------------------------- (a)(1) Offer to Purchase, dated July 8, 1997. (a)(2) Letter of Transmittal with respect to the Common Stock. (a)(3) Letter of Transmittal with respect to the Series D Preferred Shares. (a)(4) Letter for use by Brokers, Dealers, Banks, Trust Companies and Nominees to their Clients. (a)(5) Letter to Clients. (a)(6) Notice of Guaranteed Delivery with respect to the Common Stock. (a)(7) Notice of Guaranteed Delivery with respect to the Series D Preferred Shares. (a)(8) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(9) Press Release jointly issued by Fremont and the Company, dated July 1, 1997. (a)(10) Form of Summary Advertisement, dated July 8, 1997. (a)(11) Fairness Opinion of CIBC Wood Gundy Securities Corp., dated June 30, 1997. (a)(12) Notice of United National Bank as Trustee of the Kerr Group, Inc. Employee Incentive Stock Ownership Plan I to Participants in Kerr Group, Inc. Employee Incentive Stock Ownership Plan I. (a)(13) Notice of United National Bank as Trustee of the Kerr Group, Inc. Employee Incentive Stock Ownership Plan to Participants in Kerr Group, Inc. Employee Incentive Stock Ownership Plan. (a)(14) Complaint entitled DR. ALAN LATIES VS. KERR GROUP, INC., ET AL. Civil Action No. 15825-NC. (a)(15) Press Release issued by the Company, dated August 1, 1997. (a)(16) Notice of Determination issued by the Pension Benefit Guaranty Corporation, dated August 1, 1997. (c)(1) Agreement and Plan of Merger, dated as of July 1, 1997, by and among Fremont, the Purchaser and the Company. (c)(2) Option Agreement, dated as of July 1, 1997, by and between Fremont and the Company. (c)(3) Guarantee, dated as of July 1, 1997, by and between Fremont Partners, L.P. and the Company. (c)(4) Confidentiality Agreement, dated November 6, 1995, by and between Fremont Group, Inc. and Lehman Brothers Inc. on behalf of the Company. (d) None. (e) Not applicable. (f) None.
4 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. Date: August 1, 1997 KERR ACQUISITION CORPORATION By: /s/ GILBERT H. LAMPHERE ----------------------------------------- Name: Gilbert H. Lamphere Title: Director and President
5 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. Date: August 1, 1997 FREMONT ACQUISITION COMPANY, LLC By: /s/ GILBERT H. LAMPHERE ----------------------------------------- Name: Gilbert H. Lamphere Title: President
6 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. Date: August 1, 1997 FREMONT PARTNERS, L.P. By: FP Advisors, L.L.C., its general partner By: Fremont Group, L.L.C., its managing member By: Fremont Investors, Inc., its manager
By: /s/ GILBERT H. LAMPHERE ----------------------------------- Name: Gilbert H. Lamphere Title: Managing Director and Director
7 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. Date: August 1, 1997 FP ADVISORS, L.L.C. By: Fremont Group, L.L.C., its managing member By: Fremont Investors, Inc., its manager By: /s/ GILBERT H. LAMPHERE ------------------------------------------------ Name: Gilbert H. Lamphere Title: Managing Director and Director
8 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. Date: August 1, 1997 FREMONT GROUP, L.L.C. By: Fremont Investors, Inc., its manager By: /s/ GILBERT H. LAMPHERE ------------------------------------------------ Name: Gilbert H. Lamphere Title: Managing Director and Director
9 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. Date: August 1, 1997 FREMONT INVESTORS, INC. By: /s/ GILBERT H. LAMPHERE ------------------------------------- Name: Gilbert H. Lamphere Title: Managing Director and Director
10 INDEX TO EXHIBITS
EXHIBIT NUMBER EXHIBIT - --------------- ------------------------------------------------------------------------------------------------- (a)(14) Complaint entitled DR. ALAN LATIES VS. KERR GROUP, INC., ET AL. Civil Action No. 15825-NC. (a)(15) Press Release issued by the Company, dated August 1, 1997. (a)(16) Notice of Determination issued by the Pension Benefit Guaranty Corporation, dated August 1, 1997.
