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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
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AMERICAN NATIONAL CAN GROUP, INC.
(Name of Subject Company)
AMERICAN NATIONAL CAN GROUP, INC.
(Name of Person Filing Statement)
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COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
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027714104 (COMMON STOCK)
(CUSIP Number of Class of Securities)
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WILLIAM A. FRANCOIS, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
AMERICAN NATIONAL CAN GROUP, INC.
8770 W. BRYN MAWR AVENUE
CHICAGO, IL 60631
(773) 399-3000
(Name, Address and Telephone Number of Person Authorized to Receive Notice and
Communications on Behalf of the Person Filing Statement)
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COPY TO:
BARRY A. BRYER, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52(ND) STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
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/ / CHECK THE BOX IF THE FILING RELATES SOLELY TO PRELIMINARY COMMUNICATIONS
MADE BEFORE THE COMMENCEMENT OF A TENDER OFFER
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ITEM 1. SUBJECT COMPANY INFORMATION.
The name of the subject company is American National Can Group, Inc., a
Delaware corporation (the "Company"). The address of the principal executive
offices of the Company is 8770 W. Bryn Mawr Avenue, Chicago, Illinois 60631. The
telephone number of the Company at its principal executive offices is
(773) 399-3000.
The title of the class of equity securities to which this
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
Exhibits or Annexes hereto, this "Statement") relates is the Common Stock, par
value $0.01 per share, of the Company (the "Common Stock"). As of March 29,
2000, there were 55,000,000 shares of Common Stock outstanding.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
The filing person is the subject company. The Company's name, business
address and business telephone number are set forth in Item 1 above.
This Statement relates to the tender offer by Rexam Acquisition
Subsidiary Inc. (the "Purchaser"), a Delaware corporation and a wholly owned
indirect subsidiary of Rexam PLC, a public limited company organized under the
laws of England and Wales ("Rexam"), to purchase all of the outstanding shares
of Common Stock (the "Shares"), at a purchase price of $18.00 per Share, net to
the seller in cash (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase, dated April 10, 2000,
and in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"). The Offer is
described in a Tender Offer Statement on Schedule TO (as amended or supplemented
from time to time, the "Schedule TO"), filed by the Purchaser with the
Securities and Exchange Commission on April 10, 2000. The Offer is being made in
accordance with the Agreement and Plan of Merger, dated as of March 31, 2000,
among Rexam, the Purchaser and the Company (the "Merger Agreement"). The Merger
Agreement provides that, subject to the satisfaction or waiver of certain
conditions, following completion of the Offer, and in accordance with the
Delaware General Corporation Law (the "DGCL"), the Purchaser will be merged with
and into the Company (the "Merger"). Following the consummation of the Merger,
the Company will continue as the surviving corporation and will be a wholly
owned indirect subsidiary of Rexam. At the effective time of the Merger (the
"Effective Time"), each issued and outstanding Share (other than Shares owned by
Rexam, the Purchaser, any of their respective subsidiaries, the Company or any
of its subsidiaries, and Shares held by stockholders who did not vote in favor
of the Merger Agreement and who comply with all of the relevant provisions of
Section 262 of the DGCL relating to dissenters' rights of appraisal) will be
converted into the right to receive the same amount in cash per Share that is
paid pursuant to the Offer (the "Merger Consideration").
The Schedule TO states that the principal office of Rexam is located at 4
Millbank, London SW1P 3XR, United Kingdom and the principal office of the
Purchaser is located at 4201 Congress Street, Suite 340, Charlotte, NC 28209.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Certain contracts, agreements, arrangements or understandings between the
Company or its affiliates and certain of its directors and executive officers
are, except as noted below, described in the Information Statement pursuant to
Rule 14f-1 under the Securities Exchange Act of 1934 (the "Information
Statement") that is attached as Annex B to this Statement and is incorporated
herein by reference. Except as described in this Statement (including in the
Exhibits hereto and in Annex B hereto) or incorporated herein by reference, to
the knowledge of the Company, as of the date of this Statement there exists no
material agreement, arrangement or understanding or any actual or potential
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conflict of interest between the Company or its affiliates and (1) the Company's
executive officers, directors or affiliates or (2) the Purchaser or the
Purchaser's executive officers, directors or affiliates.
THE MERGER AGREEMENT. The summary of the Merger Agreement and the
description of the conditions of the Offer contained in Sections 12 and 14,
respectively, of the Offer to Purchase of the Purchaser, dated April 10, 2000
and filed as Exhibit (d)(1) to the Schedule TO, which is being mailed to
stockholders together with this Statement, are incorporated herein by reference.
Such summary and description are qualified in their entirety by reference to the
Merger Agreement, which has been filed as Exhibit (e)(1) hereto and is
incorporated herein by reference.
THE STOCKHOLDERS AGREEMENT. The summary of the Stockholders Agreement
("Stockholders Agreement") contained in Section 12 of the Offer to Purchase of
the Purchaser, dated April 10, 2000 and filed as Exhibit (d)(2) to the Schedule
TO, which is being mailed to stockholders together with this Statement, are
incorporated herein by reference. Such summary and description are qualified in
their entirety by reference to the Stockholders Agreement, which has been filed
as Exhibit (e)(2) hereto and is incorporated herein by reference.
EFFECTS OF THE OFFER AND THE MERGER UNDER COMPANY STOCK PLANS AND AGREEMENTS
BETWEEN THE COMPANY AND ITS EXECUTIVE OFFICERS.
Certain members of the Company's management and the Board have interests in
the transactions contemplated by the Merger Agreement that are in addition to
their interests as Company shareholders generally. The Board was aware of these
interests and considered them, among other matters, in approving the Merger
Agreement and the transactions contemplated thereby.
EMPLOYMENT AND SEVERANCE ARRANGEMENTS WITH THE COMPANY, AS AMENDED. Edward
Lapekas, Michael Herdman, Alan Schumacher, Dennis Bankowski and Curtis Clawson
are each a party to an amended and restated executive employment agreement with
the Company that provides that upon a termination of employment by the Company
other than for "cause" or by the executive for "good reason" (in each case, as
defined in the agreements) following a change of control, the executive will be
entitled to receive the following payments and benefits for the continuation
period specified for each executive: (1) base salary, (2) an annual incentive
plan payment for the full and partial years during the continuation period at
target level, (3) full vesting of all time-based equity incentive awards,
(4) continued health and other welfare benefits until the executive is age 55
and service credit for eligibility towards retiree medical benefits,
(5) transfer of the title to the executive's Company car, (6) outplacement
services, (7) matching and profit sharing contributions under the Company's
Capital Accumulation Plan, (8) continued life and long-term disability insurance
and (9) an enhanced pension benefit, calculated as if the executive reached age
60 while employed by the Company and had the greater of (a) 30 years of credited
service and (b) the executive's actual years of credited service including
additional years equal to the continuation period. The continuation period for
Mr. Lapekas is three years and for the other executives it is two years. The
consummation of the transactions contemplated by the Merger Agreement will
constitute a change of control for purposes of the executive agreements. The
executive agreements contain non-competition, confidentiality and
non-solicitation provisions that restrict the executives while employed and for
specified periods thereafter. If any amounts payable to an executive under the
executive agreement or otherwise would subject the executive to the excise tax
under Section 4999 of the Internal Revenue Code of 1986 (the "Code"), the
Company will make a payment to the executive such that after the payment of all
income and excise taxes, the executive will be in the same after-tax position as
if no excise tax had been imposed.
In addition, Allan Bohner and William Francois are parties to executive
agreements that provide for termination benefits substantially similar to the
benefits described above for a two year continuation period, upon a termination
of employment by the Company without cause or by the executive for good
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reason. Mr. Francois' agreement does not provide for annual incentive plan
payments during the continuation period, but does provide for a pro-rata award
at target level for the year of the date of termination and for the Company to
continue to pay the premiums and other costs associated with split-dollar life
insurance policies covering the executive.
In connection with the transactions contemplated by the Merger Agreement,
the executive agreements were amended to provide for additional annual incentive
plan payments for the full and partial years during the continuation period at
target level and for a pro-rata annual incentive award based on the maximum
level for the period from January 1, 2000 through the Effective Time, and that
such payments shall be treated as includable compensation for purposes of all
employee benefits provided by the Company that are affected by the compensation
or earnings of the executive (consistent with his executive agreement,
Mr. Francois will receive an additional pro-rata bonus only and the maximum
level award will be in lieu of the target level award provided under his
agreement prior to the amendment). The additional annual incentive payments are
subject to the executive satisfying certain performance conditions relating to
the Merger. The executive agreements, as amended, also provide for the payment
of the executive's retention award under the retention program (as described
below) upon the earlier to occur of the 30(th) day after the Effective Time and
the date that the executive is due to receive his first payment under the
executive agreement; provided, however, that if the executive's employment is
not terminated under circumstances entitling the executive to receive the
severance payments described above, the executive will receive the retention
award at the time the awards are otherwise payable as described below. In
addition, the executive agreements with Messrs. Bohner and Francois were amended
to provide for an excise tax gross-up that is the same as the provision
described above for the other executives.
RETENTION PROGRAM. In connection with their approval of the Merger and the
transactions contemplated thereby, the Boards of Directors of the Company and
Rexam approved the establishment of a cash retention program with an aggregate
value of approximately $13 million, to be allocated among the Company's
employees, including members of senior management. The retention program
generally provides that a participant's allocated portion of the retention pool
will be paid to him or her on the earlier of the two year anniversary of the
Effective Time and the date that the participant is terminated from the Company
under circumstances entitling such participant to severance under the applicable
severance plan of the Company or, if applicable, such participant's employment
agreement.
DIRECTORS PENSION CONVERSION PLAN. Pursuant to the Merger Agreement, stock
units held by directors of the Company pursuant to the Directors' Pension
Conversion Plan will be converted into a right to receive an amount in cash
equal to the product of the Merger Consideration and the number of shares of
Common Stock underlying the director's stock units, on the earlier of the
closing of the Offer (if Rexam then owns 80% of the Common Stock of the Company)
and the Effective Time.
STOCK-BASED RIGHTS. The Merger Agreement provides that, at the earlier of
the closing of the Offer (if Rexam then owns 80% of the Common Stock of the
Company) and the Effective Time of the Merger, each outstanding stock option to
acquire Common Stock, whether vested or unvested, will be canceled, and the
option holder will be entitled to receive an amount equal to the excess of the
Merger Consideration over the exercise price, multiplied by the number of shares
of Common Stock underlying the option, less applicable withholding. In addition,
the Merger Agreement provides that, at the earlier of the closing of the Offer
(if Rexam then owns 80% of the Common Stock of the Company) and the Effective
Time, each conversion share, performance share and restricted share obligation
will become fully vested and non-forfeitable, and immediately thereafter will be
canceled, entitling the holder thereof to receive an amount equal to the Merger
Consideration multiplied by the number of shares of Common Stock underlying the
stock award, less applicable withholding.
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ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendation of the Board of Directors. The Company's Board of
Directors (the "Board" or the "Board of Directors"), at a meeting held on
March 31, 2000, determined that the terms of the Offer and the Merger are
advisable, fair to, and in the best interests of, the stockholders of the
Company. At this meeting, the Board approved the Merger Agreement, the Offer,
the Merger and the other transactions contemplated by the Merger Agreement, and
approved the Merger Agreement and the Stockholders Agreement for purposes of
Section 203 of the DGCL. Your Board unanimously recommends that stockholders
accept the Offer and tender their Shares in the Offer.
(b) (i) Background of the Offer; Contacts with Rexam.
From time to time prior to the Company's initial public offering on
August 2, 1999 (the "Initial Public Offering"), Pechiney had expressed an
interest in selling the Company, which was at that time a wholly owned
subsidiary of Pechiney. Pechiney ultimately selected the Initial Public Offering
as a financial alternative intended to monetize part of its stake in the Company
and to provide for future liquidity by creating a public trading market for the
Company's shares.
Between the date of the Initial Public Offering and December 1, 1999, the
Company's stock price consistently traded below the $17.00 per share Initial
Public Offering price, with the closing price of the Company's Common Stock on
the New York Stock Exchange ranging from $11.8125 to $17.00. During that period,
Pechiney and the Company received inquiries (including from Rexam) from time to
time about the possibility of acquiring Pechiney's 45% stake in the Company or
an acquisition of the entire Company. In early December 1999, the Board
instructed management to explore strategic alternatives to enhance stockholder
value. The Company retained Deutsche Bank Securities Inc. ("Deutsche Bank") to
assist it in its review of strategic alternatives. Between December, 1999 and
February, 2000, Deutsche Bank held due diligence meetings with the Company's
management and made several presentations to management and the Board on
possible strategic alternatives.
On February 7, 2000, representatives from Deutsche Bank met with Pechiney
and its financial advisors, Rothschild & Cie Banque ("Rothschild"), to discuss
Pechiney's intentions with respect to its holdings in the Company. On
February 8, 2000, Deutsche Bank was informed by Rothschild of Rexam's interest
in exploring a merger between Rexam and the Company in an all stock transaction
at an implied exchange ratio of the then-prevailing market prices of the two
companies. On February 8, 2000, the closing price of the Company's Common Stock
on the New York Stock Exchange was $12.00 per share. In response to this
inquiry, representatives of Deutsche Bank met with representatives of Schroders
plc ("Schroders") and Salomon Smith Barney Inc. ("Salomon Smith Barney"),
Rexam's financial advisors, on February 15, 2000, to further discuss Rexam's
proposal, and indicated that, based on the implied value of the proposal, such
proposal would not be the basis for further discussions.
On February 22, 2000, Mr. Lapekas, the Chairman and Chief Executive Officer
of the Company, received an unsolicited nonbinding letter from two publicly
traded companies (the "Joint Offerors") expressing an interest in exploring a
joint acquisition of the Company at a price of $17.00 per share, subject to due
diligence and other conditions.
On February 23, 2000, Mr. Lapekas received a letter from Rexam, indicating
its continued interest in exploring a business combination with the Company.
Rexam noted that it would be willing to pursue a transaction pursuant to which
each of the Company's shares would be exchanged for $13.60 in cash and $2.80
worth of Rexam common stock per share of Company Common Stock. Rexam also stated
that it would be willing to consider alternative forms of consideration,
including a cash election transaction pursuant to which the Company's
stockholders could elect to receive cash or stock in exchange for their shares,
provided that no more than 80% of the aggregate consideration to be paid in
exchange for shares of Company Common Stock would be paid in cash. Rolf
Borjesson, the Chief
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Executive Officer of Rexam, called Mr. Lapekas later that day to inform him that
Rexam would also be willing to consider an all-cash transaction at $17.00 per
share.
On the same day, February 23, 2000, Mr. Lapekas also received an unsolicited
letter from a financial sponsor (the "Financial Sponsor") indicating an interest
in exploring a business combination in the form of a leveraged buyout of the
Company at $17.00 per share. While such a transaction contemplated management
participation, the Company's management was not a party to the proposal. In
addition, an executive of a subsidiary of another publicly traded company (the
"Strategic Investor") called Mr. Lapekas to express an interest in a strategic
transaction with the Company, possibly involving a joint venture or a minority
investment in the Company. The closing share price for Company Common Stock on
the New York Stock Exchange on February 22, 2000 was $10.5625.
On February 24, 2000, the Board met at a regularly scheduled meeting and
discussed the Company's strategic direction and the unsolicited indications of
interest that the Company had received. Members of management made a detailed
financial presentation of the Company's business and financial condition and
prospects, including a discussion of the difficult pricing environment in the
beverage packaging industry recently created by the Company's competitors and
the negative impact of such pricing environment on the Company's projected
profitability and cash flow. Representatives from Deutsche Bank summarized each
of the indications of interest and outlined the advantages and disadvantages of
the Company's strategic alternatives, including those of remaining independent,
growth through acquisition or a sale of the Company. After discussion, the Board
concluded that in light of the difficult pricing environment in the beverage
packaging industry recently created by the Company's competitors resulting in a
negative impact on the Company's projected profitability and cash flow, as well
as the Company's relatively low Common Stock trading range, remaining
independent and growth through acquisition did not present the most attractive
alternatives available to maximize stockholder value. The Board accordingly
directed management and its advisors to further explore the indications of
interest that were received and to update the Board within two weeks.
On March 1, 2000, Mr. Lapekas and representatives from Deutsche Bank met
with executives of the Strategic Investor. The Strategic Investor stated that
its proposed strategic transaction would be in the form of a minority
investment, but that it needed time to evaluate the likelihood of its being able
to proceed.
On March 2, 2000, representatives from Deutsche Bank and Wachtell, Lipton,
Rosen & Katz ("Wachtell Lipton"), special counsel to the Company, met separately
with executives of the Financial Sponsor, financial advisors to Rexam and
financial advisors to the Joint Offerors and, at the direction of the Company,
indicated to each that the Board did not find a $17.00 per share offer
compelling. Representatives from Deutsche Bank advised each of the parties to
provide the Company with a revised proposal, including the highest price at
which it would be prepared to make an offer.
Between March 6, 2000 and March 8, 2000, each of the three parties who were
asked to respond to the Company did so. On March 6, 2000 the Financial Sponsor
sent a letter to Deutsche Bank in which it reiterated its interest in exploring
a leveraged buyout of the Company at $17.00 per share. On March 7, 2000, at the
direction of Rexam, representatives of Salomon Smith Barney called to state
Rexam's willingness to explore a business combination with the Company at an
all-cash price of $17.75 per share. On March 7, Mr. Lapekas received a letter
from the Joint Offerors, in which they reiterated their previous indication of
interest to make a joint acquisition of the Company at $17.00 per share. Each
letter indicated, among other terms, a need for a period of due diligence.
On March 7, 2000, the Board met telephonically to receive an update on the
discussions with the parties that had previously indicated an interest in
exploring a business combination with the Company. Deutsche Bank discussed the
indications of interest and the relative advantages and disadvantages of each
offer and reviewed with the Board the advisability and likely outcome of
soliciting a selected list of additional potential acquirors. Additionally, in
light of the difficulties being experienced in the high
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yield debt markets and the difficult pricing environment in the beverage
packaging industry recently created by the Company's competitors, the Financial
Sponsor's offer was deemed to be significantly less likely to be increased. The
advisors noted that Rexam was prepared to promptly devote substantial resources
to commence due diligence and to quickly commence negotiation of a transaction.
It was also noted that Rexam appeared to be a desirable acquiror from both a
financial and regulatory viewpoint resulting in a greater likelihood of
consummation if there was agreement on a transaction. After thorough discussion,
the Board authorized management to negotiate an enhanced offer with Rexam, and,
if such enhanced offer were received, to provide a one-week exclusive due
diligence period to Rexam.
Later that day, on March 7, 2000, Mr. Lapekas called Mr. Borjesson to inform
him that the Company was willing to promptly proceed with Rexam, provided that
Rexam raised its indicated offer price. Rexam indicated that it would be willing
to pay $18.00 cash per share of Company Common Stock.
On March 10, 2000, the Board met telephonically with management and
representatives from Wachtell Lipton and Deutsche Bank to review the progress of
discussions with Rexam and the other parties. Management and representatives
from Deutsche Bank reviewed the events of the preceding few days. After a
discussion, the Board authorized management to permit Rexam to begin due
diligence and later that day Rexam and the Company executed a confidentiality
agreement.
During the week of March 13, 2000, representatives of Rexam and their
advisors met with members of the Company's management and representatives from
Deutsche Bank to conduct a review of the Company's business and operations. Also
during this period, Rexam conducted legal, business and financial due diligence
with respect to the Company.
On March 18, 2000, Rexam's legal advisors provided drafts of an acquisition
agreement and a stockholders agreement pursuant to which Pechiney, the Company's
largest shareholder, would, among other things, agree to support the transaction
with Rexam. Rexam stated that the execution of the Stockholders Agreement would
be a condition for Rexam's entry into the proposed transaction. Between
March 18 and March 21, 2000, Rexam's and the Company's respective legal advisors
began negotiating the proposed draft of acquisition agreement.
