<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
RULE 13e-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the
Securities Exchange Act of 1934)
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ROPAK CORPORATION
(Name of the Issuer)
LINPAC MOULDINGS LTD.
(Name of Person(s) Filing Statement)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
776670 10 1
(CUSIP Number of Class of Securities)
David Williams
Deykin Avenue
Witton, Birmingham B6 7HY, United Kingdom
011-44-21-328-2400
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of Person(s) Filing Statement)
With a copy to:
Stanley H. Meadows, P.C.
McDermott, Will & Emery
227 West Monroe
Chicago, Illinois 60606
312 372-2000
This statement is filed in connection with (check the appropriate box):
a. [_] 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. [_] The filing of a registration statement under the Securities Act of 1933.
c. [X] 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 Filing Fee
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Transaction valuation: $25,757,446* Amount of Filing fee: $5,152
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* For purposes of calculating fee only. This amount assumes the purchase of
2,122,636 shares of common stock, value $.01 per share, of Ropak Corporation,
plus 218,950 shares issuable upon the exercise of all existing vested options
to purchase shares, at $11.00 in cash per share. The amount of the filing
fee, calculated in accordance with Rule 0-11 under the Securities Exchange
Act of 1934, as amended, equals 1/50 of one percentum of the aggregate value
of the cash offered by the bidder.
[X] 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: $5,152
Form or Registration No.: Schedule 14D-1
Filing Party: LINPAC Mouldings Ltd.
Date Filed: March 21, 1995
<PAGE>
INTRODUCTION
This Rule 13E-3 Transaction Statement (this "Schedule 13E-3") relates to the
offer by LINPAC Mouldings Ltd., an United Kingdom corporation ("Purchaser"),
to purchase any and all outstanding shares of common stock, par value $.01 per
share ("Shares"), of Ropak Corporation, a Delaware corporation (the "Company"),
not currently owned by Purchaser (the "Publicly Held Shares") at $11.00 per
share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase of the Purchaser dated
March 21, 1995 (the "Offer to Purchase") and in the related Letter of
Transmittal (which together with the Offer to Purchase constitute the "Offer").
This Schedule 13E-3 is intended to satisfy the reporting requirements of Section
13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Copies of the Offer to Purchase and related Letter of Transmittal are attached
as exhibits to, and incorporated by reference in, the Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1"). The Schedule 14D-1 was filed by Purchaser
with the Securities and Exchange Commission (the "Commission") contemporaneously
with this Schedule 13E-3.
The following cross-reference sheet is being supplied pursuant to General
Instruction F to the Schedule 13E-3 and shows the location in the Schedule 14D-1
of the information required to be included in response to the items of this
Schedule 13E-3. The information contained in the Schedule 14D-1, including all
exhibits thereto, is expressly and hereby incorporated herein by reference and
the responses to each item of this Schedule 13E-3 are qualified in their
entirety by reference to the information contained in the Schedule 14D-1 and the
exhibits thereto. All cross-references in this Schedule 13E-3, other than
cross-references to the Schedule 14D-1, are to the Offer to Purchase.
<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Item in Where located in
Schedule 13E-3 Schedule 14D-1
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<S> <C>
Item 1(a).................................................... Item 1(a)
Item 1(b).................................................... Item 1(b)
Item 1(c).................................................... Item 1(c)
Item 1(d).................................................... *
Item 1(e).................................................... *
Item 1(f).................................................... *
Item 2(a).................................................... Item 2(a)
Item 2(b).................................................... Item 2(b)
Item 2(c).................................................... Item 2(c)
Item 2(d).................................................... Item 2(d)
Item 2(e).................................................... Item 2(e)
Item 2(f).................................................... Item 2(f)
Item 2(g).................................................... Item 2(g)
Item 3(a)(1)................................................. Item 3(a)
Item 3(a)(2)................................................. Item 3(b)
Item 3(b).................................................... *
Item 4....................................................... *
Item 5....................................................... Item 5
Item 6(a).................................................... Item 4(a)
Item 6(b).................................................... *
Item 6(c).................................................... Item 4(b)
Item 6(d).................................................... Item 4(c)
Item 7(a).................................................... Item 5
Item 7(b).................................................... *
Item 7(c).................................................... *
Item 7(d).................................................... *
Item 8....................................................... *
Item 9....................................................... *
Item 10(a)................................................... Item 6(a)
Item 10(b)................................................... Item 6(b)
Item 11...................................................... Item 7
Item 12(a)................................................... *
Item 12(b)................................................... *
Item 13...................................................... *
Item 14(a)................................................... *
Item 14(b)................................................... *
Item 15(a)................................................... *
Item 15(b)................................................... Item 8
Item 16...................................................... Item 10(f)
Item 17...................................................... Item 11**
</TABLE>
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* This item is not required by Schedule 14D-1.
** To the extent applicable.
<PAGE>
Item 1: ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION
(a) The name of the subject company is Ropak Corporation, a Delaware
corporation (the "Company"), which has its principal executive
offices at 660 South State College Boulevard, Fullerton,
California 92631.
(b) This Schedule 13E-3 relates to the offer by Purchaser to purchase
any and all outstanding Shares at a price of $11.00 per share, net
to the seller in cash (the "Offer Price"), upon the terms and
subject to the conditions set forth in the Offer to Purchase and in
the related Letter of Transmittal. Information concerning the
number of outstanding Shares and the approximate number of holders
of record is set forth in the "Introduction" of the Offer to
Purchase and is incorporated herein by reference.
(c) Information concerning the principal market in which the Shares are
traded and the high and low sales prices of the Shares for each
quarterly period during the past two years is set forth in
"THE OFFER--Price Range of the Shares; Dividends on the Shares" of
the Offer to Purchase and is incorporated herein by reference.
(d) Information concerning dividends paid during the past two years and
restrictions on the Company's present or future ability to pay
dividends is set forth in "THE OFFER--Price Range of the Shares;
Dividends on the Shares" of the Offer to Purchase and is
incorporated herein by reference.
(e) To the knowledge of Purchaser, the Company has not made any
underwritten public offerings in the past three years.
(f) The information set forth in "SPECIAL FACTORS--Background of the
Offer" and "THE OFFER--Certain Information Concerning the
Purchaser" of the Offer to Purchase is incorporated herein by
reference.
Item 2. IDENTITY AND BACKGROUND
(a)-(d) and (g) This Schedule 13E-3 is being filed by the Purchaser, a
corporation incorporated in the United Kingdom. Information concerning the
principal business and the address of the principal offices of the Purchaser
is set forth in "THE OFFER--Certain Information Concerning the Purchaser" of the
Offer to Purchase and is incorporated herein by reference. The names, business
addresses, present principal occupations or employment, material occupations,
positions, or offices during the last five years and citizenship of the
directors and executive officers of the Purchaser and LINPAC Group Ltd, the
parent corporation of Purchaser ("LINPAC Group"), are set forth in Annex A to
the Offer to Purchase and are incorporated herein by reference.
(e) and (f) To the best of Purchaser's knowledge, during the last
five (5) years, none of LINPAC Group, Purchaser or any of the persons listed on
Annex A to the Offer to Purchase (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) was a 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 future violations of, 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) and (b) The information set forth in "SPECIAL FACTORS--Background of
the Offer," "SPECIAL FACTORS--Interests of Certain Persons in the Offer;
Contacts with the Company" and "THE OFFER--Arrangements with Officers of the
Company and Other Agreements" of the Offer to Purchase is incorporated herein by
reference.
Item 4. TERMS OF THE TRANSACTION
The information set forth in "Introduction," "SPECIAL FACTORS--
Background of the Offer," "THE OFFER--Terms of the Offer" and "THE OFFER--
Options" of the Offer to Purchase is incorporated herein by reference.
<PAGE>
Item 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE
(a)-(e) The information set forth in "SPECIAL FACTORS--Fairness of the
Offer," and "SPECIAL FACTORS--Reasons for the Offer and Plans for the Company"
of the Offer to Purchase is incorporated herein by reference.
(f) and (g) The information set forth in "Introduction" and
"THE OFFER--Effect of the Offer on the Market for the Shares; Stock Quotation
and Exchange Act Registration" of the Offer to Purchase is incorporated herein
by reference.
Item 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION
(a)-(b) The information set forth in "THE OFFER--Source and Amount of
Funds" and "THE OFFER--Fees and Expenses" of the Offer to Purchase is
incorporated herein by reference.
(c) Not Applicable.
(d) Not Applicable.
Item 7. PURPOSES(S), ALTERNATIVES, REASONS AND EFFECTS
The information set forth in "Introduction," "SPECIAL FACTORS--
Background of the Offer," "SPECIAL FACTORS--Fairness of the Offer," "SPECIAL
FACTORS--Reasons for the Offer and Plans for the Company," "SPECIAL FACTORS--
Interests of Certain Persons in the Offer; Contacts with the Company," "THE
OFFER--Certain Tax Consequences," and "THE OFFER--Effect of the Offer on the
Market for the Shares; Stock Quotation and Exchange Act Registration" of the
Offer to Purchase is incorporated herein by reference.
Item 8. FAIRNESS OF THE TRANSACTION
The information set forth in "Introduction," "SPECIAL FACTORS--
Background of the Offer," "SPECIAL FACTORS--Fairness of the Offer" and
"SPECIAL FACTORS--Reasons for the Offer and Plans for the Company" of the Offer
to Purchase is incorporated herein by reference.
Item 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS
The information set forth in "SPECIAL FACTORS--Background of the Offer"
of the Offer to Purchase is incorporated herein by reference.
Item 10. INTEREST IN SECURITIES OF THE ISSUER
The information set forth in "Introduction," "SPECIAL
FACTORS--Background of the Offer," "SPECIAL FACTORS--Interests of Certain
Persons in the Offer; Contacts with the Company," "THE OFFER--Certain
Information Concerning the Company" and "THE OFFER--Certain Information
Concerning Purchaser" of the Offer to Purchase is incorporated herein by
reference.
Item 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO
THE ISSUER'S SECURITIES
The information set forth in "SPECIAL FACTORS--Background of the Offer,"
"SPECIAL FACTORS--Interests of Certain Persons in the Offer; Contacts with the
Company," and "THE OFFER--Arrangements with Officers of the Company and Other
Agreements" of the Offer to Purchase is incorporated herein by reference.
Item 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH
REGARD TO THE TRANSACTION
<PAGE>
(a) The information set forth in "SPECIAL FACTORS--Background of the
Offer," "SPECIAL FACTORS--Interests of Certain Persons in the Offer; Contacts
with the Company," "THE OFFER--Certain Information Concerning the Company"
and "THE OFFER--Arrangements with Officers of the Company and Other Agreements"
of the Offer to Purchase is incorporated herein by reference.
(b) To the knowledge of the Purchaser, after making reasonable inquiry,
no executive officer, director or affiliate of the issuer has made a
recommendation of support of or opposed to the Offer. The information set forth
in "SPECIAL FACTORS--Fairness of the Offer" of the Offer to Purchase is
incorporated herein by reference.
Item 13. OTHER PROVISIONS OF THE TRANSACTION
(a) The information set forth in "Introduction," "SPECIAL FACTORS--
Appraisal Rights; Fair Price Provisions," "THE OFFER--Certain Legal Matters,"
Annex B and Annex C of the Offer to Purchase is incorporated herein by
reference.
(b) Not Applicable
(c) Not Applicable
Item 14. FINANCIAL INFORMATION
(a) The information set forth in "THE OFFER--Certain Information
Concerning the Company," and Annex D of the Offer to Purchase is incorporated
herein by reference.
(b) Not Applicable
Item 15. PERSON AND ASSETS EMPLOYED RETAINED OR UTILIZED
(a) The information set forth in "THE OFFER--Arrangements with Officers
of the Company and Other Agreements" of the Offer to Purchase is incorporated
herein by reference.
(b) Not Applicable
Item 16. ADDITIONAL INFORMATION
Additional information concerning the Offer is set forth in the Offer
to Purchase and the Annexes thereto, which is attached as Exhibit (d)(1) to this
Schedule 13E-3.
Item 17. MATERIAL TO BE FILED AS EXHIBITS
(a) Not Applicable.
(b)(1) Confidential Presentation to the Special Committee of the Board
of Directors of Ropak Corporation by Wertheim Schroder & Co.
Incorporated dated November 29, 1994
(c)(1) Option Agreement dated September 25, 1994 among LINPAC
Mouldings Ltd., Ropak Corporation and certain members of the
Roper Family.
(c)(2) Side Letter Agreement dated February 27, 1995 among LINPAC
Mouldings Ltd., Rhino Corporation and certain members of the
Roper Family.
(c)(3) Stock Purchase Agreement dated February 27, 1995 among LINPAC
Mouldings Ltd. and certain members of the Roper family.
(c)(4) Stock Purchase Agreement dated February 10, 1995 between LINPAC
Mouldings Ltd. and C. Richard Roper, as custodian for Cathy
Diane Roper.
(c)(5) Stock Purchase Agreement dated February 10, 1995 between LINPAC
Mouldings Ltd. and C. Richard Roper, as custodian for Robert
Richard Roper.
(c)(6) Employment Agreements between the Company and each of the Roper
Brothers effective as of January 1, 1995, executed February 27,
1995.
(c)(7) Guaranty Agreements dated February 27, 1995 made by LINPAC
Mouldings Ltd. on behalf of the Roper Brothers.
(c)(8) Share Purchase Agreement dated October 14, 1994 between LINPAC
Mouldings Ltd. and National Bank of Canada, with related
Exchange Agreement providing rights to exchange Ropak Canada,
Inc. preferred stock.
(c)(9) Stock Purchase Agreement dated January 12, 1995 among LINPAC
Mouldings Ltd., Chesapeake Partners Limited Partnership,
Chesapeake Partners Institutional Fund Limited Partnership and
Chesapeake Partners International Ltd.
(c)(10) Letter Agreement dated February 27, 1995 executed by William H.
Roper agreeing to cancellation of stock option agreement dated
February 19, 1991.
(c)(11) Letter Agreement dated February 27, 1995 executed by C. Richard
Roper agreeing to cancellation of stock option agreement dated
February 19, 1991.
<PAGE>
(c)(12) Letter Agreement dated February 27, 1995 executed by
Robert E. Roper agreeing to cancellation of stock
option agreement dated February 19, 1991.
(c)(13) Form of Indemnification Agreement entered into by Ropak
Corporation and each director of Ropak Corporation.
(c)(14) Letter dated March 15, 1995 executed by Douglas H. MacDonald
expressing his intention to tender shares.
(c)(15) Letter dated March 15, 1995 executed by James R. Connell
expressing his intention to tender shares.
(c)(16) Letter dated March 15, 1995 executed by Ronald W. Cameron
expressing his intention to tender shares.
(c)(17) Letter dated March 15, 1995 executed by James R. Dobell
expressing his intention to tender shares.
(d)(1) Offer to Purchase dated March 21, 1995.
(d)(2) Letter of Transmittal.
(d)(3) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(d)(4) Letter to Clients.
(d)(5) Notice of Guaranteed Delivery.
(d)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(d)(7) Notice of Cancellation.
(d)(8) Press release issued by LINPAC Mouldings Ltd., dated
March 15, 1995.
(d)(9) Form of press release to be issued by LINPAC Mouldings Ltd. on
March 21, 1995.
(e)(1) Delaware General Corporation Law Appraisal Rights (see
Annex B of Offer to Purchase, Exhibit (d)(1)).
(e)(2) Article Ninth to Ropak Corporation's Certificate of
Incorporation (see Annex C of the Offer to Purchase, Exhibit
(d)(1))
(f) Not Applicable.
<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.
March 21, 1995
LINPAC MOULDINGS LTD.
/s/ David A. Williams
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Name: David A. Williams
Title: Managing Director
<PAGE>
EXHIBIT (b)(1)
CONFIDENTIAL PRESENTATION TO
THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF
ROPAK CORPORATION
[LOGO OF WERTHEIM SCHRODER & CO.]
WERTHEIM SCHRODER & CO.
INCORPORATED
November 29, 1994
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
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TABLE OF CONTENTS
Page
Scope of the Assignment . . . . . . . . . . . . . . . . . . . . . . 1
Due Diligence Procedures . . . . . . . . . . . . . . . . . . . . . 2
Historical Overview . . . . . . . . . . . . . . . . . . . . . . . . 4
Recent Highlights . . . . . . . . . . . . . . . . . . . . . . . . . 7
Ownership Information . . . . . . . . . . . . . . . . . . . . . . . 9
Contacts Since Announcement of Wertheim Schroder Engagement . . . . 11
Transaction Overview . . . . . . . . . . . . . . . . . . . . . . . 13
Terms of the Linpac Offer
Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . 15
Business Description . . . . . . . . . . . . . . . . . . . . . . . 18
Product Lines
Joint Ventures and Investment
Strategic Highlights . . . . . . . . . . . . . . . . . . . . . . . 25
New Product Opportunities . . . . . . . . . . . . . . . . . . . . . 28
Major Contributors to Future Growth . . . . . . . . . . . . . . . . 29
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 1
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
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TABLE OF CONTENTS (CONTINUED)
Financial Review . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Three-Year Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Stock Price Performance . . . . . . . . . . . . . . . . . . . . . . 40
Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Valuation Methodology . . . . . . . . . . . . . . . . . . . . . . . 46
Investment Banking Conclusion . . . . . . . . . . . . . . . . . . . 63
Exhibit
Historical and Projected Financial Information . . . . . . . . . . . 1
Analysis of Comparable Publicly Traded Companies . . . . . . . . . . 2
Premiums in Merger and Acquisition Transactions . . . . . . . . . . 3
Discounted Cash Flow Analysis . . . . . . . . . . . . . . . . . . . 4
Leveraged Buyout Analysis . . . . . . . . . . . . . . . . . . . . . 5
Analysis of Comparable Merger & Acquisition Transactions . . . . . . 6
Comparable Companies S&P Tear Sheets . . . . . . . . . . . . . . . . 7
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 2
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
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SCOPE OF THE ASSIGNMENT
[_] To evaluate, from a financial point of view, the fairness to Ropak
Corporation's ("Ropak" or the "Company") shareholders, other than Linpac
or the members of the Roper family, of the proposal by Linpac Mouldings
Ltd. ("Linpac") to acquire all the common equity of Ropak Corporation
at a price of $10.50 per share.
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 1
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
DUE DILIGENCE PROCEDURES
[_] Reviewed the Company's historical financial information including annual
reports and 10K's for the 1989 - 1993 fiscal years ended December 31,
quarterly reports for 1993 and the first three quarters of 1994, the
Company's proxy dated May 17, 1994, the October 1994 financial statements
and the budget for the fiscal year 1994.
[_] Discussed with management the Company's operations, customers, markets,
competition, products, and historical and projected financial information.
[_] Reviewed with management the Company's three-year financial projections
dated August 31, 1993 and the Company's revised three-year financial
projections dated November 9, 1994.
[_] Visited the Ropak West, Ropak Central, and Capilano divisions and
discussed their operations with management.
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 2
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
DUE DILIGENCE PROCEDURES (CONTINUED)
[_] Interviewed several U.S. and Canadian customers.
[_] Discussed the state of the polyethylene market with several of Ropak's
U.S.-based suppliers.
[_] Reviewed Ropak's accounting practices and copies of the management letters
for the years 1988 through 1993 with the Company's auditors, Deloitte &
Touche.
[_] Wertheim Schroder did not perform a market check.
[_] Wertheim Schroder had no contact with Linpac.
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 3
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
HISTORICAL OVERVIEW
[_] Ropak West Inc. was founded in La Mirada, California in 1978 and became a
publicly owned company in December 1981 when it was merged with an
inactive publicly held corporation.
[_] The company's name was changed to Ropak Corporation in 1985.
[_] In December 1985, Ropak issued one million shares of common stock at
$11.00 per share in an equity offering.
[_] In 1989, Ropak acquired a 20% equity interest in the predecessor company
of In Vitro International. It further increased its interest through
subsequent transactions to approximately 1,340,337 shares between 1990 and
1991.