EX-99.(A)(14) 2 EXHIBIT (A)(14) IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - ---------------------------------------x DR. ALAN LATIES, Plaintiff, Civil Action No. 15825 - v. - KERR GROUP, INC., HERBERT ELISH, HARVEY L. SPERRY, D. GORDON STRICKLAND, CLASS ACTION JAMES R. MELLOR, ROBERT M. O'HARA, COMPLAINT GORDON C. HURLBERT, MICHAEL C. JACKSON, --------- and JOHN D. KYLE, Defendants. - ---------------------------------------x Plaintiff, by his attorneys, alleges upon information and belief, except as to paragraph 1 which is alleged upon knowledge, as follows: PARTIES ------- 1. Plaintiff is and, at all relevant times, has been the owner of shares of the $1.70 Class B Cumulative Convertible Preferred Stock, Series D, per value $.50 per share (the "Preferred") of defendant Kerr Group, Inc. ("Kerr" or the "Company"). 2. (a) Kerr is a corporation organized and existing under the laws of the State of Delaware with offices in Lancaster, Pennsylvania. Kerr produces plastic packaging products. (b) The Company has authorized and outstanding about 487,000 shares of Preferred and 3,933,000 shares of common stock (the "Common"). Both classes are listed and traded on the New York Stock Exchange. (c) Holders of the Preferred are entitled to a cumulative dividend, payable quarterly, at the annual rate of $1.70 per share. The Preferred is redeemable at the option of the Company at any time, in whole or in part, at a price of $20.00 per share plus cumulative unpaid dividends. In the event of a dissolution, winding up, or liquidation of the Company, voluntary or involuntary, the holders of Preferred are entitled to receive $20.00 per share, plus any dividend arrearage on such stock, before any distribution or payment is made to any holder of Common Stock. In addition, the Preferred is convertible into Common Stock at the rate of 1.4545 shares of Common Stock for each share of Preferred. The Preferred have the right to vote only on amendments to the Certificate of Incorporation that would materially adversely affect their rights. However, if six quarterly dividends on the Preferred are unpaid, the holders of Preferred are entitled, voting as a class, to elect two additional persons to the Board of Directors of the Company until all such dividends have been paid. (d) The Company has not declared a dividend on the Preferred since the first quarter of 1996, or a total of six quarters. The cumulative amount of undeclared dividends as of June 30, 1997 is $2.55 per Preferred share. At June 30, 1997, the Preferred's liquidation value was $22.55 per share. 3. (a) Defendant Herbert Elish ("Elish") is the Chairman of Kerr's Board of Directors. The other directors of Kerr are defendants Gordon C. Hurlbert, Michael C. Jackson ("Jackson"), John D. Kyle, James R. Mellor, Robert M. O'Hara, Harvey L. Sperry, and D. Gordon Strickland ("Strickland"), the President and Chief Executive Officer of the Company. (b) Each director owns a substantial number of shares of Common Stock, as follows: DIRECTOR COMMON SHARES OWNED -------- ------------------- Harvey L. Sperry 22,696 D. Gordon Strickland 12,410 James R. Mellor 23,197 Gordon C. Hurlbert 14,455 Herbert Elish 20,685 Michael C. Jackson 9,850 Robert M. O'Hara 12,069 John D. Kyle 9,363 (c) In 1996 defendants Strickland and Elish each received options to purchase 10,000 shares of Common Stock at a price of $3.9375 per share. Except in the case of a change in control of the Company, these options are not exercisable unless and until the closing price of the Common Stock on the New York Stock Exchange reaches $10.00 per share and remains at or above that level for at least 10 consecutive trading days. (d) Defendant Jackson, an Advisory Director of Lehman Brothers, Inc. ("Lehman"), owns 748 Preferred and is the only Kerr Director who owns any Preferred. CLASS ACTION ALLEGATIONS 4. Plaintiff brings this action for declaratory, injunctive and other relief on his own behalf and as a class action, pursuant to Rule 23 of the Rules of this Court on behalf of a class (the "Class") consisting of all stockholders of Kerr (except defendants herein and any person, firm, trust, corporation or other entity related to or affiliated with any of the defendants or their successors in interest) who have or will be harmed as a result of defendants' action. 