As filed with the Securities and Exchange Commission on November 23, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 4
to
SCHEDULE 13E-3
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
CHRISTIANA COMPANIES, INC.
(Name of the Issuer)
C2, INC.
SHELDON B. LUBAR
(Name of Person(s) Filing Statement)
COMMON SHARES $1.00 PAR VALUE
(Title of Class of Securities)
170819106
(CUSIP Number of Class of Securities)
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William T. Donovan
Chairman
C2, Inc.
700 North Water Street, Suite 1200
Milwaukee, Wisconsin 53202
(414) 291-9000
Facsimile: (414) 291-9061
--------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)
Copies to:
Marc J. Marotta
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 271-2400
--------------------
This statement is filed in connection with (check the appropriate box):
A. |X| The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
B. |X| The filing of a registration statement under the Securities Act of 1933.
C. [ ] A tender offer.
D. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [ ]
CALCULATION OF REGISTRATION FEE
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Transaction Valuation Amount of Filing Fee
$85,193,623(1) $17,036(1)
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(1) Determined pursuant to Rule 0-11(b)(2) of the Securities Exchange Act of
1934.
Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or Schedule and the date of its filing
Amount Previously Paid: $38,240
Form or Registration No.: Form S-4 Reg. No. 333-65663
Filing Party: Weatherford, Inc. and Christiana Companies, Inc.
Date Filed: February 19, 1998
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INTRODUCTION
This Schedule 13E-3 relates to the proposed merger (the "Merger") of
Christiana Acquisition, Inc. a Wisconsin corporation ("Sub") and wholly-owned
subsidiary of Weatherford International, Inc. (formerly known as EVI
Weatherford, Inc.), a Delaware corporation ("Weatherford") with and into
Christiana Companies, Inc., a Wisconsin corporation (the "Company"). Under the
terms of the Merger, the Christiana shareholders will be entitled to receive
shares of Weatherford Common Stock and cash in exchange for their shares of
Christiana Common Stock. The number of shares of Weatherford Common Stock that
will be issued to the Christiana shareholders will be equal to the number of
shares of Weatherford Common Stock held by Christiana at the time of the Merger
divided by the number of outstanding shares of Christiana Common Stock. The
amount of cash that will be payable to the Christiana shareholders in the Merger
will be equal to the amount of cash held by Christiana in excess of its accrued
unpaid taxes, the value of certain tax benefits and fixed liabilities at the
time of the Merger divided by the number of outstanding shares of Christiana
Common Stock at the time of the Merger.
As part of the Merger, the Company will sell two-thirds of its interest
in Total Logistic Control, LLC, a Delaware limited liability company and
wholly-owned subsidiary of the Company ("Logistic") to C2, Inc., a newly-formed
Wisconsin corporation currently controlled by Sheldon B. Lubar ("C2") for $10.67
million (the "Logistic Sale"). Consummation of the Merger (including the
Logistic Sale) is subject to a number of conditions, including approval by the
shareholders of Weatherford and the Company.
Pursuant to a separate prospectus being provided to Company
shareholders, C2 is offering each Company shareholder the ability to purchase
one share of C2 common stock ("C2 Stock") for $4.00 per share for each share of
Christiana held immediately prior to the Merger, with the objective of raising
$20.8 million, $10.67 million of which will be utilized to fund the acquisition
of the two-thirds ownership in Logistic by C2. Christiana shareholders may
purchase additional shares of C2 subject to availability.
The information required to be disclosed to the Company's shareholders
by Schedule 13E-3 is contained in the Form S-4 Registration Statement of
Weatherford International, Inc. filed on November 23 , 1998 (Reg. No.
333-65663), which includes, as a part thereof, the Joint Proxy Statement for
Weatherford and the Company and a Prospectus relating to the Weatherford Shares
(the "Form S-4"). The following is a cross-reference sheet showing the location
in the Form S-4 of the information required by Schedule 13E-3.
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CROSS-REFERENCE SHEET
Unless otherwise specified, all
references are
To sections of the Form S-4 or to
Schedule 13E-3 Exhibits
Item Number and Caption to this statement which are
incorporated by reference
Item 1. Issuer and Class of Security
Subject to the Transaction.
(a).......................... COVER PAGE TO JOINT PROXY STATEMENT
PROSPECTUS; WHERE YOU CAN FIND MORE
INFORMATION; SUMMARY.
(b).......................... GENERAL INFORMATION ABOUT THE MEETINGS
- Record Date and Outstanding Shares.
(c)-(d)...................... SUMMARY - Price Range of Common Stock;
PRICE RANGE OF COMMON STOCK AND
DIVIDEND POLICY.
(e).......................... SUMMARY - Related Party Transactions;
COVER PAGE TO JOINT PROXY
STATEMENT/PROSPECTUS; DESCRIPTION OF
C2 - General.
(f).......................... Since the commencement of the
Company's second full fiscal year
preceding the date of this Schedule
(i) the Company has not purchased any
of its own securities and (ii) Sheldon
B. Lubar purchased 2,500 shares of
Company Common Stock on September 9,
1996 for $21.350 per share and 2,000
shares of Company Common Stock on
September 19, 1996 for $22.250 per
share. Sheldon B. Lubar is the sole
shareholder of C2. Mr.Lubar acquired
his 25 shares of C2 on December 11,
1997 for $4.00 per share.
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Unless otherwise specified, all
references are
To sections of the Form S-4 or to
Schedule 13E-3 Exhibits
Item Number and Caption to this statement which are
incorporated by reference
Item 2. Identity and Background.
(a)-(d); (g)................. DESCRIPTION OF C2 -
General--Management; STOCK OWNERSHIP
AND CERTAIN BENEFICIAL OWNERS -
Christiana. Sheldon B. Lubar is a
United States citizen. The business
addresses for the directors and
executive officers of C2 (which
includes Mr. Lubar) are as follows:
William T. Donovan - Director and
Chairman
700 North Water Street
Suite 1200
Milwaukee, Wisconsin 53202
David J. Lubar - Director and President
700 North Water Street
Suite 1200
Milwaukee, Wisconsin 53202
David E. Beckwith - Secretary
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Nicholas F. Brady - Director
Darby Advisors, Inc.
1133 Connecticut Avenue, N.W.
Suite 200
Washington, D.C. 20036
Albert O. Nicholas - Director
Nicholas Company, Inc.
700 North Water Street
Milwaukee, Wisconsin 53202
Sheldon B. Lubar - Director
700 North Water Street
Milwaukee, Wisconsin 53202
The addresses for the material
occupations, positions, offices or
employments for each of the directors and
executive officers of C2 (which
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Unless otherwise specified, all
references are
To sections of the Form S-4 or to
Schedule 13E-3 Exhibits
Item Number and Caption to this statement which are
incorporated by reference
includes Mr. Lubar) during the last five
years, which occupations, positions,
offices or employments are described
more fully under DESCRIPTION OF C2 -
Management are as follows:
William T. Donovan
C2, Inc.
Christiana Companies, Inc.
Lubar & Co.
(Prior to December, 1997,
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202)
(December, 1997 - Present,
700 North Water Street
Milwaukee, Wisconsin 53202)
David J. Lubar
C2, Inc.
Lubar & Co.
(Prior to December, 1997,
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202)
(December, 1997 - Present,
700 North Water Street
Milwaukee, Wisconsin 53202)
Oyvind Solvang
C2, Inc.
700 North Water Street
Suite 1200
Milwaukee, Wisconsin 53202
Cleary Gull Reiland & McDevitt, Inc.
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Scinticor, Incorporated
9051 West Heather Avenue
Milwaukee, WI 53224
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Unless otherwise specified, all
references are
To sections of the Form S-4 or to
Schedule 13E-3 Exhibits
Item Number and Caption to this statement which are
incorporated by reference
Applied Power, Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007
David E. Beckwith
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Nicholas F. Brady
Darby Advisors, Inc.
1133 Connecticut Avenue, N.W.
Suite 200
Washington, D.C. 20036
Sheldon B. Lubar
Lubar & Co.
Christiana Companies, Inc.
(Prior to December, 1997,
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202)
(December, 1997 - Present,
700 North Water Street
Milwaukee, Wisconsin 53202)
Albert O. Nicholas
Nicholas Company, Inc.
700 North Water Street
Milwaukee, Wisconsin 53202
(e)-(f)...................... During the last five years, neither C2
nor any person controlling C2, nor, to
the best knowledge of C2, any of the
directors or executive officers of C2
including, without limitation, Sheldon
B. Lubar, has (i) been convicted in a
criminal proceeding (excluding traffic
violations or similar misdemeanors);
or (ii) been a party to a civil
proceeding of a judicial or
administrative body of competent
jurisdiction and as a result of such
proceeding has been or is subject to a
judgment, decree or final order
enjoining future violations of,
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Unless otherwise specified, all
references are
To sections of the Form S-4 or to
Schedule 13E-3 Exhibits
Item Number and Caption to this statement which are
incorporated by reference
or prohibiting activities subject to,
federal or state securities laws or
finding any violation of such laws.
Item 3. Past Contacts, Transactions
or Negotiations.
(a)-(b)...................... BACKGROUND OF THE TRANSACTION;
CHRISTIANA'S REASONS FOR THE
TRANSACTION; RELATED PARTY TRANSACTIONS;
THE MERGER; INTERESTS OF CERTAIN
PERSONS IN THE TRANSACTION;
DESCRIPTION OF CHRISTIANA - Certain
Relationships and Related
Transactions; STOCK OWNERSHIP AND
CERTAIN BENEFICIAL OWNERS.
Item 4. Terms of the Transaction
(a).......................... SUMMARY; GENERAL INFORMATION ABOUT THE
MEETINGS; BACKGROUND OF THE
TRANSACTION; CHRISTIANA'S REASONS FOR
THE TRANSACTION; RELATED PARTY
TRANSACTIONS; THE MERGER; MATERIAL
FEDERAL INCOME TAX CONSIDERATIONS.
(b).......................... RELATED PARTY TRANSACTIONS; THE MERGER;
INTERESTS OF CERTAIN PERSONS IN THE
TRANSACTION.
Item 5. Plans or Proposals of the
Issuer or Affiliate.
(a)-(b);(e).................. WEATHERFORD'S REASONS FOR THE
TRANSACTION; THE MERGER; ORGANIZATION OF
WEATHERFORD AND CHRISTIANA AND LOGISTIC
BEFORE AND
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Unless otherwise specified, all
references are
To sections of the Form S-4 or to
Schedule 13E-3 Exhibits
Item Number and Caption to this statement which are
incorporated by reference
AFTER THE TRANSACTION; ANCILLARY
TRANSACTIONS.
(c).......................... THE MERGER - Terms of the Merger -
General Description of the Merger -
Management Following Merger.
(d).......................... THE MERGER - General Description of
the Merger.