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 4
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
HISTORICAL OVERVIEW (CONTINUED)
[_] Linpac Group, a large U.K.-based privately-held packaging company,
acquired an 8.5% interest in Ropak in 1992 when it purchased from
Massachusetts Mutual Life Insurance Company convertible debt issued by
Ropak in 1985. The principal amount of this debt was $1,250,000.
[_] In April and June 1993, respectively, Ropak acquired the assets of two
Canadian companies, CRS Plastics ("CRS"), a division of Vulcan Packaging,
Inc. ("Vulcan"), and the injection molding division of Vulcan.
[_] The $5.2 million acquisition of Vulcan's injection molding division was
funded through the issuance of preferred stock of Ropak Canada, which is
exchangeable into 577,778 shares of Ropak common stock at $9.00 per share.
[_] The $3.5 million acquisition of CRS was funded through the issuance of an
exchangeable subordinated promissory note, exchangeable for one million
shares of InVitro International common stock.
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 5
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
HISTORICAL OVERVIEW (CONTINUED)
[_] In November 1993, Vulcan exchanged the promissory note issued by Ropak for
one million shares of InVitro International held at the time by Ropak. As
a result of this transaction, along with the sale of 31,233 shares for
cash which also took place in 1993, Ropak's interest in InVitro
International common stock decreased from 1,340,337 shares to 309,104
shares.
[_] On October 14, 1994, Linpac acquired all of the preferred stock issued in
the Vulcan acquisition from the National Bank of Canada which held the
stock as collateral for loans made to Vulcan.
[_] Currently, the Company owns and operates ten plants in the United States
and Canada, including a new materials handling facility in Kentucky which
became fully operational in November 1994. Ropak is projecting $124.4
million in 1994 sales.
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 6
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
RECENT HIGHLIGHTS
[_] 1992 Acquisition by Linpac of an 8.5% interest in Ropak
[_] April and June, 1993 Acquisition of CRS Plastics and the injection
molding division of Vulcan Packaging, Inc.
[_] April 4, 1994 Publication of research report on Ropak, by
Bridgecorp Securities with buy recommendation.
Stock closes at $5.50 with volume of 2,000 shares.
[_] September 1, 1994 "The Kon-Lin Letter" gives buy recommendation on
Ropak. Stock closes at $7.75 with volume of 3,400
shares.
[_] September 19, 1994 Article in Los Angeles Times recommending Ropak
stock. Stock closes at $8.31 with volume of
154,700 shares.
[_] September 23, 1994 Volume of 635,900 shares (14.8% of total shares
outstanding). Stock closes at $9.50 with volume
of 635,900 shares.
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 7
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
RECENT HIGHLIGHTS (CONTINUED)
[_] September 28, 1994 Announcement of Linpac offer of $10.50 for all
common equity of Ropak, other than the share held
by Linpac. Stock closes at $10.00 with volume of
406,500 shares
[_] September 29, 1994 684,000 shares of Ropak traded (15.8% of total
shares outstanding). Stock closes at $10.13
[_] October l4, 1994 Acquisition by Linpac of Vulcan Preferred Stock
from the National Bank of Canada for $5.922
million, equivalent to $10.25 per share. Stock
closes at $10.00
[_] November 1, 1994 Start-up of Kentucky material handling facility
[_] November 8, 1994 Retention of Wertheim Schroder by the Special
Committee of the Board of Ropak Corporation to
evaluate the Linpac proposal
[_] November 17, 1994 Release of Third Quarter results
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[LOGO OF WERTHEIM SCHRODER & CO.] Page 8
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
OWNERSHIP INFORMATION
<TABLE>
<S> <C>
Shares Outstanding on October 31, 1994 4,299,184
Shares Outstanding on October 31, 1994
(including conversion of Convertible Preferred Stock) 4,876,961
Fully Diluted Shares
(including conversion of Convertible Preferred Stock) 5,351,492
Shares controlled by Linpac 2,159,964(1)
(40.4% of fully diluted shares outstanding)
</TABLE>
(1) Includes 100,000 shares purchased in the market by Linpac between 9/30/94
and 10/24/94 as disclosed in the 13-D dated 11/10/94.
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<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
OWNERSHIP INFORMATION (CONTINUED)
Institutional Investors
<TABLE>
<CAPTION>
No. of % of Shares
Institutional Investor Shares Outstanding Reporting Date
- --------------------------------------- --------- ----------- --------------
<S> <C> <C> <C>
Chesapeake Partners Management Co. Inc. 273,500 6.4% 10/94
Fidelity Management & Resource Corp. 267,500 6.2% 6/94
Killen Group 261,300 6.1% 6/94
Dimensional Fund Advisors 180,760 4.2% 6/94
Wells Fargo Institutional Trust 104,213 2.4% 6/94
Mellon Bank Corporation 29,465 0.7% 6/94
--------- -----
Total 1,116,738 26.0%
========= =====
</TABLE>
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<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
CONTACTS SINCE ANNOUNCEMENT
OF WERTHEIM SCHRODER ENGAGEMENT
[_] The Harbour Group: The Harbour Group, a private investment firm based in
St. Louis Missouri, called Wertheim Schroder after the public announcement
related to the retention of Wertheim Schroder as financial adviser to the
Special Committee. They indicated they had met with the Roper family and
asked if a package of confidential information on the Company was
available. The Harbour Group was particularly interested in Ropak's 1995
projections. Wertheim Schroder indicated that it was not authorized to
provide confidential information at this time and that it would contact
The Harbour Group at a later date.
[_] Mabon Nugent Securities: Terry L. Nagelvoort was contacted around November
17, 1994 by Julie Heckman of Mabon Nugent Securities who indicated she had
an interested client who was familiar with the Company and who had visited
its facilities. Gianmaria Delzanno of Wertheim Schroder spoke with Ms.
Heckman who indicated she would talk to her client to discuss its interest
in Ropak and would get back to Wertheim Schroder. She also asked to have
a copy of a research report, which was sent to her.
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<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
CONTACTS SINCE ANNOUNCEMENT
OF WERTHEIM SCHRODER ENGAGEMENT
(CONTINUED)
[_] Scholey Company: Scholey is a Newport Beach based company that produces
materials handling and other products. William Scholey contacted Ropak
shortly after the announcement of the proposed Ropak/Linpac merger. No
discussions have been held with the company since the initial contact.
Gianmaria Delzanno attempted to contact William Scholey on November 22,
1994, but was unsuccessful. A message was left for William Scholey to
return Gianmaria Delzanno's call.
[_] Neither Quanex nor Sun Coast has contacted Wertheim Schroder.
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<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
TRANSACTION OVERVIEW
Terms of the Linpac Offer
<TABLE>
<CAPTION>
<S> <C>
Price per Share: $10.50
Total Number of Fully Diluted Shares(1): 5,351,492
Net Exercise Price of Options: $2.515 million
Total Implied Value of Linpac Offer: $53.676 million
Net Debt Outstanding(1) $32.358 million(1)
---------------
Total Implied Enterprise Value: $86.034 million
---------------
</TABLE>
(1) Assumes conversion at $9.00 per share of Preferred Stock purchased by
Linpac into 577,778 shares.
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<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
TRANSACTION OVERVIEW
Valuation of Ropak under terms of Linpac offer
<TABLE>
<CAPTION>
Multiple implied
Ropak by Linpac offer
---------------- ----------------
<S> <C> <C>
LTM Primary EPS $0.68 15.5x
LTM Fully Diluted EPS $0.58 18.0x
Projected Primary 1994 EPS $0.79 13.3x
Projected Primary 1995 EPS $0.95 11.0x
Shareholders' Equity $29.347 million 1.8x
LTM Net Sales $120.520 million 0.7x
LTM EBIT $7.039 million 12.2x
LTM EBITDA $14.551 million 5.9x
</TABLE>
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
INDUSTRY OVERVIEW
[_] The plastic container, packaging and materials handling industries
are cyclical, with sales and profitability dependent on the state of
the economy.
[_] Certain segments of the plastic container and packaging industries
are less cyclical than others. In particular, the food, agriculture,
fishing, dairy, and food processing markets are less likely to be impacted
by economic cycles.
[_] Plastics are replacing other materials such as metal, wood and fiber
in several applications, but at a slower pace than in the past few
years.
[_] There is significant growth potential in the materials handling market.
However, at present, a large portion of the sales of these products
are to the cyclical automotive industry.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
INDUSTRY OVERVIEW (CONTINUED)
[_] Demand for plastic containers, packaging and materials handling products
is expected to be at least as strong in 1995 as in 1994.
[_] The tight polyethylene supply condition that exists in the market today
is expected to continue through the end of the first quarter of 1995,
at which time supplies should begin to increase. Polyethylene prices are
expected to stabilize after the first quarter of 1995.
[_] Injection molded product manufacturers are generally able to pass resin
price increases to customers and, at the same time, expand gross margins.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
EFFECT OF RESIN PRICE ON ROPAK GROSS MARGIN
[GRAPH GOES HERE]
- --------------------------------------------------------------------------------
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
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BUSINESS DESCRIPTION
Product Lines
[_] Industrial Containers
[_] Collapsible Pallet-Sized Bins
[_] Other Products
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
BUSINESS DESCRIPTION
Product Lines (continued)
[_] Ropak designs, manufactures and markets a broad range of rigid plastic
shipping containers for use in the food, specialty chemical, fishing,
paints, and a wide variety of other industries.
[_] Ropak also designs, manufactures and markets a broad range of packaging
and materials handling products.
[_] Industrial Containers
- Ropak's line of industrial shipping containers include 1, 2, 3 1/2,
4 1/4, 5, and 6 gallon containers and matching lids in a variety
of colors.
- The Company's standard industrial covers are designed to package
hazardous chemicals and other materials. Other covers are available
for non-hazardous products.
- The Company also manufactures square containers, primarily for seasonal
businesses, to package fruit, fish roe, and other food products.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
BUSINESS DESCRIPTION
Product Lines (continued)
[_] Collapsible Pallet-Sized Bins
- Beginning in 1989, Ropak entered the collapsible bin business through
the Company's Materials Handling Division. Most of the Company's
product line has typically been manufactured by an independent firm
using Ropak owned tooling.
- To date, most of the Company's collapsible bins have been sold to
the automotive industry (e.g., Chrysler).
- In November 1994, Ropak began operations at a new materials handling
manufacturing facility located in Kentucky.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
BUSINESS DESCRIPTION
Product Lines (continued)
[_] Other Products
- Plastic containers with lids and associated holding trays for
installation in freezer cabinets of retail ice cream stores.
- Four liter containers designed to hold ice cream, sour cream, yogurt,
cottage cheese and other semi-soft retail products.
- Plastic trays for growing and handling seedlings, storage trays,
plastic drums, and plastic jugs.
- New round and square products for use in the retail industry for
holding pet food, bird seed, laundry detergent, kitty litter, and
other retail items.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
BUSINESS DESCRIPTION
Joint Ventures and Investments
Flamegrace Limited
[_] As of July 1, 1988, the Company entered into a joint venture agreement
in which Ropak acquired a 50% interest in Flamegrace Limited of the
U.K. for $900,000 total, paid in cash and 83,994 shares of Ropak stock.
[_] Flamegrace Limited has developed a one-piece cold-formed plastic container
intended for use in the paint industry.
[_] As part of the joint venture, Ropak has exclusive U.S. and Canadian
rights to Flamegrace's cold-forming technology and certain product
designs. Royalties are to be paid to Flamegrace as a percentage of
total plastic paint container sales. To date, Ropak has not developed
any products using Flamegrace's technology.
[_] As part of its equity stake in the joint venture, Ropak also receives
a 50% interest in the royalties generated by the same Flamegrace
technologies and patents worldwide, except for Columbia and the U.K.
[_] The current book value of Ropak's joint venture in Flamegrace is $0.
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Presentation to the Special Committee of the
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- --------------------------------------------------------------------------------
BUSINESS DESCRIPTION
Joint Ventures and Investments (continued)
Daitainer Co. Ltd.
[_] In October 1989, the Company entered into a shareholders agreement
with four Japanese companies, led by C. Itoh & Co., to organize Daitainer
Co. Ltd. The agreement provided for the marketing of Ropak's
North-American made products in Japan as well as for the joint
manufacturing of several products in a Japanese facility.
[_] Ropak currently owns 30% of the capital stock of Daitainer and has
agreed to provide Daitainer with technical, operating and marketing
support. Ropak also has licensed to Daitainer the rights to manufacture
Ropak's plastic containers in Japan in exchange for royalty payments.
[_] The Japanese participants in the joint venture have agreed to provide
raw materials, technical know-how, marketing support, employment
assistance, and leased facilities to Daitainer.
[_] To date, the operations of Daitainer have not been profitable.
[_] The book value of Ropak's investment in Daitainer has been written
down to $0.
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Presentation to the Special Committee of the
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BUSINESS DESCRIPTION
Joint Ventures and Investments (continued)
Clamar Plastics
[_] In September 1992, Ropak sold the assets of its Bishop Falls, Newfoundland
manufacturing facility to Clamar Plastics for approximately $414,000
in cash and $66,000 in assets.
[_] In connection with the transaction, the Company acquired a 20% interest
in Clamar Plastics.
[_] The book value of this investment is approximately $20,000.
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Presentation to the Special Committee of the
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STRATEGIC HIGHLIGHTS
[_] 1992-1994 Refocus on core business
[_] 1993-1994 Acquisitions of CRS Plastics and the pail division of
Vulcan Plastics
[_] 1994 Start up of new Materials Handling plant in Kentucky
[_] 1994-1997 Focus on New Products and Materials Handling
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Presentation to the Special Committee of the
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STRATEGIC HIGHLIGHTS
[_] Between 1988 and 1992, the Company pursued a diversification strategy
with the formation of Daitainer Co. Ltd. and investments in Flamegrace
Limited and InVitro International (formerly Ropak Laboratories).
[_] Between 1992 and 1994, the Company began to refocus its manufacturing
efforts on its core pail and materials handling businesses.
[_] During 1993 and 1994, the Company invested significantly in its core
businesses with the acquisition of CRS Plastics and of the pail division
of Vulcan Plastics (both of Canada) and with the development of a new
materials handling facility in Kentucky. In addition, in these two
years, the Company invested approximately $17.4 million in capital
expenditures, 18.4% more than the previous three year period.
[_] Currently, the Company is one of the leaders in the North American
pails and materials handling markets and is recognized for innovative
design, quality and customer service.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
STRATEGIC HIGHLIGHTS (CONTINUED)
[_] In the next three years, a larger portion of the Company's revenues
will be derived from materials handling products and new containers
designed for the retail packaging industry, including food, detergent,
pet foods, and other products.
[_] In 1994, new product sales are projected to be $2.9 million. Under
the August 1993, three-year plan, new product sales were expected to
increase to $17.7 million in 1997. In the November 1994 plan, the Company
expects to achieve $14.7 million in 1997 new product sales, accounting
for almost 30% of net sales growth over the 1995-1997 three-year period.
[_] In 1994, materials handling product sales are projected at $17.5 million.
In the November 1994 plan, the Company expects to achieve $35.0 million
in 1997 material handling product sales accounting for over 40% of
net sales growth over the 1995-1997 three-year period.
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<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
NEW PRODUCT OPPORTUNITIES
[_] New product growth opportunities exist in five major markets:
- Bird Feed
- Dry Pet Food
- Ice Melt
- Kitty Litter
- Laundry Detergent
[_] The E-Z cover, by allowing Ropak to convert an industrial container
to a more user friendly retail container, has attracted strong interest.
The Company has no competition in this market.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
MAJOR CONTRIBUTORS TO FUTURE GROWTH
[_] New Products Net sales projected to increase from $2.9 million
(or 2.4% of net sales) in 1994 to $14.7 million
(or 8% of net sales) in 1997. New products account
for approximately 30% of net sales growth between
1995 and 1997.
[_] Material Handling Net sales projected to increase from $17.5 million
(or 14.1% net sales) in 1994 to $35 million (or
20.9% of net sales) in 1997. Materials handling
accounts for over 40% of net sales growth between
1995 and 1997.
[_] New products and materials handling together account for approximately
68% of the 1995-1997 projected growth in net sales.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
FINANCIAL REVIEW
<TABLE>
<CAPTION>
Nine Months Ended September 30,
---------------------------------------------------------------
Growth Growth
Actual 1994 Rate(2) Budget 1994 Rate(2) Actual 1993
----------- ------- ----------- ------- -----------
% %
<S> <C> <C> <C> <C> <C>
Net Sales $96,922 19 $96,566 18 $81,594
EBITDA 13,014 35 13,095 36 9,626
EBIT 7,543(1) 53 7,626 60 4,763
Net Income 3,216(1) 92 3,487 108 1,675
EPS Primary 0.73 92 0.79 108 0.38
Fully Diluted 0.63 66 0.68 79 0.38
</TABLE>
(1) Excluding reserves of $500,000 taken in the third quarter 1994.
(2) Growth rates are over actual 1993 results.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
THREE YEAR PLAN
- --------------------------------------------------------------------------------
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
AUGUST 1993 THREE-YEAR PLAN
[_] The August 1993 three-year plan shows a significant contribution from
new products and materials handling products, which together account
for approximately 68% of the total increase in net sales between 1994
and 1996. In addition, the core business is projected to increase over
the three year period at an average annual rate of 3.8% in terms of
net sales.
[_] The August 1993 three-year plan further assumes that net sales for
the U.S. Division would grow by 31.7%; net sales for the Canadian Division
would grow by 20.5% and net sales for the Materials Handling Division
would grow by 53% over the 1994-1996 period. These increases correspond
to annual average growth rates of 9.6%, 6.4% and 15.2% respectively
for each of the three Divisions.
[_] The August 1993 plan assumes a significant improvement in both Gross
and EBIT margins which results from both lower manufacturing costs
derived from increased volume and capacity utilization, as well as
a change in product mix with new products and materials handling products
having higher margins than the core business.
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Presentation to the Special Committee of the
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AUGUST 1993 THREE-YEAR PLAN
<TABLE>
<CAPTION>
Years Ending December 31,
--------------------------------------------
1994-1996
Average
1993A(1) 1994 1995 1996 Growth Rate
-------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net Sales $105,192 $119,599 $141,390 $156,097 9.3%
EBITDA 13,886 20,100 24,933 27,447 17.0%
EBIT 4,388 6,197 14,056 18,676 44.4%
Net Income 1,511 2,088 6,411 8,952 62.5%
Capital
Expenditures 6,005 13,903 10,877 8,771 NM
</TABLE>
(1) Excludes one-time and non-recurring items.
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Presentation to the Special Committee of the
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AUGUST 1993 THREE-YEAR PLAN
<TABLE>
<CAPTION>
Fiscal Years Ending December 31,
-----------------------------------------------
1993A(1) 1994 1995 1996
-------- -------- -------- --------
% % % %
<S> <C> <C> <C> <C>
Net Sales 100.0 100.0 100.0 100.0
EBITDA 13.2 16.8 17.6 17.6
EBIT 4.2 5.2 9.9 12.0
Net Income 1.4 1.7 4.5 5.7
</TABLE>
(1) Excludes one-time and non-recurring items.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
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NOVEMBER 1994 THREE-YEAR PLAN
[_] The November 1994 three-year plan reflects two key adjustments made
to the original plan. The first results from a devaluation of the Canadian
dollar as compared to the U.S. dollar. The August 93 plan was based
on an exchange rate of CDN$1.00 = U.S.$0.80. The November 94 plan is
based on an exchange rate of CDN$1.00 = U.S.$0.74.
[_] The second adjustment is the reduction by approximately 1.5% Gross
Margins and approximately 2.0% of EBIT Margins based on a review of
general market conditions.
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Presentation to the Special Committee of the
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NOVEMBER 1994 THREE-YEAR PLAN (CONTINUED)
[_] Other factors considered in the revision of the August '93 plan were:
(1) an expected loss of net sales at Ropak Canada - Capilano Division
resulting from the relocation of a major customer's manufacturing
operation;
(2) a loss of net sales at Ropak Canada - Burlington Division in
connection with the integration of the Vulcan operating division
acquired in 1993;
(3) a gain in net sales due to an improvement in CRS results.
