MORGAN STANLEY
MORGAN STANLEY & CO.
INCORPORATED
1251 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
(212) 703-4000
Exchange Offer for
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
Borden, Inc.
By Exchanging for Each Such Share
A Number of Shares of Common Stock
of
RJR Nabisco Holdings Corp.
Based on the Exchange Ratio Described Below
by
Borden Acquisition Corp.
a corporation formed at the direction of
Kohlberg Kravis Roberts & Co.
------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1994,
UNLESS THE EXCHANGE OFFER IS EXTENDED.
------------------
November , 1994
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Borden Acquisition Corp., a New Jersey corporation
(the "Purchaser"), to act as Dealer Manager in connection with the Purchaser's
offer to exchange for shares of Common Stock, par value $.01 per share
("Holdings Common Stock"), of RJR Nabisco Holdings Corp., a Delaware corporation
("Holdings"), equal to the Exchange Ratio (as defined in the Offering
Circular/Prospectus referred to below) all the outstanding shares of Common
Stock, par value $.625 per share (the "Borden Shares"), of Borden, Inc., a New
Jersey corporation ("Borden"), upon the terms and subject to the conditions set
forth in the Offering Circular/Prospectus, dated November , 1994 (the
"Offering Circular/Prospectus"), and in the related Letter of Transmittal (which
together constitute the "Exchange Offer") enclosed herewith. The Merger
Agreement (as defined in the Offering Circular/Prospectus) provides that Borden
will redeem the outstanding Preferred Stock Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of January 28, 1986, as
amended, between Borden and The Bank of New York, as Rights Agent, at a
redemption price of one and two-thirds cents per Right immediately prior to
consummation of the Exchange Offer. Unless and until the Rights have been
redeemed, holders of Borden Shares will be required to tender one Right for each
Borden Share tendered in order to effect a valid tender of such Borden Share. If
the Distribution Date (as defined in the Offering Circular/Prospectus) has not
occurred prior to the time Borden Shares are tendered pursuant to the Exchange
Offer, a tender of Borden Shares will constitute a tender of the associated
Rights. If the Distribution Date has occurred and certificates representing
Rights ("Rights Certificates") have been distributed by Borden to holders of
Borden Shares, such holders of Borden Shares shall be required to tender Rights
Certificates representing a number of Rights equal to the number of Borden
Shares being tendered in order to effect a valid tender of such Borden Shares.
Holders of Borden Shares and Rights whose certificates for such Borden Shares
(the "Share Certificates") and, if applicable, Rights Certificates are not
immediately available or who
cannot deliver their Share Certificates or, if applicable, their Rights
Certificates, and all other required documents to the Exchange Agent (as defined
below) prior to the Expiration Date (as defined in the Offering
Circular/Prospectus), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Borden Shares and Rights according
to the guaranteed delivery procedures set forth under "The Exchange
Offer--Procedure for Tendering Shares of Borden Common Stock--Guaranteed
Delivery" in the Offering Circular/Prospectus. Unless the context otherwise
requires, all references to Borden Shares shall be deemed to refer also to the
associated Rights, unless and until redeemed by Borden.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Borden Shares registered in your name or in the name of
your nominee.
The Exchange Offer is conditioned upon, among other things, there being
validly tendered and not properly withdrawn prior to the expiration of the
Exchange Offer a number of Borden Shares which, when added to any Borden Shares
previously acquired by the Purchaser or Whitehall Associates, L.P. (other than
pursuant to the Option (as defined in the Offering Circular/Prospectus)),
represents more than 41% of the Borden Shares outstanding on a fully diluted
basis (other than dilution due to the Rights). The Exchange Offer is also
subject to other material terms and conditions, which Borden shareholders should
carefully consider. See "The Exchange Offer--Certain Conditions of the Exchange
Offer" and "Description of Merger Agreement and Conditional Purchase/Option
Agreement" in the Offering Circular/Prospectus.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offering Circular/Prospectus.