(f)-(g)..................... The Merger will result in Christiana
Common Stock becoming eligible for
termination of registration pursuant
to Section 12(g)(4) of the Exchange
Act and the suspension of Christiana's
obligation to file reports pursuant to
Section 15(d) of the Exchange Act.
Item 6. Sources and Amount of Funds
or Other Consideration.
(a).......................... SUMMARY - The Merger; THE MERGER -
Terms of the Merger; RELATED PARTY
TRANSACTIONS.
(b).......................... SUMMARY; OPINIONS OF FINANCIAL
ADVISORS. DESCRIPTION OF C2 --
General; CHRISTIANA'S REASONS FOR THE
TRANSACTIONS.
(c)-(d)...................... DESCRIPTION OF C2 -- Description of
Logistic Credit Agreement.
Item 7. Purpose(s), Alternatives,
Reasons and Effects.
(a).......................... CHRISTIANA'S REASONS FOR THE
TRANSACTION.
(b).......................... BACKGROUND OF THE TRANSACTION.
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(c).......................... BACKGROUND OF THE TRANSACTION;
CHRISTIANA'S REASONS FOR THE
TRANSACTION.
(d).......................... SUMMARY - The Merger; ANCILLARY
TRANSACTIONS; THE MERGER; DESCRIPTION
OF C2 - Description of Logistic Credit
Agreement.
Item 8. Fairness of the Transaction.
(a)-(b)...................... BACKGROUND OF THE TRANSACTION;
CHRISTIANA'S REASONS FOR THE
TRANSACTION. Both Mr. Lubar and C2
believe the entire Transaction
(including the Merger and the Logistic
Sale) are fair to unaffiliated
shareholders of the Company.
(c).......................... GENERAL INFORMATION ABOUT THE MEETINGS.
(d).......................... BACKGROUND OF THE TRANSACTION
(e).......................... BACKGROUND OF THE TRANSACTION
(f).......................... Not applicable.
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Unless otherwise specified, all
references are
To sections of the Form S-4 or to
Schedule 13E-3 Exhibits
Item Number and Caption to this statement which are
incorporated by reference
Item 9. Reports, opinions, Appraisals
and Certain Negotiations.
(a)-(c)...................... OPINIONS OF FINANCIAL ADVISORS;
BACKGROUND OF THE TRANSACTION; The
opinions of Prudential Securities
Incorporated and American Appraisal
Associates, Inc. will be made
available for inspection and copying
at the principal executive offices of
the Company during regular business
hours by any interested equity
security holder of Christiana or his
or her representative which has been
so designated in writing.
Item 10. Interest in Securities of
the Issuer.
(a).......................... STOCK OWNERSHIP AND CERTAIN BENEFICIAL
OWNERS.
(b).......................... Not applicable
Item 11. Contracts, Arrangements or
Understandings with Respect
to the Issuer's Securities.
THE MERGER; GENERAL INFORMATION ABOUT
THE MEETING; SUMMARY - RELATED PARTY
TRANSACTIONS - C2 Offering.
Item 12. Present Intention and
Recommendation of Certain
Persons with Regard to the
Transaction.
(a).......................... GENERAL INFORMATION ABOUT THE MEETINGS.
(b).......................... BACKGROUND OF THE TRANSACTION;
CHRISTIANA'S REASONS FOR THE
TRANSACTION.
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Unless otherwise specified, all
references are
To sections of the Form S-4 or to
Schedule 13E-3 Exhibits
Item Number and Caption to this statement which are
incorporated by reference
Item 13. Other Provisions of the
Transaction.
(a).......................... THE MERGER
(b)-(c)...................... Not applicable
Item 14. Financial Information.
(a).......................... CHRISTIANA'S CONSOLIDATED FINANCIAL
STATEMENTS; CHRISTIANA CONSOLIDATED
FINANCIAL STATEMENTS; The Company's
ratio of earnings to fixed charges for
its fiscal years ended June 30, 1996,
June 30, 1997 and June 30, 1998 was
1.10x, 1.84x and 1.46x, respectively.
The Company's book value per share on
June 30, 1997 and on June 30, 1998 was
$14.03 and $26.46, respectively.
(b).......................... Not applicable.
Item 15. Persons and Assets Employed,
Retained or Utilized.
(a).......................... DESCRIPTION OF C2 - Management.
(b).......................... Not applicable.
Item 16. Additional Information Not applicable.
Item 17. Material to be Filed as
Exhibits.
(a)(1)....................... Credit Agreement, by and among Logistic,
Firstar Bank of Milwaukee, N.A.,
individually and as agent, and the
lenders that are a part thereto.*
(a)(2) ...................... First Amendment to Credit Agreement and
Escrow Release Agreement, dated as of
November 2, 1998, by and among Logistic,
Firstar Bank Milwaukee, N.A.,
individually and as agent and the
lenders that are a party thereto
(a)(3) ...................... Second Amendment to Credit Agreement,
dated as of November 17, 1998, by and
among Logistic, Firstar Bank Milwaukee,
N.A., individually and as agent, and the
lenders that are a party thereto.
(b)(1)....................... Prudential Securities Opinion
(incorporated by reference to Appendix
E to Form S-4 (Reg. No. 333-65663)).
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<PAGE>
Unless otherwise specified, all
references are
To sections of the Form S-4 or to
Schedule 13E-3 Exhibits
Item Number and Caption to this statement which are
incorporated by reference
(b)(2) American Appraisal Opinion (incorporated
by reference to Annex F to Form S-4
(Reg. No. 333-65663)).
(b)(3) ...................... Report of Prudential Securities
Incoporated dated October 12, 1998
(c)(1)....................... Amended and Restated Agreement and
Plan of Merger, dated as of October
14, 1998, by and among Weatherford,
Sub, the Company and C2 (incorporated
by reference to Appendix A of Form S-4
(Reg. No. 333-65663)).
(c)(2)....................... Purchase Agreement, dated December 12,
1997, by and among Weatherford,
Logistic, the Company and C2
(incorporated by reference to Appendix
B to Form S-4 (Reg. No. 333-65663)).
(c)(3)....................... First Amended and Restated Operating
Agreement, by and among C2 and
Christiana (incorporated by reference
to Appendix C to Form S-4 (Reg. No.
333-65663)).
(d)(1)....................... Form S-4 filed October 14, 1998 (of
which the Joint Proxy Statement
Prospectus of the Company and
Weatherford is a part (Reg. No.
333-65663)).
(e).......................... Dissenters' rights provisions of the
Wisconsin Business Corporation Law
(incorporated by reference to Appendix
H of Form S-4 (Reg. No. 333-65663)).
(f).......................... Not applicable
- ---------------------------
* Previously Filed.
ITEM 1 ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The name of the issuer is CHRISTIANA COMPANIES, INC., a Wisconsin
corporation (the "Company"). The address of its principal executive offices is
700 North Water Street, Suite 1200, Milwaukee, Wisconsin 53202.
(b) The class of equity securities to which this Schedule 13E-3 relates
is the Common Stock, par value $1.00 per share, of the Company. The amount of
such class outstanding as of October
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16, 1998 is 5,149,330. The approximate number of holders of record of such class
as of October 16, 1998 is 920.
(c) and (d) Reference is hereby made to the information set forth in
the sections entitled "SUMMARY - Price Range of Common Stock" and "PRICE RANGE
OF COMMON STOCK AND DIVIDEND POLICY" of the Form S-4, which is incorporated
herein by reference.
(e) Reference is hereby made to the Cover Page of the Joint Proxy
Statement/Prospectus and in the information set forth in the sections entitled
"SUMMARY - Related Party Transactions" and "DESCRIPTION OF C2 -General" of the
Form S-4, which is incorporated herein by reference.
(f) Since the commencement of the Company's second full fiscal year
preceding the date of this Schedule (i) the Company has not purchased any of its
own securities and (ii) Sheldon B. Lubar purchased 2,500 shares of Company
Common Stock on September 9, 1996 for $21.350 per share and 2,000 shares of
Company Common Stock on September 19, 1996 for $22.250 per share. Sheldon B.
Lubar is the sole shareholder of C2. Mr. Lubar acquired his 25 shares of C2 on
December 11, 1997 for $4.00 per share.
ITEM 2 IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Schedule 13E-3 is being filed by C2 and Sheldon B.
Lubar. Reference is hereby made to the information set forth in the sections
entitled "DESCRIPTION OF C2 - General" and "DESCRIPTION OF C2 Management" and
the sections entitled "STOCK OWNERSHIP AND CERTAIN BENEFICIAL OWNERS-Christiana"
in the Form S-4, both of which are incorporated herein by reference. Sheldon B.
Lubar is a United States citizen. The business addresses for the directors and
executive officers of C2 (which includes Mr. Lubar) are as follows:
William T. Donovan - Director and Chairman
700 North Water Street
Suite 1200
Milwaukee, Wisconsin 53202
David J. Lubar - Director and President
700 North Water Street
Suite 1200
Milwaukee, Wisconsin 53202
David E. Beckwith - Secretary
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Nicholas F. Brady - Director
Darby Advisors, Inc.
1133 Connecticut Avenue, N.W.
Suite 200
Washington, D.C. 20036
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Albert O. Nicholas - Director
Nicholas Company, Inc.
700 North Water Street
Milwaukee, Wisconsin 53202
Sheldon B. Lubar - Director
700 North Water Street
Milwaukee, Wisconsin 53202
The addresses for the material occupations, positions, offices or
employments for each of the directors and executive officers of C2 (which
includes Mr. Lubar) during the last five years, which occupations, positions,
offices or employments are described more fully under "DESCRIPTION OF C2
Management" are as follows:
William T. Donovan
C2, Inc.
Christiana Companies, Inc.
Lubar & Co.
(Prior to December, 1997,
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202)
(December, 1997 - Present,
700 North Water Street
Milwaukee, Wisconsin 53202)
David J. Lubar
C2, Inc.
Lubar & Co.
(Prior to December, 1997,
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202)
(December, 1997 - Present,
700 North Water Street
Milwaukee, Wisconsin 53202)
Oyvind Solvang
C2, Inc.
700 North Water Street
Suite 1200
Milwaukee, Wisconsin 53202
Cleary Gull Reiland & McDevitt, Inc.
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Scinticor, Incorporated
9051 West Heather Avenue
Milwaukee, WI 53224
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Nicholas F. Brady
Darby Advisors, Inc.
1133 Connecticut Avenue, N.W.
Suite 200
Washington, D.C. 20036
Albert O. Nicholas
Nicholas Company, Inc.
700 North Water Street
Milwaukee, Wisconsin 53202
David E. Beckwith
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Sheldon B. Lubar
Lubar & Co.
Christiana Companies, Inc.