[_] The November 1994 three-year plan further assumes a delay in the
introduction of new products in 1995 which will result in the loss
of approximately $1.4 million in net sales.
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Presentation to the Special Committee of the
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NOVEMBER 1994 THREE YEAR PLAN
<TABLE>
<CAPTION>
Years Ending December 31,
-----------------------------------------------------------------
1994-1997
Average
Growth
1993A(1) 1994 L/E 1995 1996 1997 Rate
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $105,192 $124,439 $133,467 $150,739 $167,338 10%
EBITDA 13,886 15,182 18,890 23,561 27,153 21%
EBIT 4,388 8,239 10,155 14,766 18,055 30%
Net Income 1,511 3,464 4,184 6,917 8,918 37%
Capital
Expenditures 6,005 11,357 16,602 8,260 9,460 NM
</TABLE>
(1) Excludes one-time and non-recurring items.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
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NOVEMBER 1994 THREE YEAR PLAN
<TABLE>
<CAPTION>
Fiscal Years Ending December 31,
--------------------------------------------------------------
1993A(1) 1994 1995 1996 1997
-------- ----- ----- ----- -----
% % % % %
<S> <C> <C> <C> <C> <C>
Net Sales 100.0 100.0 100.0 100.0 100.0
EBITDA 13.2 12.2 14.2 15.6 16.2
EBIT 4.2 6.6 7.6 9.8 10.8
Net Income 1.4 2.8 3.1 4.6 5.3
</TABLE>
(1) Excludes one-time and non-recurring items.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
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NOVEMBER 1994 THREE-YEAR PLAN
Annual Growth Assumptions
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Net Sales 7% 13% 11%
EBITDA 24% 25% 15%
EBIT 23% 45% 22%
Net Income 21% 65% 29%
</TABLE>
Historical and Projected Average Annual Growth Rates
<TABLE>
<CAPTION>
1989-1994 1994-1997
--------- ---------
<S> <C> <C>
Net Sales 7% 14%
EBITDA 8% 21%
EBIT 12% 48%
Net Income 36% 81%
</TABLE>
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<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
STOCK PRICE PERFORMANCE
[_] IPO in 1985 at $11.00 per share. Since the public offering there have
been four 10% stock dividends.
[_] Between January 1, 1990 and September 1, 1994 the stock traded between
$4.50 and $8.50.
[_] Ropak's small capitalization, and the large percentage of total shares
outstanding held by the Roper family and Linpac, cause the market for
the stock to be illiquid.
[_] Average daily volume in the 12 months through September 1, 1994 was
8,217 shares, or only 0.2% of the average number of shares outstanding.
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
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STOCK PRICE PERFORMANCE (CONTINUED)
[_] No major Wall Street firm publishes research on the Company; the most
recent research report available was published by Bridgeport Securities
in April 1994 with a buy recommendation.
[_] Investors had no information about the future prospects of the company
until the publication of the Bridgeport Securities report and a buy
recommendation in "The Kon-Lin Letter" on September 1.
[_] Since September 1, average trading volume has been 78,596 shares, nearly
10 times the average before that date.
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Presentation to the Special Committee of the
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- --------------------------------------------------------------------------------
Price/Volume Graph for Ropak Stock
1/1/90-11/28/94
GRAPH GOES HERE
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
Price/Volume Graph for Ropak Stock
7/1/1994-11/28/1994
GRAPH GOES HERE
- --------------------------------------------------------------------------------
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Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
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ROPAK TRADING DATA SINCE 8/1/1994
<TABLE>
<CAPTION>
Closing | Closing | Closing
Date Volume Price | Date Volume Price | Date Volume Price
---- ------ ------- | ---- ------ ------- | ---- ------ -------
<S> <C> <C> | <C> <C> <C> | <C> <C> <C>
8/15/94 1,400 $6.25 | 9/19/94 154,700 $ 8.31 | 10/24/94 9,600 $10.19
8/16/94 100 6.25 | 9/20/94 300,600 9.00 | 10/25/94 9,600 10.19
8/17/94 10,600 6.50 | 9/21/94 290,500 9.00 | 10/26/94 15,000 10.19
8/18/94 51,200 7.00 | 9/22/94 435,100 9.00 | 10/27/94 24,700 10.13
8/19/94 76,300 7.50 | 9/23/94 635,900 9.50 | 10/28/94 7,200 10.13
8/22/94 42,700 7.63 | 9/26/94 81,900 9.00 | 10/31/94 6,500 10.13
8/23/94 13,900 7.50 | 9/27/94 73,200 9.00 | 11/1/94 46,600 10.13
8/24/94 19,100 7.38 | 9/28/94 406,500 10.00 | 11/2/94 34,700 10.13
8/25/94 20,700 7.50 | 9/29/94 678,500 10.13 | 11/3/94 8,600 10.13
8/26/94 78,400 8.00 | 9/30/94 132,900 10.13 | 11/4/94 35,100 10.00
8/29/94 19,700 8.13 | 10/3/94 141,500 10.38 | 11/7/94 59,400 10.13
8/30/94 29,700 7.63 | 10/4/94 115,100 10.38 | 11/8/94 60,900 10.25
8/31/94 18,500 7.94 | 10/5/94 17,100 10.31 | 11/9/94 7,400 10.13
9/1/94 3,400 7.75 | 10/6/94 79,600 10.13 | 11/10/94 12,500 10.13
9/2/94 4,700 8.00 | 10/7/94 41,100 10.25 | 11/11/94 28,000 10.19
9/5/94 0 8.00 | 10/10/94 13,300 10.25 | 11/14/94 51,300 10.25
9/6/94 40,300 7.75 | 10/11/94 6,700 10.13 | 11/16/94 10,300 10.13
9/7/94 3,100 7.50 | 10/12/94 10,000 10.13 | 11/17/94 70,900 10.25
9/8/94 29,400 7.50 | 10/13/94 11,000 10.13 | 11/18/94 400 10.00
9/9/94 15,100 7.50 | 10/14/94 1,600 10.00 | 11/21/94 12,500 10.25
9/12/94 6,500 7.50 | 10/17/94 95,800 10.25 | 11/22/94 6,100 10.25
9/13/94 10,100 7.50 | 10/18/94 16,100 10.25 | 11/23/94 3,400 10.25
9/14/94 2,600 7.50 | 10/19/94 6,800 10.25 | 11/24/94 500 10.25
9/15/94 1,500 7.63 | 10/20/94 60,700 10.13 | 11/25/94 7,000 10.13
9/16/94 12,900 7.38 | 10/21/94 8,400 10.25 | 11/28/94 2,000 10.25
</TABLE>
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 44
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
VALUATION
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 45
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
VALUATION METHODOLOGY
[_] Publicly traded comparable companies analysis
[_] Study of control premiums in comparable transactions
[_] Comparable Merger & Acquisition transactions ("M&A")
[_] Discounted Cash Flow Analysis ("DCF")
[_] Leveraged Buyout Analysis ("LBO")
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 46
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
COMPARABLE PUBLICLY TRADED COMPANY ANALYSIS
[_] AEP Industries, Inc.
[_] Furon Company
[_] Intertape Polymer Group, Inc.
[_] Liqui-Box Corporation
[_] Park-Ohio Industries
[_] Sealright Company, Inc.
[_] Tuscarora, Inc.
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 47
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
COMPARABLE PUBLICLY TRADED COMPANY ANALYSIS
Considered but excluded:
[_] CFI Industries, Inc.
[_] International Container Systems Inc.
[_] IPL Systems, Inc.
[_] Portage Industries Corporation
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 48
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
COMMENTS ON COMPARABLE PUBLICLY TRADED COMPANIES
Other Comparable Companies Considered
Company Reason for Excluding
- ------------------------------------ -----------------------------------------
CFI Industries, Inc. The company is too small with a market
capitalization of approximately $7
million.
International Container Systems Inc. The company is too small, with a market
capitalization of less than $5 million.
IPL Systems Inc. The company experienced significant
losses in 1993 and the latest twelve
months period, making most market
multiples meaningless. In addition,
the company is too small with
approximately $19 million in market
capitalization.
Portage Industries Corporation The company is too small, with a market
capitalization of less than $6 million.
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 49
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
COMPARABLE PUBLICLY TRADED COMPANY ANALYSIS
<TABLE>
<CAPTION>
Comparable Companies
Ropak(1) Average(1)
-------- --------------------
<S> <C> <C>
Gross Margin 21.4% 25.8%
EBIT Margin 5.8% 10.6%
EBITDA Margin 12.1% 16.1%
Net Income Margin 2.5% 6.2%
Projected 1995 EPS growth
(Over LTM EPS) 39.7% 26.3%
</TABLE>
(1) Based on LTM financial results.
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 50
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
COMPARABLE PUBLICLY TRADED COMPANY ANALYSIS
<TABLE>
<CAPTION>
Average
Ropak Comparable Implied
LTM company Equity
30-Sep-94 multiple Value
--------- ---------- -------
<S> <C> <C> <C>
Price/Primary LTM EPS $0.68 15.5x $53,972
Price/Projected 1994 EPS 0.79 11.9x 47,907
Price/Projected 1995 EPS 0.95 9.8x 47,716
Price/Fully Diluted LTM EPS 0.58 15.9x 47,173
Enterprise Value/EBIT 7,039 10.9x 44,477
Enterprise Value/EBITDA 14,551 6.8x 67,175
-------
Average: $51,403(1)
-------
Price Per Share: $10.08
-------
</TABLE>
(1) Assumes exercise of options outstanding.
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 51
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
PREMIUM M&A ANALYSIS IN TRANSACTIONS SINCE 1/1/92
<TABLE>
<CAPTION>
Period Prior to Announcement
----------------------------------------------------
Target Sector 1 Day 1 Week 4 Weeks
- ------------------------- ----- ------ -------
<C> <S> <S> <S>
Manufacturing 28% 32% 34%
General Industry 37% 40% 46%
</TABLE>
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 52
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
VALUATION ON BASIS OF COMPARABLES PLUS PREMIUMS
<TABLE>
<CAPTION>
<S> <C>
Comparable Companies Valuation per Share $10.08
Acquisition Premium (28%-34%) $2.82-$3.43
-------------
Implied Acquisition Value per Share $12.90-$13.51
-------------
</TABLE>
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 53
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
DCF MODELS
Sensitivity Analysis: Base Case
<TABLE>
<CAPTION>
1995-1997 1998-1999
------------------- ------------------
<S> <C> <C>
Net Sales Company projections Held at 1997 level
Gross and EBITDA Margins Company projections Held at 1997 level
Tax Rate Company projections Held at 1997 level
Interest Rates 50 basis points Held at 1997 level
above Company
projections
Accounts Receivable/Payable Company projections Held at 1997 level
& Inventory Turns
Capital Expenditures Company projections $9 million
(Amounts in $ millions) ($16.6; $8.3; $9.5)
</TABLE>
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 54
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
DCF MODELS
Sensitivity Analysis: Downside Case
<TABLE>
<CAPTION>
1995-1997 1998-1999
--------------------- ------------------
<S> <C> <C>
Net Sales 5% lower than Held at 1997 level
Company projections
Gross and EBITDA Margins 1.5% lower than Held at 1997 level
Company projections
Tax Rate Company projections Held at 1997 level
Interest Rates 50 basis points above Held at 1997 level
Company projections
Accounts Receivable/Payable Company projections Held at 1997 level
& Inventory Turns
Capital Expenditures Company projections $9 million
(Amounts in $ millions) ($16.6; $8.3; $9.5)
</TABLE>
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 55
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
DCF MODELS
Sensitivity Analysis: Upside Case
<TABLE>
<CAPTION>
1995-1997 1998-1999
--------------------- ------------------
<S> <C> <C>
Net Sales Company projections 5% increase from
previous year
Gross and EBITDA Margins Company projections Held at 1997 level
Tax Rate Company projections Held at 1997 level
Interest Rates 50 basis points above Held at 1997 level
Company projections
Accounts Receivable/Payable Company projections Held at 1997 level
& Inventory Turns
Capital Expenditures Company projections $9 million
(Amounts in $ millions) ($16.6; $8.3; $9.5)
</TABLE>
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 56
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
DCF RESULTS
<TABLE>
<CAPTION>
Per Share Equity Valuation(1)
------------------------------------------------------
<S> <C> <C> <C>
Discount Rates 14% 15% 16%
------ ------ ------
Base Case $13.86 $13.08 $12.33
Downside Case $9.52 $8.91 $8.32
Upside Case $15.41 $14.56 $13.75
</TABLE>
(1) Assumes a 1999 EBITDA exit multiple of 6.0x.
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 57
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
LBO MODEL
The LBO analysis assumes the Downside Case:
<TABLE>
<CAPTION>
1995-1997 1998-1999
<S> <C> <C>
Net Sales 5% lower than Held at 1997 level
Company projections
Gross and Operating Margins 1.5% lower than Held at 1997 level
Company projections
Tax Rate Company projections Held at 1997 level
Interest Rate on Term Loan and 50 b.p. above Held at 1997 level
Revolver Company projections
Accounts Receivable/Payable Company projections Held at 1997 level
& Inventory Turns
Capital Expenditures $10 million in 1995 $7 million
$7 million thereafter
</TABLE>
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 58
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
LBO MODEL
<TABLE>
<CAPTION>
<S> <C>
Price per share $11.00
1999 EBITDA Exit Multiple 6.0x
Interest Rate on Subordinated Debt 13.5%
5-Year IRR for Equity Investors 27.2%
Pro forma 1994 results:
EBITDA/Total Interest 2.0x
Total Debt/EBITDA 5.0x
Total Debt/Total Capital 76.3%
</TABLE>
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 59
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
M&A ANALYSIS
[_] Merger & Acquisition transactions in the plastics, packaging, and general
industrial manufacturing industries were reviewed for the last three
years.
[_] Particular attention was focused on 1994 transactions.
[_] There were no direct comparable transactions in the plastic containers
and packaging sector.
[_] The transactions examined produce a wide valuation range as a result
of the large difference between EBIT and EBITDA of Ropak.
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 60
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
M&A ANALYSIS
Valuation Summary(1)
<TABLE>
<CAPTION>
Effective Date/ EV/ EV/ PP/
Announcement Date Target/Acquiror EBIT EBITDA Net Income
- ----------------- --------------- ----- ------ ----------
<S> <C> <C> <C> <C>
Jan. 27, 94/ Rexnord/
Dec. 2, 93 BTR Holdings 7.5x 5.6x 8.4x
Feb. 25, 94/ Aladdin Mills/
Dec. 6, 93 Mohawk Industries 12.5x 9.5x 19.9x
Aug. 5, 94/ Motor Coach Industries/
May 18, 94 Grupo Dina S.A. de C.V. 10.0x 9.1x 12.0x
Aug. 16, 94/ Mr. Coffee/
Jan. 21, 94 Health O Meter 10.8x 8.0x 19.3x
March 12, 93/ Carriage Industries/
Sept. 4, 93 Dixie Yarns 17.2x 8.3x 17.9x
----- ------ -----
Average: 11.6x 8.1x 15.5x
Price per Share $9.68 $16.49 $9.09
----- ------ -----
</TABLE>
(1) Based on last date available prior to announcement date.
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 61
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
VALUATION CONCLUSIONS
<TABLE>
<CAPTION>
Valuation Method Per Share Value
- ------------------------------------------------------ ---------------
<S> <C>
Publicly traded Comparable companies
and premium analysis $12.90-$13.51
DCF Analysis $12.33-$13.86
LBO Analysis $11.00
M&A Analysis $9.09-$16.49
</TABLE>
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 62
<PAGE>
Presentation to the Special Committee of the
Board of Directors of Ropak Corporation
- --------------------------------------------------------------------------------
INVESTMENT BANKING CONCLUSION
Wertheim Schroder deems a range of $12.50 to $13.50 per Ropak share to be
fair, from a financial point of view, to the shareholders of Ropak Corporation
other than Linpac or the members of the Roper family.
- --------------------------------------------------------------------------------
[LOGO OF WERTHEIM SCHRODER & CO.] Page 63
<PAGE>
ROPAK CORPORATION
INCOME STATEMENT
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------
ACTUAL PROJECTED
------------------------------------------------ -----------------------------------------
1989(1) 1990(1) 1991(1) 1992(1) 1993(1) 1994(2) 1995(2) 1996(2) 1997(2)
------- ------- ------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET SALES $89,801 $91,187 $94,013 $94,803 $105,192 $124,439 $133,467 $150,739 $167,338
Cost of Sales (71,463) (69,798) (73,259) (73,025) (83,509) (97,620) (103,531) (114,381) (125,816)
- ------------------------------------ ------- ------- ------- ------- -------- -------- -------- -------- --------
GROSS PROFIT 18,338 21,389 20,754 21,778 21,683 26,819 29,936 36,358 41,522
Operating Expenses (excl. D&A) (8,082) (10,975) (11,581) (8,493) (10,391) (11,612) (11,046) (12,797) (14,369)
- ------------------------------------ ------- ------- ------- ------- -------- -------- -------- -------- --------
EBITDA 10,256 10,414 9,173 13,285 11,292 15,207 18,890 23,561 27,153
Depreciation & Amortization (5,639) (5,902) (6,243) (6,323) (6,455) (6,519) (8,735) (8,795) (9,098)
- ------------------------------------ ------- ------- ------- ------- -------- -------- -------- -------- --------
EBIT 4,617 4,512 2,930 6,962 4,388 8,239 10,155 14,766 18,055
Other Income/(Expense) (353) (396) (510) (421) 15 0 0 0 0
Net Interest Income/(Expense) (2,969) (3,000) (2,485) (1,608) (1,902) (2,166) (2,811) (2,629) (2,407)
- ------------------------------------ ------- ------- ------- ------- -------- -------- -------- -------- --------
PRE-TAX INCOME 1,295 1,116 (65) 4,933 2,501 6,073 7,344 12,137 15,648
Income Tax Expense (550) (705) 7 (2,680) (990) (2,609) (3,160) (5,220) (6,730)
- ------------------------------------ ------- ------- ------- ------- -------- -------- -------- -------- --------
NET INCOME $745 $411 ($58) $2,253 $1,511 $3,464 $4,184 $6,917 $8,918
======= ======= ======= ======= ======== ======== ======== ======== ========
</TABLE>
[FN]
(1) Results have been adjusted to eliminate one-time and unusual charges.
(2) As projected by management.
<PAGE>
ROPAK CORPORATION
MARGIN ANALYSIS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------
ACTUAL PROJECTED
----------------------------------------------- -------------------------------------
1989(1) 1990(1) 1991(1) 1992(1) 1993(1) 1994(2) 1995(2) 1996(2) 1997(2)
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET SALES 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Sales (79.6)% (76.5)% (77.9)% (77.0)% (79.4)% (78.4)% (77.6)% (75.9)% (75.2)%
- ------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
GROSS PROFIT 20.4% 23.5% 22.1% 23.0% 20.6% 21.6% 22.4% 24.1% 24.8%
Operating Expenses (excl. D&A) (9.0)% (12.0)% (12.3)% (9.0)% (9.9)% (9.3)% (8.3)% (8.5)% (8.6)%
- ------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
EBITDA 11.4% 11.4% 9.8% 14.0% 10.7% 12.2% 14.2% 15.6% 16.2%
Depreciation & Amortization (6.3)% (6.5)% (6.6)% (6.7)% (6.1)% (5.2)% (6.5)% (5.8)% (5.4)%
- ------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
EBIT 5.1% 4.9% 3.1% 7.3% 4.2% 6.6% 7.6% 9.8% 10.8%
Other Income/(Expense) (0.3)% (0.4)% (0.5)% (0.4)% 0.0% 0.0% 0.0% 0.0% 0.0%
Net Interest Income/(Expense) (3.3)% (3.3)% (2.6)% (1.7)% (1.8)% (1.7)% (2.1)% (1.7)% (1.4)%
- ------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
PRE-TAX INCOME 1.4% 1.2% (0.1)% 5.2% 2.4% 4.9% 5.5% 8.1% 9.4%
Income Tax Expense (0.6)% (0.8)% 0.0% (2.8)% (0.9)% (2.1)% (2.4)% (3.5)% (4.0)%
- ------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
NET INCOME 0.8% 0.5% (0.1)% 2.4% 1.4% 2.8% 3.1% 4.6% 5.3%
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
[FN]
(1) Results have been adjusted to eliminate one-time and unusual charges.