On March 21, 2000, the Board met telephonically to discuss the status of the
negotiations with Rexam. At the Board meeting, representatives of Wachtell
Lipton reviewed drafts of the acquisition agreement and the stockholders
agreement and summarized the key issues that had been discussed with Rexam's
legal advisors, including the structure of the transaction, provisions relating
to the break-up fees and termination rights and the other conditions to closing.
Rexam, the Company, and their respective advisors continued negotiation of
the acquisition agreement between March 21, 2000 and March 31, 2000, and an
agreement was reached resulting in the Merger Agreement. Also during the period
between March 21, 2000 and March 31, 2000, Rexam, Pechiney and their respective
advisors negotiated the terms of the Stockholders Agreement and an agreement was
reached resulting in the Stockholders Agreement.
During the period leading up to March 31, 2000, Deutsche Bank received
telephone calls from the advisors to the Joint Offerors and representatives of
the Financial Sponsor inquiring as to the status of their proposals. Such
discussions did not result in revised indications of interest from either party.
On Friday afternoon, March 31, 2000, the Board met to receive presentations
from the Company's legal and financial advisors and to consider the Offer, the
Merger and the Merger Agreement. At the meeting, Deutsche Bank delivered its
written opinion that, as of such date, the consideration to be received by the
holders of Shares pursuant to the Offer and the Merger Agreement was fair from a
financial point of view to such holders. Following such presentations and
receipt of Deutsche Bank's opinion, the Board determined that the terms of the
Offer and the Merger were advisable, fair to and
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in the best interests of, the stockholders of the Company, approved the Offer,
the Merger, the Merger Agreement and the other transactions contemplated
thereby, and determined to recommend that the Company's stockholders accept the
Offer and tender their Shares pursuant to the Offer and approve and adopt the
Merger Agreement. Following the Board meeting, Rexam and the Company executed
the Merger Agreement and Rexam and Pechiney executed the Stockholders Agreement.
On Monday morning, April 3, 2000, Rexam and the Company issued a joint press
release in the United States announcing the execution of the Merger Agreement.
On April 10, 2000, in accordance with the Merger Agreement, the Purchaser
commenced the Offer.
(ii) Reasons for the Recommendation of the Board of Directors.
In reaching its recommendations described above in paragraph (a) of this
Item 4, the Board of Directors considered a number of factors, including the
following:
1. COMPANY OPERATING AND FINANCIAL CONDITION. The current and historical
financial condition and results of operations of the Company, as well as
the prospects and strategic objectives of the Company, including the
risks involved in achieving those prospects and objectives, and the
current and expected conditions in the industry in which the Company's
business operates. The Board considered the current conditions and
pricing pressures in the beverage packaging industry and the resulting
negative impact of such factors on the Company's projected profitability
and cash flow.
2. TRANSACTION FINANCIAL TERMS/PREMIUM TO MARKET PRICE. The relationship of
the Offer Price to the historical market prices of the Shares. The $18.00
Offer represents a 42.57% premium over the $12.625 closing price of the
Shares on the New York Stock Exchange on March 30, 2000 (the last trading
day prior to the Board meeting at which the Board approved the Merger
Agreement) and a 60.17% premium over the $11.238 average closing price
for the 30 day trading period ending on March 30, 2000. The Board also
considered the form of consideration to be paid to holders of Shares in
the Offer and the Merger, and the certainty of value of such cash
consideration compared to stock. The Board was aware that the
consideration received by holders of Shares in the Offer and Merger would
be taxable to such holders for federal income tax purposes.
3. STRATEGIC ALTERNATIVES. The presentation of Deutsche Bank and the
Board's review with respect to trends in the industry in which the
Company's business operates and the strategic alternatives available to
the Company, including the Company's alternative to remain an independent
public company and the possibility of acquisitions or mergers with other
companies in such industries, a leveraged buy-out of the Company and
other extraordinary corporate transactions, as well as the risks and
uncertainties associated with such alternatives. The Board considered
possible alternatives to the Offer and the Merger involving third
parties, the likelihood of consummation with respect to such proposals,
and the risks associated therewith.
4. DEUTSCHE BANK FAIRNESS OPINION. Presentations from Deutsche Bank and the
opinion of Deutsche Bank, dated March 31, 2000, that as of that date,
based upon and subject to certain considerations and assumptions, the
consideration to be received by holders of Shares pursuant to the Merger
Agreement was fair from a financial point of view to such holders. A copy
of the opinion rendered by Deutsche Bank to the Board, setting forth the
procedures followed, the matters considered and the assumptions made by
Deutsche Bank in arriving at its opinion, is attached hereto as Annex A
and incorporated herein by reference. Stockholders are urged to read this
opinion in its entirety. The Board was aware that Deutsche Bank becomes
entitled to certain fees described in Item 5 upon the consummation of the
Offer.
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5. PECHINEY SUPPORT. The fact that Pechiney, beneficial owner of
approximately 45% of the outstanding Shares, is in favor of the Offer,
the Merger and the transactions contemplated thereby and has entered into
the Stockholders Agreement, pursuant to which it has agreed to tender its
Shares in the Offer, to support Rexam's transaction and to oppose
competing transactions. The Board considered the terms of the
Stockholders Agreement, including that if the Merger Agreement were
terminated under circumstances in which the termination fee becomes
payable to Rexam, Pechiney would remain subject to the restrictions of
the Stockholders Agreement and would not be able to support a competing
proposal for the later of six months after such termination or
December 31, 2000. The Board also considered the provision of the
Stockholders Agreement pursuant to which Pechiney agreed to pay to Rexam
any cash proceeds that Pechiney receives, with respect to its shares of
common stock, that are in excess of $18.00 per share in connection with a
transaction other than with Rexam or the Purchaser.
6. TIMING OF COMPLETION. The anticipated timing of consummation of the
transactions contemplated by the Merger Agreement, including the
structure of the transactions as a tender offer for all of the Shares,
which should allow stockholders to receive the transaction consideration
earlier than in an alternative form of transaction, followed by the
Merger in which stockholders will receive the same consideration as
received by stockholders who tender their Shares in the Offer.
7. LIMITED CONDITIONS TO CONSUMMATION. Rexam's obligation to consummate the
Offer and the Merger is subject to a limited number of conditions, with
no financing condition. The Board also considered the relative likelihood
of obtaining required regulatory approvals for this transaction, as
compared to a transaction with other potential partners, and Rexam's
shareholder approval, and the terms of the Merger Agreement regarding the
obligations of both companies to pursue such approvals, including the
provision in the Merger Agreement that requires Rexam to pay to the
Company $15,000,000 in the event that Rexam's shareholders fail to
approve the transaction or Rexam's Board of Directors withdraws or
modifies its recommendation so long as the Company is not materially in
breach of its representations and covenants.
8. ALTERNATIVE TRANSACTIONS. The Board considered that under the terms of
the Merger Agreement, while the Company is prohibited from soliciting
acquisition proposals from third parties, the Company may engage in
discussions or negotiations with, and may furnish non-public information
to, a third party that makes a non-solicited acquisition proposal if,
among other things, the Board determines in good faith with the advice of
its financial advisors that such acquisition proposal would or is
reasonably likely to provide greater value to the Company's stockholders
from a financial point of view than the Offer and the Merger. The Board
considered that the terms of the Merger Agreement permit the Company to
terminate the Merger Agreement to enter into such a superior transaction
involving the Company if the Company pays Rexam a $35,000,000 termination
fee and expenses of up to $15,000,000, and gives Rexam four business
days' notice prior to terminating the Merger Agreement. The Board
considered the possible effect of these provisions of the Merger
Agreement, and the terms of the Stockholders Agreement, on third parties
who might be interested in exploring an acquisition of the Company. In
this regard, the Board recognized that the provisions of the Merger
Agreement relating to termination fees, non-solicitation of acquisition
proposals and the execution of the Stockholders Agreement by Pechiney
were insisted upon by Rexam as a condition to entering into the Merger
Agreement.
9. POTENTIAL CONFLICTS OF INTEREST. The interests of certain Company
executives in the Offer and the Merger (see Item 3--"EFFECTS OF THE OFFER
AND THE MERGER UNDER COMPANY STOCK PLANS AND AGREEMENTS BETWEEN THE
COMPANY AND ITS EXECUTIVE OFFICERS.").
9
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The foregoing includes the material factors considered by the Board of
Directors. In view of its many considerations, the Board of Directors did not
find it practical to, and did not, quantify or otherwise assign relative weights
to the specific factors considered. In addition, individual members of the Board
may have given different weights to the various factors considered. After
weighing all of these considerations, the Board determined to approve the Merger
Agreement and recommend that holders of Shares tender their Shares in the Offer.
(c) Intent to Tender. After reasonable inquiry and to the best of the
Company's knowledge, each executive officer, director and affiliate of the
Company currently intends to tender all Shares held of record or beneficially
owned by such person to the Purchaser in the Offer.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
Pursuant to a letter agreement dated December 9, 1999, as supplemented
March 16, 2000, the Company formally retained Deutsche Bank to act as its
financial advisor in connection with the proposed sale of the Company. The Board
retained Deutsche Bank based upon Deutsche Bank's qualifications, experience and
expertise. Deutsche Bank is an internationally recognized investment banking and
advisory firm. Deutsche Bank, as part of its investment banking and financial
advisory business, is continuously engaged in the valuation of businesses and
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for corporate and other
purposes. In addition, Deutsche Bank is a full-service securities firm engaged
in securities trading, brokerage and financing activities. In the ordinary
course of Deutsche Bank's trading and brokerage activities, Deutsche Bank or its
affiliates may at any time hold long or short positions, and may trade or
otherwise effect transactions, for its own account or the accounts of customers,
in debt or equity securities or senior loans of the Company or Rexam. In the
past, Deutsche Bank and its affiliates have provided financial advisory and
financing services for the Company, including acting as co-manager in the
Company's Initial Public Offering.
Pursuant to the Deutsche Bank engagement letter, the Company paid to
Deutsche Bank an advisory fee of $250,000 and agreed to pay a fee of $1,500,000
upon delivery of the opinion with respect to a transaction, such fees to be
creditable against a transaction fee of 0.425% of the aggregate consideration,
including liabilities assumed, payable in the transaction. The Company has also
agreed to reimburse Deutsche Bank for reasonable expenses as incurred. In
addition, the Company has agreed to indemnify Deutsche Bank, its directors,
officers, agents and employees and each person, if any, controlling Deutsche
Bank against certain liabilities and expenses, including certain liabilities
under the federal securities laws, arising out of Deutsche Bank's engagement.
Except as described above, neither the Company nor any person acting on its
behalf currently intends to employ, retain or compensate any person to make
solicitations or recommendations to stockholders on its behalf concerning the
Offer or the Merger.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
Except as set forth below, no transactions in Shares have been effected
during the past 60 days by the Company or, to the knowledge of the Company, by
any executive officer, director, affiliate or subsidiary of the Company. On
February 14, 2000, Joseph Esterman, the Company's Vice President, Investor
Relations purchased a total of 4,117 shares of Company Common Stock through a
broker at an average price of $11.28 per share.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Except as set forth in this Statement, the Company is not currently
undertaking or engaged in any negotiations in response to the Offer that relate
to (1) a tender offer for or other acquisition of the
10
<PAGE>
Company's securities by the Company, any subsidiary of the Company or any other
person; (2) an extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Company or any subsidiary of the Company; (3) a
purchase, sale or transfer of a material amount of assets of the Company or any
subsidiary of the Company; or (4) any material change in the present dividend
rate or policy, or indebtedness or capitalization of the Company.
Except as set forth in this Statement, there are no transactions,
resolutions of the Board of Directors, agreements in principle, or signed
contracts in response to the Offer that relate to one or more of the events
referred to in the preceding paragraph.
ITEM 8. ADDITIONAL INFORMATION.
(a) Delaware General Corporation Law. As a Delaware corporation, the Company
is subject to Section 203 of the DGCL. In general, Section 203 would prevent an
"interested stockholder" (generally defined as a person beneficially owning 15%
or more of a corporation's voting stock) from engaging in a "business
combination" (as defined in Section 203) with a Delaware corporation for three
years following the date such person became an interested stockholder unless:
(1) before such person became an interested stockholder, the board of directors
of the corporation approved the transaction in which the interested stockholder
became an interested stockholder or approved the business combination, (2) upon
consummation of the transaction which resulted in the interested stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding for purposes of determining the number of
shares of outstanding stock held by directors who are also officers and by
employee stock plans that do not allow plan participants to determine
confidentially whether to tender shares), or (3) following the transaction in
which such person became an interested stockholder, the business combination is
(x) approved by the board of directors of the corporation and (y) authorized at
a meeting of stockholders by the affirmative vote of the holders of at least
66 2/3% of the outstanding voting stock of the corporation not owned by the
interested stockholder. In accordance with the provisions of Section 203, the
Board of Directors has approved the Merger Agreement and the Stockholders
Agreement, as described in Item 4 above and, therefore, the restrictions of
Section 203 are inapplicable to the Merger and the transactions contemplated
under the Stockholders Agreement.
(b) Under the DGCL, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the outstanding shares of Common Stock, Purchaser
will be able to effect the Merger after consummation of the Offer without a vote
of the Company's stockholders. However, if Purchaser does not acquire at least
90% of the Shares pursuant to the Offer or otherwise and a vote of the Company's
stockholders is required under Delaware law, a significantly longer period of
time will be required to effect the Merger.
(c) Regulatory Approvals.
UNITED STATES ANTITRUST COMPLIANCE. Under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") and the rules that have
been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The purchase of Shares pursuant to the Offer is subject to such
requirements.
Pursuant to the requirements of the HSR Act, the Purchaser has advised the
Company that it expects to file a Notification and Report Form with respect to
the Offer and Merger with the Antitrust Division and the FTC on or about April
11, 2000. As a result, the waiting period applicable to the purchase of Shares
pursuant to the Offer would be scheduled to expire at 11:59 p.m., New York City
time, 15 days after such filing. However, prior to such time, the Antitrust
Division or the FTC may
11
<PAGE>
extend the waiting period by requesting additional information or documentary
material relevant to the Offer from the Purchaser. If such a request is made,
the waiting period will be extended until 11:59 p.m., New York City time, on the
tenth day after substantial compliance by the Purchaser with such request.
Thereafter, such waiting period can be extended only by court order or by
agreement of the parties.
The Antitrust Division and the FTC scrutinize the legality under the
antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer. At any time before or after the consummation of
any such transactions, the Antitrust Division or the FTC could take such action
under the antitrust laws of the United States as it deems necessary or desirable
in the public interest, including seeking to enjoin the purchase of Shares
pursuant to the Offer or seeking divestiture of the Shares so acquired or
divestiture of substantial assets of Rexam or the Company. Private parties
(including individual States) may also bring legal actions under the antitrust
laws of the United States. The Company does not, and the Purchaser has advised
the Company that it does not, believe that the consummation of the Offer will
result in a violation of any applicable antitrust laws. However, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made,
or if such a challenge is made, what the result will be. See Item 3.
EUROPEAN ECONOMIC AREA AND EUROPEAN NATIONAL MERGER REGULATION. Rexam and
the Company each conduct substantial operations in the European Economic Area.
Council Regulation (EEC) 4064/89, as amended, and Article 57 of the European
Economic Area Agreement (together, the "European Regulation") require that
concentrations with a "Community or EFTA dimension" be notified in prescribed
form to the Commission of the European Communities for review and approval. In
these cases, the European Commission, as opposed to the individual countries
within the European Economic Area, will, with certain exceptions, have exclusive
jurisdiction to review the concentration.
Rexam and the Company have determined that the Offer and the Merger have a
"Community dimension," and thus, intend to file promptly notification in the
prescribed form with the European Commission in accordance with the European
Regulation.
This filing will trigger a one-month review period during which the European
Commission is required to determine whether the proposed merger is compatible
with the European common market. This one-month period may be extended to six
weeks if the parties submit a proposal for divestiture or undertaking in order
to get a positive decision from the European Commission. If at the end of this
initial review period the European Commission has "serious doubts" about the
proposed merger's compatibility with the common market, the Commission can
subject the transaction to a "second-stage" review, which may take up to
approximately four months to complete.
The Company does not, and the Purchaser has advised the Company that it does
not, believe that the Offer and Merger are incompatible with the European common
market. However, there can be no assurance that the European Commission will
allow the consummation of the Offer and Merger, or that the necessary approval
will be granted without conditions. See Item 3.
OTHER FILINGS. There is a possibility that other filings may have to be
made with foreign governments under their pre-merger notification statutes. The
filing requirements of various nations are being analyzed by the parties and,
where necessary, the parties intend to make such filings.
(d) The Purchaser's Designation of Persons to be Elected to the Board Of
Directors.
The Information Statement attached as Annex B to this Statement is being
furnished in connection with the possible designation by Rexam, pursuant to the
terms of the Merger Agreement, of certain persons to be elected to the Board of
Directors other than at a meeting of the Company's stockholders.
12
<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------
<S> <C>
(a)(1) Offer to Purchase, dated April 10, 2000 (incorporated by
reference to Exhibit (a)(1)(A) to the Schedule TO of the
Purchaser filed on April 10, 2000).
(a)(2) Letter of Transmittal (incorporated by reference to Exhibit
(a)(1)(B) to the Schedule TO of the Purchaser filed on April
10, 2000).
(a)(3) Letter to Stockholders of the Company, dated April 10, 2000.
(a)(4) Opinion of Deutsche Bank Securities Inc., dated March 31,
2000 (included as Annex A to the Statement).
(a)(5) Joint Press Release issued by Rexam and the Company on April
3, 2000 (incorporated by reference to Exhibit (a)(1)(G) to
the Schedule TO of the Purchaser filed on April 10, 2000).
(e)(1) Agreement and Plan of Merger, dated as of March 31, 2000,
among Rexam, the Purchaser and the Company (incorporated by
reference to Exhibit (d)(1) to the Schedule TO of the
Purchaser filed on April 10, 2000).
(e)(2) Stockholders Agreement, dated as of March 31, 2000, between
Rexam and Pechiney (incorporated by reference to
Exhibit (d)(2) to the Schedule TO of the Purchaser filed on
April 10, 2000).
(e)(3) Confidentiality Agreement, dated March 10, 2000, between
Rexam and the Company (incorporated by reference to
Exhibit (d)(3) to the Schedule TO of the Purchaser filed on
April 10, 2000).
(e)(4) First Amendment to Agreement, dated as of March 31, 2000,
among American National Can Company, the Company and Allan
Bohner.
(e)(5) Second Amendment to Amended and Restated Executive
Employment Agreement, dated as of March 31, 2000, among
American National Can Company, the Company and Curtis J.
Clawson.
(e)(6) Second Amendment to Amended and Restated Executive
Employment Agreement, dated as of March 31, 2000, among
American National Can Company, the Company and Edward A.
Lapekas.
(e)(7) Second Amendment to Amended and Restated Executive
Employment Agreement, dated as of March 31, 2000, among
American National Can Company, the Company and Dennis R.
Bankowski.
(e)(8) Second Amendment to Amended and Restated Executive
Employment Agreement, dated as of March 31, 2000, among
American National Can Company, the Company and Michael D.
Herdman.
(e)(9) Second Amendment to Amended and Restated Executive
Employment Agreement, dated as of March 31, 2000, among
American National Can Company, the Company and
Alan A. Schumacher.
(e)(10) First Amendment to Agreement among American National Can
Company, the Company and William A. Francois, dated as of
March 31, 2000.
</TABLE>
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
<TABLE>
<S> <C> <C>
AMERICAN NATIONAL CAN GROUP, INC.
By: /s/ WILLIAM A. FRANCOIS
-----------------------------------------
Name: William A. Francois
Title: Senior Vice President, General
Counsel and Secretary
</TABLE>
Dated: April 10, 2000
<PAGE>
ANNEX A
<TABLE>
<S> <C>
DEUTSCHE BANC ALEX. BROWN [LOGO]
Deutsche Bank Securities
Inc.
130 Liberty Street, MS 2331
New York, NY 10006
Tel 212 250-6000
Fax 212 250-6400
</TABLE>
March 31, 2000
Board of Directors
American National Can Group, Inc.