(Prior to December, 1997,
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202)
(December, 1997 - Present,
700 North Water Street
Milwaukee, Wisconsin 53202)
(e) and (f) None of the persons or entities with respect to whom
information is required by this item was, during the last five years, convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors)
or was party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining further violations of, or prohibiting
activities, subject to, federal or state securities laws or finding of any
violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) and (b) Reference is hereby made to the information set forth in
the sections entitled "BACKGROUND OF THE TRANSACTION," "CHRISTIANA'S REASONS FOR
THE TRANSACTION," "RELATED PARTY TRANSACTIONS," "THE MERGER," "INTERESTS OF
CERTAIN PERSONS IN THE TRANSACTION," DESCRIPTION OF CHRISTIANA - Certain
Relationships and Related Transactions," and "STOCK OWNERSHIP AND CERTAIN
BENEFICIAL OWNERS" of the Form S-4, which is incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) Reference is hereby made to the information set forth in the
sections entitled "SUMMARY," "WHERE YOU CAN FIND MORE INFORMATION," "BACKGROUND
OF THE TRANSACTION," "CHRISTIANA's REASONS FOR THE TRANSACTION." "ANCILLARY
TRANSACTIONS," "THE MERGER," and "MATERIAL FEDERAL INCOME TAX CONSIDERATIONS" of
the Form S-4, which is incorporated herein by reference.
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(b) Reference is hereby made to the information set forth in the
sections entitled "RELATED PARTY TRANSACTIONS," "THE MERGER," and "INTERESTS OF
CERTAIN PERSONS IN THE TRANSACTION" of the Form S-4, which is incorporated
herein by reference.
ITEM 5. PLANS OF PROPOSALS OF THE ISSUER OR AFFILIATE.
Other than as set forth herein or in the Form S-4, neither the Company,
any affiliate of the Company, C2 nor Mr. Lubar have any plan or proposal
regarding activities or transactions which are to occur after the Transaction
which relate to or result in:
(i) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company, C2 or any of their
subsidiaries;
(ii) A sale or transfer of a material amount of assets of the Company,
C2 or any of their subsidiaries;
(iii) Any change in the present board of directors or management of the
Company or C2 including, but not limited to, any plan or proposal to change the
number or term of directors, to fill any existing vacancy on the board or to
change any material term of the employment contract of any executive officer;
(iv) Any material change in the present dividend rate or policy or
indebtedness or capitalization of the Company or C2;
(v) Any other material change in the Company's or C2's corporate
structure or business;
(vi) A class of equity securities of the Company or C2 becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934; or
(vii) The suspension of the Company's or C2's obligation to file
reports pursuant to Section 15(d) of the Securities Exchange Act of 1934.
(a), (b) and (e) Reference is hereby made to the information set forth
in the sections entitled "WEATHERFORD'S REASONS FOR THE TRANSACTION," "THE
MERGER," "ORGANIZATION OF WEATHERFORD AND CHRISTIANA BEFORE AND AFTER THE
TRANSACTION," and "RELATED PARTY TRANSACTIONS" in the Form S-4, which is
incorporated herein by reference. Except as set forth in the Form S-4, neither
C2 nor Sheldon B. Lubar have any present plans or proposals which would relate
to, or would result in, any transaction, change or other occurrence with respect
to the Company or any class of its equity securities.
(c) Reference is hereby made to the information set forth in the
sections entitled "THE MERGER - Terms of the Merger - General Description of the
Merger - Management Following Merger" of the Form S-4 which is incorporated
herein by reference.
(d) Reference is hereby made to the information set forth in the
section entitled "THE MERGER - General Description of the Merger of the Form
S-4" which is incorporated herein by reference.
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(f) and (g) The Merger will result in Company Common Stock becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act and the suspension of Company's obligations to file reports
pursuant to Section 15(d) of the Exchange Act.
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
(a) Reference is hereby made to the information set forth in the
sections entitled "SUMMARY - The Merger," "THE MERGER - Terms of the Merger,"
and "RELATED PARTY TRANSACTIONS" of the Form S-4, which is incorporated herein
by reference.
(b) Reference is hereby made to the sections entitled "OPINIONS OF
FINANCIAL ADVISORS" "DESCRIPTION OF C2 - General" and "CHRISTIANA'S REASONS FOR
THE TRANSACTION" of the Form S-4, which is incorporated herein by reference.
(c)-(d) Reference is hereby made to the section entitled "DESCRIPTION
OF C2 - Description of Logistic Credit Agreement" in the Form S-4, which is
incorporated herein by reference.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) Reference is hereby made to the information set forth in the
section entitled "CHRISTIANA'S REASONS FOR THE MERGER" of Form S-4, which is
incorporated herein by reference.
(b) Reference is hereby made to the section entitled "BACKGROUND OF THE
TRANSACTION" of the Form S-4, which is incorporated herein by reference.
(c) Reference is hereby made to the sections entitled "BACKGROUND OF
THE TRANSACTION" and "CHRISTIANA'S REASONS FOR THE TRANSACTION" of the Form S-4,
which is incorporated herein by reference.
(d) Reference is hereby made to the information set forth in the
sections entitled "SUMMARY - The Merger," "RELATED PARTY TRANSACTIONS", "THE
MERGER" and "DESCRIPTION OF C2 - Description of Logistic Credit Agreement" of
the Form S-4, which is incorporated herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)-(b) Reference is hereby made to the information set forth in the
sections entitled "BACKGROUND OF THE TRANSACTION" and "CHRISTIANA'S REASONS FOR
THE TRANSACTION" of the Form S-4, which is incorporated herein by reference.
(c) Reference is hereby made to the information set forth in the
section entitled "GENERAL INFORMATION ABOUT THE MEETINGS" of the Form S-4, which
is incorporated herein by reference.
(d)-(e) Reference is hereby made to the section entitled "BACKGROUND OF
THE TRANSACTION" of the Form S-4, which is incorporated herein by reference.
(f) No such offer has been received.
16
<PAGE>
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c) Reference is hereby made to the information set forth in the
sections entitled "OPINIONS OF FINANCIAL ADVISORS" and "BACKGROUND OF THE
TRANSACTION" of the Form S-4, which is incorporated herein by reference. The
opinions of Prudential Securities Incorporated and American Appraisal
Associates, Inc. will be made available for inspection and copying at the
principal executive offices of the Company during regular business hours by any
interested equity security holder of Christiana or his or her representative
which has been so designated in writing.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b) Reference is hereby made to the information set forth in
the section entitled "STOCK OWNERSHIP AND CERTAIN BENEFICIAL OWNERS" of the Form
S-4, which is incorporated herein by reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE
ISSUER'S SECURITIES.
Reference is hereby made to the information set forth in the sections
entitled "THE MERGER", "GENERAL INFORMATION ABOUT THE MEETINGS", "DESCRIPTION OF
C2 - General"; "SUMMARY - RELATED PARTY TRANSACTIONS - C2 Offering" of the Form
S-4, which is incorporated herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH
REGARD TO THE TRANSACTION.
(a) Reference is hereby made to the information set forth in the
section entitled "GENERAL INFORMATION ABOUT THE MEETINGS" of the Form S-4, which
is incorporated herein by reference.
(b) Reference is hereby made to the information set forth in the
sections entitled "BACKGROUND OF THE TRANSACTION" and "CHRISTIANA'S REASONS FOR
THE TRANSACTION" of the Form S-4, which is incorporated herein by reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) Reference is hereby made to the information set forth in the
section entitled "THE MERGER" of the Form S-4, which is incorporated herein by
reference.
(b) None.
(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) Reference is hereby made to the information set forth in the
sections entitled "CHRISTIANA'S CONSOLIDATED FINANCIAL STATEMENTS" and
"CHRISTIANA CONSOLIDATED FINANCIAL STATEMENTS" to the Form S-4, which is
incorporated herein by reference. The Company's ratio of earnings to fixed
charges for its fiscal years ended June 30, 1996,
17
<PAGE>
June 30, 1997 and June 30, 1998 was 1.10x, 1.84x and 1.46x,
respectively. The Company's book value per share on June 30, 1997 and on June
30, 1998 was $14.03 and $26.46, respectively.
(b) The information requested herein is not material since, following
the Merger, the Company will be a wholly-owned subsidiary of Weatherford with no
operations. In addition, the Merger will result in shares of Company Common
Stock being automatically converted into the consideration described above in
this Schedule 13E-3 under the heading "Introduction."
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) Reference is hereby made to the section entitled "DESCRIPTION OF C2
- - Management" of the Form S-4, which is incorporated by reference herein.
(b) Not applicable.
ITEM 16. ADDITIONAL INFORMATION.
Reference is hereby made to the entire text of the Form S-4, which are
incorporated herein by reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1)-- Form of Credit Agreement, by and among Logistic, Firstar Bank of
Milwaukee, N.A. individually and as agent, and the lenders that
are a party thereto.*
(a)(2)-- First Amendment to Credit Agreement and Escrow Release Agreement,
dated as of November 2, 1998, by and among Logistic, Firstar Bank
Milwaukee, N.A., individually and as agent and the lenders that are
a party thereto
(a)(3)-- Second Amendment to Credit Agreement, dated as of November 17, 1998,
by and among Logistic, Firstar Bank Milwaukee, N.A., individually
and as agent, and the lenders that are a party thereto.
(b)(1)-- Prudential Securities Opinion (incorporated by reference to
Appendix E to Form S-4 (Reg. No. 333-65663)).
(b)(2)-- American Appraisal Opinion (incorporated by reference to Annex G
to Form S-4 (Reg. No. 333-65663)).
(b)(3)-- Report of Prudential Secutites Incorporated, dated October 12, 1998.
(c)(1)-- Amended and Restated Agreement and Plan of Merger, dated as of
October 14, 1998, by and among Weatherford, Sub, the Company and
C2 (incorporated by reference to Appendix A of Form S-4 (Reg. No.
333-65663)).
(c)(2)-- Purchase Agreement, dated December 12, 1997, by and among
Weatherford, Logistic, the Company and C2 (incorporated by
reference to Appendix B to Form S-4 (Reg. No. 333-65663)).
(c)(3)-- First Amended and Restated Operating Agreement,l by and among C2
and Christiana (incorporated by reference to Appendix C to Form
S-4 (Reg. No. 333-65663)).
(d)(1)-- Form S-4 filed October 14, 1998 (of which the Joint Proxy
Statement Prospectus of the Company and Weatherford is a part
(Reg. No. 333-65663)).
(e)-- Dissenters' rights provisions of the Wisconsin Business
Corporation Law (incorporated by reference to Appendix H of Form
S-4 (Reg. No. 333-65663)).
(f)-- Not applicable
- -----------------------------
* Previously Filed.
18
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: November 23, 1998
C2, INC.