(2) As projected by management.
<PAGE>
- -----------------------------
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
- -----------------------------
ROPAK CORPORATION
VALUATION BASED ON COMPARABLE PUBLICLY TRADED COMPANIES
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
COMPARABLE COMPANY IMPLIED ENTERPRISE IMPLIED EQUITY
ROPAK MULTIPLES VALUE VALUE
LTM ----------------------- ------------------------------ -----------------------------
VALUATION MULTIPLE 30-SEP-94 LOW AVERAGE(1) HIGH LOW AVERAGE HIGH LOW AVERAGE HIGH
- ----------------------------- --------- ----- ---------- ----- ------- ------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Price / Primary LTM EPS $0.68 10.0x 15.5x 19.5x $66,273 $86,330 $100,717 $33,915 $53,972 $68,359
Price / Projected 1994 EPS 0.79 10.4x 11.9x 18.5x 73,839 80,265 108,310 41,481 47,907 75,952
Price / Projected 1995 EPS 0.95 8.4x 9.8x 14.6x 72,699 80,074 104,540 40,341 47,716 72,182
Price / Fully Diluted LTM EPS 0.58 10.7x 15.9x 20.2x 63,229 79,531 92,842 30,871 47,173 60,484
Market Value / Book Value 29,257 1.7x 2.3x 2.8x 81,710 100,071 115,084 49,352 67,713 82,726
Enterprise Value / Revenues 120,520 0.7x 1.0x 1.8x 81,523 125,251 215,089 49,165 92,893 182,731
Enterprise Value / EBIT 7,039 7.4x 10.9x 12.5x 51,986 76,835 87,881 19,628 44,477 55,523
Enterprise Value / EBITDA 14,551 5.3x 6.8x 8.4x 77,604 99,533 121,680 45,246 67,175 89,322
AVERAGE(2): AVERAGE(2):
----------- -----------
$67,605 $83,761 $102,662 $35,247 $51,403 $70,304
======= ======= ======== ======= ======= =======
PRICE PER SHARE:
----------------
$7.06 $10.08 $13.61
======= ======= =======
</TABLE>
[FN]
(1) Excludes high and low multiples.
(2) Excludes Market Value/Book Value and Enterprise Value/Revenues multiples.
<PAGE>
- -----------------------------
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
- -----------------------------
COMPARISON OF PUBLICLY TRADED COMPARABLE COMPANIES
Market Value from Stock Closing Price as of 11/25/94
<TABLE>
<CAPTION>
VALUATION RATIOS
- --------------------------------------------------------------------------------
PRICE / PRIMARY LTM EPS PRICE / PROJECTED 1994 EPS
- -------------------------------------- --------------------------------------
<S> <C> <C> <C>
Furon Company 19.5x Tuscarora Inc. 18.5x
Tuscarora Inc. 18.5x Furon Company 18.4x
Intertape Polymer Group Inc. 18.3x Intertape Polymer Group Inc. 15.3x
ROPAK CORP. 15.5x Sealright Co Inc. 14.5x
Liqui-Box Corp. 15.5x ROPAK CORP. 13.3x
Sealright Co Inc. 14.7x A.E.P. Industries 11.5x
A.E.P. Industries 10.7x Park Ohio 10.4x
Park Ohio 10.0x Liqui-Box Corp. n/a
PRICE / PROJECTED 1995 EPS MARKET VALUE/BOOK VALUE
- -------------------------------------- --------------------------------------
Tuscarora Inc. 14.6x Liqui-Box Corp. 2.8x
Furon Company 14.1x Park Ohio 2.7x
Sealright Co Inc. 13.1x Intertape Polymer Group Inc. 2.3x
Intertape Polymer Group Inc. 12.1x Tuscarora Inc. 2.2x
ROPAK CORP. 11.0x Furon Company 2.2x
A.E.P. Industries 9.8x A.E.P. Industries 2.1x
Park Ohio 8.4x ROPAK CORP. 1.8x
Liqui-Box Corp. n/a Sealright Co Inc. 1.7x
ENTERPRISE VALUE/REVENUES ENTERPRISE VALUE/EBIT
- -------------------------------------- --------------------------------------
Intertape Polymer Group Inc. 1.8x Tuscarora Inc. 12.5x
Liqui-Box Corp. 1.4x Furon Company 12.4x
Tuscarora Inc. 1.3x ROPAK CORP. 12.2x
Sealright Co Inc. 0.9x Park Ohio 11.9x
A.E.P. Industries 0.8x Intertape Polymer Group Inc. 11.8x
Park Ohio 0.8x Sealright Co Inc. 9.8x
ROPAK CORP. 0.7x Liqui-Box Corp. 8.7x
Furon Company 0.7x A.E.P. Industries 7.4x
ENTERPRISE VALUE/EBIT ENTERPRISE VALUE/EBITDA
- -------------------------------------- --------------------------------------
Tuscarora Inc. 12.5x Park Ohio 8.4x
Furon Company 12.4x Intertape Polymer Group Inc. 8.2x
ROPAK CORP. 12.2x Furon Company 6.9x
Park Ohio 11.9x Liqui-Box Corp. 6.6x
Intertape Polymer Group Inc. 11.8x Tuscarora Inc. 6.5x
Sealright Co Inc. 9.8x Sealright Co Inc. 6.1x
Liqui-Box Corp. 8.7x ROPAK CORP. 5.9x
A.E.P. Industries 7.4x A.E.P. industries 5.3x
OPERATING RATIOS
- --------------------------------------------------------------------------------
GROSS MARGIN EBIT MARGIN
- -------------------------------------- --------------------------------------
Liqui-Box Corp. 31.9% Liqui-Box Corp. 16.1%
A.E.P. industries 30.5% Intertape Polymer Group Inc. 15.2%
Furon Company 29.3% A.E.P. Industries 11.0%
Tuscarora Inc. 27.3% Tuscarora Inc. 10.4%
Intertape Polymer Group Inc. 22.7% Sealright Co Inc. 9.4%
Sealright Co Inc. 22.2% Park Ohio 6.4%
ROPAK CORP. 21.4% ROPAK CORP. 5.8%
Park Ohio 16.9% Furon Company 5.5%
PRETAX MARGIN NET MARGIN
- -------------------------------------- --------------------------------------
Liqui-Box Corp. 16.0% Liqui-Box Corp. 9.5%
Intertape Polymer Group Inc. 13.1% Intertape Polymer Group Inc. 8.1%
A.E.P. Industries 10.2% A.E.P. Industries 6.6%
Tuscarora Inc. 8.9% Tuscarora Inc. 5.6%
Sealright Co Inc. 7.6% Park Ohio 5.3%
Park Ohio 5.4% Sealright Co Inc. 4.5%
Furon Company 5.3% Furon Company 3.4%
ROPAK CORP. 4.1% ROPAK CORP. 2.5%
EBITDA MARGIN TOTAL DEBT/CAPITALIZATION
- -------------------------------------- --------------------------------------
Intertape Polymer Group Inc. 21.9% ROPAK CORP. 53.9%
Liqui-Box Corp. 21.3% Sealright Co Inc. 40.2%
Tuscarora Inc. 20.0% Park Ohio 38.9%
Sealright Co Inc. 15.3% Tuscarora Inc. 38.0%
A.E.P. Industries 15.3% Intertape Polymer Group Inc. 29.1%
ROPAK CORP. 12.1% A.E.P. Industries 26.4%
Furon Company 9.8% Furon Company 21.6%
Park Ohio 9.1% Liqui-Box Corp. 2.8%
EBIT/ENDING ASSETS NET RETURN ON ENDING EQUITY
- -------------------------------------- --------------------------------------
Liqui-Box Corp. 25.6% Park Ohio 23.6%
A.E.P. Industries 17.3% A.E.P. Industries 19.3%
Intertape Polymer Group Inc. 12.0% Liqui-Box Corp. 18.8%
Sealright Co Inc. 11.2% Intertape Polymer Group Inc. 12.7%
Park Ohio 9.8% Tuscarora Inc. 12.1%
Furon Company 8.9% Sealright Co Inc. 11.5%
ROPAK CORP. 8.1% Furon Company 11.5%
Tuscarora Inc. n/a ROPAK CORP. 10.2%
</TABLE>
<PAGE>
- ------------------------------
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
- ------------------------------
COMPARISON OF SELECTED PUBLICLY TRADED PLASTIC & PACKAGING COMPANIES
(in thousands, except per share data)
<TABLE>
<CAPTION>
A.E.P. Furon
Ropak Corp. Industries Company
------------- ------------ ---------
Business Description: Designs, manufactures Manufactures and sells Designs and
and markets a a variety of polyethylene manufactures advanced
broad range of rigid film products for plastic components
plastic containers commercial, industrial, for the automotive,
for industry. agricultural and construction aerospace and
VALUATION RATIOS applications. chemical industries.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Price/Primary LTM EPS 15.5x 10.7x 19.5x
Price/Projected 1994 EPS 13.3x 11.5x 18.4x
Price/Projected 1995 EPS 11.0x 9.8x 14.1x
Price/Fully Diluted LTM EPS 18.0x 10.7x 20.2x
Market Value/Book Value 1.8x 2.1x 2.2x
Enterprise Value/Revenues 0.7x 0.8x 0.7x
Enterprise Value/EBIT 12.2x 7.4x 12.4x
Enterprise Value/EBITDA 5.9x 5.3x 6.9x
- ------------------------------------------------------------------------------------------------------------------------------------
MARKET DATA
Symbol/Exchange ROPK/NMS AEPI/NASDAQ FCBN/NYSE
Closing Price as of 11/25/94 $10.50 $16.50 $21.50
52 Week Price Range $5.00-$10.50 $11.33-$21.00 $13.38-$21.25
Annual Current Dividend $0.00 $0.08 $0.12
Indicated Yield 0.0% 0.5% 0.6%
Shares Outstanding (000's) 4,299(a) Oct-94 7,368 Sep-94 8,709 Jul-94
Market Value (MV) $53,676 $121,571 $187,242
Enterprise Value $86,034 $138,883 $194,742
LTM INCOME DATA
Last Twelve Months (LTM) 30-Sep-94 31-Jul-94 30-Jul-94
Fiscal Year Ended 31-Dec-93 31-Oct-93 29-Jan-94
Revenues $120,520 $170,645 $287,897
Gross Profit 25,738 51,985 84,251
EBIT 7,039 18,805 15,713
Pretax Income 4,968 17,485 15,392
Net Income(2) 2,978 11,275 9,912
Depreciation & Amortisation 7,512 7,236 12,419
Depreciation as % of EBITDA 52% 28% 44%
EBITDA 14,551 26,041 28,132
Earnings Per Share(1) $0.68 $1.54 $1.10
1994 Projected EPS(1)(# analysts) $0.79(b) $1.44(l) $1.17(l)
1995 Projected EPS(1)(# analysts) 0.95(l) 1.68(l) 1.52(l)
1996 Projected EPS(1)(# analysts) n/a(o) n/a(o) n/a(o)
Fully-Diluted LTM Earnings Per Share $0.58 $1.54 $1.07
LTM BALANCE SHEET DATA
Total Assets $86,969 $108,704 $175,874
Cash & Equivalents 1,970 3,723 16,261
Long-term Debt 30,153 20,900 16,753
Total Debt 34,328 21,035 23,761
Preferred Stock + Minority Interests 0 0 0
Common Shareholders' Equity 29,347 58,502 86,398
OPERATING RATIOS
Total Debt/Capitalization 53.9% 26.4% 21.6%
EBIT/Ending Assets 8.1% 17.3% 8.9%
Net Return on Ending Equity 10.2% 19.3% 11.5%
Gross Margin 21.4% 30.5% 29.3%
EBIT Margin 5.8% 11.0% 5.5%
Pretax Margin 4.1% 10.2% 5.3%
Net Margin 2.5% 6.6% 3.4%
</TABLE>
<TABLE>
<CAPTION>
Intertape
Polymer Liqui-Box
Group Inc. Corp. Park Ohio
------------ ----------- -----------
Business Description: Develops, manufactures Producer of Manufactures plastic
and sells a variety of bag-in-box flexible and steel containers
specialized polyolefin and injection moulded for the food and
plastic packaging products, packaging and of building industries,
primarily film carton sealing equipment for filling machined and rubber
VALUATION RATIOS tape and soft drink cases. the packages. products for transport.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Price/Primary LTM EPS 18.3x 15.5x 10.0x
Price/Projected 1994 EPS 15.3x n/a 10.4x
Price/Projected 1995 EPS 12.1x n/a 8.4x
Price/Fully Diluted LTM EPS 18.3x 15.5x 11.5x
Market Value/Book Value 2.3x 2.8x 2.7x
Enterprise Value/Revenues 1.8x 1.4x 0.8x
Enterprise Value/EBIT 11.8x 8.7x 11.9x
Enterprise Value/EBITDA 8.2x 6.6x 8.4x
- ------------------------------------------------------------------------------------------------------------------------------------
MARKET DATA
Symbol/Exchange ITP/NYSE LIQB/NMS PKOH/NASDAQ
Closing Price as of 11/25/94 $15.88 $33.00 $13.00
52 Week Price Range $12.00-$17.25 $33.00-$40.50 $11.63-$18.13
Annual Current Dividend $0.18 $0.39 $0.00
Indicated Yield 1.1% 1.2% 0.0%
Shares Outstanding (000's) 10,462(a) Jul-94 6,300 Nov-94 8,944 Oct-94
Market Value (MV) $166,084 $207,886 $116,268
Enterprise Value $199,262 $202,793 $142,177
LTM INCOME DATA
Last Twelve Months (LTM) 30-Jun-94 1-Oct-94 30-Sep-94
Fiscal Year Ended 31-Dec-93 1-Jan-94 31-Dec-93
Revenues $111,652 $144,887 $187,372
Gross Profit 25,291 46,177 31,718
EBIT 16,948 23,288 11,957
Pretax Income 14,600 23,113 10,123
Net Income(2) 9,018 13,810 9,959
Depreciation & Amortisation 7,461 7,565 5,045
Depreciation as % of EBITDA 31% 25% 30%
EBITDA 24,409 30,853 17,002
Earnings Per Share(1) $0.87 $2.13 $1.30
1994 Projected EPS(1)(# analysts) $1.04(3) n/a(o) $1.25(l)
1995 Projected EPS(1)(# analysts) 1.31(3) n/a(o) 1.55(l)
1996 Projected EPS(1)(# analysis) n/a(o) n/a(o) n/a(o)
Fully-Diluted LTM Earnings Per Share $0.87 $2.13 $1.13
LTM BALANCE SHEET DATA
Total Assets $141,619 $90,857 $122,133
Cash & Equivalents 147 7,174 975
Long-term Debt 24,041 28 24,903
Total Debt 32,107 2,081 26,884
Preferred Stock + Minority Interests 1,217 0 0
Common Shareholders' Equity 76,835 73,521 42,281
OPERATING RATIOS
Total Debt/Capitalization 29.1% 2.8% 38.9%
EBIT/Ending Assets 12.0% 25.6% 9.8%
Net Return on Ending Equity 12.7% 18.8% 23.6%
Gross Margin 22.7% 31.9% 16.9%
EBIT Margin 15.2% 16.1% 6.4%
Pretax Margin 13.1% 16.0% 5.4%
Net Margin 8.1% 9.5% 5.3%
</TABLE>
<TABLE>
<CAPTION>
Sealright Co Tuscarora
Inc. Inc.
-------------- -----------
Business Description: Designs and Manufacturer of
manufactures packaging custom molded foam
including round food plastic products made
containers and plastic from expanded
packaging for snacks polystyrene Avg. ex
VALUATION RATIOS Average Hi/Lo
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Price/Primary LTM EPS 14.7x 18.5x 15.3x 15.5
Price/Projected 1994 EPS 14.5x 18.5x 14.8x 11.9
Price/Projected 1995 EPS 13.1x 14.6x 12.0x 9.8
Price/Fully Diluted LTM EPS 14.9x 19.3x 15.8x 15.9
Market Value/Book Value 1.7x 2.2x 2.3x 2.3
Enterprise Value/Revenues 0.9x 1.3x 1.1x 1.0
Enterprise Value/EBIT 9.8x 12.5x 10.6x 10.9
Enterprise Value/EBITDA 6.1x 6.5x 6.8x 6.8
- ----------------------------------------------------------------------------------------------------------------------------------
MARKET DATA
Symbol/Exchange SRCO/NMS TUSC/NMS
Closing Price as of 11/25/94 $17.25 $17.25
52 Week Price Range $12.00-$17.50 $13.00-$20.00
Annual Current Dividend $0.46 $0.40
Indicated Yield 2.7% 2.3%
Shares Outstanding (000's) 11,063 Sep-94 6,138 Aug-94
Market Value (MV) $190,839 $105,882
Enterprise Value $265,610 $131,163
LTM INCOME DATA
Last Twelve Months (LTM) 30-Sep-94 31-Aug-94
Fiscal Year Ended 31-Dec-93 31-Aug-94
Revenues $286,750 $120,085
Gross Profit 63,681 27,609
EBIT 27,025 10,506
Pretax Income 21,900 9,017
Net Income(2) 13,001 5,703
Depreciation & Amortisation 16,819 9,721
Depreciation as % of EBITDA 38% 48%
EBITDA 43,844 20,226
Earnings Per Share(1) $1.17 $0.93
1994 Projected EPS(1)(# analysts) $1.19(4) $0.93(2)
1995 Projected EPS(1)(# analysts) 1.32(4) 1.18(2)
1996 Projected EPS(1)(# analysis) 1.46(2) 1.35(o)
Fully-Diluted LTM Earnings Per Share $1.16 $0.89
LTM BALANCE SHEET DATA
Total Assets $241,142 $94,225
Cash & Equivalents 1,362 3,671
Long-term Debt 69,257 25,284
Total Debt 76,133 28,952
Preferred Stock + Minority Interests 0 0
Common Shareholders' Equity 113,134 47,180 Avg. ex
Average Hi/Lo
OPERATING RATIOS ----------------------------
Total Debt/Capitalization 40.2% 38.0% 28.1% 30.8%
EBIT/Ending Assets 11.2% n/a 14.1% 10.1%
Net Return on Ending Equity 11.5% 12.1% 15.6% 14.9%
Gross Margin 22.2% 27.3% 25.8% 26.4%
EBIT Margin 9.4% 10.4% 10.6% 10.5%
Pretax Margin 7.6% 8.9% 9.5% 9.1%
Net Margin 4.5% 5.6% 6.2% 6.0%
</TABLE>
<PAGE>
- -----------------------------
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
- -----------------------------
Comparison of Selected Publicly Traded Plastic & Packaging Companies
(in thousands, except per share data)
<TABLE>
<CAPTION>
Intertape
A.E.P. Furon Polymer
Ropak Corp. Industries Company Group Inc.