8770 West Bryn Mawr Avenue
Chicago, IL 60631
Members of the Board:
Deutsche Bank Securities Inc. ("Deutsche Bank") has acted as financial
advisor to American National Can Group ("ANC" or the "Company") in connection
with the Agreement and Plan of Merger (the "Merger Agreement") dated March 31,
2000, among the Company, Rexam plc ("Rexam") and Merger Sub, a wholly owned
subsidiary of Rexam ("Merger Sub"), which provides, among other things, for
Merger Sub to commence a cash tender offer for all the outstanding shares of the
common stock, par value $.01 per share, of the Company ("Company Common Stock")
at a purchase price of $18.00 per share, net to the seller in cash (the
"Consideration"), to be followed by a merger of Merger Sub with and into the
Company (the cash tender offer and the merger collectively, the "Transaction")
whereby each share of Company Common Stock not owned directly or indirectly by
the Company or Rexam will be converted into the right to receive the
Consideration, and as a result, the Company will become a wholly owned
subsidiary of Rexam. The terms and conditions of the Transaction are more fully
set forth in the Merger Agreement.
You have requested Deutsche Bank's opinion, as investment bankers, as to the
fairness, from a financial point of view, to the stockholders of ANC of the
Consideration.
In connection with Deutsche Bank's role as financial advisor to ANC, and in
arriving at its opinion, Deutsche Bank has reviewed certain publicly available
financial and other information concerning the Company and certain internal
analyses and other information furnished to it by the Company. Deutsche Bank has
also held discussions with members of the senior management of the Company
regarding the business and prospects of the Company. In addition, Deutsche Bank
has (i) reviewed the reported prices and trading activity for Company Common
Stock, (ii) compared certain financial and stock market information for the
Company with similar information for certain companies whose securities are
publicly traded, (iii) reviewed the financial terms of certain recent business
combinations which it deemed comparable in whole or in part, (iv) reviewed the
terms of the Merger Agreement and certain related documents, and (v) performed
such other studies and analyses and considered such other factors as it deemed
appropriate.
A-1
<PAGE>
Deutsche Bank has not assumed responsibility for independent verification
of, and has not independently verified, any information, whether publicly
available or furnished to it, concerning the Company, including, without
limitation, any financial information, forecasts or projections considered in
connection with the rendering of its opinion. Accordingly, for purposes of its
opinion, Deutsche Bank has assumed and relied upon the accuracy and completeness
of all such information and Deutsche Bank has not conducted a physical
inspection of any of the properties or assets, and has not prepared or obtained
any independent evaluation or appraisal of any of the assets or liabilities, of
the Company. With respect to the financial forecasts and projections made
available to Deutsche Bank and used in its analyses, Deutsche Bank has assumed
that they have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of the management of the Company, as to the
matters covered thereby. In rendering its opinion, Deutsche Bank expresses no
view as to the reasonableness of such forecasts and projections or the
assumptions on which they are based. Deutsche Bank's opinion is necessarily
based upon economic, market and other conditions as in effect on, and the
information made available to it as of, the date hereof.
For purposes of rendering its opinion, Deutsche Bank has assumed that, in
all respects material to its analysis, the representations and warranties of the
Company, Rexam, and Merger Sub contained in the Merger Agreement are true and
correct, the Company, Rexam and Merger Sub will each perform all of the
covenants and agreements to be performed by it under the Merger Agreement and
all conditions to the obligations of each of the Company, Rexam and Merger Sub
to consummate the Transaction will be satisfied without any waiver thereof.
Deutsche Bank has also assumed that all material governmental, regulatory or
other approvals and consents required in connection with the consummation of the
Transaction will be obtained.
This opinion is addressed to, and for the use and benefit of, the Board of
Directors of ANC and is not a recommendation to the stockholders to approve the
Transaction. This opinion is limited to the fairness, from a financial point of
view, to the stockholders of ANC of the Consideration, and Deutsche Bank
expresses no opinion as to the merits of the underlying decision by the Company
to engage in the Transaction.
Deutsche Bank will be paid a fee for its services as financial advisor to
ANC in connection with the Transaction, a substantial portion of which is
contingent upon consummation of the Transaction. We are an affiliate of Deutsche
Bank AG (together with its affiliates, the "DB Group"). One or more members of
the DB Group have, from time to time, provided investment banking and other
financial services to the Company for which it has received compensation,
including acting as co-manager in connection with the Company's initial public
offering of common stock in 1999. In the ordinary course of business, members of
the DB Group may actively trade in the securities and other instruments and
obligations of the Company and Rexam for their own accounts and for the accounts
of their customers. Accordingly, the DB Group may at any time hold a long or
short position in such securities, instruments and obligations.
Based upon and subject to the foregoing, it is Deutsche Bank's opinion as
investment bankers that, as the date hereof, the Consideration is fair, from a
financial point of view, to the stockholders of ANC.
Very truly yours,
/s/ Deutsche Bank Securities Inc.
DEUTSCHE BANK SECURITIES INC.
A-2
<PAGE>
ANNEX B
AMERICAN NATIONAL CAN GROUP, INC.
8770 W. BRYN MAWR AVENUE
CHICAGO, ILLINOIS 60631
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on or about April 10, 2000 as
part of the Solicitation/ Recommendation Statement on Schedule 14D-9 (the
"Statement") of American National Can Group, Inc. (the "Company"). You are
receiving this Information Statement in connection with the possible election of
persons designated by Rexam Inc. ("Rexam") to a majority of seats on the Board
of Directors (the "Board of Directors" or the "Board") of the Company. On
March 31, 2000, the Company entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Rexam and Rexam Acquisition Subsidiary Inc. (the
"Purchaser"), a Delaware corporation and a wholly owned indirect subsidiary of
Rexam, pursuant to which the Purchaser is required to commence a tender offer to
purchase all outstanding shares of Common Stock, par value $0.01 per share, of
the Company (the "Shares"), at a price per Share of $18.00, net to the seller in
cash (the "Offer Price"), upon the terms and conditions set forth in the
Purchaser's Offer to Purchase, dated April 10, 2000, and in the related Letter
of Transmittal (which, together with any amendments and supplements thereto,
collectively constitute the "Offer"). Copies of the Offer to Purchase and the
Letter of Transmittal have been mailed to stockholders of the Company and are
filed as Exhibits (a)(1)(A) and (a)(2)(B) respectively, to the Tender Offer
Statement on Schedule TO (as amended from time to time, the "Schedule TO") filed
by the Purchaser with the Securities and Exchange Commission (the "Commission")
on April 10, 2000. The Merger Agreement provides that, subject to the
satisfaction or waiver of certain conditions, following completion of the Offer,
and in accordance with the Delaware General Corporation Law (the "DGCL"), the
Purchaser will be merged with and into the Company (the "Merger"). Following
consummation of the Merger, the Company will continue as the surviving
corporation and will be a wholly owned indirect subsidiary of Rexam. At the
effective time of the Merger (the "Effective Time"), each issued and outstanding
Share (other than Shares that are owned by Rexam, the Purchaser, any of their
respective subsidiaries, the Company or any of its subsidiaries, and Shares held
by stockholders of the Company who did not vote in favor of the Merger Agreement
and who comply with all of the relevant provisions of Section 262 of the DGCL)
will be converted into the right to receive the amount in cash per Share paid
pursuant to the Offer.
The Offer, the Merger, and the Merger Agreement are more fully described in
the Statement to which this Information Statement forms Annex B, which was filed
by the Company with the Commission on April 10, 2000 and which is being mailed
to stockholders of the Company along with this Information Statement.
This Information Statement is being mailed to you in accordance with
Section 14(f) of the Securities Exchange Act of 1934 ("Exchange Act") and
Rule 14f-1 promulgated thereunder. The information set forth herein supplements
certain information set forth in the Statement. Information set forth herein
related to Rexam, the Purchaser or the Rexam Designees (as defined below) has
been provided by Rexam. You are urged to read this Information Statement
carefully. You are not, however, required to take any action in connection with
the matters set forth herein.
Pursuant to the Merger Agreement, the Purchaser commenced the Offer on
April 10, 2000. The Offer is currently scheduled to expire at 12:00 midnight,
New York City time, on Friday, May 5, 2000, unless the Purchaser extends it.
B-1
<PAGE>
GENERAL
The Common Stock is the only class of equity securities of the Company
outstanding which is entitled to vote at a meeting of the stockholders of the
Company. As of the close of business on March 29, 2000, there were 55,000,000
outstanding shares of Common Stock, of which Rexam and the Purchaser own no
shares as of the date hereof.
RIGHTS TO DESIGNATE DIRECTORS AND REXAM DESIGNEES
The information contained herein concerning Rexam Designees (as described
below) has been furnished to the Company by Rexam and its designees.
Accordingly, the Company assumes no responsibility for the accuracy or
completeness of this information.
The Merger Agreement provides that, promptly upon the purchase of and
payment for Shares by the Purchaser pursuant to the Offer, Rexam will be
entitled to designate such number of directors (the "Rexam Designees") on the
Board, rounded up to the next whole number, as is equal to the product obtained
by multiplying the total number of directors on the Board by the percentage that
the number of Shares so purchased and paid for bears to the total number of
Shares then outstanding.
The Merger Agreement provides that the Company will, upon request of the
Purchaser, promptly increase the size of the Board of Directors or obtain the
resignations of such number of directors as is necessary to enable the Rexam
Designees to be elected to the Board and, subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder, will cause the Rexam
Designees to be so elected.
Notwithstanding the foregoing, if Shares are purchased pursuant to the
Offer, there will be until the Effective Time at least three members of the
Board who were directors on the date of the Merger Agreement and who are not
officers of the Company or representatives of any affiliates of the Company.
The Rexam Designees will be selected by Rexam from among the individuals
listed below. Each of the following individuals has consented to serve as a
director of the Company if appointed or elected. None of the Rexam Designees
currently is a director of, or holds any positions with, the Company. Rexam has
advised the Company that, to the best of Rexam's knowledge, except as set forth
below, none of the Rexam Designees or any of their affiliates beneficially owns
any equity securities or rights to acquire any such securities of the Company,
nor has any such person been involved in any transaction with the Company or any
of its directors, executive officers or affiliates that is required to be
disclosed pursuant to the rules and regulations of the Commission other than
with respect to transactions between Rexam and the Company that have been
described in the Schedule TO or the Statement.
The name, age, citizenship, present principal occupation or employment and
five-year employment history of each of the individuals who may be selected as
Rexam Designees are set forth below. Unless otherwise noted, the business
address of each person listed below is 4 Millbank, London, SW1P, 3XR, United
Kingdom.
ROLF L. BORJESSON, 57, Swedish. Mr. Borjesson has served as director and
Chief Executive of Rexam since 1996. He has served as director of Midway Holding
Company AB and Sodra Regionen Svenska Handelsbanken AB since 1995.
Mr. Borjesson has also served as director of Invensys plc since 1998 and
director and Chief Executive of PLM AB from 1990 to 1996.
FRANK C. BROWN, 49, American. Mr. Brown has served as President and as
director of Rexam Inc. since 1996. From 1992 until 1996 he served as General
Counsel and Secretary of Rexam Inc. The business address of Mr. Brown is 4201
Congress Street, Suite 340, Charlotte, NC 28209.
B-2
<PAGE>
YVES E. DOMINIONI, 53, French. Mr. Dominioni has served as director of Rexam
since 1997. He has served as Directeur General of Sofab SA since 1995.
LARS G. EMILSON, 58, Swedish. Mr. Emilson has served as director of Rexam
since 1999. He also served as Director of PLM AB since 1999 and Chief Executive
Officer of PLM AB since 1999. Managing Director, PLM Beverage Can Division from
1992 to 1999.
DAVID W. GIBSON, 37, British. Mr. Gibson has served as company Secretary of
Rexam since 1996 and was company Solicitor of Rexam from 1989 to 1996.
RONALD H. GLASSHOFF, 51, American. Mr. Glasshoff has served as Vice
President-Finance and director of Rexam Inc. since 1991. The business address of
Mr. Glasshoff is 4201 Congress Street, Suite 340, Charlotte, NC 28209.
ROBERT W. GLUSKIN, 53, American. Mr. Gluskin has served as director of Rexam
since 1997. He has also been President of Rexam Medical Packaging Inc. since
1993. The business address of Mr. Gluskin is 4201 Congress Street, Suite 340,
Charlotte, NC 28209.
MICHAEL J. HARTNALL, 57, British. Mr. Hartnall has served as Finance
Director of Rexam since 1987. He also served as director of PLM AB since 1999
and Director of Quote-plan Limited since 1992.
JEREMY LANCASTER, 64, British. Mr. Lancaster has served as Chairman of Rexam
since 1996. He also served as Chairman of Hepworth PLC and non-executive
director of TPIC (Birmingham) Limited since 1996. Prior to 1996, Mr. Lancaster
was the Chairman and Chief Executive of Wolseley plc.
CHARLOTTE J. VINCINI, 46, American. Ms. Vincini has served as
Director-Corporate Benefits of Rexam Inc. since 1995. The business address of
Ms. Vincini is 4201 Congress Street, Suite 340, Charlotte, NC 28209.
B-3
<PAGE>
OWNERSHIP OF COMMON STOCK BY THE
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth information as of March 29, 2000, with
respect to the beneficial ownership of the Company's Common Stock by (i) each
director of the Company, (ii) each of the Chief Executive Officer and the other
four most highly compensated executive officers of the Company ("Named Executive
Officers"), (iii) all directors and executive officers of the Company as a
group, and (iv) each person who, to the best of the Company's knowledge,
beneficially owns more than five percent of any class of the Company's voting
securities. Except as otherwise indicated, persons listed below have sole voting
and investment power with respect to all shares held by them, except to the
extent such power may be shared with a spouse.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
(2)(3) PERCENT OF CLASS
------------------ ----------------
<S> <C> <C>
DIRECTORS (1)
Christel Bories........................................... 4,360 *
Frank W. Considine........................................ 6,360 *
Ronald J. Gidwitz......................................... 14,635 *
George D. Kennedy......................................... 14,635 *
Homer J. Livingston, Jr................................... 10,633 *
Roland H. Meyer, Jr....................................... 4,630 *
James J. O'Connor......................................... 14,635 *
Alain Pasquier............................................ 4,630 *
Jean-Dominique Senard..................................... 4,630 *
James R. Thompson......................................... 10,633 *
Jack H. Turner............................................ 5,630 *
NAMED EXECUTIVE OFFICERS
Edward A. Lapekas......................................... 82,443 *
Curtis J. Clawson......................................... 73,572 *
Dennis R. Bankowski....................................... 38,477 *
Michael D. Herdman........................................ 43,645 *
Alan H. Schumacher........................................ 36,197 *
Jean-Pierre Rodier........................................ 4,630 *
DIRECTORS AND EXECUTIVE
OFFICERS AS A GROUP
(25 individuals, including those named above) (4)......... 451,786 *
PRINCIPAL STOCKHOLDERS
Pechiney.................................................. 25,000,000 45.455%
7, place du Chancelier
Adenauer
75218 Paris Cedex 16,
France
Capital Research and...................................... 4,210,200 7.7%
Management Company (5)
333 S. Hope St.
Los Angeles, CA 90071
FMR Corp. (6)............................................. 2,903,400 5.278%
82 Devonshire St.
Boston, MA 02109
</TABLE>
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* Less than one percent
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(1) Does not include directors who are Named Executive Officers.
(2) Includes 3,968 shares which each non-employee director of the Company has
the right to acquire pursuant to stock options issued under the Company's
Directors' Stock Plan and 662 deferred stock units payable to each
non-employee director upon their retirement or other termination from the
Board. Non-employee directors who served on the Board of American National
Can Company prior to the Initial Public Offering had accrued a retirement
benefit which was converted at the time of the Initial Public Offering to
deferred stock units receivable upon their retirement or other termination
from the Board in the following amounts: Messrs. Gidwitz, Kennedy and
O'Connor each received 10,005 deferred stock units and Messrs. Livingston
and Thompson each received 6,003 deferred stock units.
(3) Includes the right to receive the following shares under the Company's Stock
Compensation Conversion Plan in exchange for stock options and stock
appreciation rights issued by the Company's former parent: Messrs. Lapekas,
Clawson, Bankowski, Herdman, and Schumacher hold 67,343, 27,507, 36,977,
31,645, and 29,441 shares, respectively. Also includes 40,000 restricted
shares granted to Mr. Clawson under the Company's Long-Term Stock Incentive
Plan.
(4) Includes 1,000 and 3,000 shares held by the spouses of two executive
officers. These officers specifically disclaim beneficial ownership of these
shares.
(5) Based solely on information contained in a Schedule 13G filed with the
Commission on February 10, 2000.
(6) Based solely on information contained in a Schedule 13G filed with the
Commission on February 14, 2000, by FMR Corp. ("FMR"), Edward C. Johnson,
III (Chairman and owner of 12% of the voting power of FMR), and Abigail P.
Johnson (a director and owner of 24.5% of the voting power of FMR). Based on
the Schedule 13G, FMR has sole voting power as to 186,200 shares of Common
Stock, shared voting power as to no shares of Common Stock, sole investment
power as to 2,903,400 shares of Common Stock and shared investment power as
to no shares of Common Stock.
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BOARD OF DIRECTORS
The Board of Directors is divided into three staggered classes. At each
annual meeting of stockholders, a class of directors will be elected for a
three-year term to succeed the directors of the same class whose terms are then
expiring. Each of the current directors has been a director of the Company since
its initial public offering on August 2, 1999 (the "Initial Public Offering").
CLASS I DIRECTORS
TERMS EXPIRING IN 2000
CHRISTEL BORIES*, 35. Mrs. Bories has been Senior Executive Vice President
and Chief Operating Officer, Plastic Packaging of Pechiney since January 1999
and also served in a similar position at American National Can Company until
July 28, 1999. From April 1995 through December 1998, she was Senior Executive
Vice President, Strategy and Control of Pechiney. From 1993 until March 1995,
she was employed at Union Miniere, a non-ferrous metal producer based in
Belgium, as Director Strategy and Control and member of the Direction Committee.
Prior to that time, she was a consultant with Corporate Value Associates.
ALAIN PASQUIER*, 51. Mr. Pasquier has held various senior corporate
management positions within Pechiney's finance department since 1993, and was
Senior Vice President-Corporate Finance of Pechiney from 1997 to 1999. He
currently serves as Senior Vice President--International and Government Affairs
of Pechiney. He is also a director of Impress Metal Packaging Holdings B.V. and
Paribas Capital Markets Ltd.
ROLAND H. MEYER, JR., 72. Mr. Meyer served as President and Chief Operating
Officer of American National Can Company from 1989, and Chief Operating Officer
from 1988, until his retirement in 1992. Mr. Meyer joined American National Can
Company in 1972 and from that time held various management positions in the
Company's Metal Container Division including Manager--Manufacturing, Vice
President--Operations, and Vice Chairman--Operations. Mr. Meyer is also a
director of Uniroyal Technology Corporation and Vice Chairman of First
Commercial Bank of Tampa.
JACK H. TURNER, 65. Mr. Turner served as President and Chief Operating
Officer of American National Can Company from 1992 until his retirement in 1995.
From September 1989 through June 1992, he was Executive Vice President and Chief
Operating Officer of American National Can Company's beverage worldwide
business. Mr. Turner joined American National Can Company in February 1969 and
has held numerous financial and operations positions.
CLASS II DIRECTORS
TERMS EXPIRE IN 2001
FRANK W. CONSIDINE, 78. Mr. Considine was Chairman of the Board of American
National Can Company from 1983 to 1990, Honorary Chairman and Chairman of the
Executive Committee from 1990 to present, President from 1969 to 1988, and Chief
Executive Officer from 1973 to 1988. Mr. Considine is also a director of SEI
Information Technology, Chairman of the Board of Directors of Loyola University
Health System/Loyola University Medical Center, Vice President of the Lyric
Opera of Chicago, and a member of the Executive Committee of the Museum of
Science and Industry, Chicago, and the Board of Trustees of the Field Museum of
Natural History, Chicago.