By: /s/ William T. Donovan
William T. Donovan
Chairman
By: /s/ Sheldon B. Lubar
Sheldon B. Lubar
19
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibit Number and Description
Page
(a)(1) -- Form of Credit Agreement, by and among Logistic,
Firstar Bank of Milwaukee, N.A. individually and
as agent, and the lenders that are a party
thereto.*
(a)(2)-- First Amendment to Credit Agreement and Escrow Release Agreement,
dated as of November 2, 1998, by and among Logistic, Firstar Bank
Milwaukee, N.A., individually and as agent and the lenders that
are a party thereto
(a)(3)-- Second Amendment to Credit Agreement, dated as of November 17,
1998, by and among Logistic, Firstar Bank Milwaukee, N.A.,
individually and as agent, and the lenders that are a party
thereto.
(b)(1) -- Prudential Securities Opinion (incorporated by
reference to Appendix F to Form S-4 (Reg. No.
333-65663)).
(b)(2) -- American Appraisal Opinion (incorporated by
reference to Annex G to Form S-4 (Reg. No.
333-65663)).
(b)(3) -- Report of Prudential Securities Incorporated, dated October 12,
1998
(c)(1) -- Amended and Restated Agreement and Plan of Merger, dated as of
October 14, 1998, by and among Weatherford, Sub, the Company and
C2 (incorporated by reference to Appendix A of Form S-4 (Reg. No.
333-65663)).
(c)(2) -- Purchase Agreement, dated December 12, 1997, by
and among Weatherford, Logistic, the Company and
C2 (incorporated by reference to Appendix B to
Form S-4 (Reg. No. 333-65663)).
(c)(3) -- First Amended and Restated Operating Agreement by
and among C2 and Christiana (incorporated by
reference to Appendix D to Form S-4 (Reg. No.
333-65663)).
(d)(1) -- Form S-4 filed October 14, 1998 (of which the
Joint Proxy Statement Prospectus of the Company
and Weatherford is a part (Reg. No. 333-65663)).
(e) -- Dissenters' rights provisions of the Wisconsin
Business Corporation Law (incorporated by
reference to Appendix H of Form S-4 (Reg. No.
333-65663)).
(f) -- Not applicable
- ------------------------
* Previously Filed.
20
EXHIBIT (a)(2)
FIRST AMENDMENT TO CREDIT AGREEMENT
and
ESCROW RELEASE AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT and ESCROW RELEASE AGREEMENT, dated as
of November 1, 1998 (the "First Amendment"), is by and among TOTAL LOGISTIC
CONTROL, LLC, a Delaware limited liability company (the "Borrower"), the several
lenders identified on the signature pages hereto and such other lenders as may
from time to time become a party hereto (the "Lenders"), and FIRSTAR BANK
MILWAUKEE, N.A., as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower, the Lenders and the Agent are parties to that
certain Credit Agreement by and among the Borrower, certain Subsidiaries of the
Borrower from time to tome parties thereto, the Lenders and the Agent pursuant
to which the Lenders have agreed to provide a $70,000,000 reducing revolving
credit facility to the Borrower on the terms and conditions set forth therein
(as amended by this First Amendment, the "Credit Agreement");
WHEREAS, the Borrower has advised the Lenders and the Agent that the
Merger Transactions and the Divestiture have been restructured and postponed;
WHEREAS, the Borrower, the Lenders and the Agent wish to permit
consummation of the restructured and postponed Merger Transactions and
Divestiture;
WHEREAS, the Borrower, the Lenders, the Agent and Quarles & Brady LLP
(the "Escrow Agent") are parties to that certain Escrow Agreement dated as of
August 14, 1998 (the "Escrow Agreement");
WHEREAS, the Borrower, the Lenders, and the Agent wish to direct the
Escrow Agent to release the Loan Documents (as defined in the Escrow Agreement)
from escrow as hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agreed as follows:
1 . Definitions. Capitalized terms not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement.
2. Amendment of Credit Agreement. The Credit Agreement is amended as
follows:
<PAGE>
2.1 Section 1.1. Section 1.l of the Credit Agreement is amended as
follows:
(a) The definition of EVI is deleted in its entirety and replaced
by the following new definition:
"EVI" means Weatherford International, Inc., a Delaware
corporation.
(b) The definition of Permitted CST Distribution is deleted in its
entirety and replaced by the following new definition:
"Permitted CST Distribution" means one or more distributions paid
by the Borrower to CST on or before January 31, 1999 in respect of
CST's ownership interest in the Borrower in an aggregate amount
not to exceed $20,000,000 for the purposes of consummating the
Merger Transactions and the Divestiture, provided that no Default
or Event of Default exists as of the date of any such distribution
or would result as a consequence of any such distribution.
2.2 Section 7.14. Section 7.l4 of the Credit Agreement is amended
by deleting the phrase "October 31, 1998" therein and substituting the
phrase "January 31, 1999" in lieu thereof.
2.3 Section 8.12. Section 8.12 of the Credit Agreement is amended
by deleting the phase "October 31, 1998" therein and substituting the
phrase "January 31, 1999" in lieu thereof.
2.4 Section 5.1(c). Schedule 5.1(c) of the Credit Agreement is
deleted in its entirety and replaced by new Schedule 5.1(c) in the form
attached hereto.
3. Escrow Agreement. The Escrow Agent is authorized and directed to take
the following actions pursuant to Section 2(b)(I) of the Escrow Agreement:
3.1 Closing Date. The Escrow Agent is authorized and directed to
insert "November 2, 1998" as the Closing Date on each of the Loan
Documents to the extent necessary to effect the consummation of the
financing transactions contemplated by the Credit Agreement.
3.2 Escrow Release. Upon insertion of the Closing Date in the Loan
Documents as set forth herein, the Escrow Agent is authorized and
directed to release promptly the Loan Documents (together with
appropriate execution versions and copies thereof) to the Borrower, the
Lenders and the Agent.
-2-
<PAGE>
4. Conditions Precedent. This First Amendment shall become effective on
the date that the Agent shall have received this First Amendment, duly executed
by the Borrower and the Lenders.
5. Representations and Warranties. To induce the lenders to enter into
this First Amendment, the Borrower hereby represents and warrants to the Agent
and to each Lender that as of the date hereof, after giving effect to this First
Amendment:
(a) the representations and warranties contained in the Credit
Agreement are true and correct;
(b) no Default or Event of Default has occurred and is continuing;
and
(c) each of the conditions set forth in Sections 5.1 and 5.2 of
the Credit Agreement has been fully satisfied; and
(d) the Borrower had delivered to the Agent a pro forma balance
sheet dated as of September 30, 1998 which reflects compliance with the
Consolidated Tangible Net Worth requirement set forth in Section 5.1(d)
of the Credit Agreement.
6. Full Force and Effect. Except as provided herein, all of the terms and
conditions set forth in the Credit Agreement, and all additional documents
entered into in connection with the Credit Agreement, shall remain unchanged and
shall continue in full force and effect as originally set forth, and each of the
foregoing is hereby ratified and confirmed in all respects.
7. Binding Effect. This First Amendment shall be binding upon the parties
hereto and their respective successors and assigned.
8. Entire Agreement. This First Agreement constitutes the entire
agreement among the Borrower, the Lenders and the Agent with respect to the
subject matter hereof.
9. Counterparts. This First Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same First Agreement.
10. Governing Law. This First Agreement shall be construed and
interpreted according to the internal laws of the State of Wisconsin without
giving effect to its conflict of laws provisions.
-3-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this First Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: TOTAL LOGISTIC CONTROL, LLC
By:
Title:
LENDERS: FIRSTAR BANK MILWAUKEE, N.A.,
In its capacity as Agent and as a Lenders
By:
Title:
BANK ONE, WISCONSIN
as a Lender
By:
Title:
HARRIS TRUST AND SAVINGS BANK
as a Lenders
By:
Title:
EXHIBIT (a)(3)
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of November 17, 1998
(the "Second Amendment"), is by and among TOTAL LOGISTIC CONTROL, LLC, a
Delaware limited liability company (the "Borrower"), the several lenders
identified on the signature pages hereto and such other lenders as may from time
to time become a party hereto (the "Lenders"), and FIRSTAR BANK MILWAUKEE, N.A.,
as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders and the Agent are parties to that
certain Credit Agreement dated as of November 2, 1998 by and among the Borrower,
certain Subsidiaries of the Borrower from time to time parties thereto, the
Lenders and the Agent (as amended by the First Amendment dated as of November 2,
1998 and this Second Amendment, the "Credit Agreement");
WHEREAS, the Borrower, the Lenders and the Agent wish to amend the Credit
Agreement as set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement.
2. Amendment of Credit Agreement. The Credit Agreement is amended as
follows:
2.1 Section 1.1. The definition of Revolving Termination Date in
Section 1.1 of the Credit Agreement is amended by deleting the phrase
"July 31, 2003" therein and substituting the phrase "November 2, 2003" in
lieu thereof.
2.2 Section 6.18. Section 6.18 of the Credit Agreement is amended
by deleting the phrase "July 31, 2003" therein and substituting the
phrase "November 2, 2003" in lieu thereof.
2.3 Schedule 2.1(a). Schedule 2.1(a) of the Credit Agreement is
deleted in its entirety and replaced by new Schedule 2.1(a) in the form
attached hereto.
<PAGE>
3. Conditions Precedent. This Second Amendment shall become effective on
the date that the Agent shall have received this Second Amendment, duly executed
by the Borrower and the Lenders.
4. Representations and Warranties. To induce the Lenders to enter into
this Second Amendment, the Borrower hereby represents and warrants to the Agent
and to each Lender that as of the date hereof, after giving effect to this
Second Amendment:
(a) the representations and warranties contained in the Credit
Agreement are true and correct; and
(b) no Default or Event of Default has occurred and is continuing.
5. Full Force and Effect. Except as provided herein, all of the terms and
conditions set forth in the Credit Agreement, and all additional documents
entered into in connection with the Credit Agreement, shall remain unchanged and
shall continue in full force and effect as originally set forth, and each of the
foregoing is hereby ratified and confirmed in all respects.
6. Binding Effect. This Second Amendment shall be binding upon the
parties hereto and their respective successors and assigns.
7. Entire Agreement. This Second Amendment constitutes the entire
agreement among the Borrower, the Lenders and the Agent with respect to the
subject matter hereof.
8. Counterparts. This Second Amendment may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Second Agreement.
9. Governing Law. This Second Amendment shall be construed and
interpreted according to the internal laws of the State of Wisconsin without
giving effect to its conflict of laws provisions.
-2-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Second Amendment to be duly executed and delivered as of the date first
above written.
BORROWER:
TOTAL LOGISTIC CONTROL, LLC
By:
Title:
LENDERS:
FIRSTAR BANK MILWAUKEE, N.A.,
In its capacity as Agent and as a Lender
By:
Title:
BANK ONE, WISCONSIN
As a Lender
By:
Title:
HARRIS TRUST AND SAVINGS BANK,
As a Lender
By:
Title:
-3-
<PAGE>
SCHEDULE 2.1(a)
REVOLVING COMMITMENTS
<TABLE>
<CAPTION>
Revolving Commitment Revolving Commitment
Amount Percentage
<S> <C> <C>
Firstar Bank Milwaukee, N.A.