5. This action is properly maintainable as a class action for the following reasons: (a) The Class of stockholders for whose benefit this action is brought is so numerous that joinder of all Class members is impracticable. The Preferred is owned by hundreds of stockholders who are scattered throughout the United States. (b) There are questions of law and fact which are common to members of the Class and which predominate over all questions effecting only individual members, including (i) whether the Acquisition (hereinafter defined) provides for unfair treatment of the Preferred; and (ii) whether the approval by Kerr's directors of the transaction which is the subject of this action constitutes a violation of their fiduciary duties to the Class. (c) Plaintiff's claims are typical of the claims of the other members of the Class and plaintiff has no interests that are adverse or antagonistic to the interests of the Class. (d) Plaintiff is committed to the vigorous prosecution of this action and has retained competent counsel experienced in litigation of this nature. Accordingly, plaintiff is an adequate representative of the Class and will fairly and adequately protect the interests of the Class. (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 and establish incompatible standards of conduct for the party opposing the Class. (f) Defendants have acted on grounds generally applicable to the Class, thereby making appropriate final injunctive or corresponding declaratory relief with respect to the Class as a whole. SUBSTANTIVE ALLEGATIONS 6. In October 1995, following defaults in covenants contained in loan agreements governing its senior unsecured debt ("the Debt"), the Company engaged Lehman to explore a possible sale of the Company. Kerr agreed to pay Lehman a fee of 1% of the amount received on the sale of the Company, if the Company is sold during the term of its agreement with Kerr or if it is sold within 24 months thereafter to a buyer identified by Lehman. 7. Lehman contacted an affiliate of Fremont Partners, L.P. ("Fremont") to determine Fremont's interest in acquiring Kerr. In late 1995 and early 1996, Fremont reviewed certain public and confidential information concerning the Company, and indicated an interest in an acquisition. However, the Company and Fremont could not agree as to a proper valuation of the Company, and negotiations for a buy-out ceased. 8. In April 1996, Lehman informed Fremont that Lehman would no longer be representing the Company, and that if Fremont had an interest in participating in the recapitalization of the Company it should contact Kerr directly. Thereafter, the Company and Fremont had a number of discussions regarding a possible recapitalization of Kerr. In January 1997, Fremont continued its discussions of a recapitalization with the Company's new financial advisor, CIBC Wood Gundy Securities Corp ("CIBC"). 9. During the same period, Kerr and its advisors discussed a restructuring of the Debt with the Debtholders. Such discussions reached an impasse, and Kerr retained bankruptcy counsel and began preparations for a possible bankruptcy filing. However, the Company obtained an extension of the default waiver (the "waiver"), and sought financing that would enable Kerr to purchase the Debt and provide it with working capital. The waiver expired on March 7, 1997, with the Debtholders refusing to grant an extension. In April 1997, Kerr entered into a revolving credit agreement with Madelaine L.L.C. secured by its receivables, in order to provide the Company with working capital. However, certain provisions of the agreement with Madelaine constituted additional defaults under the terms of the Debt. The Debtholders threatened legal action against the Company, its officers, directors and advisors, based upon claims of breach of contract and breach of fiduciary duty. Kerr was notified that the Debt would be accelerated on June 4, 1997. In late May, the Debtholders agreed not to accelerate the Debt until July 3, 1997, in exchange for $500,000 and the payment by the Company of interest on the Debt at the default rate. 10. In late May 1997, Kerr and Fremont resumed discussions of a buy-out. On June 30, 1997, the Company and Fremont entered into an agreement under which a corporation wholly owned by Fremont would acquire all of the Company's shares of Preferred for $12.00 per Preferred share and all of the Common Stock shares for $5.40 per share in cash (the "Acquisition"), by means of a cash tender offer at those prices for the Preferred and the Common Stock, to be followed by a cash merger whereby any Preferred or Common shares not previously tendered would be acquired. Following Fremont's purchase of shares of Common Stock in the tender offer, Fremont is entitled to designate the number of directors of the Kerr board which is proportionate to its ownership of the outstanding Common Stock shares. The tender offer is conditioned upon Fremont receiving at least 51% of the Common Stock shares. Fremont commenced its tender offer on July 8, 1997. 