GEORGE D. KENNEDY, 73. Mr. Kennedy was Chairman and a director of
Mallinckrodt Group Inc., a producer of medical products and chemicals, from 1991
until his retirement in October 1994. He was Chairman and Chief Executive
Officer of Mallinckrodt Group Inc. from 1986 to 1991. Mr. Kennedy is also a
director of the Kemper National Insurance Companies and Scotsman
Industries, Inc.
HOMER J. LIVINGSTON, JR., 64. Mr. Livingston served as President and Chief
Executive Officer of the Chicago Stock Exchange in Chicago, Illinois from
November 1992 until his retirement in May 1995.
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From 1988 through 1992, Mr. Livingston was chairman of the Board and Chief
Executive Officer of Livingston Financial Group. He has also held the positions
of Executive Vice President of First National Bank of Chicago, Partner at Lehman
Bros., Partner at William Blair & Co., President and Chief Executive Officer of
LaSalle National Bank and Trustee of Southern Pacific Railroad. Mr. Livingston
is also a director of Peoples Energy Corporation.
JEAN-DOMINIQUE SENARD*, 47. Mr. Senard has been Senior Executive Vice
President and Chief Financial Officer and a member of the Executive Committee of
Pechiney since October 1996. Prior to joining Pechiney, Mr. Senard was employed
by the French company Saint-Gobain from January 1987 through October 1996, where
he was Group Treasurer from January 1987 through January 1989, Director of
Treasury and Financing from January 1989 through September 1995, and Financial
Director of Saint-Gobain's General Delegation for Germany and Central Europe and
a member of the Management Committee of Vegla GmbH from October 1995 through
October 1996.
CLASS III DIRECTORS
TERMS EXPIRE IN 2002
RONALD J. GIDWITZ, 55. Mr. Gidwitz is a partner in GCG Partners, a private
investment firm, a position he has held since 1998. He previously served as
President and Chief Executive Officer of Helene Curtis Industries, Inc. from
1979 to 1998. He is also a director of Continental Materials Corporation,
Prairie Packaging Corporation and SEI Consulting. Mr. Gidwitz is also Chairman
of the Illinois State Board of Education, a member of the Board of Governors of
Boys and Girls Clubs of America, Chairman of the Board of the Field Museum of
Natural History and a member of the boards of directors of Lyric Opera of
Chicago, the Museum of Science and Industry, and the Board of Trustees of
Rush-Presbyterian Medical Center.
EDWARD A. LAPEKAS, 56. Mr. Lapekas has held the position of Chairman of the
Board and Chief Executive Officer of the Company since July 28, 1999. Prior
thereto in 1999, he was President and Chief Operating Officer of the Company. He
served as President and Chief Operating Officer--Beverage Cans worldwide of
American National Can Company since November 1996. He joined American National
Can Company in June 1996 as Senior Vice President--Beverage Cans Americas. Prior
to joining American National Can Company, Mr. Lapekas served as Vice Chairman of
Schmalbach-Lubeca A.G., a packaging company based in Germany, from July 1991
through June 1996. Prior to that time, he held senior management positions
throughout the world with Continental Can Company from 1968 through 1991.
JAMES J. O'CONNOR, 63. Mr. O'Connor is the retired Chairman and Chief
Executive Officer of Commonwealth Edison Company and Unicom Corporation, a
holding company, where he served from June 1994 until March 1998, and of Edison
Company, an electric utility, where he served from 1980 to March 1998. He is
also a Director of Corning Incorporated, Scotsman Industries Inc., Smurfit-Stone
Container Corporation, Tribune Company and UAL Corporation.
JEAN-PIERRE RODIER*, 52. Mr. Rodier served as Chairman of the Board and
Chief Executive Officer of the Company until July 28, 1999, at which time he
resigned from that position. Since 1994, Mr. Rodier has served as Chairman and
Chief Executive Officer of Pechiney, formerly the Company's parent company.
Prior to July 28, 1999, he served as Chairman of the Board and Chief Executive
Officer of American National Can Company. Before joining Pechiney in 1994,
Mr. Rodier served as Chairman and Chief Executive Officer of Penarroya and
Managing Director of Penarroya's parent company, Imetal. He has also held the
positions of Chairman of the Executive Board for Metaleurop France and head of
Union Miniere, the Belgian affiliate of Groupe Suez.
JAMES R. THOMPSON, 63. Mr. Thompson was Governor of Illinois from 1977
through 1991. Since January 1991, Mr. Thompson has been a partner in, and
Chairman of the Executive Committee of, Winston & Strawn, a Chicago, Illinois
law firm, and since January 1993, he has been Chairman of the
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<PAGE>
firm. Mr. Thompson is also a director of FMC Corporation, Prime Retail, Inc.,
Prime Retail.com, Hollinger International, Inc., Jefferson Smurfit Group, Metal
Management, Inc. Navigant Consulting, Prime Group Realty Trust and Union Pacific
Resources. He also serves as a Public Governor of the Chicago Board of Trade and
is the Chairman of the Public Review Board of the Hotel and Restaurant Employees
International Union. He is Chairman of the Board of Trustees of the Illinois
Mathematics and Science Academy Foundation, and serves as a trustee of the
Chicago Historical Society, Lyric Opera of Chicago and the Museum of
Contemporary Art.
There are no family relationships among any of the Company's directors or
executive officers.
- ------------------------
* Designated by Pechiney, which, pursuant to a Director Nomination Agreement
between the Company and Pechiney, has the right to nominate four of the
thirteen members of the Board.
DIRECTOR COMPENSATION
Directors who are officers or employees of the Company do not receive
compensation other than reimbursement for out-of-pocket expenses incurred by
them in connection with their travel to and attendance at meetings of the Board
of Directors or its committees.
In addition to the reimbursement of expenses, directors of the Company who
are not officers or employees receive an annual cash retainer of $25,000 and an
annual grant of deferred stock units with a fair market value of $15,000. These
shares will be transferred to the director at the time of termination or
retirement from the Board of Directors and are subject to forfeiture in the
event of the Company's insolvency. The non-employee directors will also receive
an annual stock option grant with a Black-Scholes value equal to $30,000. The
options are granted at the fair market value, are exercisable immediately, and
will have a ten-year term. In addition, non-employee directors who chair any
committee of the Board receive a fee of $3,000 per year for each committee they
chair. Directors can elect to defer the receipt of their annual cash retainers
and chairman fees until retirement from the Board. Until distribution of the
deferred amounts following retirement, the deferred amounts will earn interest
based on mutual funds selected by the director from a company listing of mutual
funds approved for the deferral plan. The Company provides each non-employee
director with $250,000 of accidental death and dismemberment insurance coverage
on a 24-hour basis for any period a non-employee director is traveling on
company business. In addition, Frank Considine is provided with a secretary, and
an automobile and office leased by the Company. Such leases and services are
valued at approximately $100,000 per year.
Non-employee directors who served on the Board prior to its Initial Public
Offering earned a retirement benefit as part of their compensation. For those
same directors, now serving on the Board, the present value of their accrued
retirement benefit was converted to deferred stock units on July 28, 1999. The
stock units are receivable by the director at the time of termination or
retirement from the Board. These shares will be transferred to the director at
the time of termination or retirement from the Board and are subject to
forfeiture in the event of the Company's insolvency. Dividend equivalents are
applied to the deferred stock units and are payable in cash or stock at the time
of the director's termination or retirement.
1999 BOARD MEETINGS
During 1999, the Board of Directors held a total of six meetings. In 1999,
all incumbent directors attended at least 75% percent of the meetings of the
Board and of the Board committees on which they served except for Mrs. Bories,
who attended 50%, Mr. Pasquier, who attended 67% and Mr. Livingston, who
attended 71%. As a group, incumbent directors attended 86% percent of all Board
and Board committee meetings held in 1999.
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BOARD COMMITTEES
The Board of Directors has four standing committees, which are described
below.
AUDIT COMMITTEE. The Audit Committee is responsible for reviewing the
propriety and accuracy of the Company's consolidated financial statements. The
Audit Committee is responsible for:
- reviewing the internal accounting controls and annual consolidated
financial statements;
- reviewing the scope of the independent certified public accountants'
audit, their report and their recommendations;
- considering the possible effect on the independence of the accountants in
approving non-audit services requested of them; and
- recommending the action to be taken with respect to the appointment of the
independent certified public accountants.
The Audit Committee held one meeting during 1999.
COMPENSATION AND ORGANIZATION COMMITTEE. The Compensation and Organization
Committee is responsible for:
- approving the compensation of all elected officers;
- reviewing, advising and making recommendations with respect to elected
officer compensation plans, their benefits and standards and taking all
related actions that are not reserved for the Board;
- providing oversight of the annual incentive plan and the other salary,
compensation or benefit plans; and
- reviewing the succession plans and management development of the senior
management positions.
The Compensation and Organization Committee held three meetings in 1999.
Pursuant to resolutions adopted by the Board on February 24, 2000, the name of
this committee was changed from the Compensation Committee to the Compensation
and Organization Committee.
EXECUTIVE COMMITTEE. During intervals between meetings of the Board, the
Executive Committee has and exercises all the powers and authority of the Board
in the management of the Company's business and affairs, except as specifically
limited in the Company's by-laws. The Executive Committee did not hold any
meetings in 1999.
NOMINATING AND GOVERNANCE COMMITTEE. The Nominating and Governance
Committee is responsible for:
- assessing the appropriate combination of skills and characteristics
required of the Board members so that the Board has a mix of business
leadership and special expertise;
- assuring that diversity is given attention in the consideration of
individual candidates;
- selecting, identifying and screening, with input from the Chief Executive
Officer, candidates for Board membership;
- nominating the chairs of other committees;
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- evaluating continued membership on the Board when the circumstances of a
director change; and
- annually evaluating and updating the governance policies.
The Nominating and Governance Committee was created pursuant to resolutions
adopted by the Board on February 24, 2000. The Committee will accept nominations
of persons for election to the Board from stockholders that are made pursuant to
timely notice in writing to the Secretary of the Company. The notice must set
forth all information about each proposed nominee as required under
Regulation 14A of the Exchange Act. The notice must also set forth, as to the
stockholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination is made, their names and record addresses and the class and
number of shares that they beneficially own.
COMMITTEE MEMBERS. The committee members for each of the four standing
committees are set forth below, with the Chairman listed first:
<TABLE>
<CAPTION>
COMPENSATION AND NOMINATING AND GOVERNANCE
AUDIT ORGANIZATION EXECUTIVE COMMITTEE
- ----- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
James J. O'Connor, Chairman George D. Kennedy, Chairman Frank W. Considine, Chairman Frank W. Considine, Chairman
Homer J. Livingston, Jr. Frank W. Considine Edward A. Lapekas George D. Kennedy
Jean-Dominique Senard Ronald J. Gidwitz Jean-Pierre Rodier James J. O'Connor
Jean-Pierre Rodier
</TABLE>
COMPENSATION AND ORGANIZATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
The following are members of the Compensation and Organization Committee:
Mr. George Kennedy, who serves as Chairman of the Committee, is an independent,
nonemployee director. Mr. Ronald Gidwitz is an independent, nonemployee
director. Mr. Kennedy and Mr. Gidwitz are the sole members of the Grant
Committee of the Compensation and Organization Committee, charged with the
responsibility for approving all incentive compensation grants made to employees
of the company, including the Named Executive Officers. Mr. Frank Considine, the
former Chairman and Chief Executive Officer of American National Can Company
having retired in 1988, also serves on the Compensation and Organization
Committee. The last member of the Compensation and Organization Committee is
Jean-Pierre Rodier, the former Chairman and Chief Executive Officer of the
Company prior to the initial public offering on July 28, 1999.
EXECUTIVE OFFICERS
In addition to Mr. Lapekas, who is a Director, the following persons are the
executive officers of the Company.
CURTIS J. CLAWSON, 40. Mr. Clawson is President and Chief Operating Officer
of the Company and has held that position since December 16, 1999. Prior to
that, he held the position of Executive Vice President and President Beverage
Cans Americas from July 1999 through December 1999. He joined the Company in
June 1998 as Senior Vice President--Beverage Cans Americas. From March 1995
through January 1998, he was an employee of Allied Signal, Incorporated,
following which he took a career break from January to June 1998. From
March 1995 through March 1997, his position was President, Filters and Spark
Plugs in the automotive aftermarket products industry, and from April 1997
through January 1998, his position was President, Laminates in the laminates and
prepeg materials industry for printed circuit boards. Prior to his employment
with Allied Signal, he was an employee of Arvin Industries, Incorporated, an
automotive equipment manufacturer. He held the position of General Manager from
January 1994 through February 1995, Vice President and Sales Manager/Plant
Manager during 1992.
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<PAGE>
DENNIS R. BANKOWSKI, 53. Mr. Bankowski is Executive Vice
President--Administration and Chief Human Resources Officer. He joined American
National Can Company in 1991 as Senior Vice President--Human Resources. In
January 1997, he was named Senior Vice President--Corporate Services. Before
joining the Company, Mr. Bankowski was employed by BP America, a subsidiary of
British Petroleum, from 1981 through 1990 where he served in the positions of
Director of Compensation, Director of Organizational Development and Vice
President of Human Resources.
ALLAN J. BOHNER, 46. Mr. Bohner is Senior Vice President--Beverage Cans
Americas Manufacturing and Worldwide Engineering and has held that position
since January 1998. His previous positions include Senior Vice President
Engineering and Research and Development from April 1995 through December 1997,
Vice President, Engineering for the Food Metal Division from July 1990 through
March 1995, Director Engineering from April 1989 through June 1990 and, since
February 1975, held other positions of increasing responsibility in the
Engineering discipline.
THOMAS J. BUCKLEY, 57. Mr. Buckley is Vice President--Tax. He joined
American National Can Company in that position in August 1995. Immediately prior
to his joining the Company, he was employed by Pechiney Corporation in the
position of Vice President and Director--Tax.
DENNIS M. BYRD, 44. Mr. Byrd is Vice President and Treasurer and has held
that position since July 1997. Prior to that, he held the positions of Assistant
Treasurer from January 1996 through June 1997, and Director of Finance from
January 1994 through December 1995. He has also held positions with the Company
as Manager of Finance, Pension Investment Administrator and Auditor.
JOSEPH R. ESTERMAN, 54. Mr. Esterman has been Vice President--Investor
Relations since he joined the company in October 1999. Prior thereto, he enjoyed
a long career at Nalco Chemical Company as Vice President, Investor Relations.
He also held positions in strategy and sales at Nalco Chemical Company.
WILLIAM A. FRANCOIS, 57. Mr. Francois is Senior Vice President, General
Counsel and Secretary and has held that position since July 1999. He joined the
Company in April 1970 in the position of Attorney and has held several legal
positions since then including Vice President, Deputy General Counsel and
Secretary from January 1988 through June 1999, Vice President, Associate General
Counsel and Secretary from January 1987 through December 1987 and Vice
President, Legal and Secretary from April of 1982 through December 1987.
LAWRENCE F. HAGENBUCH, 33. Mr. Hagenbuch is Vice President-Corporate
Strategy and has held that position since joining the Company in December, 1999.
Prior to joining the Company, he was employed by GE Capital, Vendor Financial
Services as General Manager-Customer Support Center from February 1999 through
December 1999. From September 1997 through January 1999 he was employed by
General Electric Company, Transportation Systems as General Manager Africa,
Europe and the Middle East, and from March 1996 until August 1997, he held the
position of Manager Business Development. From August 1994 until February 1996
he was employed by Booz Allen as an associate in the Engineering Manufacturing
Group.
MICHAEL D. HERDMAN, 49. Mr. Herdman is Executive Vice President and
President--Beverage Cans Europe and Asia. Since 1991, Mr. Herdman has held the
position of Senior Vice President--Beverage Cans Europe for American National
Can Company. In January 1997, he also assumed responsibility for the beverage
can business in Asia. Since joining the Company in 1972, Mr. Herdman's prior
positions have included Managing Director of Nacanco Ltd., Vice President of
Business Development, Vice President and General Manager--Plastics, Managing
Director--Iberica, and other sales and manufacturing management positions.
CLIFFORD R. KLOTZ, 55. Mr. Klotz is Vice President--Environment and
Government Affairs and has held that position since March 1, 1991, which through
1995 also included the responsibility for the general management of the
Recycling Division. He joined American National Can Company in 1971
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<PAGE>
and since that time has also held the positions of Vice President and General
Manager Recycling, Vice President of Sales--Closure Division, Manager Government
Affairs, and Manager Environmental Programs.
JOHN G. LABAHN, 41. Mr. LaBahn is Vice President, Controller and Chief
Accounting Officer of the Company. He has held this position since July 1999.
From February 1998 until June 1999 he held the position of Vice President and
Controller. Prior to that he held the positions of Director of Risk Management
from February 1996 and Vice President Shared Services from February 1992 through
January 1996. He began his career with the Company in August 1987.
ALAN H. SCHUMACHER, 53. Mr. Schumacher is Executive Vice President and Chief
Financial Officer of the Company. He has held this position in the Company since
July 1997. From January 1988 through June 1997, he held the positions of Vice
President, Controller and Chief Accounting Officer. Positions held at the
Company prior to 1988 include Assistant Corporate Controller, and Manager
Corporate Accounting. Prior to joining the Company, Mr. Schumacher was employed
in the audit function of Price Waterhouse and Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, requires the Company's officers and
directors, and persons who are holders of more than ten percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership on Forms 3, 4, and 5 with the Commission and the New York
Stock Exchange, Inc., and to furnish the Company with copies of these forms.
Based on its review of the copies of Forms 3, 4, and 5 submitted to the Company,
the Company believes that all the officers, directors, and persons who hold more
than ten percent of the Common Stock of the Company complied with all filing
requirements imposed by Section 16(a) of the Exchange Act during 1999 except for
Mr. Lapekas, who inadvertently failed to timely file with respect to the
acquisition of 100 shares or the symbolic first trade in the Company's stock on
the New York Stock Exchange in connection with the Initial Public Offering.
CERTAIN TRANSACTIONS BETWEEN DIRECTORS AND THE COMPANY
The law firm of Winston & Strawn, of which Mr. Thompson is a partner and
Chairman of the Executive Committee, was retained as special counsel to the
Board in connection with the Initial Public Offering.
Messrs. Alain Pasquier, Jean-Pierre Rodier, Jean-Dominque Senard and
Mrs. Christel Bories are executive officers of Pechiney, a company which holds
approximately 45.5% of the outstanding common stock of the Company.
TRANSACTIONS AND AGREEMENTS WITH PECHINEY
ALUMINUM PURCHASES. The Company purchases a portion of its aluminum
supplies from Pechiney Rhenalu, a subsidiary of Pechiney, on an arm's-length
basis and under normal market terms and conditions. The aluminum purchased
represented approximately 15% of the Company's total aluminum purchases in 1999.
In 1999, the approximate value of these purchases was $179 million.
The Company also has an agreement with Pechiney World Trade, a subsidiary of
Pechiney, under which Pechiney World Trade procures used aluminum beverage cans
on the open market to satisfy a portion of the Company's aluminum can sheet
supply. This is an arm's-length agreement.
BEER BOTTLE TECHNOLOGY OPTION AGREEMENT. The Company has entered into an
agreement with Pechiney that may give the Company access to Pechiney's
multi-layer plastic beer bottle technology if the Company chooses to enter the
market at any time before July 28, 2001. If, prior to that date, the Company
gives notice to Pechiney, Pechiney may respond by requesting the Company to
form a joint
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venture with it with respect to the development and production of multi-layer
plastic beer bottles. If the Company and Pechiney cannot agree on the terms of
the joint venture, the agreement requires Pechiney to license its multi-layer
plastic beer bottle technology to the Company on market terms. As part of the
Stockholders Agreement, Rexam has agreed to cause the Company to enter into a
termination agreement, in form and substance reasonably acceptable to Pechiney,
terminating the Beer Bottle Technology Option Agreement, as soon as practicable
after Rexam closes the Offer, but in no event later than five business days
thereafter.