Closing Date through November 2, 1999 $30,000,000 0.4285714285714%
November 3, 1999 through November 2, 2000 29,464,286 0.4285714285714%
November 3, 2000 through November 2, 2001 27,578,571 0.4285714285714%
November 3, 2001 through November 2, 2002 25,435,714 0.4285714285714%
November 3, 2002 through November 2, 2003 22,864,286
Bank One, Wisconsin
Closing Date through November 2, 1999 $20,000,000 0.2857142857143%
November 3, 1999 through November 2, 2000 19,642,857 0.2857142857143%
November 3, 2000 through November 2, 2001 18,385,714 0.2857142857143%
November 3, 2001 through November 2, 2002 16,957,143 0.2857142857143%
November 3, 2002 through November 2, 2003 15,242,857 0.2857142857143%
Harris Trust and Savings Bank
Closing Date through November 2, 1999 $20,000,000 0.2857142857143%
November 3, 1999 through November 2, 2000 19,642,857 0.2857142857143%
November 3, 2000 through November 2, 2001 18,385,714 0.2857142857143%
November 3, 2001 through November 2, 2002 16,957,143 0.2857142857143%
November 3, 2002 through November 2, 2003 15,242,857 0.2857142857143%
<CAPTION>
LOC COMMITMENTS
LOC Commitment
LOC Commitment Amount Percentage
<S> <C> <C>
Firstar Bank Milwaukee, N.A.
Closing Date through November 2, 2003 $1,500,000 0.4285714285714%
Bank One, Wisconsin
Closing Date through November 2, 2003 $1,000,000 0.2857142857143%
Harris Trust and Savings Bank
Closing Date through November 2, 2003 $1,000,000 0.2857142857143%
</TABLE>
HIGHLY CONFIDENTIAL
PROJECT BUDDHA
PRESENTATION TO THE BOARD OF DIRECTORS
October 12, 1998
<PAGE>
TABLE OF CONTENTS
________________________________________________________________________________
SECTION TITLE
I. Transaction Overview
A. Parties to the Transaction
B. Transaction Summary
C. Recent Events
D. Rationale
II. Company Overviews
A. CST/TLC Overview
B. Weatherford Overview
III. Valuation of TLC
A. Comparable Transactions
B. Alternative Transaction
C. Transaction Consideration Analysis
IV. Historical Market Value Analysis
V. Liquidity Analysis
Appendix
A. Comparable Transactions
B. Shareholder Profile
C. Price/Volume Graphs
<PAGE>
I. TRANSACTION OVERVIEW
<PAGE>
A. PARTIES TO THE TRANSACTION
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
PARTIES TO THE TRANSACTION
CST: CST ("CST" or the "Company"), through its wholly-owned subsidiary
TLC, provides public refrigerated and non-refrigerated
warehousing, transportation and logistic services primarily to
the food producing and manufacturing industries. At October 6,
1998, CST owned 3,897,462 shares of Weatherford, representing a
4.0% ownership position in Weatherford./(1)/
WEATHERFORD: Weatherford ("Weatherford") is an international manufacturer and
supplier of oilfield equipment. Weatherford has a diversified
presence in the exploration, production, and transmission sectors
of the oil and gas industry through its role as service provider
and equipment manufacturer. The Company operates in three
industry segments: oilfield services, oilfield products and gas
compression.
_______________
(1) Source: CST management
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
PARTIES TO THE TRANSACTION
TLC: TLC ("TLC") is a wholly-owned subsidiary of CST that provides
full service public and contract warehousing and logistic
services for all ranges of refrigerated and ambient temperatures.
TLC's transportation and distribution services include full
service truckload, less-than-truckload and pooled consolidation
in both temperature controlled and dry freight equipment.
LUBAR INC.: Lubar Inc. ("Lubar") is a Venture Capital firm owned by Mr.
Lubar, William T. Donovan and Mr. Lubar, Jr. - all of whom are
current Board members of CST. Lubar has formed C-2, Inc. for the
purpose of acquiring two-thirds of the equity of TLC.
C-2, INC.: C-2, Inc. ("C-2") is a wholly-owned special purpose subsidiary
of Lubar, Inc. C-2 will be the vehicle by which the existing
public shareholders of CST will own an interest in TLC if they so
elect.
MR. LUBAR: Mr. Lubar is the Chairman and Chief Executive Officer of CST.
He currently controls approximately 52%/(1)/ of the
outstanding shares of CST. In addition, he is a principal of
Lubar Inc. and he serves as a director of Weatherford.
_______________
(1) Source: Proxy dated July 13, 1998.
<PAGE>
B. TRANSACTION SUMMARY
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
TRANSACTION SUMMARY
TRANSACTION
SUMMARY: In the proposed transaction (the "Transaction"), CST will cause
TLC to increase borrowings from the bank group and upstream $23.4
million in cash to CST ($20 million as a dividend and $3.4
million as repayment of intercompany debt). CST will then
purchase $10.0 million of Weatherford shares in the open market
to be distributed to CST Shareholders (the "Mandatory Purchase").
Under certain conditions, CST may be obligated to purchase an
additional $5.0 million of Weatherford shares to be distributed
to CST Shareholders (the "Contingent Purchase").
CST will then sell two-thirds of the interest in TLC to C-2 for
$10,666,667. CST will then merge with and into a wholly-owned
subsidiary of Weatherford in a transaction qualifying as a
reorganization under Section 368(a)(1)(A) of the Internal
Revenue Code.
CONSIDERATION: Each issued and outstanding share of CST common stock (the "CST
Common Stock") will be converted into the right to receive
approximately .76 shares of Weatherford plus $4.09 in Cash/(1)/
and the pro rata number of additional Weatherford Shares
distributed in the Mandatory Purchase or (Cont'd)
_______________
(1) The Cash is equal to the sum of (i) $20 million to be received in connection
with a Dividend payable to CST by TLC, (ii) $10.7 million to be paid to CST in
connection with the sale of two-thirds of the interest in TLC to C-2, Inc.,
(iii) $3.3 million to be received by CST in connection with the repayment of
intercompany debt and (iv) all other cash of CST at the time of closing less the
sum of (i) an amount of cash necessary to pay any CST liabilities and
Transaction expenses less the Mandatory Purchase. See "Transaction Consideration
Analysis" p. 36.
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
TRANSACTION SUMMARY
CONSIDERATION
CONT'D: approximately .76 shares of Weatherford plus $3.12 Cash/(1)/ and
the pro rata number of additional Weatherford Shares
distributed in the Mandatory Purchase and the Contingent
Purchase.
CONTINGENT PURCHASE
CIRCUMSTANCE: If at the time of closing, the price per share of Weatherford
Stock is between $19.00 and $14.00, CST is required to exercise
such portion of the Contingent Purchase necessary to allow the
Merger to be treated as a "tax free" reorganization under the
Internal Revenue Code. The minimum price under which the
transaction will close is $14.00.
ORIGINAL
AGREEMENT: In the Original Agreement, $10.0 million was to be left in CST
according to the terms of the merger, and net of liabilities
which might arise, $10.0 million was payable to CST shareholders
five years after the Transaction closed. In the current
agreement, the $10.0 million will instead fund the Mandatory
Purchase. In the Original Agreement, there was no Mandatory or
Contingent Purchase.
_______________
(1) The Cash is equal to the sum of (i) $20 million to be received in connection
with a Dividend payable to CST by TLC, (ii) $10.7 million to be paid to CST in
connection with the sale of two-thirds of the interest in TLC to C-2, Inc.,
(iii) $3.3 million to be received by CST in connection with the repayment of
intercompany debt and (iv) all other cash of CST at the time of closing less the
sum of (i) an amount of cash necessary to pay any CST liabilities and
Transaction expenses less the Mandatory Purchase less the Contingent Purchase.
See "Transaction Consideration Analyst" p. 36.
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
TRANSACTION SUMMARY
STOCK/CASH
ELECTION: Each CST shareholder will be given the opportunity to participate
in the two-thirds sale of TLC to C-2 via an election to purchase
C-2 stock. With respect to the Cash portion of the Consideration,
each CST shareholder will be required to make an election
(assuming the Contingent Purchase is not exercised) to receive
either (i) cash or (ii) cash and C-2 stock prior to the effective
date of the Transaction.
PUT OPTION: Weatherford will receive from C-2 a put option to sell its one-
third ownership position in TLC to C-2 for $7.1 million five
years from the effective date of the Transaction.
TAX
CONSEQUENCES: Weatherford must hold TLC for a minimum of five years after the
Transaction (except in accordance with the Participation Rights)
in order to meet the continued business interest requirement
pursuant to Section 368 (a) of the Internal Revenue Code of 1986,
as amended. The Weatherford shares will be received tax-free by
the CST Shareholders, while all proceeds of any cash distribution
to CST Shareholders would be subject to capital gains tax to the
extent the cash and the value of the Weatherford shares received
by the CST shareholders exceed the shareholders' basis in CST.
PARTICIPATION
RIGHTS: In the event that C-2 proposes a sale of its interest in TLC to
an unrelated third party, Weatherford will have the right to
participate in that sale (i.e. Weatherford has the right to sell
its interest in TLC at the same time.)
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
TRANSACTION SUMMARY
+------------------+
/| CST Shareholders |\
/ +------------------+ \
/ | \
/ | \ 3,897,462 Weatherford
C-2 Purchase / | \ Shares+Net Cash balance
Option / | \ of CST+Mandatory
/ | \ Purchase+Contingent
/ | \ Purchase (if
/ $10.7MM+ | \ exercised).
/ Indemnity+ | \
+------------------+ 5-Yr. Put +-----------------+ \ +----------------+
| |----------------| |\ \ | |
| C-2, INC. | 2/3 Equity of | CST | \ \| WEATHERFORD |
| | TLC | | \ | |
| |----------------| | \ +----------------+
+------------------+ +-----------------+ \ |
| | | | \ |
| | | | \ |
| | | | \ |
Mandatory (and | | | | Merged \Into |
Contingent Purchase) | | | | \ |
+-------------------------+ | | | \ |
| | | | +--------------+
+------------------+ | | | | CST |
| | | | | | ACQUISITION |
| WEATHERFORD | | | | +--------------+
| OPEN MARKET |----------------------+ | |
+------------------+ $10.0 million of | | The merger conveys CST's
WFT Shares (and | | remaining assets which are
contingent $5.0 | | 3,897,482 Weatherford
million of WFT | | Shares + Mandatory Purchase
Shares) | | and if exercised Contingent
| | Purchase+ Net Cash balance
| | of CST+ 1/3 Equity of TLC
| | + Indemnity + 5-Yr. Put to
$3.3. mil. debt repayment + | ---+---- Sell 1/3 of TLC to C-2
$20 mil. cash dividend ------ | |
| |
+------------------+ +--------------------+
| | | |
| TLC | | 3,897,462 |
| (wholly-owned | | Weatherford Common |
| CST sub.) | | Shares |
| | | (100% owned by CST)|
+------------------+ +--------------------+
<PAGE>
C. RECENT EVENTS
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
RECENT EVENTS
- - On August 17, 1998 at a special meeting of CST's shareholders,
the merger between CST and Weatherford pursuant to an agreement
dated December 12, 1997 was approved. The Merger was not
consummated because the decrease in the price of Weatherford
stock from $46.38 on December 12, 1997 (the last trading date
prior to a public announcement of the Merger) to below $30.00
prevented the Merger from being treated as a "tax free"
reorganization under the Internal Revenue Code thereby leaving
unsatisfied a material condition to the closing of the merger.