2. The Letter of Transmittal to tender Borden Shares for your use and
for the information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Borden Shares.
3. The Notice of Guaranteed Delivery for Borden Shares and Rights to be
used to accept the Exchange Offer if Share Certificates (or Rights
Certificates if applicable) are not immediately available or if such
certificates and all other required documents cannot be delivered to First
Chicago Trust Company of New York (the "Exchange Agent") by the Expiration
Date or if the procedure for book-entry transfer cannot be completed by the
Expiration Date.
4. A printed form of letter which may be sent to your clients for whose
accounts you hold Borden Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients' instructions
with regard to the Exchange Offer.
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
6. A return envelope addressed to First Chicago Trust Company of New
York, the Exchange Agent.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON ,
, 1994, UNLESS THE EXCHANGE OFFER IS EXTENDED.
In order to take advantage of the Exchange Offer, (i) a duly executed and
properly completed Letter of Transmittal and any required signature guarantees,
or an Agent's Message (as defined in the Offering Circular/Prospectus) in
connection with a book-entry delivery of Borden Shares or Rights, and other
required documents should be sent to the Exchange Agent, and (ii) either Share
Certificates representing the tendered Borden Shares (and, if applicable,
tendered Rights) should be delivered to the Exchange Agent, or such Borden
Shares (and, if applicable, tendered Rights) should be tendered by book-entry
transfer into the Exchange Agent's account maintained at one of the Book-Entry
Transfer
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Facilities (as described in the Offering Circular/Prospectus), all in accordance
with the instructions set forth in the Letter of Transmittal and the Offering
Circular/Prospectus.
Unless and until the Rights are redeemed by Borden, shareholders will be
required to tender one Right for each Borden Share tendered in order to effect a
valid tender of such Borden Share. If separate Rights Certificates are not
issued, a tender of Borden Shares will also constitute a tender of Rights. See
"The Exchange Offer--Procedure for Tendering Shares of Borden Common Stock" in
the Offering Circular/Prospectus for a discussion of procedures for tendering
Rights in the event that a Distribution Date occurs and Rights Certificates are
distributed to shareholders prior to the date of tender pursuant to the Exchange
Offer. If, in accordance with the Merger Agreement, the Rights are redeemed by
the Board of Directors prior to the consummation of the Exchange Offer,
tendering shareholders who are holders of record as of the applicable record
date will be entitled to receive and retain the redemption price of one and
two-thirds cents per Right in accordance with the Rights Agreement.
If holders of Borden Shares wish to tender, but it is impracticable for them
to forward their Share Certificates or, if applicable, Rights Certificates, or
other required documents on or prior to the Expiration Date or to comply with
the book-entry transfer procedures on a timely basis, a tender may be effected
by following the guaranteed delivery procedures specified under "The Exchange
Offer-- Procedure for Tendering Shares of Borden Common Stock--Guaranteed
Delivery" in the Offering Circular/Prospectus.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than Morgan Stanley & Co. Incorporated (the "Dealer
Manager"), the Exchange Agent and D.F. King & Co., Inc. (the "Information
Agent") (as described in the Offering Circular/Prospectus)) for soliciting
tenders of Borden Shares pursuant to the Exchange Offer. The Purchaser will,
however, upon request, reimburse you for customary clerical and mailing expenses
incurred by you in forwarding any of the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any stock transfer taxes payable on the
transfer of Borden Shares to it, except as otherwise provided in Instruction 6
of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer should be
addressed to the Dealer Manager or the Information Agent, at their respective
addresses and telephone numbers set forth on the back cover of the Offering
Circular/Prospectus. Additional copies of the enclosed material may be obtained
from the Information Agent.
Very truly yours,
MORGAN STANLEY & CO.
Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE DEALER MANAGER, BORDEN, THE
EXCHANGE AGENT OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
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