ANC TECHNOLOGY OPTION AGREEMENT. The Company has entered into an agreement
that gives Pechiney the option to obtain access from the Company, on market
terms, to drawn and wall-ironed aluminum can forming technology for use in its
non-beverage can operations.
INDEMNITIES AND GUARANTIES. Pechiney Plastic Packaging, Inc. has agreed to
indemnify (and Pechiney has agreed to guarantee these indemnity obligations) the
Company in respect of the following matters:
- POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS. Pechiney Plastic Packaging
has agreed to assume post-employment benefit obligations other than
pensions for plastic employees and a portion of other non-beverage can
employees. Pechiney and Pechiney Plastic Packaging will indemnify the
Company for any losses the Company may incur with respect to these
obligations.
- VISKASE LITIGATION. The Company is the defendant in patent infringement
proceedings brought by Viskase Corporation. The proceedings relate to the
plastic packaging business that the Company transferred to Pechiney
Plastic Packaging in the reorganization preceding the Initial Public
Offering. Pechiney Plastic Packaging has agreed to indemnify (and Pechiney
has agreed to guarantee these indemnity obligations) the Company for any
payments the Company may be required to make with respect to the
proceedings.
- EUROPEAN COMMISSION INVESTIGATION. In July 1999, staff of the Competition
Directorate of the European Commission conducted interviews with staff and
inspected documents, in each case on a voluntary basis, at the Company's
European headquarters in the United Kingdom in connection with an
investigation of the European beverage can market. Pechiney has agreed to
reimburse the Company for any monetary sanctions that the European
Commission may impose on the Company as a result of this investigation. In
connection with the Stockholders Agreement, as soon as practicable after
the closing of the Offer, Rexam has agreed to cause the Company to enter
into a termination and release agreement terminating this indemnification
obligation.
- ENVIRONMENTAL. Under U.S. environmental laws and regulations, the Company
is exposed to the risk of substantial costs and liabilities, including the
cost of remediating pollution damage related to its current or past
operations or facilities. These potential costs and liabilities extend to
assets that have been sold and activities that have been discontinued.
--PLASTICS OPERATIONS. Pechiney Plastic Packaging has agreed to indemnify
the Company against any losses the Company may incur with respect to
environmental liabilities relating to identified and unidentified past and
present plastics operations and facilities. This indemnity extends to
assets that have been sold and activities that have been discontinued.
Pechiney has not guaranteed and is not legally required to support this
obligation.
--OTHER NON-BEVERAGE CAN OPERATIONS. For any unidentified liabilities
relating to other non-beverage can operations, Pechiney has agreed to
indemnify the Company in part against any losses the Company may incur.
This partial indemnity is limited to 80% of any direct loss the Company
suffers and is valid for ten years following the date of the Initial
Public Offering. Each claim is subject to a $0.5 million deductible and
the indemnity is limited to a maximum overall amount of $75 million.
Pechiney's indemnity relates only to other non-beverage can
B-13
<PAGE>
operations that the Company has transferred, sold or shut down in the
past. It does not include the plastics operations, which are covered by
Pechiney Plastic Packaging's indemnity only. The Company may be exposed to
contingent liability to the extent that the identified liabilities exceed
the Company's reserve amounts, or any unidentified liabilities exceed the
partial indemnity from Pechiney.
SERVICES AGREEMENTS. Prior to the Initial Public Offering, Pechiney
provided the Company with treasury and exchange rate services. After the Initial
Public Offering, the Company has obtained these services from third party
sources. The Company also shared a number of other services with the
non-beverage can activities in Pechiney's U.S. packaging group. In connection
with the reorganization prior to the Initial Public Offering, the Company
entered into two agreements regarding these services:
- For most of the corporate services that the Company shared with Pechiney's
U.S. plastic packaging operations, the relevant service departments were
divided between Pechiney Plastic Packaging and the Company. The payroll,
retiree, related information technology, employee benefits design and
administration, communications and certain legal services were transferred
to Pechiney Plastic Packaging. The Company was able to purchase those
services from Pechiney Plastic Packaging under a Shared Services
Agreement. The agreement specifies that the services will be provided on
an arm's-length basis. The Shared Services Agreement has a term of five
years and may be extended by written agreement. The Company has the right
to cancel the services under the agreement, in part or in full, upon one,
three or six months' notice, depending on the service. As soon as
practicable after Rexam purchases Shares in the Offer, but in no event
later than five business days thereafter, Rexam has also agreed to cause
the Company to enter into an amendment, in form and substance reasonably
acceptable to Pechiney, amending the term of the Shared Services
Agreement, to expire 12 months following Rexam's closing of the Offer.
Pechiney has waived any rights to receive a termination fee in connection
with the termination of the Shared Services Agreement.
The Company also entered into a Reciprocal Services Agreement with Pechiney
Plastic Packaging under which the Company and Pechiney Plastic Packaging provide
each other with other corporate services. The Reciprocal Corporate Services
Agreement has a term of five years and may be extended by written agreement.
Both parties have the right to cancel the services under the Reciprocal Services
Agreement, in part or in full, upon 180 days' notice.
The total amount of these services, as well as certain research and
development services rendered prior to the Initial Public Offering, for 1999 was
approximately $5.7 million.
B-14
<PAGE>
EXECUTIVE COMPENSATION
The following table shows information concerning the compensation paid for
services rendered in all capacities to the Company and its subsidiaries for the
fiscal year ended December 31, 1999, for all Named Executive Officers, based on
their employment by the company or an affiliate of the Company at December 31,
1999. The compensation described in this table was paid by American National Can
Company, or an affiliate of American National Can Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION 1999 LONG-TERM COMPENSATION PAYOUTS
--------------------------------------------- -------------------------------------------
RESTRICTED LONG-TERM
OTHER ANNUAL STOCK STOCK INCENTIVE
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS/ SARS PLAN PAYOUTS
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (1) (3) (#) ($)
- --------------------- -------- -------- -------- ------------ ---------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jean-Pierre Rodier... 1999 $121,851 $0 $0 $0 0/0 $0
Chairman & Chief 1998 208,156 0 0 0 0/0 0
Executive Officer
(former)
Edward A. Lapekas.... 1999 578,504 746,666 0 1,144,831 564,000/63,000 0
Chairman & Chief 1998 420,000 472,226 0 0 0/109,000 0
Executive Officer
Curtis J. Clawson.... 1999 325,000 309,833 6,688 467,619 153,000/12,000 31,144
Executive Vice 1998 175,000 158,550 5,917 450,000(2) 0/58,000 30,438(2)
President &
President--
Beverage Cans
America
Dennis R. Bankowski.. 1999 322,000 306,973 0 628,609 153,000/36,000 0
Executive Vice 1998 310,000 227,385 0 0 0/58,000 0
President
Administration &
Chief Human
Resources Officer
Michael D. Herdman... 1999 311,000 241,513 171,319(5) 537,965 153,000/18,400 0
Executive Vice 1998 262,000 222,307 251,745 0 0/58,000 0
President & President
- --Beverage Cans
Europe and Asia
Alan H. Schumacher 1999 280,267 267,485 0 500,497 153,000/12,800 0
Executive Vice 1998 231,000 186,971 0 0 0/58,000 0
President & Chief
Financial Officer
<CAPTION>
ALL OTHER
NAME AND COMPENSATION
PRINCIPAL POSITION ($)(4)
- --------------------- ----------------
<S> <C>
Jean-Pierre Rodier... $0
Chairman & Chief 0
Executive Officer
(former)
Edward A. Lapekas.... 11,383
Chairman & Chief 19,362
Executive Officer
Curtis J. Clawson.... 5,977
Executive Vice 4,196
President &
President--
Beverage Cans
America
Dennis R. Bankowski.. 10,744
Executive Vice 10,415
President
Administration &
Chief Human
Resources Officer
Michael D. Herdman... 10,234
Executive Vice 9,078
President & President
- --Beverage Cans
Europe and Asia
Alan H. Schumacher 10,404
Executive Vice 9,707
President & Chief
Financial Officer
</TABLE>
- ------------------------------
(1) Amounts shown represent the value of future shares, the rights to which the
Named Executive Officer received through the conversion of outstanding stock
options or stock appreciation rights in the Company's former parent company,
Pechiney, including those SARs included in footnote (3) below. None of the
shares were exercisable at fiscal year end 1999. The number of shares to be
received by the executives are: Mr. Lapekas--67,343, Mr. Clawson--27,507,
Mr. Bankowski--36,977, Mr. Herdman--31,645 and Mr. Schumacher--29,441.
(2) As a condition of his hiring offer, Mr. Clawson was granted the right to
receive 18,000 performance shares of Pechiney which could be earned over six
years if annual business unit return on capital employed targets were
achieved above the projected levels. In 1999 these Pechiney performance
shares were converted to 30,197 Company performance shares having
approximately the same value as the Pechiney performance shares at the time
of the conversion. In connection therewith, Mr. Clawson was paid $31,144 for
performance during 1999 and $30,438 for performance during 1998.
B-15
<PAGE>
(3) Pechiney Stock Appreciation Rights granted under the Company's Long-Term
Incentive Plan for 1998 and 1999. All stock appreciation rights were
canceled on July 28, 1999 and converted to the right to receive shares of
the Company stock under the American National Can Group, Inc. Stock
Compensation Conversion Plan. The value of the future shares arising from
the conversion is included in the table under the column labeled "Restricted
Stock Awards" for 1999.
(4) The amounts shown include $8,075.53 contributed to each of the Named
Executive Officers under the American National Can Company Capital
Accumulation Plan for Salaried Employees, except Mr. Clawson who received
$5,148.93. Also included are the following amounts representing imputed
income from a company-sponsored group life insurance plan: Mr. Lapekas
$3,307.50, Mr. Herdman $685.38, Mr. Schumacher $855.42, Mr. Bankowski
$1,195.38, and Mr. Clawson $828.00. Also included for Messrs. Bankowski,
Herdman and Schumacher is the amount of $1,472.75 representing the fair
market value of shares of stock received under the Pechiney Employee Stock
Purchase Plan.
(5) Amounts represent allowances paid to, and expenses paid on behalf of,
Mr. Herdman in connection with his foreign assignment, including $98,892.00
that Mr. Herdman received as a cost of living and housing allowance and
$35,528 that the Company paid on behalf of Mr. Herdman to cover his foreign
income tax expenses.
GRANTS OF OPTIONS AND STOCK APPRECIATION RIGHTS
The following table provides information related to stock options granted to
the Named Executive Officers during the fiscal year ended December 31, 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS GRANTED TO EXERCISE OR MARKET PRICE
GRANTED EMPLOYEES IN BASE PRICE AT GRANT EXPIRATION
NAME (#) (1) FISCAL YEAR (2) ($/SHARE) ($/SHARE) DATE
- ---- -------------- --------------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Jean-Pierre Rodier....... 0/0 0/0 -- -- --
Edward A. Lapekas........ 564,000/63,000 16.5/12.7 $17.00/18.1875 $17.00/18.1875 7/28/09/
7/28/99
Curtis J. Clawson........ 153,000/12,000 4.5/2.4 17.00/18.1875 17.00/18.1875 7/28/09/
7/28/99
Dennis R. Bankowski...... 153,000/36,000 4.5/7.3 17.00/18.1875 17.00/18.1875 7/28/09/
7/28/99
Michael D. Herdman....... 153,000/18,400 4.5/3.7 17.00/18.1875 17.00/18.1875 7/28/09/
7/28/99
Alan H. Schumacher....... 153,000/12,800 4.5/2.6 17.00/18.1875 17.00/18.1875 7/28/09/
7/28/99
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR
SAR TERM ($) (3)
----------------------------
NAME 5% 10%
- ---- ------------ -------------
<S> <C> <C>
Jean-Pierre Rodier....... -- --
Edward A. Lapekas........ $6,029,842/0 $15,280,803/0
Curtis J. Clawson........ 1,635,755/0 4,145,324/0
Dennis R. Bankowski...... 1,635,755/0 4,145,324/0
Michael D. Herdman....... 1,635,755/0 4,145,324/0
Alan H. Schumacher....... 1,635,755/0 4,145,324/0
</TABLE>
- ------------------------------
(1) Stock options were granted to the Named Executive Officers on July 28, 1999,
in conjunction with the Company's Initial Public Offering of stock and
become exercisable over five years. Stock appreciation rights granted in
February 1999 were tied to the Company's former parent company's stock,
Pechiney American Depository Shares as traded on the New York Stock
Exchange. All outstanding Pechiney stock appreciation rights, granted at any
time prior to the Company's Initial Public Offering of stock on July 28,
1999, were subsequently canceled on July 28, 1999 and converted to the right
to receive future shares of stock in the Company, under the Stock
Compensation Conversion Plan described below.
(2) 3,422,200 options were granted to employees in 1999. 494,800 stock
appreciation rights in Pechiney American Depositary Shares were granted to
employees in 1999.
(3) The 5% and 10% rates of appreciation were set by the Commission and are not
intended to forecast future appreciation, if any, of the Company's capital
stock. There can be no assurance that the amounts reflected in these columns
will be achieved or, if achieved, will exist at the time of any option
exercise.
B-16
<PAGE>
STOCK COMPENSATION CONVERSION PLAN
Prior to the offering, the Company's executives participated annually in a
long-term incentive plan. The plan granted them either options to purchase
Pechiney capital stock traded on the Paris stock exchange or SARs which provided
them with the opportunity to receive cash awards equal to the appreciation in
Pechiney American Depositary Shares traded on the New York Stock Exchange, or
both. At the time of the Initial Public Offering of stock, the Company converted
the outstanding SARs granted since September 16, 1997 to the right to receive
shares of its stock in the future. Additionally, all employees holding
outstanding Pechiney stock options were given the opportunity to exchange those
options for the right to receive shares of the Company's stock in the future.
The vesting schedule of these rights approximated those of the original SAR
and option grants.
OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table sets forth information concerning option and SAR
exercises with respect to Pechiney capital stock by the Named Executive Officers
during the fiscal year ended December 31, 1999.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTION/SARS AT
SHARES FISCAL YEAR END
ACQUIRED VALUE -----------------------------
NAME TYPE ON EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE
- ---- ----------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Jean-Pierre Rodier 0 $0 0 0
(1).................
Edward A. Lapekas..... Options 0 0 0 564,000
SARS 0 0 0 0
Future Shares (2) 0 0 0 63,000
Curtis J. Clawson..... Options 0 0 0 153,000
SARS 0 0 0 0
Future Shares 0 0 0 12,000
Dennis R. Bankowski... Options 0 0 0 153,000
SARS 0 0 0 0
Future Shares 0 0 0 36,000
Michael D. Herdman.... Options 0 0 1,750 (3) 153,000
SARS 0 0 0 0
Future Shares 0 0 0 18,400
Alan H. Schumacher.... Options 0 0 0 153,000
SARS 0 0 0 0
Future Shares 0 0 0 12,800
<CAPTION>
VALUE OF UNEXERCISED IN-THE-
MONEY OPTION/SARS AT
FISCAL YEAR-END($)
-------------------------------
NAME EXERCISABLE UNEXERCISABLE
- ---- ------------- -------------
<S> <C> <C>
Jean-Pierre Rodier $ 0 $ 0
(1).................
Edward A. Lapekas..... 0 0
0 0
0 819,000
Curtis J. Clawson..... 0 0
0 0
0 156,000
Dennis R. Bankowski... 0 0
0 0
0 468,000
Michael D. Herdman.... 68,499 (4) 0
0 0
0 239,200
Alan H. Schumacher.... 0 0
0 0
0 166,400
</TABLE>
- ------------------------------
(1) Mr. Rodier was not awarded any stock options or stock appreciation rights in
respect of services performed as an executive officer of the Company.
(2) Future Shares refer to the right to receive shares of company stock granted
under the Stock Compensation Conversion Plan described above.
(3) Mr. Herdman retained 1,750 Pechiney options previously granted under the
1996 Pechiney Stock Option Plan.
(4) Stated in Euros.
The closing price of the Company Common Stock on December 31, 1999, the last
trading day prior to the Company's fiscal year end, was $13.00 per share on the
New York Stock Exchange. The
B-17
<PAGE>
closing price of Pechiney capital stock on December 31, 1999, its last trading
day prior to Pechiney's fiscal year end, was euro 70.95 per share on the Paris
stock exchange.
RETIREMENT BENEFITS
Most of the Company's salaried employees are participants in the
tax-qualified American National Can Company Pension Plan for Salaried Employees.
In addition, those salaried employees whose benefits under this plan would be
limited by Section 401(a)(17) or 415 of the Code, or who had deferred
compensation that was not taken into account under the plan, participate in a
non-qualified, unfunded supplemental pension plan. Benefits under this plan are
paid out of the general assets of the Company; however, the Company may elect to
fund and secure all or a part of the supplemental pension plan through the use
of a "Rabbi" Trust meeting the Code requirements. Upon a change of control the
"Rabbi" Trust must be fully funded. All funding before and after a change of
control is subject to the claims of the Company's creditors.
When an executive retires at the normal retirement age of 65, the
approximate annual retirement benefits payable under the Company's plans for the
following earnings classifications and years of service are set forth in the
table below. The benefits reflect a reduction to recognize, in part, the cost of
Social Security benefits related to service for the Company. The plans also
provide for the payment of benefits to an employee's surviving spouse.
<TABLE>
<CAPTION>
YEARS OF SERVICE
- ------------------------------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- --------------------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
$ 250,000 $ 52,543 $ 70,057 $ 88,745 $107,495 $ 126,245
500,000 108,793 145,057 182,495 219,995 257,495
750,000 165,043 220,057 276,245 332,495 388,745
1,000,000 221,293 295,057 369,995 444,995 519,995
1,250,000 266,293 370,057 463,745 557,495 651,245
1,500,000 333,793 445,057 557,495 669,995 782,495
1,750,000 390,043 520,057 651,245 782,495 913,745
2,000,000 446,293 595,057 744,995 894,995 1,044,995
</TABLE>
Covered earnings for retirement benefit purposes include salary and annual
bonus. The calculation of retirement benefits under the pension plans generally
is based upon average covered earnings for the highest five consecutive years of
service. The years of credited service as of December 31, 1999 for the Named
Executive Officers are as follows: 3 years for Mr. Lapekas, 1 year for
Mr. Clawson, 27 years for Mr. Herdman, 22 years for Mr. Schumacher and 9 years
for Mr. Bankowski. By contractual agreement, Mr. Rodier does not participate in
the Company's pension plans.
EMPLOYMENT CONTRACTS, TERMINATION AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
EMPLOYMENT AND SEVERANCE ARRANGEMENTS WITH THE COMPANY, AS AMENDED. Edward
Lapekas, Michael Herdman, Alan Schumacher, Dennis Bankowski and Curtis Clawson
are each a party to an amended and restated executive employment agreement with
the Company that provides that upon a termination of employment by the Company
other than for "cause" or by the executive for "good reason" (in each case, as
defined in the agreements) following a change of control, the executive will be
entitled to receive the following payments and benefits for the continuation
period specified for each executive: (1) base salary, (2) an annual incentive
plan payment for the full and partial years during the continuation period at
target level, (3) full vesting of all time-based equity incentive awards,
(4) continued health and other welfare benefits until the executive is age 55
and service credit for eligibility towards retiree medical benefits,
(5) transfer of the title to the executive's Company car, (6) outplacement
services, (7) matching and profit sharing contributions under the Company's
Capital Accumulation Plan, (8) continued life and long-term disability insurance
and (9) an enhanced pension
B-18
<PAGE>
benefit, calculated as if the executive reached age 60 while employed by the
Company and had the greater of (a) 30 years of credited service and (b) the
executive's actual years of credited service including additional years equal to
the continuation period. The continuation period for Mr. Lapekas is three years
and for the other executives it is two years. The consummation of the
transactions contemplated by the Merger Agreement will constitute a change of
control for purposes of the executive agreements. The executive agreements
contain non-competition, confidentiality and non-solicitation provisions that
restrict the executives while employed and for specified periods thereafter. If
any amounts payable to an executive under the executive agreement or otherwise
would subject the executive to the excise tax under Section 4999 of the Code,
the Company will make a payment to the executive such that after the payment of
all income and excise taxes, the executive will be in the same after-tax
position as if no excise tax had been imposed.