- - On May 27, 1998, a merger between EVI Inc. and Weatherford
Enterra Inc. was completed. The combined entity, Weatherford
International, Inc., trades on the New York Stock Exchange under
the symbol "WFT." EVI Inc. completed its buyout of Weatherford
Enterra Inc. for $2.77 billion. The transaction was accounted for
as a pooling of interests, whereby Weatherford Enterra Inc.'s
stockholders received 0.95 shares of newly issued shares of
Weatherford International, Inc. common stock for each Weatherford
Enterra common share.
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
LTM STOCK PRICE CHART FOR WEATHERFORD AND CST
[Graphic Omitted]
Graph depicting last twelve months stock price for Weatherford and CST Daily
from October 7, 1997 to October 6, 1998 expressed as percent with Weatherford
100 = 66.125 and CST 100 = 46.375.
Source: IDD Information Services/Trade line
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
LTM STOCK PRICE CHART FOR WEATHERFORD AND CST
[Graphic Omitted]
Chart depicting last twelve months Stock Price for Weatherford and CST Daily
from October 7, 1997 to October 6, 1998 expressed in dollars
Source: IDD Information Services/Tradeline
<PAGE>
D. RATIONALE
<PAGE>
TRANSACTION OVERVIEW
________________________________________________________________________________
RATIONALE
CST Shareholders will receive consideration, which represents a
12.3% premium/(1)/ on a per share basis to CST shareholders'
current per share market value.
CST Shareholders will receive Weatherford Common Stock in
exchange for CST Common Stock on a tax-free basis.
The Transaction eliminates $20.8 million/(2)/ in capital gains
tax which would be realized at the CST corporate level in a
liquidation.
The Transaction significantly enhances liquidity for current CST
Shareholders.
The Transaction allows for meaningful realization of value in
CST's TLC subsidiary.
The Transaction allows current shareholders of CST to have a
direct investment in Weatherford Common Stock.
The Transaction allows current shareholders of CST to participate
in the TLC business on the same terms as management.
______________
(1) See "Transaction Consideration Analysis," pg. 35.
(2) Assumes a Weatherford share price of $18.75 (as of 10/7/98). See "Tax
Liability Comparison," pg. 33.
<PAGE>
II. COMPANY OVERVIEWS
<PAGE>
A. CST/TLC OVERVIEW
<PAGE>
COMPANY OVERVIEWS
________________________________________________________________________________
CST/TLC OVERVIEW
CST, headquartered in Milwaukee, Wisconsin, is primarily engaged
in providing public refrigerated and non-refrigerated warehousing
and logistic services. CST's principal businesses/assets include
3,897,462 shares of Weatherford Common Stock and TLC.
TLC provides full service public and contract warehousing, as
well as logistic services in all ranges of refrigerated and
ambient temperatures.
TLC also provides a full range of international freight
management services, fully computerized inventory management,
repackaging and just-in-time production supply services.
TLC's customers are primarily national, regional and local firms
engaged in food processing, consumer product manufacturing,
wholesale distribution and retailing.
TLC's refrigerated distribution centers are located in Rochelle,
Illinois; Beaver Dam, Wisconsin; Wauwatosa, Wisconsin; Holland,
Michigan; and Kalamazoo, Michigan.
<PAGE>
COMPANY OVERVIEWS
________________________________________________________________________________
CST/TLC OVERVIEW
In addition to the refrigerated distribution centers described
above, TLC operates a national network of owned and leased dry
distribution centers (non-refrigerated) which comprise
approximately 900,000 square feet of storage capacity. TLC's dry
distribution centers are located in Zeeland and Kalamazoo,
Michigan; Munster, Indiana; South Brunswick, New Jersey; and
Bayamon, Puerto Rico.
Competition in integrated logistic services is both on a national
and local basis with a predominant emphasis on transportation
services. At present, there are no direct competitors that
provide the same type of warehousing and transportation services
as TLC. Each of TLC's individual business segments, however, is
highly fragmented with many local, regional and national
competitors (especially those in the transportation and dry
warehousing industries). TLC's competitive edge is its ability to
provide fully integrated logistic services designed for its
customers' distribution needs and the utilization of its network
of strategically-located refrigerated and dry distribution
centers.
<PAGE>
COMPANY OVERVIEWS
________________________________________________________________________________
CST/TLC OVERVIEW
(In thousands, except per share data)
CST CONSOLIDATED
----------------
MARKET VALUE DATA:
RECENT PRICE (AS OF 10/7/98): $18.00
52 WEEK HIGH: $ 46.56
LOW: $ 17.38
SHARES OUTSTANDING/(2)/: 5,149
EQUITY MARKET VALUE: $ 92,688
NET DEBT (AT 6/30/98): 24,825
--------
UNLEVERAGED MARKET VALUE: $117,513
========
HISTORICAL OPERATING DATA:
YEARS ENDED JUNE 30,
--------------------------------------------------
1995/(1)/ 1996 1997 1998
---- ---- ---- ----
Revenue $126,881 $77,170 $84,208 $90,179
EBITDA 18,531 11,380 11,734 12,436
Net Income 5,062 3,603/(3)/ 6,663/(3)/ 6,007/(3)/
______________
(1) Data includes operating results of Prideco, which was merged into
Weatherford in June 1995. Prideco contributed approximately $55.2 million
and $47.1 million in revenues and cost of goods sold in fiscal 1995,
respectively.
(2) Fully-diluted calculated using the treasury stock method.
(3) Includes results of Weatherford accounted for under the equity method.
<PAGE>
COMPANY OVERVIEWS
________________________________________________________________________________
CST/TLC OVERVIEW
(In thousands)
<TABLE>
TLC STAND-ALONE HISTORICAL OPERATING DATA/(1)/
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
----------------------------------------------------------
1993 1994 1995 1996 1997 1998
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
WAREHOUSING AND LOGISTIC REVENUE $15,190 $42,355 $71,030 $77,884 $84,208 $90,179
COSTS & EXPENSES:
WAREHOUSING AND LOGISTICS EXPENSE 4,942 29,877 51,449 59,998 64,786 70,052
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 3,721 3,581 6,136 5,849 6,409 6,659
------- -------- -------- -------- -------- --------
OPERATING INCOME 6,527 8,897 13,445 12,037 13,013 13,469
OTHER EXPENSE:
INTEREST EXPENSE, NET 2,176 2,763 3,137 2,936 2,976 2,614
DEPRECIATION 3,134 4,126 5,730 6,188 6,540 6,394
LOSS ON DISPOSAL OF ASSETS - - - - 1,036 325
OTHER EXPENSES 241 387 291 302 753 154
------- -------- -------- -------- -------- --------
PRE-TAX INCOME 976 1,621 4,287 2,611 1,707 3,981
PROVISION FOR INCOME TAXES 391 627 1,724 1,075 695 1,589
------- -------- -------- -------- -------- --------
NET INCOME $585 $994 $2,563 $1,536 $1,011 $2,393
======= ======== ======== ======== ======== ========
EBIT $3,152 $4,384 $7,424 $5,547 $5,719 $6,920
EBIT Margin 21% 10% 10% 7% 7% 8%
EBITDA $6,286 $8,511 $13,154 $11,734 $12,260 $13,315
EBITDA Margin 41% 20% 19% 15% 15% 15%
</TABLE>
_______________
(1) Source: CST Management
<PAGE>
COMPANY OVERVIEWS
________________________________________________________________________________
CST/TLC OVERVIEW
(In thousands)
<TABLE>
TLC STAND-ALONE PROJECTED OPERATING DATA/(1)/
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
----------------------------------------------------------
ACTUAL BUDGET
1998 1998 1999 2000 2001 2002
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
WAREHOUSING AND LOGISTIC REVENUE $90,179 $97,356 $106,713 $112,638 $118,223 $124,323
COSTS & EXPENSES:
WAREHOUSING AND LOGISTICS EXPENSE 70,052 75,262 83,043 87,675 92,219 97,178
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 6,659 7,268 6,670 6,695 7,002 7,338
------- -------- -------- -------- -------- --------
OPERATING INCOME 13,469 14,826 17,000 18,268 19,002 19,807
OTHER EXPENSE:
INTEREST EXPENSE, NET/(2)/ 2,614 4,617 4,490 3,950 3,368 2,695
DEPRECIATION 6,394 7,615 7,449 7,171 6,968 6,785
LOSS ON DISPOSAL OF ASSETS 325 - - - - -
OTHER EXPENSE 154 338 1,500 1,000 1,000 1,000
------- -------- -------- -------- -------- --------
PRE-TAX INCOME 3,981 2,256 3,561 6,147 7,666 9,327
PROVISION FOR INCOME TAXES 1,589 857 1,353 2,336 2,913 3,544
------- -------- -------- -------- -------- --------
NET INCOME $2,393 $1,399 $2,208 $3,811 $4,753 $5,783
======= ======== ======== ======== ======== ========
EBIT $6,920 $6,873 $8,051 $10,097 $11,034 $12,022
EBIT Margin 8% 7% 8% 9% 9% 10%
EBITDA $13,315 $14,488 $15,500 $17,268 $18,002 $18,807
EBITDA Margin 15% 15% 15% 15% 15% 15%
</TABLE>
_______________
(1) Source: CST Management
(2) Actual 1998 interest is lower than the Budget because the borrowing which
was anticipated in the Budget did not occur.
<PAGE>
B. WEATHERFORD OVERVIEW
<PAGE>
COMPANY OVERVIEWS
________________________________________________________________________________
WEATHERFORD OVERVIEW
Weatherford has a solid manufacturing base and comprehensive
product line including drill pipe and premium casing and tubing,
completion, and artificial lift equipment. The Company has a
diversified international presence in the exploration,
production, and transmission sectors of the oil and gas industry
through its role as service provider and equipment manufacturer.
The Company operates in three industry segments: oilfield
services, oilfield products and gas compression.
The Company's products are used in the exploration and production
of oil and natural gas and it is currently the largest
manufacturer and supplier of drill pipe in the world, the largest
manufacturer of premium tubulars in North America and among the
largest manufacturers of rod lift equipment in the world.