----------- ---------- -------- ----------
<S> <C> <C> <C> <C>
HISTORICAL INCOME DATA
Net Revenues
- ----------------------------
LTM $120,520 $170,645 $287,897 $111,652
1993 105,192 153,307 285,194 104,280
1992 94,803 142,621 300,107 94,229
1991 94,013 133,448 306,170 100,171
1990 91,187 137,409(a) 326,920 87,326
1989 89,801(c) 120,959 332,248 52,352(b)
Growth Rate 3.6% 5.2% (3.8%) 15.7%
Gross Profit
- ----------------------------
LTM $ 25,738 $ 51,985 $ 84,251 $ 25,291
1993 21,683 43,839 80,467 28,697
1992 21,778 36,137 86,175 24,938
1991 20,754(i) 33,575 81,389 23,440
1990 21,389 32,139(a) 95,152 20,594
1989 18,338(c) 26,714 96,385 9,301(b)
Growth Rate 3.6% 11.7% (4.5%) 27.7%
EBIT (excludes Other Income)
- ----------------------------
LTM $ 7,039(e) $ 18,805 $ 15,713 $ 16,948
1993 4,388(d) 14,277 14,009 15,616
1992 6,962(f) 6,660 14,393 12,950
1991 2,930(g)(i) 8,085 7,898(a) 12,077
1990 4,512(h) 8,166(a) 22,182 9,169
1989 4,617(c) 9,596 27,821 2,445(b)
Growth Rate 3.4% 6.1% (16.5%) 50.0%
Pretax Income
- ----------------------------
LTM $ 4,968(e) $ 17,485 $ 15,392 $ 14,600
1993 2,501(d)(j)(k) 11,906 12,968 13,260
1992 4,933(f)(l) 5,236 12,513 9,865
1991 (65)(g)(i)(m) 6,038 4,178(b) 7,070(c)
1990 1,116(h) 6,939(a) 15,402 3,596
1989 1,295(c) 8,868 17,385 (184)(b)
Growth Rate 32.3% 3.1% (7.6%) NM
Net Income
- ----------------------------
LTM $ 2,978(e) $ 11,275 $ 9,912 $ 9,018
1993 1,511(d)(j)(k) 7,334 8,170 7,919
1992 2,253(f)(l) 3,577 7,257 5,599(d)
1991 (58)(g)(i)(m) 3,505 (1,528)(b) 3,560(c)
1990 411(h) 3,737(a) 9,093 3,218
1989 745(c) 5,325 10,257 (773)(b)
Growth Rate 36.6% 6.1% (6.6%) NM
Primary EPS
- ----------------------------
LTM $ 0.68 $ 1.54 $ 1.10 $ 0.87
1993 0.34(d)(j)(k) 1.01 0.92 0.77
1992 0.54(f)(l) 0.49 0.84 0.58
1991 (0.02)(g)(i)(m) 0.73 (0.18)(b) 0.51
1990 0.11(h) 0.78(a) 1.17 0.51
1989 0.19(c) 1.15 1.52 (0.25)(b)
Growth Rate 31.7% (7.0%) (12.5%) NM
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Liqui-Box Sealright Co Tuscarora
Corp. Park Ohio Inc. Inc.
----------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
HISTORICAL INCOME DATA
Net Revenues
- ----------------------------
LTM $144,887 $187,372 $286,750 $120,085
1993 130,081 147,168 275,665 $101,075
1992 116,117 119,839 263,778 95,809
1991 107,790 115,497 258,349 84,420
1990 113,130 125,152 205,861 85,458
1989 102,760 141,845 190,302 77,642
Growth Rate 5.1% 0.3% 10.4% 6.6%
Gross Profit
- ----------------------------
LTM $ 46,177 $ 31,718 $ 63,681 $ 27,609
1993 44,115 25,369 59,371 21,508
1992 38,050 17,027 65,302 22,442
1991 34,876 19,396 62,496 19,549
1990 34,504 19,735 53,315 20,344
1989 28,387 20,731 51,457 18,409
Growth Rate 10.3% 2.6% 5.0% 4.2%
EBIT (excludes Other Income)
- ----------------------------
LTM $ 23,288 $ 11,957 $ 27,025 $ 10,506
1993 21,948 7,515 24,621 6,823
1992 19,100 (5,310) 32,958(a) 9,419
1991 16,814 392 32,578 8,758
1990 17,645 1,267 28,258 9,853
1989 14,445 3,398 27,028 9,174
Growth Rate 9.6% NM (0.3%) (6.2%)
Pretax Income
- ----------------------------
LTM $ 23,113 $ 10,123 $ 21,900 $ 9,017
1993 21,594 6,273 19,143 6,285
1992 18,848 (6,067)(a) 28,464(a) 8,289
1991 16,421 79(b) 27,545 6,856
1990 16,386 915 26,062 7,912
1989 14,111 2,743 24,357 7,479
Growth Rate 10.4% NM (3.9%) (3.0%)
Net Income
- ----------------------------
LTM $ 13,810 $ 9,959 $ 13,001 $ 5,703
1993 12,937 6,031 11,085 3,949
1992 11,250 (6,199)(a) 17,096(a) 4,819
1991 9,631 (49)(b) 15,921 4,230
1990 9,876 832 15,697 4,874
1989 8,651 2,524 14,339 4,478
Growth Rate 9.8% NM (4.2%) (2.6%)
Primary EPS
- ----------------------------
LTM $ 2.13 $ 1.30 $ 1.17 $ 0.93
1993 2.00 0.90 1.00 0.65
1992 1.73 (1.03)(a) 1.55(a) 0.82(a)
1991 1.48 (0.01)(b) 1.44 0.70(a)
1990 1.46(a) 0.14 1.42 0.81(a)
1989 1.23(a) 0.45 1.30 0.75(a)
Growth Rate 12.1% NM (4.3%) (2.7%)
</TABLE>
<PAGE>
- -----------------------------
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
- -----------------------------
COMPARISON OF SELECTED PUBLICLY TRADED PLASTIC & PACKAGING COMPANIES
(in thousands, except per share data)
<TABLE>
<CAPTION>
INTERTAPE SEALRIGHT
ROPAK A.E.P. FURON POLYMER LIQUI-BOX PARK CO TUSCARORA
CORP. INDUSTRIES COMPANY GROUP INC. CORP. OHIO INC. INC.
------ ---------- ------- ---------- --------- ------ --------- ---------
EBITDA
- ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LTM 14,551 (e) 26,041 28,132 24,409 30,853 17,002 43,844 20,226
1993 11,292 (d) 21,152 26,216 23,093 28,670 12,451 40,274 16,029
1992 13,285 (f) 12,878 26,547 19,896 26,083 (887)(a) 46,334 17,298
1991 9,173 (g)(i) 13,175 22,955 18,232 23,901 4,806 (b) 43,902 15,994
1990 10,414 (h) 12,268(a) 36,661 14,114 24,650 5,626 36,259 16,454
1989 10,256 (c) 12,912 43,961 5,247 (b) 19,689 7,359 34,488 14,638
Growth Rate 4.5% 10.9% (12.7%) 39.2% 8.4% NM 5.7% 2.3%
MARGIN ANALYSIS
Gross Profit Margin
- ------------------------------
LTM 21.4% 30.5% 29.3% 22.7% 31.9% 16.9% 22.2% 27.3%
1993 20.6% 28.6% 28.2% 27.5% 33.9% 17.2% 21.5% 21.3%
1992 23.0% 25.3% 28.7% 26.5% 32.8% 14.2% 24.8% 23.4%
1991 22.1% (i) 25.2% 26.6% 23.4% 32.4% 16.8% 24.2% 23.2%
1990 23.5% 23.4%(a) 29.1% 23.6% 30.5% 15.8% 25.9% 23.8%
1989 20.4% (c) 22.1% 29.0% 17.8% (b) 27.6% 14.6% 27.0% 23.7%
EBIT Margin
- ------------------------------
LTM 5.8% (e) 11.0% 5.5% 15.2% 16.1% 6.4% 9.4% 10.4%
1993 4.2% (d) 9.3% 4.9% 15.0% 16.9% 5.1% 8.9% 6.8%
1992 7.3% (f) 4.7% 4.8% 13.7% 16.4% (4.4%) 12.5%(a) 9.8%
1991 3.1% (g)(i) 6.1% 2.6% (a) 12.1% 15.6% 0.3% 12.6% 10.4%
1990 4.9% (h) 5.9%(a) 6.8% 10.5% 15.6% 1.0% 13.7% 11.5%
1989 5.1% (c) 7.9% 8.4% 4.7% (b) 14.1% 2.4% 14.2% 11.8%
Pretax Margin
- ------------------------------
LTM 4.1% (e) 10.2% 5.3% 13.1% 16.0% 5.4% 7.6% 8.9%
1993 2.4% (d)(j)(k) 7.8% 4.5% 12.7% 16.6% 4.3% 6.9% 6.2%
1992 5.2% (f)(l) 3.7% 4.2% 10.5% 16.2% (5.1%)(a) 10.8%(a) 8.7%
1991 (0.1%)(g)(i)(m) 4.5% 1.4%(b) 7.1% (c) 15.2% 0.1% (b) 10.7% 8.1%
1990 1.2% (h) 5.1%(a) 4.7% 4.1% 14.5% 0.7% 12.7% 9.3%
1989 1.4% (c) 7.3% 5.2% (0.4%)(b) 13.7% 1.9% 12.8% 9.6%
Net Margin
- ------------------------------
LTM 2.5% 6.6% 3.4% 8.1% 9.5% 5.3% 4.5% 5.6%
1993 1.4% (d)(j)(k) 4.8% 2.9% 7.6% 9.9% 4.1% 4.0% 3.9%
1992 2.4% (f)(l) 2.5% 2.4% 5.9% (d) 9.7% (5.2%)(a) 6.5%(a) 5.0%
1991 (0.1%)(g)(i)(m) 2.6% (0.5%)(b) 3.6% (c) 8.9% (0.0%)(b) 6.2% 5.0%
1990 0.5% (h) 2.7%(a) 2.8% 3.7% 8.7% 0.7% 7.6% 5.7%
1989 0.8% (c) 4.4% 3.1% (1.5%)(b) 8.4% 1.8% 7.5% 5.8%
EBITDA Margin
- ------------------------------
LTM 12.1% (e) 15.3% 9.8% 21.9% 21.3% 9.1% 15.3% 20.0%
1993 10.7% (d) 13.8% 9.2% 22.1% 22.0% 8.5% 14.6% 15.9%
1992 14.0% (f) 9.0% 8.8% 21.1% 22.5% (0.7%)(a) 17.6% 18.1%
1991 9.8% (g)(i) 9.9% 7.5% 18.2% 22.2% 4.2% (b) 17.0% 18.9%
1990 11.4% (h) 8.9%(a) 11.2% 16.2% 21.8% 4.5% 17.6% 19.3%
1989 11.4% (c) 10.7% 13.2% 10.0% (b) 19.2% 5.2% 18.1% 18.9%
</TABLE>
<PAGE>
- -----------------------------
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
- -----------------------------
COMPARISON OF SELECTED PUBLICLY TRADED PLASTIC & PACKAGING COMPANIES
(in thousands, except per share data)
<TABLE>
<CAPTION>
INTERTAPE SEALRIGHT
ROPAK A.E.P. FURON POLYMER LIQUI-BOX PARK CO TUSCARORA
CORP. INDUSTRIES COMPANY GROUP INC. CORP. OHIO INC. INC.
------- ---------- -------- ---------- --------- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HISTORICAL BALANCE SHEET DATA
Total Assets
- ------------------------------
LTM $86,969 $108,704 $175,874 $141,619 $90,857 $122,133 $241,142 94,225
1993 77,180 88,992 175,224 124,474 86,072 97,644 214,266 79,969
1992 64,040 84,393 174,229 119,753 68,657 71,729 191,218 75,510
1991 65,889 74,983 171,543 113,939 63,512 62,610 159,555 63,775
1990 74,531 73,810 207,197 115,826 64,223 71,028 151,689 53,138
1989 71,815 65,573 236,660 117,793 64,161 74,463 102,816 46,777
Growth Rate (0.1%) 7.7% (7.5%) 1.4% 6.8% 5.7% 18.5% 15.3%
Common Shareholders' Equity
- ------------------------------
LTM $29,347 $58,502 $86,398 $76,835 $73,521 $42,281 $113,134 $47,180
1993 26,401 50,616 80,815 71,197 65,210 17,933 104,647 42,546
1992 23,962 43,734 75,247 67,498 55,972 8,795 98,429 39,280
1991 22,567 37,983 70,243 48,313 47,740 39,742 89,217 35,152
1990 23,611 35,619 97,412 36,480 42,130 49,888 77,213 31,451
1989 23,703 32,232 65,581 37,317 42,305 51,698 64,829 27,360
Growth Rate 2.3% 11.7% 1.6% 21.0% 12.2% (32.0%) 12.8% 11.7%
</TABLE>
<TABLE>
<CAPTION>
CAPITALIZATION
As of: 30-Sep-94 31-Jul-94 30-Jul-94 31-Dec-93
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Short-term Debt $4,175 $135 $7,008 $8,066
======= ======= ======== =======
Long-term Debt $30,153 50.8% 20,900 26.3% 16,753 16.2% 24,041 24.9%
Preferred Stock & Minority Interests 0 0.0% 0 0.0% 0 0.0% 1,217 1.3%
Common Shareholders' Equity 29,257 49.2% 58,502 73.7% 86,398 83.8% 71,197 73.8%
------- ------ ------- ------ -------- ------ ------- ------
TOTAL CAPITALIZATION $59,410 100.0% $79,402 100.0% $103,151 100.0% $96,455 100.0%
======= ====== ======= ====== ======== ====== ======= ======
Cash & Cash Equivalents $1,970 $3,723 $16,261 $147
======= ======= ======== =======
As of: 1-Oct-94 30-Sep-94 30-Sep-94 31-Aug-94
Short-term Debt $2,053 $1,981 $6,876 $3,668
======= ======= ======== =======
Long-term Debt $28 0.0% $24,903 37.1% $69,257 38.0% $25,284 34.9%
Preferred Stock & Minority Interests 0 0.0% 0 0.0% 0 0.0% 0 0.0%
Common Shareholders' Equity 73,521 100.0% 42,281 62.9% 113,134 62.0% 47,180 65.1%
------- ------ ------- ------ -------- ------ ------- ------
TOTAL CAPITALIZATION $73,549 100.0% $67,184 100.0% $182,391 100.0% $72,464 100.0%
======= ====== ======= ====== ======== ====== ======= ======
Cash & Cash Equivalents $7,174 $975 $1,362 $3,671
======= ======= ======== =======
</TABLE>
<PAGE>
General
(1) 1994 and 1995 projected Earnings Per Share information from First Call on-
line database as of 10-24-94, except Ropak Corp. from Research Note
published by Bridgecorp Securities on 4/4/1994
(2) Net Income is from continuing operations and before extraordinary items and
changes in accounting principles and after preferred dividends, minority
interest and equity income of associated companies.
Ropak Corp.
- -----------
(a) Shares Outstanding calculated to exclude options
(b) Since an updated First Call result is not available, a company estimate has
been used
(c) 1989 Revenue Information as restated in 1991 10K to exclude businesses
subsequently sold
(d) 1993 EBIT includes $92,000 add back for license fee settlement ($62,744
after Effective Tax Rate of 31.8%, or $0.01 per share)
(e) LTM EBIT excludes $329,000 for premium refund on workers compensation
(f) 1992 EBIT includes $361,000 add back for license fee settlement and $242,000
add back for litigation costs (total of $272,556 after Effective Tax Rate of
54.8%, or $0.07 per share)
(g) 1991 EBIT includes $1,167,000 add back for litigation costs $758,550 after
tax, or $0.195 per share)
(h) 1990 EBIT includes $239,000 add back in litigation costs ($88,024 after
Effective Tax Rate of 63.2%, $0.02 per share)
(i) 1991 Gross Profit includes $2.1 million add back for loss due to write down
of inventory ($1.365 million after assumed Tax Rate of 35%, $0.35 per share)
(j) 1993 Pre-tax Income excludes $2.5 million Gain on exchange of subordinated
note ($1.9 million after Effective Tax Rate, $0.43 per share)
(k) 1993 Pre-tax Income excludes $155,000 Gain on sale of stake in InVitro
International ($105,710 after Effective tax Rate of 31.8%, or $0.02 per
share)
(l) 1992 Pre-tax Income excludes $1.444 million Loss on sale of stake in InVitro
International ($659,910 after Effective Tax rate of 54.8%, or $0.16 per
share)
(m) 1991 Pre-tax Income excludes $1,903,000 Gain on sale of stake in InVitro
International ($0.49 per share)
A.E.P. Industries
- -----------------
(a) 1990 Pro-forma to include the acquired Princeton Packaging Corporation's
stretch film business for the whole year; pro-forma numbers for 1989 do not
exist.
Furon Company
- -------------
(a) 1991 EBIT was dramatically lower owing to severe increases in operating
costs and pressure on margins.
(b) 1991 Pretax includes $23.65 million add back of restructuring charge and
$8.371 million add back of Unusual charge (total of $20.814 million after
Assumed Tax Rate of 35%, $2.47 per share)
Intertape Polymer Group Inc.
- ----------------------------
(a) In the absence of Shares Outstanding information in the 6K, the latest
weighted average number of shares has been used
(b) No proforma is available for an acquisition at the end of 1989 which is the
cause of the dramatic increase in 1990 figures
(c) Excludes loss on abandonment of project of $C533,000
(d) Excludes C$350,000 for settlement of a lawsuit
(e) Excludes loss on extinguishment of interest rate swap contract of C$566,000
Liqui-Box Corp.
- ---------------
(a) Pro-forma for 1991 3-for-1 stock split
Park Ohio
- ---------
(a) Excludes business restructuring costs of $1.451 million (Not taxed due to
NOL, $0.25 per share)
(b) Excludes business restructuring costs of $3.952 million (Not taxed due to
NOL, $0.71 per share)
Sealright Co Inc.
- -----------------
(a) Excludes $1,586,000 provision for write down of plant facilities to net
realisable value ($952,556 after Effective Tax @ 39.9%, $0.10 per share)
Tuscarora Inc.
- --------------
(a) Restated for stock split in 1993
<PAGE>
- -----------------------------
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
- -----------------------------
ANALYSIS OF ACQUISITIONS OF PUBLIC COMPANIES
PREMIUMS AND FORM OF CONSIDERATION PAID (a)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
PREMIUM (PERIOD
PRIOR TO ANNOUNCEMENT) CONSIDERATION TRANS-
NUMBER ---------------------------- ---------------------------- ACTION
OF DEALS 1 DAY 1 WEEK 4 WEEKS CASH COMMON OTHER(b) VALUE
-------- ----- ------ ------- ----- ------ -------- -------
SUMMARY OF TRANSACTIONS BY YEAR
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Transactions: 1994 YTD 100 36.3% 40.8% 46.3% 36.1% 58.0% 5.8% $331.6
Total Transactions: 1993 162 35.9% 38.5% 42.7% 36.2% 57.3% 6.5% 387.3
Total Transactions: 1992 128 40.2% 44.1% 52.0% 26.8% 66.1% 7.1% 194.6
--- ----- ----- ----- ----- ----- ----- -------
Total 390 37.4% 40.9% 46.7% 33.1% 60.4% 6.5% $309.8
=== ===== ===== ===== ===== ===== ===== =======
- ------------------------------------------------------------------------------------------------------------------------------------
SUMMARY OF TRANSACTIONS BY VALUE
Less than $5.0 million 27 1.7% 5.5% 18.2% 37.5% 57.5% 5.0% $2.7
Between $5.0 million and $20.0 million 72 36.6% 40.5% 40.4% 39.7% 54.0% 6.3% 11.5
Between $20.0 million and $100.0 million 131 42.8% 45.6% 52.2% 35.6% 60.1% 4.3% 53.6
Between $100.0 million and $200.0 million 64 35.8% 38.1% 46.1% 29.6% 63.9% 6.5% 143.4
Greater than $200.0 million 96 34.1% 38.8% 43.9% 25.8% 64.0% 10.2% 1,080.3
--- ----- ----- ----- ----- ----- ----- -------
Total 390 35.5% 39.0% 44.6% 33.1% 60.4% 6.5% $309.8
=== ===== ===== ===== ===== ===== ===== =======
- ------------------------------------------------------------------------------------------------------------------------------------
SUMMARY OF TRANSACTIONS BY GENERAL INDUSTRY
Financial 169 43.5% 47.7% 55.4% 27.2% 70.2% 2.6% $168.0
Manufacturing 97 28.5% 31.7% 34.2% 42.0% 51.2% 6.8% 273.9
Natural Resources 14 23.6% 29.5% 32.9% 28.4% 45.6% 26.0% 196.3
Services 86 38.3% 39.8% 45.9% 30.3% 60.0% 9.7% 604.7
Trade 24 26.8% 32.1% 34.8% 51.4% 38.2% 10.4% 462.1
--- ----- ----- ----- ----- ----- ----- -------
Total 390 36.9% 40.3% 45.9% 33.1% 60.4% 6.5% $309.8
=== ===== ===== ===== ===== ===== ===== =======
</TABLE>
[FN]
- ----------------------
(a) Screening criteria: completed friendly mergers or acquisitions of public
companies where 100% of the target company was acquired in the transaction.