11. By reason of the individual defendants' positions as directors and/or officers of Kerr, those defendants were and are in a fiduciary relationship with plaintiff and the other public Preferred holders, and owe them the highest obligations of good faith, full disclosure and fair dealing and to act in an informed and deliberate manner so that the price paid for the Preferred is fair and so that the total consideration paid upon the acquisition of the Company is apportioned fairly as between the Preferred and the Common Stock. 12. The Acquisition unduly favors the Common Stock at the expense of the Preferred. The price to be paid for the Preferred under the Acquisition is grossly unfair to the Class. Although Kerr's Schedule 14D-9 filing with the Securities and Exchange Commission (the "14D-9") states that the Board, in approving the Acquisition, relied upon the market prices of the Preferred and Common Stock, the allocation of the Acquisition proceeds is more favorable to the Common Stock than the recent relative market prices of the Preferred and Common Stock. The price to be paid in the Acquisition for each of the Common Stock, $5.40, is equal to 43.2% of the $12.50 to be paid for each of the Preferred. In 1996 and 1997, the Common Stock generally traded at a price which was less than 43.2% of the Preferred's market price. During the month of June 1997, immediately prior to the announcement of the Acquisition plan, the Common Stock traded at a high of $4.25, or only 30% of the Preferred's high of $14, while the lowest price during the month for the Common Stock was $2.25, or 33% of the Preferred's low of $6.75. On June 30, 1997, the day before the Acquisition plan was announced, the Common Stock closed at $3.875, or only 31% of the Preferred's closing price of $12.50. 13. The unfair allocation of Acquisition proceeds is also reflected in the substantial premium over market paid to the Common Stockholders, and the lack of any premium to the Preferred holders. The price paid for the Common Stock holders in the Acquisition provides a premium of about 40% over the pre-announcement market price, while no premium is to be paid on the Preferred. In fact, with respect to the high prices during the month of June 1997, the Acquisition provides the Common Stock a premium of 27% over the high price during that month, but relegates the Preferred to a DISCOUNT of 11% from its high of $14 per share. 14. Moreover, the priorities and rights granted by the Company's certificate of incorporation to the Preferred, including the Preferred's liquidation priority, are valuable legal rights, upon which the Preferred stockholders relied in acquiring their Preferred. Such priorities are of particular importance when a corporation is in serious financial distress and contemplating a bankruptcy filing, as was true of Kerr in 1997. In such circumstances, the Common Stock's equity is more likely to be entirely wiped out than the Preferred's and the Common's greater "upside" advantage is eliminated. Indeed, had the extent of the Company's financial difficulties in the first half of 1997 been fully disclosed, the Common would have traded at a much lower percentage of the Preferred than indicated above. The price to be paid for the Preferred in the Acquisition does not properly reflect the value of the Preferred's special rights. 15. Although Kerr's directors obtained an opinion from CIBC that the price "to be received by the holders of Common Stock, on the one hand, and Preferred Stock, on the other, pursuant to the [Acquisition], is fair to such holders from a financial point of view." CIBC did not opine as to the fairness of the relative values to be received by the holders of the Preferred and Common Stock. Similarly, the 14D-9 does not disclose the basis upon which the price to be paid by Fremont was allocated as between the holders of Preferred and Common Stock. 16. By approving the allocation of the Acquisition proceeds as between the Preferred and Common Stock provided in the Acquisition, Kerr's directors, in violation of their fiduciary duty, have benefitted themselves at the expense of the Class, since they own substantial amounts of Common Stock and almost no Preferred. Also, the consummation of the Acquisition would enable defendants Strickland and Elish to realize large profits on the exercise of options on the Common Stock, and would enable Lebman, of which defendant Jackson is an Advisory Director, to obtain a large fee. 17. Despite the clear conflict between their own personal interests and those of the holders of Preferred, Kerr's directors have failed to take measures to assure that the Preferred's position is protected in the negotiations with Fremont or the consideration and approval of the Acquisition. The tender offer is not subject to the tender of any amount of Preferred to Fremont and the Preferred have no right to vote upon the merger which will follow the tender offer. Moreover, although the Company has not paid six consecutive quarterly dividends to the Preferred, the directors have failed to call a meeting of the Preferred to elect two directors to represent the Preferred's interests on the Board with respect to the Acquisition. 