Income from continuing operations for fiscal 1997 was $196.8
million, or $2.01 per share, from revenues of $1,969.1 million,
as compared to income from continuing operations for fiscal 1996
of $92.2 million, or $1.01 per share, from revenues of $1,467.3
million.
<PAGE>
COMPANY OVERVIEWS
________________________________________________________________________________
WEATHERFORD OVERVIEW
(In thousands, except for per share data)
WEATHERFORD
-----------
MARKET VALUE DATA
RECENT PRICE (AS OF 10/7/98) $ 18.75
52 WEEK HIGH: $ 73.00
LOW: $ 15.00
SHARES OUTSTANDING/(1)/: 97,568
EQUITY MARKET VALUE: $1,829,394
NET DEBT (AT 6/30/98) 803,731
-------------
UNLEVERAGED MARKET VALUE: $2,633,125
=============
<TABLE>
HISTORICAL OPERATING DATA:
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------------------ -------------------------
1995 1996 1997 1997 1998
------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
Revenue $1,125,803 $1,467,270 $1,969,089 $980,252 $1,104,293
EBITDA/(2)/ 208,705 291,729 480,455 211,408 299,439
Net Income/(3)/ 46,405/(4)/ 92,161 196,773 83,644 120,652/(5)/
</TABLE>
_______________
(1) Fully-diluted calculated using the treasury stock method.
(2) EBITDA is calculated by taking the restated combined operating income for
Weatherford and adding historical depreciation and amortization for both
EVI and Weatherford Enterra.
(3) Excludes all extraordinary items.
(4) Excludes merger costs and other charges of $88,182 tax effected at 38%.
(5) Excludes merger costs and other charges of $120,000, tax effected at 38%.
<PAGE>
III. VALUATION OF TLC
<PAGE>
A. COMPARABLE TRANSACTIONS
<PAGE>
VALUATION OF TLC
________________________________________________________________________________
COMPARABLE TRANSACTIONS
(Dollars in thousands)
<TABLE>
<CAPTION>
VALUATION MULTIPLES IMPLIED UNLEVERED MARKET VALUE
TLC LTM -----------------------------------------
- ------------------------------------------------------
STATISTIC/(1)/ HIGH LOW MEAN MEDIAN HIGH LOW MEAN
MEDIAN
-------------- ------- ------- -------- ---------- ----------- ---------- -----------
- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<C>
REVENUES $ 90,179.2 2.4X 1.7X 2.0X 1.9X $ 215,284.0 $149,768.5 $ 177,495.9
$ 167.435.4
EBIT 7,074.2 17.1 11.0 13.2 11.4 121,170.4 78,007.7
93,366.9 80,922.8
EBITDA 13,468.5 9.9 6.8 8.1 7.7 133,188.5 91,585.9
109,591.3 103,999.4
----------- ---------- -----------
- -----------
Mean: $ 156,547.6 $106,454.0 $ 126,818.1
$ 117,452.5
----------- ---------- -----------
- -----------
</TABLE>
_______________
(1) Source: CST management
<PAGE>
VALUATION OF TLC
________________________________________________________________________________
COMPARABLE TRANSACTIONS - IMPLIED VALUATION
GRAPHICS OMITTED
Chart depicting Comparable Transactions - Implied Valuation
<PAGE>
VALUATION OF TLC
________________________________________________________________________________
COMPARABLE TRANSACTIONS - IMPLIED VALUATION
GRAPHICS OMITTED
Chart depicting Comparable Transactions - Implied valuation (All of the implied
transaction prices were decreased by the amount that the Morgan Stanley REIT
Index decreased for the effective dates of the Comparable Transactions to
10/8/98)
<PAGE>
C. ALTERNATIVE TRANSACTION
<PAGE>
ALTERNATIVE TRANSACTION
________________________________________________________________________________
TAX LIABILITY COMPARISON
(Dollars in thousands except per share data)
An alternative to the proposed Transaction is the outright sale by CST of its
position in Weatherford Common Stock for cash. While this alternative is
recognized as a method in which CST shareholders would be able to monetize the
current value of their ownership in Weatherford, significant capital gains taxes
would be incurred at the CST corporate level and significant ordinary income tax
would be incurred at the shareholder level.
In the proposed Transaction, the corporate tax liability would be eliminated,
and the tax at the shareholder level would be deferred until the individual
shareholder liquidated his holding in Weatherford.
<TABLE>
CURRENT CAPITAL GAINS TAX LIABILITY COMPARISON:
<CAPTION>
Alternative Alternative
Proposed
Transaction Transaction
Transaction
------------ -----------
- -----------
<S> <C> <C> <C>
Current Shares Owned By CST 3,897 3,897
3,897
Current Price/Share of Weatherford x$14.00/(1)/ x$18.75/(2)/
x$18.75
------------ -----------
- -----------
Current Market Value of Weatherford Investment $54,564 $73,077
$73,077
Total CST Tax Basis in Weatherford Investment/(3)/ $18,973 $18,973
$18,973
------------ -----------
- -----------
Weatherford Shares Liquidated (Yes/No) Yes Yes
No
Current Taxable Gain to CST $35,592 $54,105
$0
% Assumed Capital Gains Tax Rate x38.5% x38.5%
x38.5%
------------ -----------
- -----------
Current Corporate Capital Gains Tax Liability $13,703 $20,830
$0
</TABLE>
_______________
(1) Represents the lowest stock price at which the Transaction may close.
(2) As of 10/7/97.
(3) Source: CST management.
<PAGE>
D. TRANSACTION CONSIDERATION ANALYSIS
<PAGE>
VALUATION OF TLC
________________________________________________________________________________
TRANSACTION CONSIDERATION ANALYSIS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
TOTAL CONSIDERATION PER CST SHARE: MANDATORY PURCHASE ONLY
CONTINGENT PURCHASE
- ------------------------------------------------------------------ ---------------------------------
- ---------------------------
<S> <C> <C>
Value of Weatherford Shares Held by CST: $14.19
$14.19
Value of Cash $4.09
$3.12
Value of $10 Million Mandatory Purchase (assuming no $1.94
$1.94
change in 10/7/98 market value)
Value of $5 million Contingent Purchase (assuming no -
$0.97
change in 10/7/98 market value)
---------------------------------
- ---------------------------
TOTAL Value/Share $20.22
$20.22
% PREMIUM TO CST MARKET VALUE 12.3%
12.3%
- ------------------------------------------------------------------ ---------------------------------
- ---------------------------
CURRENT CST SHARE PRICE/(1)/ $18.00
$18.00
- ------------------------------------------------------------------ ---------------------------------
- ---------------------------
VALUE OF CONSIDERATION VALUE OF
CONSIDERATION
RECEIVED PER CST RECEIVED
PER CST
SHARE
SHARE
---------------------------------
- ---------------------------
I. STOCK CONSIDERATION:
Weatherford Shares Held by CST 3,897
3,897
CST Shares Outstanding: 5,149
5,149
Weatherford Shares Received per CST Share: 0.76
0.76
Current Weatherford Share Price/(1)/ x$18.75
x$18.75
---------------------------------
- ---------------------------
$14.19
$14.19
II. CASH CONSIDERATION:
Aggregate Cash Distribution/(2)/ $21,042
$16,042
Cash Distribution per CST Share: $4.09
$3.12
</TABLE>
_______________
(1) Price as of 10/7/98.
(2) Aggregate Cash Distribution to CST shareholders at time of closing is net
of taxes and anticipated expenses. See "Transaction Consideration
Analysis," pg. 39. Actual cash receipt by CST shareholders is reduced in
the event that the shareholder elects to purchase shares in C-2. See
"Stock/Cash Election," pg. 10.
<PAGE>
VALUATION OF TLC
________________________________________________________________________________
TRANSACTION CONSIDERATION ANALYSIS
(in thousands)
CASH SOURCES & USES - TRANSACTION CASH FLOW TO CST SHAREHOLDERS
Cash Sources:
CST Cash and Accrued Interest (at 9/30/98) $5,882
Dividend from TLC 20,000
Intercompany Note Repayment 3,330
2/3 TLC Equity Purchase Proceeds 10,667
------
TOTAL Cash Sources $39,879
======
Cash Uses:
Taxes Due/(1)/ 5,702
Options Cash Out* 1,693
Transaction Expenses/(2)/ 1,302
CST Operating Cash Flow 140
Total Cash Cost Uses 8,837
TOTAL Net Cash to CST Shareholders $31,042
Less: Weatherford Share Purchase (10,000)
-------
TOTAL Cash Distribution $21,042
(1) Net Tax Calculation:
- -----------------------
Tax cost/(benefit) of 6/30/98 results $ 452
Tax on gain 5,751
Taxes paid year to date (501)
--------
Net Tax Due 5,702
(2) Assumed outstanding transaction expenses are as follow:
- -----------------------------------------------------------
Fairness Opinion/PSI $ 300
Lease Termination Penalty 327
Legal Expenses (est.) 185
Arthur Andersen Opinion (est.) 50
Weatherford-Related Expense 158
Solvency Opinion Expense 31
All Other Expense (est.) 251
--------
$ 1,302
_______________
* Contractual obligation based on employee contracts.
<PAGE>
VALUATION OF TLC
________________________________________________________________________________
TRANSACTION CONSIDERATION ANALYSIS
(in thousands)
ASSUMED TLC UNLEVERED PURCHASE PRICE CALCULATION
TLC LTM EBITDA $ 13,469
Equity Purchase Price of TLC (100%) $ 16,000
Net Debt on 6/30/98 Balance Sheet 32,823
New Debt, net of Intercompany Note Repayment/(1)/ 20,000
------
$ 52,823
Assumed Unlevered PP of TLC $ 68,823
======
Assumed Unlevered PP/EBITDA Multiple 5.1x
_______________
(1) New debt assumed immediately prior to proposed Transaction, $20 million and
$3 million of which will be used to pay CST shareholders a cash dividend
and repay an intercompany note, respectively.
<PAGE>
IV. HISTORICAL MARKET VALUE ANALYSIS
<PAGE>
HISTORICAL MARKET VALUE ANALYSIS
________________________________________________________________________________
IMPLIED MARKET VALUE CONTRIBUTION OF WFT TO CST
GRAPHICS OMITTED
Chart depicting Implied Market Value Contribution of WFT to CST for period
10/8/97 to 10/7/98.
<PAGE>
HISTORICAL MARKET VALUE ANALYSIS
________________________________________________________________________________
IMPLIED MARKET VALUE CONTRIBUTION OF WFT TO CST/(1)/
Equity Market Value
-------------------------------------------
Per Share Total (thousands)
CST $18.00 $92,688/(2)/
ATTRIBUTABLE TO WEATHERFORD
INVESTMENT/(1)/ 14.19 73,077/(2)/
IMPLIED NON-WEATHERFORD
MARKET VALUE $3.81 $19,611
================= =====================
_______________
(1) Based on a Weatherford stock price of $18.75, as of 10/7/98 market close.