Averages are weighted by the number of transactions in each sort category.
(b) Includes options, warrants and preferred stock.
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
Analysis of Acquisitions of Public Companies
Premiums and Form of Consideration Paid (a)
(dollars in millions)
<TABLE>
<CAPTION>
Date Date
Announced Effective Target Name Acquiror Name Target Industry
- --------- --------- --------------------------------------- --------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
10/21/94 10/21/94 Wert & Garvey Inc DiMark Inc Investment & Commodity Firms, Dealers,
Exchange
10/04/94 10/04/94 Malibu Grand Prix Corp Mountasia Entertainment Amusement and Recreation Services
10/03/94 10/03/94 Chomerics Inc (WR Grace & Co) Parker Hannifin Corp Electronic and Electrical Equipment
08/29/94 11/01/94 Brock Candy Co Brach Acquisition Co Food and Kindred Products
08/19/94 08/19/94 Sunland Computer Services Inc Dataflex Corp Business Services
08/18/94 09/29/94 Micro Palm Computers Inc WPI Group Inc Computer and Office Equipment
08/15/94 10/27/94 Sundowner Offshore Services Nabors Industries Inc Oil and Gas; Petroleum Refining
08/05/94 08/26/94 Hyload Inc Ruberoid PLC Rubber and Miscellaneous
Plastic Products
08/02/94 08/31/94 WestGas Gathering Inc WG Acquisition Inc Electric, Gas, and Water Distribution
07/27/94 09/21/94 IRT Corp Thermo Instrument Electronic and Electrical Equipment
Systems Inc
07/25/94 09/21/94 Nature Food Centers Inc General Nutrition Companies Retail Trade-Food Stores
07/15/94 07/15/94 Homart Development Co Sizeler Property Real Estate; Mortgage Bankers
Investors Inc and Brokers
07/14/94 09/19/94 Active Noise & Vibration Tech Noise Cancellation Tech Inc Measuring, Medical, Photo
Equipment; Clocks
07/14/94 10/19/94 Kendall International Inc Tyco International Ltd Measuring, Medical, Photo
Equipment; Clocks
07/14/94 09/26/94 Southern Hospitality Corp DavCo Restaurants Inc Retail Trade-Eating and Drinking Places
07/12/94 10/19/94 Diasonics Ultrasound Inc Elbit Ltd (Elron Measuring, Medical, Photo
Electronics) Equipment; Clocks
07/12/94 08/16/94 Katz Media Investor Group Advertising Services
07/05/94 10/21/94 SynOptics Communications Inc Wellfleet Communications Business Services
07/01/94 08/17/94 Lincoln Foodservice Products Welbilt Corp (new) Machinery
06/27/94 10/03/94 Golden West Homes Oakwood Homes Corp Wood Products, Furniture, and Fixtures
06/27/94 11/04.94 Kirschner Medical Corp Biomet Inc Measuring, Medical, Photo
Equipment; Clocks
06/23/94 08/29/94 Gates/FA Distributing Inc Arrow Electronics Inc Wholesale Trade-Durable Goods
06/22/94 11/10/94 RHNB Corp, Rock Hill, SC NationsBank Corp Commercial Banks, Bank Holding Companies
06/20/94 06/29/94 Kover Group Inc Med/Waste Inc Business Services
06/17/94 09/30/94 Health Equity Properties Inc Omega Healthcare Investment & Commodity Firms, Dealers
Investors Inc Exchange
06/13/94 09/16/94 Chiles Offshore Noble Drilling Corp Oil and Gas; Petroleum Refining
06/13/94 10/06/94 Hallmark Healthcare Corp Community Health Health Services
Systems Inc
06/13/94 09/08/94 Trans Sierra Communications Mikohn Gaming Corp Business Services
06/09/94 08/23/94 Sunward Technologies Inc Read-Rite Corp Electronic and Electrical Equipment
06/06/94 06/06/94 Imo Industries Inc T-Hydronics Inc Measuring, Medical, Photo
Equipment; Clocks
06/02/94 11/01/94 Charter FSB Bancorp Inc Sovereign Bancorp Savings and Loans, Mutual Savings Banks
06/01/94 09/01/94 Nichols Institute Corning Lab Services Inc Business Services
05/31/94 11/01/94 Home Federal Svgs Bk, Wash, DC First Union Corp, Savings and Loans, Mutual Savings Banks
Charlotte, NC
05/23/94 09/01/94 H & H Oil Tool Co Weatherford International Business Services
Inc
05/23/94 09/16/94 Medical Care America Inc Columbia Healthcare Corp Health Services
05/23/94 09/01/94 SuperMac Technology Inc Radius Inc Computer and Office Equipment
05/23/94 08/05/94 Wheatley TXT Corp Dresser Industries Inc Electric, Gas, and Water Distribution
05/19/94 09/20/94 ASK Group Inc Computer Associates Business Services
Intl Inc
05/13/94 09/01/94 MSA Realty Corp Simon Property Group Investment & Commodity Firms, Dealers,
Exchange
05/13/94 09/13/94 Serving Software Inc HBO & Co Prepackaged Software
05/11/94 10/13/94 Optical Radiation Corp Benson Eyecare Corp Measuring, Medical, Photo
Equipment; Clocks
05/10/94 08/19/94 PDA Engineering MacNeal-Schwendler Corp Business Services
05/06/94 09/20/94 Glendale Bancorporation Mellon Bank, Pittsburgh, PA Commercial Banks, Bank Holding Companies
05/06/94 05/06/94 RF Inc Butler National Corp Wholesale Trade-Durable Goods
05/04/94 06/23/94 Allied Clinical Laboratories National Health Health Services
Laboratories
05/03/94 05/03/94 Universal Land Title Inc. Engle Homes Inc Insurance
05/02/94 09/29/94 Statesman Group Inc Conseco Capital Insurance
Partners II LP
05/02/94 11/03/94 Syntex Corp Roche Holding AG Drugs
04/26/94 08/10/94 Montana Naturals Intl Inc Vitamin Specialties Corp Food and Kindred Products
04/26/94 05/27/94 RHI Entertainment Inc Hallmark Cards Inc Motion Picture Production
and Distribution
04/18/94 08/15/94 Total Energy Services Co Enterra Corp Machinery
</TABLE>
<TABLE>
Consideration (%) Premium (%)
Date Transaction ---------------------- -------------------------
Announced Value Cash Common Other 1 Day 1 Week 4 Weeks
- --------- ----------- ------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
10/21/94 11.7 0.0% 100.0% 0.0%
10/04/94 22.8 87.9% 12.1% 0.0%
10/03/94 40.0 100.0% 0.0% 0.0%
08/29/94 155.0 90.3% 0.0% 9.7% 105.1 116.2 150.0
08/19/94 4.8 0.0% 100.0% 0.0%
08/18/94 1.8 0.0% 100.0% 0.0%
08/15/94 83.9 0.0% 100.0% 0.0% 27.5 26.4 33.5
08/05/94 3.0 100.0% 0.0% 0.0%
08/02/94 87.0 100.0% 0.0% 0.0%
07/27/94 6.8 100.0% 0.0% 0.0%
07/25/94 61.2 100.0% 0.0% 0.0% 21.5 37.1 50.0
07/15/94 11.0 100.0% 0.0% 0.0%
07/14/94 2.7 7.4% 92.6% 0.0%
07/14/94 1,435.4 0.0% 100.0% (0.0%) 20.3 19.4 22.1
07/14/94 18.4 76.1% 0.0% 23.9%
07/12/94 69.9 100.0% 0.0% 0.0% 47.0 37.8 52.1
07/12/94 287.1 34.7% 0.0% 65.3%
07/05/94 1,170.7 0.0% 100.0% 0.0% 16.2 28.5 16.2
07/01/94 52.4 100.0% 0.0% 0.0% 17.7 17.7 17.7
06/27/94 15.5 0.0% 99.9% 0.1%
06/27/94 40.9 100.0% 0.0% 0.0% 79.2 79.2 87.0
06/23/94 141.8 0.0% 100.0% 0.0% 13.9 12.5 13.2
06/22/94 43.7 0.0% 99.9% 0.1% 29.3 45.9 50.4
06/20/94 0.4 0.0% 90.0% 10.0%
06/17/94 144.0 0.0% 100.0% 0.0% 1.2 (0.1) 1.2
06/13/94 200.2 0.0% 100.0% 0.0% 5.0 2.4 23.5
06/13/94 161.7 0.0% 43.2% 56.8% 75.7 60.6 111.6
06/13/94 3.0 0.0% 100.0% 0.0%
06/09/94 109.5 0.0% 100.0% 0.0% 36.3 32.9 58.4
06/06/94 3.0 100.0% 0.0% 0.0%
06/02/94 75.9 0.0% 100.0% 0.0% 48.4 54.4 64.5
06/01/94 322.2 0.0% 69.0% 31.0% 301.0 290.9 301.0
05/31/94 22.9 0.0% 99.9% 0.1% 86.9 113.3 141.7
05/23/94 27.6 0.0% 100.0% 0.0% 67.6 59.6 76.4
05/23/94 875.6 0.0% 100.0% 0.0% 55.7 49.8 66.6
05/23/94 80.5 0.0% 100.0% 0.0% 39.1 47.6 29.1
05/23/94 173.8 0.0% 100.0% 0.0% 25.1 25.1 32.1
05/19/94 328.4 100.0% 0.0% 0.0% 47.2 39.5 57.0
05/13/94 49.5 0.0% 100.0% 0.0% 45.2 36.5 31.2
05/13/94 46.5 0.0% 100.0% 0.0% 5.9 17.3 29.2
05/11/94 135.4 72.1% 27.9% 0.0% 35.6 33.7 35.6
05/10/94 61.0 0.0% 0.0% 100.0% 138.3 138.3 56.6
05/06/94 28.0 100.0% 0.0% 0.0% 31.3 50.0 50.0
05/06/94 3.5 0.0% 99.7% 0.3%
05/04/94 180.6 100.0% 0.0% 0.0% 24.6 68.6 72.0
05/03/94 2.3 100.0% 0.0% 0.0%
05/02/94 349.2 100.0% 0.0% 0.0% 5.2 24.5 41.9
05/02/94 5,307.2 100.0% 0.0% 0.0% 57.4 71.4 79.4
04/26/94 4.9 0.0% 99.4% 0.6%
04/26/94 365.8 100.0% 0.0% 0.0% 35.8 36.5 48.5
04/18/94 296.0 0.0% 77.0% 23.0%
</TABLE>
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
Analysis of Acquisitions of Public Companies
Premiums and Form of Consideration Paid (a)
(dollars in millions)
<TABLE>
<CAPTION>
Date Date
Announced Effective Target Name Acquiror Name Target Industry
- --------- --------- ---------------------------------- -------------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
04/15/94 09/30/94 Suburban Bancorp, Palatine, IL Bank of Montreal Commercial Banks, Bank Holding Companies
04/11/94 08/10/94 Fischer & Porter Co Elsag Bailey Process Measuring, Medical, Photo Equipment;
Clocks
04/05/94 09/14/94 Kenfil Inc AmeriQuest Technologies Inc Wholesale Trade-Durable Goods
04/04/94 07/15/94 Hook-SupeRx Inc Revco DS Inc (Anac Holding) Miscellaneous Retail Trade
03/31/94 06/01/94 Central Point Software Inc Symantec Corp Prepackaged Software
03/31/94 11/11/94 Intramed Laboratories Inc Baxter International Inc Measuring, Medical, Photo Equipment;
Clocks
03/31/94 05/12/94 Software Toolworks Inc Pearson PLC Prepackaged Software
03/30/94 10/31/94 First Western Financial Corp AMFED Financial Inc Savings and Loans, Mutual Savings Banks
03/28/94 10/03/94 Fishkill National Corp Community Bancorp Inc NY Commercial Banks, Bank Holding Companies
03/25/94 09/27/94 United National Bancorp First Commonwealth Financial Commercial Banks, Bank Holding Companies
03/24/94 07/13/94 American Oil and Gas Co KN Energy Inc Oil and Gas; Petroleum Refining
03/21/94 10/03/94 Citizens First Bancorp Inc National Westminster Bancorp Commercial Banks, Bank Holding Companies
03/18/94 09/01/94 Momentum Corp Phillips & Jacobs Inc Wholesale Trade-Durable Goods
03/15/94 08/31/94 Aldus Corp Adobe Systems Inc Prepackaged Software
03/10/94 07/19/94 American Natural Energy Corp Alexander Energy Corp Oil and Gas; Petroleum Refining
03/10/94 05/18/94 Grumman Corp Northrop Corp Aerospace and Aircraft
03/07/94 09/30/94 West Newton Savings Bank Shawmut National Corp Savings and Loans, Mutual Savings Banks
03/04/94 10/01/94 Business Bancorp SJNB Financial Corp Commercial Banks, Bank Holding Companies
03/04/94 04/18/94 Home Nutritional Services Inc WR Grace & Co Health Services
03/02/94 09/30/94 Cohasset Svgs Bk, Cohasset, MA Shawmut National Corp Savings and Loans, Mutual Savings Banks
03/01/94 03/21/94 Gitano Group Inc Fruit of the Loom Inc Textile and Apparel Products
02/23/94 08/11/94 Turf Paradise Inc Hollywood Park Inc Amusement and Recreation Services
02/22/94 09/13/94 Crestmont Financial Corp Summit Bancorporation, NJ Savings and Loans, Mutual Savings Banks
02/22/94 05/19/94 Omni Films International Inc Iwerks Entertainment Inc Wood Products, Furniture, and Fixtures
02/21/94 07/01/94 Grand Valley Gas Co Associated Natural Gas Corp Electric, Gas, and Water Distribution
02/17/94 08/31/94 Pioneer Financial Corp Signet Banking Corp Savings and Loans, Mutual Savings Banks
02/15/94 05/31/94 Ramsay-HMO United HealthCare Corp Health Services
02/10/94 05/17/94 Interspec Inc Advanced Technology Labs Measuring, Medical, Photo Equipment;
Clocks
02/07/94 07/11/94 Medisys, Health Infusion, 1 Other T2 Medical Inc Health Services
02/02/94 10/03/94 Loan America Financial Barnett Banks Inc Real Estate; Mortgage Bankers and
Brokers
01/31/94 03/31/94 VMX Inc Octel Communications Corp Investment & Commodity Firms, Dealers,
Exchang
01/28/94 09/01/94 Continental Bank Corp NA BankAmerica Corp Commercial Banks, Bank Holding Companies
01/28/94 08/19/94 First Inter-Bancorp Inc First Fidelity Bancorporation Savings and Loans, Mutual Savings Banks
01/27/94 04/01/94 Community Savings Bank, MA Andover Bank, Andover, MA Savings and Loans, Mutual Savings Banks
01/24/94 05/27/94 Envirofil Inc USA Waste Services Inc Business Services
01/24/94 05/18/94 On the Border Cafes Inc Brinker International Inc Retail Trade-Eating and Drinking Places
01/20/94 08/17/94 Mr. Coffee Inc Health o meter Products Inc Electronic and Electrical Equipment
01/19/94 05/31/94 Complete Health Services Inc United HealthCare Corp Health Services
01/18/94 04/07/94 CBM Sage Technologies Inc Retail Trade-Home Furnishings
01/18/94 08/01/94 Frankford Corp Keystone Financial, Harrisburg Commercial Banks, Bank Holding Companies
01/17/94 08/01/94 BancFlorida Financial Corp First Union Corp, Charlotte, NC Credit Institutions
01/14/94 03/08/94 Critical Care America Inc Caremark International Inc Health Services
01/11/94 05/31/94 BMC Bankcorp Inc CBT Corp Commercial Banks, Bank Holding Companies
01/11/94 08/26/94 Cumberland Federal Bancorp Fifth Third Bancorp, Cincinnati Savings and Loans, Mutual Savings Banks
01/10/94 06/17/94 TakeCare Inc FHP International Corp Health Services
01/06/94 09/29/94 Blockbuster Entertainment Corp Viacom Inc (Natl Amusements) Motion Picture Production and
Distribution
01/05/94 03/28/94 McGaw Inc IVAX Corp Drugs
01/04/94 06/23/94 Mediplex Group Inc Sun Healthcare Group Inc Health Services
01/03/94 05/18/94 Alta Energy Corp Devon Energy Corp Oil and Gas; Petroleum Refining
12/29/93 05/02/94 Boston Restaurant Associates Capucino's Inc Retail Trade-Eating and Drinking Places
12/22/93 12/22/93 Automotive Industries Inc Acorn Venture Capital Corp Wholesale Trade-Durable Goods
</TABLE>
<TABLE>
Consideration (%) Premium (%)
Date Transaction ---------------------- -------------------------
Announced Value Cash Common Other 1 Day 1 Week 4 Weeks
- --------- ----------- ------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
04/15/94 254.1 0.0% 100.0% 0.0% 55.4 79.5 86.1
04/11/94 156.5 100.0% 0.0% 0.0% 181.2 189.6 177.1
04/05/94 9.0 0.0% 99.9% 0.1% (44.0) (25.3) (44.0)
04/04/94 586.8 48.9% 0.0% 51.1% 50.7 48.6 66.7
03/31/94 63.0 0.0% 99.2% 0.8%
03/31/94 9.7 0.0% 99.6% 0.4% 89.2 117.6 117.6
03/31/94 435.4 100.0% 0.0% 0.0% 47.5 28.3 55.3
03/30/94 61.2 51.0% 49.0% 0.0% 30.8 26.6 28.7
03/28/94 26.2 0.0% 100.0% 0.0%
03/25/94 26.0 0.0% 100.0% 0.0% 2.3 2.3 8.9
03/24/94 286.8 0.0% 100.0% 0.0% 4.0 4.0 5.2
03/21/94 486.1 100.0% 0.0% 0.0% 9.9 20.0 16.4
03/18/94 29.0 0.0% 100.0% 0.0%
03/15/94 433.0 0.0% 100.0% 0.0% 23.0 36.4 59.9
03/10/94 27.9 0.0% 99.9% 0.1% 33.3 47.8 36.0
03/10/94 2,104.0 100.0% 0.0% 0.0% 55.5 65.3 59.0
03/07/94 42.9 100.0% 0.0% 0.0% 35.1 47.1 96.1
03/04/94 9.6 44.8% 54.9% 0.3% 41.7 41.7 47.8
03/04/94 90.8 100.0% 0.0% 0.0% 79.4 90.3 65.3
03/02/94 16.1 100.0% 0.0% 0.0% 33.3 48.8 39.1
03/01/94 100.0 100.0% 0.0% 0.0% (100.0) (100.0) (100.0)
02/23/94 33.8 0.0% 100.0% 0.0% 36.8 33.3 44.4
02/22/94 86.2 0.0% 100.0% 0.0% 5.9 6.5 14.8
02/22/94 19.6 22.4% 77.4% 0.1% (37.0) (30.0) (33.7)
02/21/94 55.0 0.0% 100.0% 0.0% 19.9 24.1 33.7
02/17/94 55.6 0.0% 100.0% 0.0% 8.9 1.8 16.9
02/15/94 564.9 0.0% 100.0% 0.0% 39.8 39.8 55.5
02/10/94 41.9 0.0% 100.0% 0.0% 78.7 78.7 62.4
02/07/94 549.0 0.0% 100.0% 0.0%
02/02/94 60.1 100.0% 0.0% 0.0% 17.3 17.3 21.5
01/31/94 147.0 0.0% 100.0% 0.0% 32.5 33.5 45.6
01/28/94 2,162.0 38.8% 61.2% 0.0% 37.4 42.5 45.2
01/28/94 56.0 100.0% 0.0% 0.0% 19.5 24.1 30.8