18. Plaintiff and the other members of the Class will suffer injury unless the unlawful actions complained of herein are enjoined. 19. Plaintiff and Class lack an adequate remedy at law. WHEREFORE, plaintiff prays for judgment: A. Declaring that this action be maintained as a class action on behalf of the Class; B. Declaring that the Acquisition is unfair to the Preferred; C. Enjoining defendants and all persons and entities acting in concert with them from taking any action to consummate any of the transactions contemplated by the Acquisition, D. Awarding plaintiff and the Class damages against defendants jointly and severally and directing defendants to account to the Class for their profits; E. Awarding costs and expenses to plaintiff including reasonable attorneys' fees; and F. Granting such other and further relief as this Court may deem just and proper. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By: /s/ [ILLEGIBLE] ------------------------------------ Suite 1401, Mellion Bank Center P.O. Box 1070 Wilmington, Delaware 19899 (302) 656-4433 Attorneys for Plaintiff OF COUNSEL: Harold B. Obstfeld HAROLD B. OBSTFELD, P.C. 500 Fifth Avenue, 56th Floor New York, New York 10110-0002 (212) 391-4150 EX-99.(A)(15) 3 EXHIBIT (A)(15) 500 New Holland Avenue [KERR GROUP, INC., LOGO OMMITTED] Lancaster, PA 17602-2104 (717) 299-6511 FOR IMMEDIATE RELEASE --------------------- LANCASTER, PENNSYLVANIA (August 1, 1997) - Kerr Group, Inc. (NYSE:KGM), announced today that Pension Benefit Guaranty Corporation ("PBGC") has published a Notice of Determination to terminate the Kerr Group, Inc. Retirement Income Plan. According to the Notice, the PBGC intends to apply to the United States District Court for the Eastern District of Pennsylvania for an order terminating the Plan, establishing August 1, 1997 as the date of termination of the Plan and appointing the PBGC statutory trustee of the Plan. Kerr recently agreed to be acquired by Fremont. A tender offer for all outstanding shares of Common Stock and Preferred Stock is currently pending and scheduled to expire on August 4, 1997. The PBGC has advised the Company that it took this action to insure that the PBGC's interests were adequately protected in connection with the consummation of the tender offer. Discussions among the Company, the PBGC and Fremont are continuing. Kerr, headquartered in Lancaster, Pennsylvania, is a major producer of plastic packaging products. # # # Company Contact: Geoffrey A. Whynot Vice President, Finance and Chief Financial Officer (717) 390-8439 EX-99.(A)(16) 4 EXHIBIT (A)(16) ATTENTION ALL PARTICIPANTS, RETIREES AND BENEFICIARIES OF THE KERR GROUP, INC. RETIREMENT INCOME PLAN NOTICE OF DETERMINATION ----------------------- PLEASE TAKE NOTICE that the Pension Benefit Guaranty Corporation ("PBGC") has determined, pursuant to Section 4042(a)(4) of the Employee Retirement Income Security Act of 1974 ("ERISA"), AS AMENDED, 29 U.S.C. Section 1342(a)(4), that the possible long-run loss of the PBGC with respect to the Kerr Group, Inc. Retirement Income Plan (the "Plan") may reasonably be expected to increase unreasonably if the Plan is not terminated. The PBGC has further determined, pursuant to Section 4042(c) of ERISA, 29 U.S.C. Section 1342(c), that the Plan should therefore be terminated in order to protect the interests of the PBGC. Accordingly, pursuant to Section 4042 of ERISA, 29 U.S.C. Section 1342, the PBGC intends to apply to the United States District Court for the Eastern District of Pennsylvania for an order terminating the Plan, establishing August 1, 1997 as the date of termination of the Plan, and appointing the PBGC statutory trustee of the Plan. Participants of the Plan should not expect to earn additional benefit eligibility service under the Plan on or after the Plan's termination date. The PBGC has completed its decisionmaking process in this matter. Accordingly, this determination is effective on the date it is issued. [PBGC LOGO OMITTED] Andrea E. Schneider Acting Deputy Executive Director and Chief Negotiator PENSION BENEFIT GUARANTY CORPORATION ISSUED: August 1, 1997 -----END PRIVACY-ENHANCED MESSAGE-----