In addition, Allan Bohner and William Francois are parties to executive
agreements that provide for termination benefits substantially similar to the
benefits described above for a two year continuation period, upon a termination
of employment by the Company without cause or by the executive for good reason.
Mr. Francois' agreement does not provide for annual incentive plan payments
during the continuation period, but does provide for a pro-rata award at target
level for the year of the date of termination and for the Company to continue to
pay the premiums and other costs associated with split-dollar life insurance
policies covering the executive.
In connection with the transactions contemplated by the Merger Agreement,
the executive agreements were amended to provide for additional annual incentive
plan payments for the full and partial years during the continuation period at
target level and for a pro-rata annual incentive award based on the maximum
level for the period from January 1, 2000 through the Effective Time, and that
such payments shall be treated as includable compensation for purposes of all
employee benefits provided by the Company that are affected by the compensation
or earnings of the executive (consistent with his executive agreement,
Mr. Francois will receive an additional pro-rata bonus only and the maximum
level award will be in lieu of the target level award provided under his
agreement prior to the amendment). The additional annual incentive payments are
subject to the executive satisfying certain performance conditions relating to
the Merger. The executive agreements, as amended, also provide for the payment
of the executive's retention award under the retention program (as described
below) upon the earlier to occur of the 30(th) day after the Effective Time and
the date that the executive is due to receive his first payment under the
executive agreement; provided, however, that if the executive's employment is
not terminated under circumstances entitling the executive to receive the
severance payments described above, the executive will receive the retention
award at the time the awards are otherwise payable as described below. In
addition, the executive agreements with Messrs. Bohner and Francois were amended
to provide for an excise tax gross-up that is the same as the provision
described above for the other executives.
COMPENSATION AND ORGANIZATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Organization Committee of the Board of Directors
oversees the administration of the executive compensation programs and
determines the direct compensation of the executive officers of the Company.
The Compensation and Organization Committee is composed of four directors:
two former employees and two independent, non-employee directors. In order to
deduct as compensation expense any compensation paid to proxy named executives
over $1,000,000 the Company's Compensation and Organization Committee has formed
a sub-committee, the Grant Committee, comprised of two independent, non-employee
directors. The Grant Committee is responsible for approving all incentive
compensation grants, performance measures used in incentive plans and certifying
that such performance measures were achieved prior to the payment of awards.
B-19
<PAGE>
The Compensation and Organization Committee also utilizes the services of
outside consulting firms to advise and provide input in the course of its
deliberations.
THE COMPANY'S EXECUTIVE COMPENSATION PHILOSOPHY
The Company has embraced value management as a tool for aligning its
strategic planning process, its budgeting process and its reward systems. In
compensation the Company has a "pay for performance" philosophy. The Company's
management compensation programs are designed to attract and retain leaders
driven to high performance. Through the Company's incentive compensation
programs the Company has aligned its managers' interests with those of its
shareholders and have made superior shareholder value creation its primary goal.
The overall objective of the Company's incentive compensation program is to
align its managers' incentives with the long-term interests of its shareholders.
To this end, both the Company's annual management incentive plan and the
long-term incentive plans are directly tied to, and reward contributions and
performance that create, value for its shareholders.
The Company's compensation program for managers and executives contains
these key components:
- Annual compensation comprised of base salary and performance based annual
incentives
- Value based long-term incentives
ANNUAL COMPENSATION
Base Salary. The Company believes that outstanding leadership can be found
in industries outside of its own and have, in recent years, recruited leaders
from other industries. As a result, the Company identifies its market for
defining competitive compensation as companies of its relative size in durable
and non-durable manufacturing and general industry segments, in addition to its
competitors in the packaging industry. A manager's total annual compensation,
including base salary and annual incentive awards, is targeted at the market
value of salaries for executives in similar positions in these types of
companies. The Company's salary increase process examines the employment, wage
and inflation trends in the countries in which it operates and is established at
the norm in those countries.
Annual Incentive Plan. The Company's annual management incentive plan was
redesigned in 2000 to link to shareholder value creation, to drive superior
business performance in the short-term and to motivate managers to reach
aggressive annual individual performance objectives. The awards for managers are
heavily weighted on business performance and bonuses above market median can
only be earned when the business achieves objectives established at the upper
quartile of the Company's industry peer group.
The business performance components in the Company's plan are EBITA
(earnings before interest, taxes and amortization) and free cash flow. The
annual targets are always established as improvements over its prior year and,
when consolidated at the corporate level, are directly linked to the goals the
Company has identified in its strategic plan. The Company goals drive value
creation for its shareholders. The Company's plan is designed to reward at
targeted incentive levels when the business performance goals are achieved. To
earn rewards greater than targeted levels, a business must perform at levels
reaching historical top quartile performance for the Company's packaging peer
group.
LONG-TERM INCENTIVES
Options. The Company has recruited strong performers at all levels and all
salaried employees are eligible to receive stock options based on their
performance and potential for success with the
B-20
<PAGE>
Company. Below the vice-president level, the determination of recipients of
stock options is very selective and only a small percentage of employees
participate.
The Company's Chief Executive Office, Executive Vice-Presidents and Senior
Vice Presidents receive 30% of their long-term incentive opportunity in an
annual option grant. At the Vice President level, 50% of the long-term incentive
opportunity is delivered in annual stock options. The options are granted at
fair market value and have a ten-year term.
The option grant is awarded in advance, before actual performance can be
measured, and will only gain value if the Company's stock price increases. The
eventual value of this award is uncapped because it is tied directly to the
share price of the Company stock, which has unlimited upside potential in the
long run. The higher the Company's stock price rises, the more each option is
worth. Since the value of the options are directly tied to the company's share
price, they will be affected by the Company's business performance, market
movements, interest rates, and industry sentiment.
Performance Based Awards. The remaining portion of the long-term incentive
opportunity for the Company's executives is delivered under a performance-based
plan. Participants are awarded cash and restricted stock based on the Company's
three-year total shareholder return relative to a packaging peer group ("RTSR").
Each year, the Company will compare its three-year RTSR performance to the
three-year performance of the companies in the Company's packaging peer group.
If the Company's RTSR performance is at or above the median of its peer
group, the performance award will be paid above the targeted award. Performance
in the bottom quartile of the Company's peer group will result in no award being
paid.
Awards based on this component will be paid in cash (50%) and in the Company
restricted stock (50%) which is restricted from sale or transfer for two years
following the issuance of the award.
Performance greater than the median peer company will earn participants a
performance award greater than 100% of target. Similarly, three-year RTSR
performance below the median peer company will result in a payout below 100% of
target. A three-year RTSR equal to the Company's top quartile goal will generate
a payout of 200% of target. The top quartile goal is established at the end of
each three-year period by adding the expected top quartile spread to the actual
median three-year RTSR. The top quartile goal level will be peer median plus 5%.
This represents the historic difference between the median and the top quartile
performer in the packaging peer group.
Performance above the top quartile goal could generate award payouts as high
as 500% of the targeted level. Since the payout is linear, additional increases
in RTSR corresponds to higher awards.
STOCK OWNERSHIP PROGRAMS
Ownership Guidelines. To further align the financial interests of the
Company's executives with those of its shareholders, the Company has implemented
minimum share ownership guidelines, which require ownership of shares of the
Company's common stock with a market value equal to the multiple of base salary
indicated:
<TABLE>
<CAPTION>
MULTIPLE
OF
BASE
SALARY
--------
<S> <C>
Chief Executive Officer..................................... 3
Chief Operating Officer, Executive Vice Presidents and
Senior Vice Presidents.................................... 2
Vice Presidents............................................. 1
</TABLE>
B-21
<PAGE>
Only shares owned directly, including restricted shares, or through the
Company's savings plan, but not shares subject to unexercised stock options,
will be considered for determining whether an executive meets the ownership
guidelines. The approximately 45 executives who are subject to the guidelines
have a transition period of five years beginning on the offering date within
which to meet the guidelines. Other executives who become subject to the
guidelines after the offering date will also have a transition period of
five years within which to meet the guidelines. Executives who fail to meet the
minimum ownership requirements will be ineligible to participate in future
long-term incentive awards.
DETERMINATION OF THE CHIEF EXECUTIVE OFFICER'S COMPENSATION
The 1999 compensation for Mr. Edward Lapekas, Chairman of the Board and
Chief Executive Officer, consisted of a base annual salary, an annual bonus,
long-term incentive stock option and stock appreciation rights grants and
employee benefits provided to salaried employees as a group, and perquisites
that are usual and customary for the position.
The Compensation and Organization Committee has determined the competitive
range of compensation for Mr. Lapekas by utilizing survey data based upon a
nationally recognized compensation survey, the Hewitt Total Compensation
Measurement Database consisting of 108 manufacturing companies similar in size
to the Company. In addition, the Company monitors the compensation levels
reported in proxies for 17 U.S. public, industrial companies which includes its
closest competitors. Considering this data and the financial performance of the
Company, the Committee increased Mr. Lapekas's base annual compensation,
effective July 28, 1999 to $650,000.
Pursuant to the terms of the annual incentive plan, during 1999,
Mr. Lapekas earned an annual bonus award of $746,666 or 200 percent of his
target bonus opportunity. This payment, made in March 2000 reflects the bonus
goals approved by the Company's former parent company, Pechiney and the
Compensation Committee at the beginning of 1999. The bonus reflects the
achievement of the Return on Capital Employed goals, utilized under the annual
incentive plan for 1999 and subjectively measured personal goals as reviewed and
approved by the Compensation and Organization Committee for the period.
Mr. Lapekas's long-term incentive plan grant of 564,000 non-qualified stock
options represents a three-year grant. He is not scheduled to receive long-term
incentive grants during 2000 and 2001.
B-22
<PAGE>
PERFORMANCE GRAPH
The following graph presents a comparison of the cumulative stockholder
return on the Common Stock of the Company for the period beginning July 28, 1999
(the date on which the Company's Common Stock was first listed on the NYSE), and
ending December 31, 1999, as measured against (i) the Standard & Poor's 500
Stock Index and (ii) the performance of peer issuers in the Company's industry.
The returns shown assume that $100 was invested in the Company's Common
Stock and in each of the two indices starting on July 28, 1999. The returns
shown also assume that all dividends paid during the period shown were
reinvested. Stockholders are cautioned against drawing any conclusions from the
data contained therein, as past performance is no guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YEARS THE COMPANY S&P 500 PEER GROUP
<S> <C> <C> <C>
July 28, 1999 $100.00 $100.00 $100.00
August 1999 $96.32 $99.51 $93.09
September 1999 $93.01 $96.78 $84.53
October 1999 $75.18 $102.90 $88.27
November 1999 $77.81 $104.99 $81.51
December 1999 $78.18 $111.18 $85.78
</TABLE>
<TABLE>
<CAPTION>
JULY 28, AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
1999 1999 1999 1999 1999 1999
--------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
AMERICAN NATIONAL CAN
GROUP, INC.......................... $100.00 $96.32 $93.01 $ 75.18 $ 77.81 $ 78.18
S & P 500............................. $100.00 $99.51 $96.78 $102.90 $104.99 $111.18
PEER GROUP............................ $100.00 $93.09 $84.53 $ 88.27 $ 81.51 $ 85.78
</TABLE>
- ------------------------
NOTE: Peer group consists of AEP Industries Inc., Applied Extrusion
Technologies, Inc., AptarGroup, Inc., Ball Corporation, Bemis Company,
Inc., BWAY Corporation, Caraustar Industries, Inc., Crown Cork & Seal
Company, Inc., Ivex Packaging Corporation, Owens-Illinois, Inc., Pactiv
Corporation, Rock-Tenn Company, Sealed Air Corporation, Shorewood
Packaging Corporation, Silgan Holdings Inc., Sonoco Products Company and
U.S. Can Corporation.
B-23
<PAGE>
[LOGO]
EDWARD A. LAPEKAS
Chairman of the Board and
Chief Executive Officer
April 10, 2000
Dear Stockholder:
I am pleased to inform you that American National Can Group, Inc. has
entered into a merger agreement with Rexam PLC, pursuant to which a wholly owned
indirect subsidiary of Rexam has commenced a tender offer to purchase all of the
outstanding shares of American National Can's common stock for $18.00 per share
in cash. The tender offer is conditioned upon, among other things, a minimum of
a majority of American National Can's shares outstanding on a fully diluted
basis being tendered and not withdrawn and the receipt of regulatory approvals.
The tender offer will be followed by a merger, in which each share of American
National Can common stock not purchased in the tender offer will be converted
into the right to receive in cash the price paid in the tender offer.
YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE TERMS OF THE REXAM OFFER AND
THE MERGER ARE ADVISABLE, FAIR TO, AND IN THE BEST INTERESTS OF, AMERICAN
NATIONAL CAN'S STOCKHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT AMERICAN NATIONAL
CAN'S STOCKHOLDERS ACCEPT THE REXAM OFFER AND TENDER THEIR SHARES OF AMERICAN
NATIONAL CAN COMMON STOCK PURSUANT TO THE OFFER.
In arriving at its recommendation, the Board of Directors considered a
number of factors, as described in the attached Schedule 14D-9, including the
written opinion of the Company's financial advisor, Deutsche Bank
Securities Inc., that, as of the date of the opinion, the consideration to be
received by the holders of American National Can common stock pursuant to the
merger agreement with Rexam is fair from a financial point of view to American
National Can's stockholders. A copy of Deutsche Bank Securities Inc.'s written
opinion, which sets forth the assumptions made, procedures followed and matters
considered by Deutsche Bank Securities Inc. in rendering its opinion, can be
found in Annex A to the Schedule 14D-9. You should read the opinion carefully
and in its entirety.
Enclosed are the Rexam Offer to Purchase, dated April 10, 2000, the Letter
of Transmittal and related documents. These documents set forth the terms and
conditions of the tender offer. The Schedule 14D-9 describes in more detail the
reasons for your Board's conclusions and contains other information relating to
the tender offer. We urge you to consider this information carefully.
/s/ Edward A. Lapekas
Edward A. Lapekas
Chairman of the Board and
Chief Executive Officer
American National Can Group, Inc. 8770 West Bryn Mawr Avenue, Chicago, Illinois
60631 (773) 399-3000
<PAGE>
Exhibit 99(e)(4)
FIRST AMENDMENT TO AGREEMENT BETWEEN
AMERICAN NATIONAL CAN COMPANY AND ALLAN BOHNER
THIS FIRST AMENDMENT TO AGREEMENT BETWEEN AMERICAN NATIONAL CAN COMPANY AND
ALLAN BOHNER is entered into as of this 31st day of March, 2000, by and among
American National Can Company, a Delaware corporation, and American National Can
Group, Inc., a Delaware corporation (collectively the "Company"), and Allan
Bohner (the "Executive").
RECITALS:
A. The American National Can Company and the Executive are parties to
an Agreement, dated as of January 15th, 1996 (the "Agreement").
B. The parties have agreed to update the Agreement to reflect certain
agreements relating to additional payments to be made to the Executive under the
Management Incentive Plan and the retention program in connection with the
proposed transactions among the Company, Rexam PLC, an English limited company
("Rexam") and Rexam Acquisition Subsidiary Inc. (the "Merger Sub") (the
"Merger"), pursuant to the Agreement and Plan of Merger among Rexam, the Merger
Sub and the Company, dated as of March 31, 2000 (the "Merger Agreement").
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which the parties hereby acknowledge, the
parties agree as follows:
1. AMENDMENT TO SECTION 4(b). Section 4(b)(i) is hereby amended by adding
"(A)" after the subsection heading "(i)" and before the word "During" and
by adding the following subsection (B) after the newly renumbered
subsection 4(b)(i)(A) thereof:
(B) Unless the Performance Conditions set forth below (the "Performance
Conditions") are not satisfied during the period commencing on the date
hereof and ending on the Closing Date (as defined in the Merger Agreement),
the Executive shall be entitled to receive, in addition to the amounts set
forth in Section 4(b)(i)(A) hereof, additional MIP awards in a lump-sum
cash payment equal to the sum of (x) the aggregate amount payable under
Section 4(b)(i)(A) hereof and (y) the amount equal to the MIP award payable
at maximum level for the year 2000 pro-rated based on a fraction, the
numerator of which shall be the number of days from January 1, 2000 until
the Closing Date, and the denominator of which shall be 365 (the sum of (x)
and (y) referred to herein as the "Additional MIP Awards"). For purposes of
this Section 4(b)(i)(B), the Performance Conditions are: (I) regular
consultation between the Executive and the Chief Executive Officer of the
Company (the "CEO") (or his designee) on any matter which is likely to have
a material and negative affect on the results of operations of the Company
and the taking of any action agreed upon by the Executive and
<PAGE>
the CEO (or his designee) pursuant to such consultation with respect to
such matter; and (II) the Executive having provided active, positive
support to the process of Rexam acquiring and integrating the Company into
Rexam's operations and administrative structures as reasonably directed by
the CEO (or his designee), including but not limited to, supporting the
acquisition internally and externally, exercising reasonable efforts under
the circumstances to minimize attrition among key management of the
Company, providing access to information and employees, in accordance with
and subject to the limitations of Section 5.02 of the Merger Agreement, and
using reasonable efforts under the circumstances to preserve relationships
with customers and suppliers, in accordance with and subject to the
limitations of Section 4.01(a) of the Merger Agreement, to the extent the
Executive's duties as of the date hereof include contact with customers and
suppliers. In the event that Rexam reasonably considers that the condition
set forth in (II) above is not being or is unlikely to be met based upon
performance to that time, Rexam will promptly advise the Executive in
writing of such, and shall provide the Executive with a reasonable
opportunity to remedy his performance and meet such Performance Conditions.
Notwithstanding anything contained in this Agreement to the contrary, the
Additional MIP Awards shall be payable upon the earlier to occur of the
thirtieth day following the Closing Date and the date that the Executive is
due to receive his first payment under Section 4 of this Agreement. For
purposes of Section 3 of this Agreement, and for purposes of all employee
benefits provided by the Company (hereunder or otherwise) that are affected
by the compensation or earnings of the Executive, the Additional MIP Awards
shall be treated as includible compensation for purposes of such
calculations and shall be deemed to have been paid over the Continuation
Period as opposed to in a lump sum.
2. AMENDMENT TO SECTION 4(b). Section 4(b) is hereby further amended by adding
the following subsection (iv) after subsection (iii) thereof:
(iv) The Executive shall be entitled to receive the amount set forth beside
the Executive's name on Exhibit A hereto (the "Retention Pool Payment").
The Retention Pool Payment shall be paid to the Executive in cash in a lump
sum upon the earlier to occur of the thirtieth day following the Closing
Date and the date that the Executive is due to receive his first payment
under Section 4 of this Agreement; PROVIDED, HOWEVER, that, notwithstanding
anything contained herein to the contrary, if the Executive's employment is
not terminated under circumstances entitling him to receive payments under
this Section 4, then the Executive shall receive the Retention Pool Payment
at the time the Retention Pool Payments are otherwise payable pursuant to
Schedule 5.08(d) of the Merger Agreement. For purposes of Section 3 of this
Agreement, and for purposes of all employee benefits provided by the
Company (hereunder or otherwise) that are affected by the compensation or
earnings of the Executive, the Retention Pool Payment shall not be treated
as includible compensation for purposes of such calculations.
2
<PAGE>
3. AMENDMENT TO SECTION 4: Section 4 of the Agreement is hereby further
amended by adding the following subsection (h) at the end thereof:
(h) TAX GROSS-UP. If any payment or benefit to or for the benefit of the
Executive in connection with a "Change of Control" (as defined in the Terms
and Conditions of the 1999 Grant Agreement under the Company's Long-Term
Stock Incentive Plan) (whether pursuant to the terms of this Agreement, or
any other plan or arrangement or agreement) is subject to the Excise Tax
(as hereinafter defined), the Company shall pay to the Executive a full
cash gross-up in an amount equal to (i) the Excise Tax allocable to such
payment or benefit; and (ii) any Excise Tax and any state, federal or other
income taxes on the amounts described in clause (i) and this clause. For
purposes of this Section 4(h), the term "Excise Tax" shall mean the tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code")
and any similar tax that may hereafter be imposed.