01/27/94 3.5 0.0% 0.0% 100.0%
01/24/94 136.1 0.0% 100.0% 0.0% (3.3) (3.3) 5.5
01/24/94 33.0 0.0% 99.9% 0.1% 29.6 45.8 70.7
01/20/94 134.9 100.0% 0.0% 0.0% (100.0) (100.0) (100.0)
01/19/94 205.9 0.0% 100.0% 0.0%
01/18/94 4.1 68.3% 29.5% 2.2%
01/18/94 131.5 0.0% 100.0% 0.0% 35.5 35.5 40.0
01/17/94 108.5 0.0% 100.0% 0.0% 30.4 49.1 49.1
01/14/94 175.0 100.0% 0.0% 0.0%
01/11/94 55.9 0.0% 100.0% 0.0%
01/11/94 137.5 0.0% 100.0% 0.0% 31.0 34.1 40.3
01/10/94 1,033.0 35.0% 15.0% 50.0% 54.6 44.1 53.1
01/06/94 7,971.1 0.0% 100.0% 0.0% 22.7 17.1 26.3
01/05/94 428.5 0.0% 100.0% 0.0% 40.1 52.3 45.1
01/04/94 320.0 33.3% 66.7% 0.0% 14.1 23.1 20.8
01/03/94 67.5 2.1% 40.2% 57.7% (14.0) (16.4) (23.7)
12/29/93 7.3 0.0% 100.0% 0.0%
12/22/93 5.0 100.0% 0.0% 0.0%
</TABLE>
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
Analysis of Acquisitions of Public Companies
Premiums and Form of Consideration Paid (a)
(dollars in millions)
<TABLE>
<CAPTION>
Date Date
Announced Effective Target Name Acquiror Name Target Industry
- --------- --------- --------------------------------------- --------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
12/21/93 04/04/94 Care Enterprises Inc Regency Health Services Inc Health Services
12/21/93 08/01/94 Mid-Atlantic Bankcorp Fulton Financial Corp Commercial Banks, Bank Holding Companies
12/17/93 07/01/94 VSB Bancorp Inc UJB Financial Corp Savings and Loans, Mutual Savings Banks
12/16/93 12/16/93 Stewart Foods Inc Modami Services Inc Food and Kindred Products
12/13/93 01/31/94 Nutmeg Industries Inc VF Corp Textile and Apparel Products
12/13/93 01/19/94 United Knitting Inc Dyersburg Corp Textile and Apparel Products
12/08/93 06/30/94 LSB Bancshares Inc of SC BB&T Financial Corp Commercial Banks, Bank Holding Companies
12/03/93 06/30/94 Farm & Home Financial Corp Roosevelt Financial Group Savings and Loans, Mutual Savings Banks
12/03/93 12/03/93 Miracle Recreation Equipment Investor Group Miscellaneous Manufacturing
12/02/93 02/01/94 Rexnord Corp BTR Dunlop Holdings Machinery
(BTR PLC)
12/02/93 04/19/94 Summit Health Ltd OrNda HealthCorp Health Services
11/30/93 08/08/94 Motor Coach Industries Intl Consorcio G Grupo Dina SA Transportation Equipment
11/24/93 08/01/94 Mid Maine Savings Bk. Auburn, ME Peoples Heritage Finl Grp Savings and Loans, Mutual Savings Banks
Inc
11/22/93 07/08/94 Lake Shore Bancorp Inc First Chicago Corp Commercial Banks, Bank Holding Companies
11/18/93 04/19/94 American Healthcare Management OrNda HealthCorp Health Services
11/18/93 06/27/94 Independence Bancorp, Perkasie CoreStates Financial Corp Commercial Banks, Bank Holding Companies
11/11/93 04/28/94 Prime Federal Bank FSB First Northern Savings Savings and Loans, Mutual Savings Banks
Bank SA
11/05/93 06/27/94 Gateway Financial Corp Shawmut National Corp Savings and Loans, Mutual Savings Banks
11/03/93 05/31/94 Federal Savings Bank MidConn Bank Savings and Loans, Mutual Savings Banks
11/02/93 05/02/94 EdgeMark Financial Corp Old Kent Financial Corp Commercial Banks, Bank Holding Companies
10/28/93 02/28/94 Terminal Data Corp BancTec Inc Electronic and Electrical Equipment
10/27/93 07/01/94 Washington Bancorp Inc Hubco Inc Savings and Loans, Mutual Savings Banks
10/26/93 04/11/94 Central Holding Co Standard Federal Bank Savings and Loans, Mutual Savings Banks
10/26/93 06/03/94 Suburban Bancshares Inc 1st United Bancorp Commercial Banks, Bank Holding Companies
10/25/93 03/29/94 Community Financial Systems First Midwest Financial Commercial Banks, Bank Holding Companies
Inc
10/25/93 03/31/94 Rational Verdix Corp Prepackaged Software
10/21/93 02/04/94 RehabClinics Inc NovaCare Inc Health Services
10/18/93 02/15/94 Artel Communications Corp Chipcom Corp Communications Equipment
10/18/93 03/02/94 Corporate Software Inc CS Acquisition Corp Wholesale Trade-Durable Goods
10/18/93 01/20/94 UniCare Financial Corp Wellpoint Health Networks Insurance
Inc
10/14/93 05/03/94 Candlewood Bank & Trust Co New Milford Bank & Trust Commercial Banks, Bank Holding Companies
Co
10/14/93 03/25/94 ESB Bancorp Inc PennFirst Bancorp Inc Commerical Banks, Bank Holding Companies
10/12/93 04/29/94 LGF Bancorp First of America Bank Savings and Loans, Mutual Savings Banks
Corp, MI
10/12/93 11/30/93 MECA Software Inc H&R Block Inc Prepackaged Software
10/07/93 06/10/94 Advanced Interventional Sys Spectranetics Corp Measuring, Medical, Photo Equipment;
Clocks
10/03/93 02/10/94 HCA-Hospital Corp of America Columbia Healthcare Health Services
Corp
10/01/93 03/01/94 KeyCorp, Albany, New York(OLD) Society Corp Commercial Banks, Bank Holding Companies
09/29/93 03/25/94 Boulevard Bancorp Inc First Bank System Inc Commercial Banks, Bank Holding Companies
09/28/93 04/22/94 Home Federal Bancorp of MO Roosevelt Financial Savings and Loans, Mutual Savings Banks
Group
09/27/93 11/17/93 Bytex Corp Network Systems Corp Communications Equipment
09/23/93 12/14/93 Preferred Health Care Ltd Value Health Inc Health Services
09/23/93 12/22/93 Telematics International Inc ECI Telecom Ltd Communications Equipment
09/21/93 05/27/94 Bank Worcester, Worcester, MA Bank of Boston Corp Commercial Banks, Bank Holding Companies
09/20/93 05/31/94 Valley Bancorp, Appleton, WI Marshall & Ilsley Corp Commercial Banks, Bank Holding Companies
09/16/93 04/22/94 GWC Corp United Water Resources Electric, Gas and Water Distribution
Inc
09/13/93 03/25/94 Commercial Bancorp of Colorado KeyCorp, Albany, Commercial Banks, Bank Holding Companies
New York(OLD)
09/13/93 11/04/93 Engraph Inc Sonoco Products Co Paper and Allied Products
09/13/93 06/23/94 Fortune Bancorp Inc AmSouth Bancorp, Savings and Loans, Mutual Savings Banks
Birmingham, AL
09/13/93 04/27/94 Republic Pictures Corp Spelling Entertainment Motion Picture Production and
Inc Distribution
09/13/93 10/11/93 Shared Financial Systems Inc Stratus Computer Inc Business Services
09/10/93 12/29/93 Geraghty & Miller Inc Heidemij Holding NV Business Services
</TABLE>
<TABLE>
Consideration (%) Premium (%)
Date Transaction ---------------------- -------------------------
Announced Value Cash Common Other 1 Day 1 Week 4 Weeks
- --------- ----------- ------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
12/21/93 120.0 0.0% 100.0% 0.0% 40.5 37.8 49
12/21/93 64.6 0.0% 100.0% 0.0%
12/17/93 71.7 0.0% 100.0% 0.0% 13.3 13.3 16
12/16/93 3.5 100.0% 0.0% 0.0%
12/13/93 325.5 100.0% 0.0% 0.0% 16.7 34.6 19
12/13/93 12.2 42.6% 41.0% 16.4%
12/08/93 122.8 0.0% 100.0% 0.0% 37.4 35.1 39
12/03/93 243.6 0.0% 100.0% 0.0% 37.1 53.2 44
12/03/93 29.0 100.0% 0.0% 0.0%
12/02/93 814.8 50.9% 0.0% 49.1% 23.3 25.0 20
12/02/93 350.8 50.9% 25.5% 23.6% (8.3) 13.8 22
11/30/93 334.6 0.0% 50.7% 49.3% 33.8 39.3 42
11/24/93 11.5 0.0% 100.0% 0.0% 21.5 23.7 33
11/22/93 307.3 0.0% 100.0% 0.0% 28.2 36.7 35
11/18/93 403.1 0.0% 59.3% 40.7% 31.3 39.2 45
11/18/93 463.0 0.0% 100.0% 0.0% 30.6 51.4 35
11/11/93 19.0 0.0% 100.0% 0.0% 2.4 2.4 2
11/05/93 152.0 0.0% 100.0% 0.0% 5.3 (5.7) 19
11/03/93 13.2 100.0% 0.0% 0.0% 14.8 14.8 24
11/02/93 62.0 0.0% 100.0% 0.0%
10/28/93 16.2 100.0% 0.0% 0.0% 22.7 28.6 28
10/27/93 40.0 49.0% 0.0% 51.0% 34.2 46.4 130
10/26/93 21.3 100.0% 0.0% 0.0% 175.0 266.7 238
10/26/93 6.7 0.0% 52.7% 47.3%
10/25/93 31.4 33.4% 0.0% 66.6%
10/25/93 56.0 0.0% 100.0% 0.0%
10/21/93 192.5 0.0% 100.0% 0.0% 8.6 10.0 10
10/18/93 39.0 0.0% 100.0% 0.0%
10/18/93 94.3 100.0% 0.0% 0.0% 33.3 36.4 34
10/18/93 145.9 100.0% 0.0% 0.0% 46.8 41.5 38
10/14/93 5.8 100.0% 0.0% 0.0% 101.6 101.6 112
10/14/93 24.3 100.0% 0.0% 0.0% 14.9 13.1 25
10/12/93 67.8 0.0% 100.0% 0.0% 27.9 30.1 42
10/12/93 30.8 100.0% 0.0% 0.0% 23.3 29.3 39
10/07/93 11.7 0.0% 99.7% 0.3% (45.9) (48.9) (54)
10/03/93 5,605.0 0.0% 100.0% 0.0% 39.6 46.9 54
10/01/93 3,923.9 0.0% 100.0% 0.0% 1.9 2.6 (0)
09/29/93 213.7 0.0% 100.0% 0.0% 22.8 25.6 49
09/28/93 67.0 24.9% 75.0% 0.1% 7.1 5.3 22
09/27/93 49.0 100.0% 0.0% 0.0% 70.0 55.4 51
09/23/93 386.7 0.0% 100.0% 0.0% 49.8 57.3 35
09/23/93 278.5 0.0% 100.0% 0.0% 25.7 21.0 37
09/21/93 226.9 100.0% 0.0% 0.0% 21.4 23.1 34
09/20/93 819.7 0.0% 100.0% 0.0% 10.7 19.0 (9)
09/16/93 193.8 4.6% 71.3% 24.1% 6.6 11.6 13
09/13/93 90.6 0.0% 100.0% 0.0% 30.3 29.6 26
09/13/93 296.0 100.0% 0.0% 0.0% 20.2 19.1 20
09/13/93 285.6 50.0% 50.0% 0.0% 27.0 21.4 31
09/13/93 93.6 100.0% 0.0% 0.0% 4.0 6
09/13/93 15.0 100.0% 0.0% 0.0%
09/10/93 69.8 0.0% 100.0% 0.0% (4.7) 1.1 17
</TABLE>
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
Analysis of Acquisitions of Public Companies
Premiums and Form of Consideration Paid (a)
(dollars in millions)
<TABLE>
<CAPTION>
Date Date
Announced Effective Target Name Acquiror Name Target Industry
- --------- --------- ---------------------------------- -------------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
09/09/93 10/13/93 A&W Brands Inc Cadbury Schweppes PLC Food and Kindred Products
09/09/93 03/17/94 Chattahoochee Bancorp Inc Bank South Corp, Atlanta, GA Commercial Banks, Bank Holding Companies
09/09/93 03/30/94 Pacific Western Bancshares, CA Comerica Inc, Detroit, Michigan Commercial Banks, Bank Holding Companies
09/09/93 07/07/94 Paramount Communications Viacom Inc (Natl Amusements) Motion Picture Production and
Distribution
09/07/93 01/21/94 Baroid Corp Dresser Industries Inc Machinery
09/07/93 04/11/94 Hamptons Bancshares Inc Suffolk Bancorp Commercial Banks, Bank Holding Companies
09/07/93 11/10/93 Total Pharmaceutical Care Inc Abbey Healthcare Group Inc Health Services
09/03/93 03/07/94 KSB Financial Independent Bank Corp, Rockland Commercial Banks, Bank Holding Companies
09/01/93 12/13/93 ChipSoft Inc Intuit Prepackaged Software
08/26/93 02/28/94 First Fidelity Bancorp Inc, WV WesBanco Inc Commercial Banks, Bank Holding Companies
08/26/93 05/27/94 Peoples Bancorp of Worcester Shawmut National Corp Commercial Banks, Bank Holding Companies
08/24/93 10/15/93 Revco Scientific Inc General Signal Corp Machinery
08/24/93 06/14/94 West Mass Bankshares Inc Vermont Financial Services Savings and Loans, Mutual Savings Banks
08/20/93 06/06/94 Mid-South Bancorp Inc Union Planters Corp Commercial Banks, Bank Holding Companies
08/20/93 09/03/93 Premier Resources Ltd Northern Reef Exploration Ltd Oil and Gas; Petroleum Refining
08/19/93 02/11/94 Celutel Inc Century Telephone Enterprises Telecommunications
08/19/93 11/30/93 Fisher-Price Inc Mattel Inc Miscellaneous Manufacturing
08/17/93 02/04/94 Spinnaker Software Corp WordStar International Inc Prepackaged Software
08/17/93 02/01/94 United Postal Bancorp Mercantile Bancorp, St Louis, MO Savings and Loans, Mutual Savings Banks
08/16/93 02/08/94 Dycam Inc Styles on Video (New Image Ind) Measuring, Medical, Photo Equipment;
Clocks
08/16/93 02/11/93 Princeton Diagnostic Labs EDITEK Inc Health Services
08/13/93 12/02/93 Amoskeag Co (Dumaines Trust) Fieldcrest Cannon Inc Transportation and Shipping (except air)
08/09/93 12/10/93 Family Health Systems Inc Physician Corp of America Health Services
08/09/93 03/18/94 San Diego Financial Corp First Interstate Bancorp, CA Commercial Banks, Bank Holding Companies
08/05/93 01/28/94 First Savings Bank FSB, SC Southern National, Lumberton, NC Savings and Loans, Mutual Savings Banks
08/05/93 01/28/94 Mountaineer Bankshares of WV One Valley Bancorp of WV Commercial Banks, Bank Holding Companies
08/05/93 01/28/94 New Line Cinema Corp Turner Broadcasting System Inc Motion Picture Production and
Distribution
08/02/93 11/23/93 American Steel & Wire Corp Birmingham Steel Corp Metal and Metal Products
08/02/93 03/16/94 Constellation Bancorp CoreStates Financial Corp Commercial Banks, Bank Holding Companies
08/02/93 02/11/94 Greenery Rehabilitation Group Horizon Healthcare Corp Health Services
08/02/93 01/31/94 Greenwich Financial Corp First Fidelity Bancorporation Savings and Loans, Mutual Savings Banks
07/30/93 12/31/93 First AmFed Corp, Huntsville, AL Colonial BancGroup Inc Commercial Banks, Bank Holding Companies
07/29/93 07/29/93 Merken Corp Management Technologies Inc Prepackaged Software
07/28/93 11/18/93 Medco Containment Services Inc Merck & Co Wholesale Trade-Nondurable Goods
07/27/93 06/17/94 First Eastern Corp, PA PNC Bank Corp, Pittsburgh, PA Commercial Banks, Bank Holding Companies
07/27/93 01/17/94 First United Bank Group Inc Norwest Corp, Minneapolis, MN Commercial Banks, Bank Holding Companies
07/27/93 12/06/93 Heritage Bankcorp Inc Standard Federal Bank Commercial Banks, Bank Holding Companies
07/23/93 11/30/93 First Amarillo Bancorp Inc Boatmen's Bancshares Inc Commercial Banks, Bank Holding Companies
07/12/93 08/18/93 Voit Corp Usaha Tegas Sdn Bhd Miscellaneous Manufacturing
07/06/93 06/01/94 Cragin Financial Corp ABN-AMRO Holding NV Savings and Loans, Mutual Savings Banks
07/02/93 01/10/94 Elmwood Bancorp Inc Keystone Financial, Harrisburg Savings and Loans, Mutual Savings Banks
07/02/93 12/23/93 Tristate Bancorp, Cincinnati, OH Fifth Third Bancorp,
Cincinnati Commercial Banks, Bank Holding Companies
06/30/93 02/10/94 FloridaBank A Federal Savings AmSouth Bancorp, Birmingham, AL Savings and Loans, Mutual Savings Banks
06/30/93 10/01/93 Quantum Chemical Corp Hanson PLC Chemicals and Allied Products
06/28/93 08/05/93 Damon Corp Corning Inc Health Services
06/25/93 04/20/94 Pennsylvania & Southern Gas Co NUI Corp Electric, Gas, and Water Distribution
06/23/93 09/08/93 Costar Corp Corning Inc Measuring, Medical, Photo Equipment;
Clocks
06/18/93 09/23/93 Pioneer Bancorp Inc First Citizens Bancshares Inc Savings and Loans, Mutual Savings Banks
06/17/93 11/10/93 Superior Teletec Inc Alpine Group Inc Metal and Metal Products
06/16/93 10/22/93 Price Co Costco Wholesale Corp Retail Trade-General Merchandise and
Apparel
06/14/93 08/31/93 Johnson Products Co Inc IVAX Corp Soaps, Cosmetics and Personal Care
Products
</TABLE>
<TABLE>
Consideration (%) Premium (%)
Date Transaction ---------------------- -------------------------
Announced Value Cash Common Other 1 Day 1 Week 4 Weeks
- --------- ----------- ------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
09/09/93 334.0 100.0% 0.0% 0.0% 21.0 21.0 29.8
09/09/93 46.0 0.0% 100.0% 0.0% 27.8 24.3 31.4
09/09/93 133.0 0.0% 100.0% 0.0% 194.2 176.4 168.2
09/09/93 9,600.0 68.7% 20.4% 10.8% 94.5 86.9 99.1
09/07/93 842.2 0.0% 100.0% 0.0% 19.3 21.3 25.5
09/07/93 13.1 23.6% 76.4% 0.0% 58.5 58.5 98.1
09/07/93 185.6 82.6% 17.4% (0.0%) 73.6 67.3 87.8
09/03/93 1.0 0.0% 100.0% 0.0%
09/01/93 226.6 0.0% 100.0% 0.0% (5.5) (3.9) 41.2