(2) Assumes diluted CST shares outstanding.
<PAGE>
HISTORICAL MARKET VALUE ANALYSIS
________________________________________________________________________________
LTM STOCK APPRECIATION/(DEPRECIATION)
GRAPHICS OMITTED
Chart depicting Latest Twelve Months Appreciation/(Depreciation) for CST and WFT
Share Price for period 10/8/97 to 10/7/98.
<PAGE>
V. LIQUIDITY ANALYSIS
<PAGE>
LIQUIDITY ANALYSIS
________________________________________________________________________________
LTM TRADING VOLUME
GRAPHICS OMITTED
Chart depicting Latest Twelve Months Trading Volume for CST and WFT Stock for
period 10/8/97 to 10/7/98.
<PAGE>
APPENDIX
<PAGE>
A. COMPARABLE TRANSACTIONS
<PAGE>
<TABLE>
APPENDIX
- ---------------------------------------------------------------------------------------------------------
COMPARABLE TRANSACTIONS/(1)/
(Dollars in thousands)
<CAPTION>
TARGET
SHARES OUT.
DATE: OFFER TERMS UPP
ANNOUNCED ATTITUDE PP
ACQUIRER DESCRIPTION OF TARGET EFFECTIVE STATUS PRICE/SHARE
- -------------------------------------- ------------------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Americold Corp./(2)/ Provider of public 9/29/97 Cash NA
refrigerated warehouse 11/3/97 Friendly $ 564,508
JV-Vornado Realty Trust, space Completed $ 111,000
Crescent Real Estate Equities Co. NA
- -------------------------------------- ------------------------- ------------ ------------ -------------
URS Logistics Inc./(2)/ Provider or refrigeration 9/29/97 Cash NA
and frozen goods Friendly $ 356,494
JV-Vornado Realty Trust, transportation services 11/3/97 Completed $ 178,000
Crescent Real Estate Equities Co. NA
- -------------------------------------- ------------------------- ------------ ------------ -------------
Christian Salvesen Inc./(3)/ Provider of refrigerated Cash NA
storage services 4/25/97 Friendly $ 122,400
CS Integrated LLC 4/25/97 Completed $ 122,400
(Security Capital Industrial Trust) NA
- -------------------------------------- ------------------------- ------------ ------------ -------------
</TABLE>
(table continued)
<TABLE>
<CAPTION>
TARGET LTM VALUATION MULTIPLES
--------------------------------------------------
REVENUE EBIT EBITDA
ACQUIRER UPP/REV UPP/EBIT UPP/EBITDA
- -------------------------------------- --------------- ---------------- ------------------
<S> <C> <C> <C>
Americold Corp./(2)/ $ 304,039 $ 49,349 $ 73,107
1.9 x 11.4 x 7.7 x
JV-Vornado Realty Trust,
Crescent Real Estate Equities Co.
- -------------------------------------- --------------- ---------------- ------------------
URS Logistics Inc./(2)/ $ 149,330 $ 20,813 $ 36,050
2.4 x 17.1 x 9.9 x
JV-Vornado Realty Trust,
Crescent Real Estate Equities Co.
- -------------------------------------- --------------- ---------------- ------------------
Christian Salvesen Inc./(3)/ $ 73,700 $ 11,100 $ 18,000
1.7 x 11.0 x 6.8 x
CS Integrated LLC
(Security Capital Industrial Trust)
</TABLE>
LEGEND
LTM = Latest Twelve Months
PP = Purchase Price
UPP = Unlevered Purchase Price
TBV = Tangible Book Value
NA = Not Applicable
NM = Not Meaningful
SUMMARY STATISTICS
High 2.4 x 17.1 x 9.9 x
Low 1.7 11.0 6.8
Mean 2.0 13.2 8.1
Median 1.9 11.4 7.7
_______________
(1) Financial data excludes the results of discontinued operations,
extraordinary gains and one-time charges. Fully-diluted shares outstanding
calculated using the treasury stock method.
(2) Debt figure included in UPP was calculated using financial statements found
in the Vornado Realty Trust 8-K, dated September 22, 1997.
(3) Christian Salvesen annual revenues, EBIT, and EBITDA figures provided by
CST management.
<PAGE>
B. SHAREHOLDER PROFILE
<TABLE>
APPENDIX
- ------------------------------------------------------------------------------------------------------
SHAREHOLDER PROFILE
(In thousands)
<CAPTION>
CST EXISTING OWNERSHIP WEATHERFORD EXISTING
OWNERSHIP
--------------------------------
- ---------------------------------
SHARES $ OWNERSHIP SHARES %
OWNERSHIP
---------------- --------------- ----------------
- ----------------
INSTITUTIONAL HOLDERS/(1)/
<S> <C> <C>
Dimensional Fund Advisors Inc. 290 5.6% - -
Vanguard Group, Inc. 42 0.8% - -
Barclays Bank PLC 37 0.7% - -
Other Institutions 92 1.8% - -
---------------- --------------- ----------------
- ----------------
CST TOTAL INSTITUTIONAL INVESTORS 461 9.0% - -
CST INSIDERS/(2)/
Sheldon B. Lubar 969 18.8% - -
Albert O. Nicholas 311 6.0% - -
Nicholas F. Brady 200 3.9% - -
William T. Donovan 168 3.3% - -
David J. Lubar 427 8.3% - -
Gary R. Sarner 61 1.2% - -
Other Lubar Family Members 1,322 25.7% - -
Other Directors and Officers 45 0.9% - -
---------------- --------------- ----------------
- ----------------
TOTAL CST DIRECTORS, OFFICERS AND INSIDERS 3,502 68.0% - -
OTHER SHAREHOLDERS 1,186 23.0% - -
---------------- --------------- ----------------
- ----------------
TOTAL SHARES AND OPTIONS OUTSTANDING 5,149 100.0% - -
================ =============== ================
================
INSTITUTIONAL HOLDERS/(1)/
FMR Corporation - - 4,772 4.8%
Fund Asset Management - - 4,415 4.5%
Lehman Brothers Holdings Inc. - - 3,599 3.6%
Franklin Resources, Inc. - - 2,897 2.9%
Massachusetts Financial Services - - 2,802 2.8%
Travelers Group Inc. - - 2,695 2.7%
Sound Shore Management, Inc. - - 2,169 2.2%
AIM Management Group Inc. - - 2,015 2.0%
PaineWebber Group, Incorporated - - 1,671 1.7%
Other Institutions - - 40,992 41.6%
---------------- --------------- ----------------
- ----------------
WEATHERFORD TOTAL INSTITUTIONAL INVESTORS - - 68,027 69.0%
- -----------------------------------------------------------------------------------------------------------------------
CST - - 3,897 4.0%
- -----------------------------------------------------------------------------------------------------------------------
WEATHERFORD INSIDERS/(3)/ - - 5,632 5.7%
William E. Macaulay - - 830 0.8%
Bernard J. Duroc-Danner - - 200 0.2%
Other Directors and Officers - - 1,102 1.1%
---------------- --------------- ----------------
- ----------------
TOTAL WEATHERFORD INSIDERS - - 7,765 7.9%
OTHER SHAREHOLDERS - - 22,863 23.2%
---------------- --------------- ----------------
- ----------------
TOTAL SHARES AND OPTIONS OUTSTANDING - - 89,656 100.0%
================ =============== ================
================
</TABLE>
(table continued)
<TABLE>
<CAPTION>
PRO FORMA COMBINED EVI
--------------------------------
SHARES % OWNERSHIP
---------------- ---------------
INSTITUTIONAL HOLDERS/(1)/
<S> <C> <C>
Dimensional Fund Advisors Inc. 219 0.2%
Vanguard Group, Inc. 32 0.0%
Barclays Bank PLC 28 0.0%
Other Institutions 70 0.1%
---------------- ---------------
CST TOTAL INSTITUTIONAL INVESTORS 349 0.3%
CST INSIDERS/(2)/
Sheldon B. Lubar 733 0.7%
Albert O. Nicholas 235 0.2%
Nicholas F. Brady 151 0.1%
William T. Donovan 127 0.1%
David J. Lubar 323 0.3%
Gary R. Sarner 46 0.0%
Other Lubar Family Members 1,001
Other Directors and Officers 34 0.0%
---------------- ---------------
TOTAL CST DIRECTORS, OFFICERS AND INSIDERS 2,651 1.6%
OTHER SHAREHOLDERS 898 0.9%
---------------- ---------------
TOTAL SHARES AND OPTIONS OUTSTANDING 3,897 3.8%
================ ===============
INSTITUTIONAL HOLDERS/(1)/
FMR Corporation 4,772 4.7%
Fund Asset Management 4,415 4.3%
Lehman Brothers Holdings Inc. 3,599 3.5%
Franklin Resources, Inc. 2,897 2.8%
Massachusetts Financial Services 2,802 2.7%
Travelers Group Inc. 2,695 2.6%
Sound Shore Management, Inc. 2,169 2.1%
AIM Management Group Inc. 2,015 2.0%
PaineWebber Group, Incorporated 1,671 1.6%
Other Institutions 40,992 40.0%
---------------- ---------------
WEATHERFORD TOTAL INSTITUTIONAL INVESTORS 68,027 66.3%
- ---------------------------------------------------- ---------------- ---------------
CST - -
- ---------------------------------------------------- ---------------- ---------------
WEATHERFORD INSIDERS/(3)/ 5,632 5.5%
William E. Macaulay 830 0.8%
Bernard J. Duroc-Danner 200 0.2%
Other Directors and Officers 1,102 1.1%
---------------- ---------------
TOTAL WEATHERFORD INSIDERS 7,765 7.6%
OTHER SHAREHOLDERS 22,863 22.3%
---------------- ---------------
TOTAL SHARES AND OPTIONS OUTSTANDING 102,553 100.0%
================ ===============
</TABLE>
_______________
(1) Institutional ownership from Vickers on October 7, 1998.
(2) CST Insider ownership from Proxy Statement dated July 13, 1998.
(3) Lubar family members include 3 of Sheldon Lubar's daughters.
(4) EVI Insider ownership from Proxy Statement dated July 13, 1998.
<PAGE>
C. PRICE/VOLUME GRAPHS
<PAGE>
APPENDIX
________________________________________________________________________________
CST LTM PRICE/VOLUME GRAPH
[Graphic Omitted]
Chart depicting CST LTM Price/Volume graph showing daily price for the
period October 7, 1997 to October 6, 1998.
<PAGE>
APPENDIX
________________________________________________________________________________
WEATHERFORD LTM PRICE/VOLUME GRAPH
[Graphic Omitted]
Chart depicting Weatherford LTM Price/Volume graph showing daily prices for
the period October 7, 1997 to October 6, 1998.