The amount of the gross-up payments to the Executive under this
Section 4(h) shall be estimated by a nationally recognized firm of
certified public accountants, which firm shall not have provided
services to the Company or any Affiliate of the Company within the
previous twelve months and shall not provide services thereto in the
following twelve months, based upon the following assumptions:
(i) all payments and benefits to or for the benefit of the Executive
in connection with a Change of Control or termination of the
Executive's employment following a Change of Control shall be
deemed to be "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" shall
be deemed to be subject to the Excise Tax except to the extent
that, in the opinion of tax counsel selected by the firm of
certified public accountants charged with estimating the gross-up
payments to the Executive under this Section 4(h), such payments
or benefits are not subject to the Excise Tax; and
(ii) the Executive shall be deemed to pay federal, state and other
income taxes at the highest marginal rate of taxation for the
applicable calendar year.
The estimated amount of the gross-up payments due the Executive
pursuant to this Section 4(h) shall be paid to the Executive in a lump
sum not later than thirty (30) business days following the effective
date of the termination. In the event that the amount of the estimated
payment is less than the amount actually due to the Executive under
this Section 4(h), the amount of any such shortfall shall be paid to
the Executive within ten (10) days after the existence of the
shortfall is discovered.
4. AMENDMENT: The provisions amended, modified or added pursuant to this
Amendment may not be amended or modified without the express written
consent
3
<PAGE>
of the parties hereto and of Rexam.
5. COUNTERPARTS. This Amendment may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment this
31st day of March, 2000.
AMERICAN NATIONAL CAN COMPANY
By: /s/ Edward Lapekas
-------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
AMERICAN NATIONAL CAN GROUP, INC.
By: /s/ Edward Lapekas
-------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
EXECUTIVE
By: /s/ Allan Bohner
-------------------------------
Allan Bohner
Solely as guarantor of the Company's
obligations and as beneficiary of the
amendment provision in Section 4 hereof.
REXAM PLC
By: /s/ Rolf Borjesson
- -------------------------------
<PAGE>
Exhibit 99(e)(5)
SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AGREEMENT is entered into as of this 31st day of March, 2000, by and among
American National Can Company, a Delaware corporation, and American National Can
Group, Inc., a Delaware corporation (collectively the "Company"), and Curtis J.
Clawson (the "Executive").
RECITALS:
A. The Company and the Executive are parties to an Amended and Restated
Executive Employment Agreement, dated as of May 28, 1999 (the "Agreement").
B. The parties have agreed to update the Agreement to reflect certain
agreements relating to additional payments to be made to the Executive under the
Management Incentive Plan and the retention program in connection with the
proposed transactions among the Company, Rexam PLC, an English limited company
("Rexam") and Rexam Acquisition Subsidiary Inc. (the "Merger Sub") (the
"Merger"), pursuant to the Agreement and Plan of Merger among Rexam, the Merger
Sub and the Company, dated as of March 31, 2000 (the "Merger Agreement").
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which the parties hereby acknowledge, the
parties agree as follows:
1. AMENDMENT TO SECTION 3(b). Section 3(b)(i) is hereby amended by adding
"(A)" after the subsection heading "(i)" and before the words "The
Executive," by changing the reference to "subsection (b)(i)" in the last
sentence of the newly renumbered subsection 3(b)(i)(A) to "subsection
(b)(i)(A)," and by adding the following subsection (B) after the newly
renumbered subsection 3(b)(i)(A) thereof:
(B) Unless the Performance Conditions set forth below (the "Performance
Conditions") are not satisfied during the period commencing on the date
hereof and ending on the Closing Date (as defined in the Merger Agreement),
the Executive shall be entitled to receive, in addition to the amounts set
forth in Section 3(b)(i)(A) hereof, additional MIP awards in a lump-sum
cash payment equal to the sum of (x) the aggregate amount payable under
Section (3)(b)(i)(A) hereof without the discount referenced in the last
sentence of Section 3(b)(i)(A) and (y) the amount equal to the MIP award
payable at maximum level for the year 2000 pro-rated based on a fraction,
the numerator of which shall be the number of days from January 1, 2000
until the Closing Date, and the denominator of which shall be 365 (the sum
of (x) and (y) referred to herein as the "Additional MIP Awards"). For
purposes of this Section 3(b)(i)(B), the Performance Conditions are: (I)
regular consultation between the Executive and the Chief Executive
<PAGE>
Officer of the Company (the "CEO") (or his designee) on any matter which is
likely to have a material and negative affect on the results of operations
of the Company and the taking of any action agreed upon by the Executive
and the CEO (or his designee) pursuant to such consultation with respect to
such matter; and (II) the Executive having provided active, positive
support to the process of Rexam acquiring and integrating the Company into
Rexam's operations and administrative structures as reasonably directed by
the CEO (or his designee), including but not limited to, supporting the
acquisition internally and externally, exercising reasonable efforts under
the circumstances to minimize attrition among key management of the
Company, providing access to information and employees, in accordance with
and subject to the limitations of Section 5.02 of the Merger Agreement, and
using reasonable efforts under the circumstances to preserve relationships
with customers and suppliers, in accordance with and subject to the
limitations of Section 4.01(a) of the Merger Agreement, to the extent the
Executive's duties as of the date hereof include contact with customers and
suppliers. In the event that Rexam reasonably considers that the condition
set forth in (II) above is not being or is unlikely to be met based upon
performance to that time, Rexam will promptly advise the Executive in
writing of such, and shall provide the Executive with a reasonable
opportunity to remedy his performance and meet such Performance Conditions.
Notwithstanding anything contained in this Agreement to the contrary, the
Additional MIP Awards shall be payable upon the earlier to occur of the
thirtieth day following the Closing Date and the date that the Executive is
due to receive his first payment under Section 3 of this Agreement. For
purposes of Sections 2(j) and 3(h) of this Agreement, and for purposes of
all employee benefits provided by the Company (hereunder or otherwise) that
are affected by the compensation or earnings of the Executive, the
Additional MIP Awards shall be treated as includible compensation for
purposes of such calculations and shall be deemed to have been paid over
the Continuation Period as opposed to in a lump sum.
2. AMENDMENT TO SECTION 3(b). Section 3(b) is hereby further amended by adding
the following subsection (iii) after subsection (ii) thereof:
(iii) The Executive shall be entitled to receive the amount set forth
beside the Executive's name on Exhibit A hereto (the "Retention Pool
Payment"). The Retention Pool Payment shall be paid to the Executive in
cash in a lump sum upon the earlier to occur of the thirtieth day following
the Closing Date and the date that the Executive is due to receive his
first payment under Section 3 of this Agreement; PROVIDED, HOWEVER, that,
notwithstanding anything contained herein to the contrary, if the
Executive's employment is not terminated under circumstances entitling him
to receive payments under this Section 3, then the Executive shall receive
the Retention Pool Payment at the time the Retention Pool Payments are
otherwise payable pursuant to Schedule 5.08(d) of the Merger Agreement. For
purposes of Sections 2(j) and 3(h) of this Agreement, and for purposes of
all employee benefits provided by the Company (hereunder or otherwise) that
are affected by the compensation or earnings of the Executive, the
2
<PAGE>
Retention Pool Payment shall not be treated as includible compensation for
purposes of such calculations.
3. AMENDMENT: The provisions amended, modified or added pursuant to this
Second Amendment may not be amended or modified without the express written
consent of the parties hereto and of Rexam.
4. COUNTERPARTS. This Amendment may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment this
31st day of March, 2000.
AMERICAN NATIONAL CAN COMPANY
By: /s/ Edward Lapekas
-------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
AMERICAN NATIONAL CAN GROUP, INC.
By: /s/ Edward Lapekas
-------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
EXECUTIVE
By: /s/ Curtis J. Clawson
-------------------------------
Curtis J. Clawson
Solely as guarantor of the Company's
obligations and as beneficiary of the
amendment provisions in Section 3
hereof.
REXAM PLC
By: /s/ Rolf Borjesson
- -------------------------------
<PAGE>
Exhibit 99(e)(6)
SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AGREEMENT is entered into as of this 31st day of March, 2000, by and among
American National Can Company, a Delaware corporation, and American National Can
Group, Inc., a Delaware corporation (collectively the "Company"), and Edward A.
Lapekas (the "Executive").
RECITALS:
A. The Company and the Executive are parties to an Amended and Restated
Executive Employment Agreement, dated as of May 28, 1999 (the "Agreement").
B. The parties have agreed to update the Agreement to reflect certain
agreements relating to additional payments to be made to the Executive under the
Management Incentive Plan and the retention program in connection with the
proposed transactions among the Company, Rexam PLC, an English limited company
("Rexam") and Rexam Acquisition Subsidiary Inc. (the "Merger Sub") (the
"Merger"), pursuant to the Agreement and Plan of Merger among Rexam, the Merger
Sub and the Company, dated as of March 31, 2000 (the "Merger Agreement").
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which the parties hereby acknowledge, the
parties agree as follows:
1. AMENDMENT TO SECTION 3(b). Section 3(b)(i) is hereby amended by adding
"(A)" after the subsection heading "(i)" and before the words "The
Executive," by changing the reference to "subsection (b)(i)" in the last
sentence of the newly renumbered subsection 3(b)(i)(A) to "subsection
(b)(i)(A)," and by adding the following subsection (B) after the newly
renumbered subsection 3(b)(i)(A) thereof:
(B) Unless the Performance Conditions set forth below (the "Performance
Conditions") are not satisfied during the period commencing on the date
hereof and ending on the Closing Date (as defined in the Merger Agreement),
the Executive shall be entitled to receive, in addition to the amounts set
forth in Section 3(b)(i)(A) hereof, additional MIP awards in a lump-sum
cash payment equal to the sum of (x) the aggregate amount payable under
Section (3)(b)(i)(A) hereof without the discount referenced in the last
sentence of Section 3(b)(i)(A) and (y) the amount equal to the MIP award
payable at maximum level for the year 2000 pro-rated based on a fraction,
the numerator of which shall be the number of days from January 1, 2000
until the Closing Date, and the denominator of which shall be 365 (the sum
of (x) and (y) referred to herein as the "Additional MIP Awards"). For
purposes of this Section 3(b)(i)(B), the Performance Conditions are: (I)
regular consultation between the Executive and the Chief Executive
1
<PAGE>
Officer of Rexam (the "CEO") (or his designee) on any matter which is
likely to have a material and negative affect on the results of operations
of the Company and the taking of any action agreed upon by the Executive
and the CEO (or his designee) pursuant to such consultation with respect to
such matter; and (II) the Executive having provided active, positive
support to the process of Rexam acquiring and integrating the Company into
Rexam's operations and administrative structures as reasonably directed by
the CEO (or his designee), including but not limited to, supporting the
acquisition internally and externally, exercising reasonable efforts under
the circumstances to minimize attrition among key management of the
Company, providing access to information and employees, in accordance with
and subject to the limitations of Section 5.02 of the Merger Agreement, and
using reasonable efforts under the circumstances to preserve relationships
with customers and suppliers, in accordance with and subject to the
limitations of Section 4.01(a) of the Merger Agreement, to the extent the
Executive's duties as of the date hereof include contact with customers and
suppliers. In the event that Rexam reasonably considers that the condition
set forth in (II) above is not being or is unlikely to be met based upon
performance to that time, Rexam will promptly advise the Executive in
writing of such, and shall provide the Executive with a reasonable
opportunity to remedy his performance and meet such Performance Conditions.
Notwithstanding anything contained in this Agreement to the contrary, the
Additional MIP Awards shall be payable upon the earlier to occur of the
thirtieth day following the Closing Date and the date that the Executive is
due to receive his first payment under Section 3 of this Agreement. For
purposes of Sections 2(j) and 3(h) of this Agreement, and for purposes of
all employee benefits provided by the Company (hereunder or otherwise) that
are affected by the compensation or earnings of the Executive, the
Additional MIP Awards shall be treated as includible compensation for
purposes of such calculations and shall be deemed to have been paid over
the Continuation Period as opposed to in a lump sum.
2. AMENDMENT TO SECTION 3(b). Section 3(b) is hereby further amended by adding
the following subsection (iii) after subsection (ii) thereof:
(iii) The Executive shall be entitled to receive the amount set forth
beside the Executive's name on Exhibit A hereto (the "Retention Pool
Payment"). The Retention Pool Payment shall be paid to the Executive in
cash in a lump sum upon the earlier to occur of the thirtieth day following
the Closing Date and the date that the Executive is due to receive his
first payment under Section 3 of this Agreement; PROVIDED, HOWEVER, that,
notwithstanding anything contained herein to the contrary, if the
Executive's employment is not terminated under circumstances entitling him
to receive payments under this Section 3, then the Executive shall receive
the Retention Pool Payment at the time the Retention Pool Payments are
otherwise payable pursuant to Schedule 5.08(d) of the Merger Agreement. For
purposes of Sections 2(j) and 3(h) of this Agreement, and for purposes of
all employee benefits provided by the Company (hereunder or otherwise) that
are affected by the compensation or earnings of the Executive, the
2
<PAGE>
Retention Pool Payment shall not be treated as includible compensation for
purposes of such calculations.
3. AMENDMENT: The provisions amended, modified or added pursuant to this
Second Amendment may not be amended or modified without the express written
consent of the parties hereto and of Rexam.
4. COUNTERPARTS. This Amendment may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment this
31st day of March, 2000.
AMERICAN NATIONAL CAN COMPANY
By: /s/ Dennis R. Bankowski
-------------------------------
Dennis R. Bankowski
Executive Vice President Administration
& Chief Human Resources Officer
AMERICAN NATIONAL CAN GROUP, INC.
By: /s/ Dennis R. Bankowski
-------------------------------
Dennis R. Bankowski
Executive Vice President Administration
& Chief Human Resources Officer
EXECUTIVE
By: /s/ Edward A. Lapekas
-------------------------------
Edward A. Lapekas
Solely as guarantor of the Company's
obligations and as beneficiary of the
amendment provisions in Section 3
hereof.
REXAM PLC
By: /s/ Rolf Borjesson
- -------------------------------
<PAGE>
Exhibit 99(e)(7)
SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AGREEMENT is entered into as of this 31st day of March, 2000, by and among
American National Can Company, a Delaware corporation, and American National Can
Group, Inc., a Delaware corporation (collectively the "Company"), and Dennis R.
Bankowski (the "Executive").
RECITALS:
A. The Company and the Executive are parties to an Amended and
Restated Executive Employment Agreement, dated as of May 28, 1999 (the
"Agreement").
B. The parties have agreed to update the Agreement to reflect certain
agreements relating to additional payments to be made to the Executive under
the Management Incentive Plan and the retention program in connection with
the proposed transactions among the Company, Rexam PLC, an English limited
company ("Rexam") and Rexam Acquisition Subsidiary Inc. (the "Merger Sub")
(the "Merger"), pursuant to the Agreement and Plan of Merger among Rexam, the
Merger Sub and the Company, dated as of March 31, 2000 (the "Merger
Agreement").
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which the parties hereby acknowledge, the
parties agree as follows:
1. AMENDMENT TO SECTION 3(b). Section 3(b)(i) is hereby amended by adding
"(A)" after the subsection heading "(i)" and before the words "The
Executive," by changing the reference to "subsection (b)(i)" in the last
sentence of the newly renumbered subsection 3(b)(i)(A) to "subsection
(b)(i)(A)," and by adding the following subsection (B) after the newly
renumbered subsection 3(b)(i)(A) thereof:
(B) Unless the Performance Conditions set forth below (the "Performance
Conditions") are not satisfied during the period commencing on the date
hereof and ending on the Closing Date (as defined in the Merger Agreement),
the Executive shall be entitled to receive, in addition to the amounts set
forth in Section 3(b)(i)(A) hereof, additional MIP awards in a lump-sum
cash payment equal to the sum of (x) the aggregate amount payable under
Section (3)(b)(i)(A) hereof without the discount referenced in the last
sentence of Section 3(b)(i)(A) and (y) the amount equal to the MIP award
payable at maximum level for the year 2000 pro-rated based on a fraction,
the numerator of which shall be the number of days from January 1, 2000
until the Closing Date, and the denominator of which shall be 365 (the sum
of (x) and (y) referred to herein as the "Additional MIP Awards"). For
purposes of this Section 3(b)(i)(B), the Performance Conditions are: (I)
regular consultation between the Executive and the Chief Executive Officer
of the Company (the "CEO") (or his designee) on any matter which is
<PAGE>
likely to have a material and negative effect on the results of operations
of the Company and the taking of any action agreed upon by the Executive
and the CEO (or his designee) pursuant to such consultation with respect to
such matter; and (II) the Executive having provided active, positive
support to the process of Rexam acquiring and integrating the Company into
Rexam's operations and administrative structures as reasonably directed by
the CEO (or his designee), including but not limited to, supporting the
acquisition internally and externally, exercising reasonable efforts under
the circumstances to minimize attrition among key management of the
Company, providing access to information and employees, in accordance with
and subject to the limitations of Section 5.02 of the Merger Agreement, and
using reasonable efforts under the circumstances to preserve relationships
with customers and suppliers, in accordance with and subject to the
limitations of Section 4.01(a) of the Merger Agreement, to the extent the
Executive's duties as of the date hereof include contact with customers and
suppliers. In the event that Rexam reasonably considers that the condition
set forth in (II) above is not being or is unlikely to be met based upon
performance to that time, Rexam will promptly advise the Executive in
writing of such, and shall provide the Executive with a reasonable
opportunity to remedy his performance and meet such Performance Conditions.
Notwithstanding anything contained in this Agreement to the contrary, the
Additional MIP Awards shall be payable upon the earlier to occur of the
thirtieth day following the Closing Date and the date that the Executive is
due to receive his first payment under Section 3 of this Agreement. For
purposes of Sections 2(j) and 3(h) of this Agreement, and for purposes of
all employee benefits provided by the Company (hereunder or otherwise) that
are affected by the compensation or earnings of the Executive, the
Additional MIP Awards shall be treated as includible compensation for
purposes of such calculations and shall be deemed to have been paid over
the Continuation Period as opposed to in a lump sum.
2. AMENDMENT TO SECTION 3(b). Section 3(b) is hereby further amended by adding
the following subsection (iii) after subsection (ii) thereof:
(iii) The Executive shall be entitled to receive the amount set forth
beside the Executive's name on Exhibit A hereto (the "Retention Pool
Payment"). The Retention Pool Payment shall be paid to the Executive in
cash in a lump sum upon the earlier to occur of the thirtieth day following
the Closing Date and the date that the Executive is due to receive his
first payment under Section 3 of this Agreement; PROVIDED, HOWEVER, that,
notwithstanding anything contained herein to the contrary, if the
Executive's employment is not terminated under circumstances entitling him
to receive payments under this Section 3, then the Executive shall receive
the Retention Pool Payment at the time the Retention Pool Payments are
otherwise payable pursuant to Schedule 5.08(d) of the Merger Agreement. For
purposes of Sections 2(j) and 3(h) of this Agreement, and for purposes of
all employee benefits provided by the Company (hereunder or otherwise) that
are affected by the compensation or earnings of the Executive, the
2
<PAGE>
Retention Pool Payment shall not be treated as includible compensation for
purposes of such calculations.
3. AMENDMENT: The provisions amended, modified or added pursuant to this
Second Amendment may not be amended or modified without the express written
consent of the parties hereto and of Rexam.
4. COUNTERPARTS. This Amendment may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment this
31st day of March, 2000.
AMERICAN NATIONAL CAN COMPANY
By: /s/ Edward Lapekas
-------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
AMERICAN NATIONAL CAN GROUP, INC.
By: /s/ Edward Lapekas
-------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
EXECUTIVE
By: /s/ Dennis R. Bankowski
-------------------------------
Dennis R. Bankowski
Solely as guarantor of the Company's
obligations and as beneficiary of the
amendment provisions in Section 3
hereof.
REXAM PLC
By: /s/ Rolf Borjesson
- -------------------------------
<PAGE>
Exhibit 99(e)(8)
SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AGREEMENT is entered into as of this 31st day of March, 2000, by and among
American National Can Company, a Delaware corporation, and American National Can
Group, Inc., a Delaware corporation (collectively the "Company"), and Michael D.
Herdman (the "Executive").
RECITALS:
A. The Company and the Executive are parties to an Amended and
Restated Executive Employment Agreement, dated as of May 28, 1999 (the
"Agreement").
B. The parties have agreed to update the Agreement to reflect certain
agreements relating to additional payments to be made to the Executive under the
Management Incentive Plan and the retention program in connection with the
proposed transactions among the Company, Rexam PLC, an English limited company
("Rexam") and Rexam Acquisition Subsidiary Inc. (the "Merger Sub") (the
"Merger"), pursuant to the Agreement and Plan of Merger among Rexam, the Merger
Sub and the Company, dated as of March 31, 2000 (the "Merger Agreement").
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which the parties hereby acknowledge, the
parties agree as follows:
1. AMENDMENT TO SECTION 3(B). Section 3(b)(i) is hereby amended by adding
"(A)" after the subsection heading "(i)" and before the words "The
Executive," by changing the reference to "subsection (b)(i)" in the
last sentence of the newly renumbered subsection 3(b)(i)(A) to
"subsection (b)(i)(A)," and by adding the following subsection (B)
after the newly renumbered subsection 3(b)(i)(A) thereof:
(B) Unless the Performance Conditions set forth below (the "Performance
Conditions") are not satisfied during the period commencing on the date
hereof and ending on the Closing Date (as defined in the Merger
Agreement), the Executive shall be entitled to receive, in addition to
the amounts set forth in Section 3(b)(i)(A) hereof, additional MIP
awards in a lump-sum cash payment equal to the sum of (x) the aggregate
amount payable under Section (3)(b)(i)(A) hereof without the discount
referenced in the last sentence of Section 3(b)(i)(A) and (y) the
amount equal to the MIP award payable at maximum level for the year
2000 pro-rated based on a fraction, the numerator of which shall be the
number of days from January 1, 2000 until the Closing Date, and the
denominator of which shall be 365 (the sum of (x) and (y) referred to
herein as the "Additional MIP Awards"). For purposes of this Section
3(b)(i)(B), the Performance Conditions are: (I) regular consultation
between the Executive and the Chief Executive
<PAGE>
Officer of the Company (the "CEO") (or his designee) on any matter
which is likely to have a material and negative effect on the results
of operations of the Company and the taking of any action agreed upon
by the Executive and the CEO (or his designee) pursuant to such
consultation with respect to such matter; and (II) the Executive having
provided active, positive support to the process of Rexam acquiring and
integrating the Company into Rexam's operations and administrative
structures as reasonably directed by the CEO (or his designee),
including but not limited to, supporting the acquisition internally and
externally, exercising reasonable efforts under the circumstances to
minimize attrition among key management of the Company, providing
access to information and employees, in accordance with and subject to
the limitations of Section 5.02 of the Merger Agreement, and using
reasonable efforts under the circumstances to preserve relationships
with customers and suppliers, in accordance with and subject to the
limitations of Section 4.01(a) of the Merger Agreement, to the extent
the Executive's duties as of the date hereof include contact with
customers and suppliers. In the event that Rexam reasonably considers
that the condition set forth in (II) above is not being or is unlikely
to be met based upon performance to that time, Rexam will promptly
advise the Executive in writing of such, and shall provide the
Executive with a reasonable opportunity to remedy his performance and
meet such Performance Conditions. Notwithstanding anything contained in
this Agreement to the contrary, the Additional MIP Awards shall be
payable upon the earlier to occur of the thirtieth day following the
Closing Date and the date that the Executive is due to receive his
first payment under Section 3 of this Agreement. For purposes of
Sections 2(j) and 3(h) of this Agreement, and for purposes of all
employee benefits provided by the Company (hereunder or otherwise) that
are affected by the compensation or earnings of the Executive, the
Additional MIP Awards shall be treated as includible compensation for
purposes of such calculations and shall be deemed to have been paid
over the Continuation Period as opposed to in a lump sum.
2. AMENDMENT TO SECTION 3(B). Section 3(b) is hereby further amended by
adding the following subsection (iii) after subsection (ii) thereof:
(iii) The Executive shall be entitled to receive the amount set forth
beside the Executive's name on Exhibit A hereto (the "Retention Pool
Payment"). The Retention Pool Payment shall be paid to the Executive in
cash in a lump sum upon the earlier to occur of the thirtieth day
following the Closing Date and the date that the Executive is due to
receive his first payment under Section 3 of this Agreement; PROVIDED,
HOWEVER, that, notwithstanding anything contained herein to the
contrary, if the Executive's employment is not terminated under
circumstances entitling him to receive payments under this Section 3,
then the Executive shall receive the Retention Pool Payment at the time
the Retention Pool Payments are otherwise payable pursuant to Schedule
5.08(d) of the Merger Agreement. For purposes of Sections 2(j) and 3(h)
of this Agreement, and for purposes of all employee benefits provided
by the Company (hereunder or otherwise) that are affected by the
compensation or earnings of the Executive, the
2
<PAGE>
Retention Pool Payment shall not be treated as includible compensation
for purposes of such calculations.
3. AMENDMENT: The provisions amended, modified or added pursuant to this
Second Amendment may not be amended or modified without the express
written consent of the parties hereto and of Rexam.
4. COUNTERPARTS. This Amendment may be executed in several counterparts,
each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
this 31st day of March, 2000.
AMERICAN NATIONAL CAN COMPANY
By: /s/ Edward Lapekas
------------------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
AMERICAN NATIONAL CAN GROUP, INC.
By: /s/ Edward Lapekas
------------------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
EXECUTIVE
By: /s/ Michael D. Herdman
------------------------------------------
Michael D. Herdman
Solely as guarantor of the Company's obligations and as beneficiary of the
amendment provisions in Section 3 hereof.
REXAM PLC
By: /s/ Rolf Borjesson
--------------------------------
<PAGE>
Exhibit 99(e)(9)
SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AGREEMENT is entered into as of this 31st day of March, 2000, by and among
American National Can Company, a Delaware corporation, and American National Can
Group, Inc., a Delaware corporation (collectively the "Company"), and Alan A.
Schumacher (the "Executive").
RECITALS:
A. The Company and the Executive are parties to an Amended and
Restated Executive Employment Agreement, dated as of May 28, 1999 (the
"Agreement").
B. The parties have agreed to update the Agreement to reflect certain
agreements relating to additional payments to be made to the Executive under the
Management Incentive Plan and the retention program in connection with the
proposed transactions among the Company, Rexam PLC, an English public limited
company ("Rexam") and Rexam Acquisition Subsidiary Inc. (the "Merger Sub") (the
"Merger"), pursuant to the Agreement and Plan of Merger among Rexam, the Merger
Sub and the Company, dated as of March 31, 2000 (the "Merger Agreement").
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which the parties hereby acknowledge, the
parties agree as follows:
1. AMENDMENT TO SECTION 3(b). Section 3(b)(i) is hereby amended by adding
"(A)" after the subsection heading "(i)" and before the words "The
Executive," by changing the reference to "subsection (b)(i)" in the
last sentence of the newly renumbered subsection 3(b)(i)(A) to
"subsection (b)(i)(A)," and by adding the following subsection (B)
after the newly renumbered subsection 3(b)(i)(A) thereof:
(B) Unless the Performance Conditions set forth below (the "Performance
Conditions") are not satisfied during the period commencing on the date
hereof and ending on the Closing Date (as defined in the Merger
Agreement), the Executive shall be entitled to receive, in addition to
the amounts set forth in Section 3(b)(i)(A) hereof, additional MIP
awards in a lump-sum cash payment equal to the sum of (x) the aggregate
amount payable under Section (3)(b)(i)(A) hereof without the discount
referenced in the last sentence of Section 3(b)(i)(A) and (y) the
amount equal to the MIP award payable at maximum level for the year
2000 pro-rated based on a fraction, the numerator of which shall be the
number of days from January 1, 2000 until the Closing Date, and the
denominator of which shall be 365 (the sum of (x) and (y) referred to
herein as the "Additional MIP Awards"). For purposes of this Section
3(b)(i)(B), the Performance Conditions are: (I) regular consultation
between the Executive and the Chief Executive
<PAGE>
Officer of the Company (the "CEO") (or his designee) on any matter
which is likely to have a material and negative effect on the results
of operations of the Company and the taking of any action agreed upon
by the Executive and the CEO (or his designee) pursuant to such
consultation with respect to such matter; and (II) the Executive having
provided active, positive support to the process of Rexam acquiring and
integrating the Company into Rexam's operations and administrative
structures as reasonably directed by the CEO (or his designee),
including but not limited to, supporting the acquisition internally and
externally, exercising reasonable efforts under the circumstances to
minimize attrition among key management of the Company, providing
access to information and employees, in accordance with and subject to
the limitations of Section 5.02 of the Merger Agreement, and using
reasonable efforts under the circumstances to preserve relationships
with customers and suppliers, in accordance with and subject to the
limitations of Section 4.01(a) of the Merger Agreement, to the extent
the Executive's duties as of the date hereof include contact with
customers and suppliers. In the event that Rexam reasonably considers
that the condition set forth in (II) above is not being or is unlikely
to be met based upon performance to that time, Rexam will promptly
advise the Executive in writing of such, and shall provide the
Executive with a reasonable opportunity to remedy his performance and
meet such Performance Conditions. Notwithstanding anything contained in
this Agreement to the contrary, the Additional MIP Awards shall be
payable upon the earlier to occur of the thirtieth day following the
Closing Date and the date that the Executive is due to receive his
first payment under Section 3 of this Agreement. For purposes of
Sections 2(j) and 3(h) of this Agreement, and for purposes of all
employee benefits provided by the Company (hereunder or otherwise) that
are affected by the compensation or earnings of the Executive, the
Additional MIP Awards shall be treated as includible compensation for
purposes of such calculations and shall be deemed to have been paid
over the Continuation Period as opposed to in a lump sum.
2. AMENDMENT TO SECTION 3(b). Section 3(b) is hereby further amended by
adding the following subsection (iii) after subsection (ii) thereof:
(iii) The Executive shall be entitled to receive the amount set forth
beside the Executive's name on Exhibit A hereto (the "Retention Pool
Payment"). The Retention Pool Payment shall be paid to the Executive in
cash in a lump sum upon the earlier to occur of the thirtieth day
following the Closing Date and the date that the Executive is due to
receive his first payment under Section 3 of this Agreement; PROVIDED,
HOWEVER, that, notwithstanding anything contained herein to the
contrary, if the Executive's employment is not terminated under
circumstances entitling him to receive payments under this Section 3,
then the Executive shall receive the Retention Pool Payment at the time
the Retention Pool Payments are otherwise payable pursuant to Schedule
5.08(d) of the Merger Agreement. For purposes of Sections 2(j) and 3(h)
of this Agreement, and for purposes of all employee benefits provided
by the Company (hereunder or otherwise) that are affected by the
compensation or earnings of the Executive, the
2
<PAGE>
Retention Pool Payment shall not be treated as includible compensation
for purposes of such calculations.
3. AMENDMENT: The provisions amended, modified or added pursuant to this
Second Amendment may not be amended or modified without the express
written consent of the parties hereto and of Rexam.
4. COUNTERPARTS. This Amendment may be executed in several counterparts,
each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
this 31st day of March, 2000.
AMERICAN NATIONAL CAN COMPANY
By: /s/ Edward Lapekas
-----------------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
AMERICAN NATIONAL CAN GROUP, INC.
By: /s/ Edward Lapekas
-----------------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
EXECUTIVE
By: /s/ Alan A. Schumacher
-----------------------------------------
Alan A. Schumacher
Solely as guarantor of the Company's
obligations and as beneficiary of the
amendment provisions in Section 3 hereof.
REXAM PLC
By: /s/ Rolf Borjesson
------------------------------------
<PAGE>
Exhibit 99(e)(10)
FIRST AMENDMENT TO AGREEMENT BETWEEN AMERICAN NATIONAL
CAN GROUP, INC., AMERICAN NATIONAL CAN COMPANY, AND
WILLIAM A. FRANCOIS
THIS FIRST AMENDMENT TO AGREEMENT BETWEEN AMERICAN NATIONAL CAN GROUP,
INC., AMERICAN NATIONAL CAN COMPANY, AND WILLIAM A. FRANCOIS is entered into as
of this 31st day of March, 2000, by and among American National Can Company, a
Delaware corporation, and American National Can Group, Inc., a Delaware
corporation (collectively the "Company"), and William A. Francois (the
"Executive").
RECITALS:
A. The Company and the Executive are parties to an Agreement, dated
as of February 18, 2000 (the "Agreement").
B. The parties have agreed to update the Agreement to reflect certain
agreements relating to additional payments to be made to the Executive under the
Management Incentive Plan and the retention program in connection with the
proposed transactions among the Company, Rexam PLC, an English limited company
("Rexam") and Rexam Acquisition Subsidiary Inc. (the "Merger Sub") (the
"Merger"), pursuant to the Agreement and Plan of Merger among Rexam, the Merger
Sub and the Company, dated as of March 31, 2000 (the "Merger Agreement").
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which the parties hereby acknowledge, the
parties agree as follows:
1. AMENDMENT TO SECTION 3(B). Section 3(b)(i) is hereby amended by adding
"(A)" after the subsection heading "(i) MIP" and before the words "The
Company" and by adding the following subsection (B) after the newly
renumbered subsection 3(b)(i)(A) thereof:
(B) Unless the Performance Conditions set forth below (the "Performance
Conditions") are not satisfied during the period commencing on the date
hereof and ending on the Closing Date (as defined in the Merger
Agreement), the Executive shall be entitled to receive, in lieu of the
amounts set forth in Section 3(b)(i)(A) hereof, a MIP award in a
lump-sum cash payment equal to the MIP award payable at maximum level
for the year 2000 pro-rated based on a fraction, the numerator of which
shall be the number of days from January 1, 2000 until the Termination
Date, and the denominator of which shall be 365 (the "MIP Award"). For
purposes of this Section 3(b)(i)(B), the Performance Conditions are:
(I) regular consultation between the Executive and the Chief Executive
Officer of the Company (the "CEO") (or his designee) on any matter
which is likely to have a material and negative effect on the results
of operations of the Company and the taking of any action agreed upon
by the Executive and the CEO (or his designee)
<PAGE>
pursuant to such consultation with respect to such matter; and (II) the
Executive having provided active, positive support to the process of
Rexam acquiring and integrating the Company into Rexam's operations and
administrative structures as reasonably directed by the CEO (or his
designee), including but not limited to, supporting the acquisition
internally and externally, exercising reasonable efforts under the
circumstances to minimize attrition among key management of the
Company, providing access to information and employees, in accordance
with and subject to the limitations of Section 5.02 of the Merger
Agreement, and using reasonable efforts under the circumstances to
preserve relationships with customers and suppliers, in accordance with
and subject to the limitations of Section 4.01(a) of the Merger
Agreement, to the extent the Executive's duties as of the date hereof
include contact with customers and suppliers. In the event that Rexam
reasonably considers that the condition set forth in (II) above is not
being or is unlikely to be met based upon performance to that time,
Rexam will promptly advise the Executive in writing of such, and shall
provide the Executive with a reasonable opportunity to remedy his
performance and meet such Performance Conditions. Notwithstanding
anything contained in this Agreement to the contrary, the MIP Award
shall be payable upon the Termination Date. For purposes of Section
3(h) of this Agreement, and for purposes of all employee benefits
provided by the Company (hereunder or otherwise) that are affected by
the compensation or earnings of the Executive, the MIP Award shall be
treated as includible compensation in the year in which the Termination
Date occurs for purposes of such calculations.
2. AMENDMENT TO SECTION 3(B). Section 3(b) is hereby further amended by
adding the following subsection (iv) after subsection (iii) thereof:
(iv) The Executive shall be entitled to receive the amount set forth
beside the Executive's name on Exhibit A hereto (the "Retention Pool
Payment"). The Retention Pool Payment shall be paid to the Executive in
cash in a lump sum upon the earlier to occur of the thirtieth day
following the Closing Date and the date that the Executive is due to
receive his first payment under Section 3 of this Agreement; PROVIDED,
HOWEVER, that, notwithstanding anything contained herein to the
contrary, if the Executive's employment is not terminated under
circumstances entitling him to receive payments under this Section 3,
then the Executive shall receive the Retention Pool Payment at the time
the Retention Pool Payments are otherwise payable pursuant to Schedule
5.08(d) of the Merger Agreement. For purposes of Section 3(h) of this
Agreement, and for purposes of all employee benefits provided by the
Company (hereunder or otherwise) that are affected by the compensation
or earnings of the Executive, the Retention Pool Payment shall not be
treated as includible compensation for purposes of such calculations.
3. AMENDMENT TO SECTION 3: Section 3 of the Agreement is hereby further
amended by adding the following subsection (k) at the end thereof:
2
<PAGE>
(k) TAX GROSS-UP. If any payment or benefit to or for the benefit of
the Executive in connection with a "Change of Control" (as defined in
the Terms and Conditions of the 1999 Grant Agreement under the
Company's Long-Term Stock Incentive Plan) (whether pursuant to the
terms of this Agreement, or any other plan or arrangement or agreement)
is subject to the Excise Tax (as hereinafter defined), the Company
shall pay to the Executive a full cash gross-up in an amount equal to
(i) the Excise Tax allocable to such payment or benefit; and (ii) any
Excise Tax and any state, federal or other income taxes on the amounts
described in clause (i) and this clause. For purposes of this Section
3(k), the term "Excise Tax" shall mean the tax imposed by Section 4999
of the Internal Revenue Code of 1986 (the "Code") and any similar tax
that may hereafter be imposed.
The amount of the gross-up payments to the Executive under this
Section 3(k) shall be estimated by a nationally recognized firm of
certified public accountants, which firm shall not have provided
services to the Company or any Affiliate of the Company within the
previous twelve months and shall not provide services thereto in
the following twelve months, based upon the following assumptions:
(i) all payments and benefits to or for the benefit of the
Executive in connection with a Change of Control or
termination of the Executive's employment following a
Change of Control shall be deemed to be "parachute
payments" within the meaning of Section 280G(b)(2) of
the Code, and all "excess parachute payments" shall be
deemed to be subject to the Excise Tax except to the
extent that, in the opinion of tax counsel selected by
the firm of certified public accountants charged with
estimating the gross-up payments to the Executive under
this Section 3(k), such payments or benefits are not
subject to the Excise Tax; and
(ii) the Executive shall be deemed to pay federal, state and
other income taxes at the highest marginal rate of
taxation for the applicable calendar year.
The estimated amount of the gross-up payments due the Executive
pursuant to this Section 3(k) shall be paid to the Executive in a
lump sum not later than thirty (30) business days following the
effective date of the termination. In the event that the amount of
the estimated payment is less than the amount actually due to the
Executive under this Section 3(k), the amount of any such
shortfall shall be paid to the Executive within ten (10) days
after the existence of the shortfall is discovered.
4. AMENDMENT: The provisions amended, modified or added pursuant to this
Amendment may not be amended or modified without the express written
consent of the parties hereto and of Rexam.
3
<PAGE>
5. COUNTERPARTS. This Amendment may be executed in several counterparts,
each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
this 31st day of March, 2000.
AMERICAN NATIONAL CAN COMPANY
By: /s/ Edward Lapekas
------------------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
AMERICAN NATIONAL CAN GROUP, INC.
By: /s/ Edward Lapekas
------------------------------------------
Edward Lapekas
Chairman and Chief Executive Officer
EXECUTIVE
By: /s/ William A. Francois
------------------------------------------
William A. Francois
Solely as guarantor of the Company's obligations and as beneficiary of the
amendment provisions in Section 4 hereof.
REXAM PLC
By: /s/ Rolf Borjesson
--------------------------------