08/26/93 75.4 0.0% 100.0% 0.0% 30.2 33.0 57.9
08/26/93 181.6 0.0% 100.0% 0.0% 66.7 70.7 79.*
08/24/93 85.0 0.0% 100.0% 0.0%
08/24/93 24.1 0.0% 99.8% 0.2% 61.5 61.5 82.*
08/20/93 23.0 0.0% 100.0% 0.0%
08/20/93 3.8 92.1% 0.0% 7.9%
08/19/93 146.8 35.0% 36.6% 28.4%
08/19/93 1,145.4 0.0% 87.4% 12.6% 36.8 35.4 43.*
08/17/93 28.3 0.0% 82.4% 17.6% 21.6 21.6 21.6
08/17/93 180.0 0.0% 100.0% 0.0% 29.0 29.0 33.*
08/16/93 6.5 0.0% 99.8% 0.2%
08/16/93 4.1 0.0% 100.0% 0.0% 36.5 36.5 36.5
08/13/93 137.6 100.0% 0.0% 0.0% 31.1 39.1 46.*
08/09/93 44.0 100.0% 0.0% 0.0%
08/09/93 362.3 0.0% 100.0% 0.0%
08/05/93 179.1 0.0% 100.0% 0.0% 70.0 96.8 96.*
08/05/93 129.5 0.0% 100.0% 0.0% 25.7 27.5 27.*
08/05/93 486.6 0.0% 73.2% 26.8% 54.9 53.6 66.*
08/02/93 130.6 6.7% 35.0% 58.2% 36.4 44.7 44.*
08/02/93 291.2 0.0% 100.0% 0.0% 3.2 4.4 25.*
08/02/93 88.0 0.0% 37.9% 62.1% 70.9 62.4 70.*
08/02/93 43.4 100.0% 0.0% 0.0% 42.2 42.2 45.*
07/30/93 44.3 0.0% 99.9% 0.1% 9.0 6.9 3.*
07/29/93 0.4 0.0% 90.0% 10.0%
07/28/93 6,225.7 40.0% 60.0% (0.0%) 31.1 36.2 21.*
07/27/93 336.0 100.0% 0.0% 0.0% 35.0 47.9 63.*
07/27/93 413.8 0.0% 100.0% 0.0% 20.0 20.0 27.*
07/27/93 110.7 100.0% 0.0% 0.0% 56.5 60.2 78.*
07/23/93 167.4 0.0% 100.0% 0.0% 38.0 32.8 47.*
07/12/93 13.9 100.0% 0.0% 0.0% 56.5 56.5 38.*
07/06/93 501.6 100.0% 0.0% 0.0% 51.2 55.9 79.*
07/02/93 34.1 0.0% 99.9% 0.1% 102.7 122.0 111.*
07/02/93 68.4 0.0% 100.0% 0.0% 29.1 29.1 37.*
06/30/93 27.3 0.0% 100.0% 0.0% 57.2 69.6 19.*
06/30/93 3,219.7 0.0% 22.4% 77.6% 60.0 55.3 39.*
06/28/93 565.3 66.9% 0.0% 33.1% 65.8 82.2 89.*
06/25/93 16.7 0.0% 100.0% 0.0%
06/23/93 167.4 0.0% 100.0% 0.0% 37.2 35.3 42.*
06/18/93 3.8 100.0% 0.0% 0.0% 45.3 45.3 58.*
06/17/93 57.8 29.4% 70.5% 0.1% 41.3 41.3 45.*
06/16/93 1,666.2 0.0% 100.0% 0.0% 12.3 23.8 21.*
06/14/93 62.9 0.0% 99.9% 0.1% 32.9 30.3 35.*
</TABLE>
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
Analysis of Acquisitions of Public Companies
Premiums and Form of Consideration Paid (a)
(dollars in millions)
<TABLE>
<CAPTION>
Date Date
Announced Effective Target Name Acquiror Name Target Industry
- --------- --------- ---------------------------------- -------------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
06/14/93 10/01/93 Vari-Care Inc Living Centers of America Inc Health Services
06/10/93 10/01/93 Affiliated Publications Inc New York Times Co Printing, Publishing, and Allied
Services
06/10/93 09/01/93 Galen Health Care Inc Columbia Hospital Corp Health Services
06/07/93 12/29/93 First Bancorp Indiana Inc Huntington Bancshares, Columbus Savings and Loans, Mutual Savings Bank
06/02/93 02/04/94 Firestone Bank, Lisbon, Ohio Citizens Bancshares Inc Commercial Banks, Bank Holding Companies
06/02/93 04/05/94 International Holding Capital CB Bancshares Inc, Honolulu, HI Savings and Loans, Mutual Savings Banks
06/01/93 10/13/93 OCOM Corp International CableTel Inc Telecommunications
06/01/93 12/27/93 Railroadmen's Federal S&L Assn Huntington Bancshares, Columbus Savings and Loans, Mutual Savings Banks
05/25/93 11/15/93 AMAX Inc Cyprus Minerals Co Metal and Metal Products
05/25/93 12/10/93 Cal Rep Bancorp Inc First Interstate Bancorp, CA Commercial Banks, Bank Holding Companies
05/21/93 08/11/93 Discount Corp of New York Zions First Natl Bk, Salt Lake Investment & Commodity Firms, Dealers,
Exchange
05/19/93 11/19/93 First Natl Finl, Albuquerque, NM First Security Corp, Utah Commercial Banks, Bank Holding Companies
05/18/93 12/31/93 Secor Bank FSB, Birmingham, AL First AL Bancshares, Birmingham Savings and Loans, Mutual Savings Banks
03/14/93 09/15/93 LDDS Communications Ins Resurgens Communications Group Telecommunications
05/13/93 09/20/93 Atek Metals Center Inc Rolled Alloys Inc Wholesale Trade-Durable Goods
05/13/93 08/31/93 HMO America Inc United HealthCare Corp Health Services
05/11/93 01/03/94 Wisconsin Southern Gas Co Wisconsin Energy Corp Electric, Gas, and Water Distribution
05/10/93 07/30/93 Lifetime Corp Olsten Corp Health Services
05/07/93 08/27/93 HDR Power Systems Inc Solidstate Controls Inc Electronic and Electrical Equipment
05/07/93 12/18/93 InterFirst Bankcorp Inc Standard Federal Bank Savings and Loans, Mutual Savings Banks
05/05/93 12/30/93 New South Bancorp First Tennessee National Corp Commercial Banks, Bank Holding Companies
05/04/93 01/21/93 United Federal Bancorp PNC Bank Corp, Pittsburgh, PA Savings and Loans, Mutual Savings Banks
04/29/93 06/02/93 Industrial Training Sys Corp Westcott Communications Inc Motion Picture Production and
Distribution
04/29/93 02/01/94 Regency Bancshares Inc Southern National, Lumberton, NC Savings and Loans, Mutual Savings Banks
04/28/93 12/15/93 BMR Financial Group SouthTrust Corp Commercial Banks, Bank Holding Companies
04/23/93 12/09/93 Mid-State Fed S&L Assn, Ocala AmSouth Bancorp, Birmingham, AL Savings and Loans, Mutual Savings Banks
04/22/93 10/29/93 Ameriscribe Corp Pitney Bowes Inc Printing, Publishing, and Allied
Services
04/20/93 07/01/93 Hall-Mark Electronics Corp Avnet Inc Wholesale Trade-Durable Goods
04/14/93 12/30/93 Peoples Westchester Savings Bk First Fidelity Bancorporation Savings and Loans, Mutual Savings Banks
04/13/93 10/14/93 Boston Five Bancorp Citizens Financial Group Inc Savings and Loans, Mutual Savings Banks
04/07/93 02/24/94 North American National Corp Liberty Corp Insurance
04/01/93 07/01/93 Systems Center Inc Sterling Software Inc Business Services
03/30/93 09/01/93 Commonwealth Bancshares Corp Meridian Bancorp Inc Commercial Banks, Bank Holding Companies
03/25/93 07/06/93 Trans Kentucky Bancorp Trans Financial Bancorp Inc Commercial Banks, Bank Holding Companies
03/19/93 10/18/93 First Fed Svgs Bank of NW FL Central Bancshares of South, AL Savings and Loans, Mutual Savings Banks
03/19/93 10/01/93 Royal Bank Group Inc Citizens Banking Corp, Flint, MI Commercial Banks, Bank Holding Companies
03/15/93 12/13/93 FirstSouth Bancorp Inc BT Financial Corp Savings and Loans, Mutual Savings Banks
03/12/93 11/10/93 Athlone Industries Inc Allegheny Ludlum Corp Metal and Metal Products
03/11/93 08/02/93 Malrite Communications Group Shamrock Broadcasting Inc Radio and Television Broadcasting
Stations
03/10/93 08/06/93 Gynex Pharmaceuticals Inc Bio-Technology General Corp Drugs
03/08/93 07/30/93 Perception Technology Corp Brite Voice Systems Inc Computer and Office Equipment
03/04/93 05/26/93 Boston Digital Corp Charterhouse Group Intl Inc Machinery
03/02/93 03/01/93 Medical Innovations Inc Ballard Medical Products Health Services
03/01/93 06/25/93 Datatronix Financial Services FIserv Inc Business Services
02/23/93 08/11/93 Village Financial Services Ltd First Fidelity Bancorporation Savings and Loans, Mutual Savings Banks
02/22/93 08/04/93 International Broadcasting Century Park Pictures Corp Amusement and Recreation Services
02/19/93 08/06/93 Pioneer Fed BanCorp Inc First Hawaiian Inc Savings and Loans, Mutual Savings Banks
02/18/93 06/02/93 NERCO Inc Kennecott Corp(RTZ Corp PLC) Mining
02/16/93 06/30/93 Equus Investments Inc Equus II Inc Investment & Commodity Firms, Dealers,
Exchange
02/08/93 07/08/93 Goldtex Inc Tomen America Inc(Tomen Corp) Textile and Apparel Products
XX/XX/XX XX/XX/XX XXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXX
</TABLE>
<TABLE>
Consideration (%) Premium (%)
Date Transaction ---------------------- -------------------------
Announced Value Cash Common Other 1 Day 1 Week 4 Weeks
- --------- ----------- ------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
06/14/93 70.9 25.2% 35.3% 39.5% 39.1 33.3 18.5
06/10/93 1,092.5 0.0% 100.0% 0.0% 11.1 13.2 23.7
06/10/93 4,187.7 0.0% 76.1% 23.9% 42.6 42.6 43.9
06/07/93 48.6 38.5% 61.5% 0.0% 60.6 85.1 97.2
06/02/93 7.6 0.0% 99.7% 0.3%
06/02/93 50.9 45.0% 55.0% (0.0%) 70.4 70.4 72.5
06/01/93 77.6 0.0% 100.0% 0.0% (2.1) 22.4
06/01/93 82.9 0.0% 100.0% 0.0% 44.0 50.5 57.7
05/25/93 2,657.0 0.0% 46.1% 53.9% (25.9) (22.2) (17.6)
05/25/93 68.0 0.0% 100.0% 0.0%
05/21/93 65.3 100.0% 0.0% 0.0% 28.0 23.1 16.4
05/19/93 201.1 0.0% 100.0% 0.0%
05/18/93 102.5 0.0% 100.0% 0.0% 52.7 61.0 77.1
05/14/93 1,961.3 0.0% 100.0% 0.0% 1.8 (0.2) (4.4)
05/13/93 18.8 100.0% 0.0% 0.0% 56.9 56.9 50.3
05/13/93 372.2 0.0% 100.0% 0.0% 33.9 32.1 88.7
05/11/93 45.1 0.0% 99.9% 0.1% 13.7 19.8 13.7
05/10/93 607.0 0.0% 51.6% 48.4% 85.5 92.4 119.8
05/07/93 6.5 100.0% 0.0% 0.0% 62.5 52.9 44.4
05/07/93 32.5 100.0% 0.0% 0.0% 14.1 9.7 5.6
05/05/93 6.3 0.0% 100.0% 0.0%
05/04/93 154.7 100.0% 0.0% 0.0% 46.1 72.2 53.8
04/29/93 3.2 100.0% 0.0% 0.0%
04/29/93 47.4 0.0% 100.0% 0.0% 65.8 52.0 52.0
04/28/93 16.0 100.0% 0.0% 0.0% 26.0 26.0 57.5
04/23/93 91.8 29.8% 70.2% 0.0% 36.2 42.9 55.7
04/22/93 87.2 0.0% 100.0% 0.0% 45.5 47.4 27.7
04/20/93 488.9 41.8% 28.9% 29.3% 36.7 47.1 36.7
04/14/93 225.3 53.5% 46.5% 0.0% 79.2 81.2 88.3
04/13/93 92.5 100.0% 0.0% 0.0% 38.7 44.4 48.6
04/07/93 52.6 100.0% 0.0% 0.0% 31.1 40.5 37.2
04/01/93 169.7 0.0% 100.0% 0.0% 36.1 39.8 36.1
03/30/93 358.5 0.0% 100.0% 0.0% 39.4 37.3 37.3
03/25/93 18.5 100.0% 0.0% 0.0%
03/19/93 14.4 100.0% 0.0% 0.0%
03/19/93 22.5 15.1% 84.9% 0.0%
03/15/93 16.0 42.5% 57.8% (0.3%)
03/12/93 105.6 0.0% 100.0% 0.0% 22.8 22.8 16.7
03/11/93 310.0 0.0% 100.0% 0.0%
03/10/93 58.8 0.0% 100.0% 0.0% 30.1 27.3 27.3
03/08/93 15.9 0.0% 100.0% 0.0% 72.7 90.0 81.0
03/04/93 10.4 100.0% 0.0% 0.0% 66.2 66.2 36.0
03/02/93 12.5 100.0% 0.0% 0.0% 6.9 12.9 6.9
03/01/93 11.9 0.0% 99.7% 0.3%
02/23/93 66.0 60.0% 40.0% 0.0% 66.8 77.2 58.6
02/22/93 10.0 100.0% 0.0% 0.0%
02/19/93 87.4 100.0% 0.0% 0.0% 37.4 33.3 33.3
02/18/93 1,161.9 40.4% 0.0% 59.6% (10.3) 1.1 (4.0)
02/16/93 10.6 0.0% 100.0% 0.0% (11.1) (14.9) (20.0)
02/08/93 15.7 100.0% 0.0% 0.0% 42.1 42.1 42.1
XX/XX/XX 45.1 100.0% 0.0% 0.0% 42.2 45.9 63.1
</TABLE>
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
Analysis of Acquisitions of Public Companies
Premiums and Form of Consideration Paid (a)
(dollars in millions)
<TABLE>
<CAPTION>
Date Date
Announced Effective Target Name Acquiror Name Target Industry
- --------- --------- ---------------------------------- -------------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
02/02/93 08/02/93 Dahlberg Inc Bausch & Lomb Inc Measuring, Medical, Photo Equipment;
Clocks
02/02/93 06/30/93 Express Cash Intl Corp Cash America International Inc Miscellaneous Retail Trade
01/29/93 08/11/93 National Community Banks Inc The Bank of New York Co Inc Commerical Banks, Bank Holding Companies
01/18/93 03/31/93 Alden Press Co APC Holding Inc Printing, Publishing, and Allied
Services
01/14/93 07/30/93 Dakota Bancorp Inc South Dakota Financial Bancorp Commercial Banks, Bank Holding Companies
01/05/93 11/18/93 Belding Heminway Co Inc Noel Group Inc Textile and Apparel Products
01/04/93 05/24/94 National Medical Waste Inc BioMedical Waste Systems Inc Sanitary Services
12/24/92 10/15/93 Autotrol Corp Osmonics Inc Measuring, Medical, Photo Equipment;
Clocks
12/23/92 12/17/93 First Financial Associates BANC ONE Corp Commercial Banks, Bank Holding Companies
12/22/92 11/19/93 Gateway Fed Corp, OH PNC Bank Corp, Pittsburgh, PA Savings and Loans, Mutual Savings Banks
12/21/92 05/14/93 CFS Financial Corp Crestar Financial Corp Savings and Loans, Mutual Savings Banks
12/18/92 05/04/93 Mass Microsystems Inc Ramtek Corp Computer and Office Equipment
12/18/92 04/16/93 Van Dorn Co Crown Cork & Seal Co Metal and Metal Products
12/15/92 06/03/93 Immunex Corp American Cyanamid Co Drugs
12/10/92 03/05/93 Clinical Homecare Ltd Curaflex Health Services Inc Wholesale Trade-Durable Goods
12/04/92 03/26/93 Colonial Cos Inc UNUM Corp Insurance
12/02/92 03/19/93 Heekin Can Inc Ball Corp Metal and Metal Products
12/01/92 02/25/93 Inforum Inc MEDSTAT Systems Inc Business Services
11/30/92 10/06/93 Centennial Savings Bank FSB Aspen Bancshares Inc Savings and Loans, Mutual Savings Banks
11/25/92 06/01/93 Ben Franklin National Bank West One Bancorp Commercial Banks, Bank Holding Companies
11/25/92 03/03/93 Geodyne Resources Inc Samson Investments Co Oil and Gas; Petroleum Refining
11/24/92 08/26/93 Decom Systems Inc CCI Coded Communications Inc Communications Equipment
11/23/92 04/06/93 Central Freight Lines Inc Roadway Services Inc Transportation and Shipping (except air)
11/20/92 07/05/94 Arcata Corp Quebecor Printing Inc Printing, Publishing, and Allied
Services
11/20/92 03/31/93 Northern Indiana Fuel & Light NIPSCO Industries Inc Electric, Gas, and Water Distribution
11/20/92 08/10/93 Preston Corp Yellow Freight System Inc Transportation and Shipping (except air)
11/17/92 12/31/92 Arkla Exploration Co Seagull Energy Corp Oil and Gas; Petroleum Refining
11/17/92 03/24/93 EquiVest Inc Medical Resource Cos of Amer Investment & Commodity Firms, Dealers,
Exchang
11/17/92 08/31/93 Franklin First Financial Corp ONBANCorp Inc Savings and Loans, Mutual Savings Banks
11/17/92 04/21/93 Republic Capital Group Inc TCF Financial Corp Savings and Loans, Mutual Savings Banks
11/16/92 06/11/93 Western Financial Corp Metropolitan Financial Corp Savings and Loans, Mutual Savings Banks
11/12/92 06/28/93 CB&T Financial, Fairmont, WV Huntington Bancshares, Columbus Commercial Banks, Bank Holding Companies
11/10/92 07/14/93 Naylor Industries Inc Insituform Technologies Inc Construction Firms
11/09/92 06/18/93 Peoples Bancorp Inc Valley National Bancorp Commercial Banks, Bank Holding Companies
10/27/92 08/24/93 Home Theater Products Inc H&S Treat & Release Inc Electronic and Electrical Equipment
10/23/92 03/15/93 Flagler Bank Corp SunTrust Banks, Inc. Atlanta, GA Commercial Banks, Bank Holding Companies
10/22/92 06/30/93 Home Fed Svgs Bk, Fort Collins KeyCorp, Albany, New York (OLD) Savings and Loans, Mutual Savings Banks
10/20/92 03/12/93 First Fed Svgs Bk, Salt Lake, UT Washington Federal Savings Savings and Loans, Mutual Savings Banks
10/16/92 03/05/93 CF&I Steel Corp Oregon Steel Mills Inc Metal and Metal Products
10/16/92 11/10/93 Mark Correctional Systems Inc Showcase Cosmetics Inc Metal and Metal Products
10/06/92 02/18/93 Applied Biosystems Inc Perkin-Elmer Corp Measuring, Medical, Photo Equipment;
Clocks
10/02/92 10/26/93 Peoples Holding Co Inc Central Bancshares of South, AL Commercial Banks, Bank Holding Companies
10/01/92 01/31/93 First United Bancorp Inc, AL SunTrust Banks Inc, Atlanta, GA Commercial Banks, Bank Holding Companies
09/30/92 02/15/93 Chuska Resources Corp Harken Energy Corp Oil and Gas; Petroleum Refining
09/28/92 03/10/93 Waste Processor Industries Inc American Ecology Corp Sanitary Services
09/24/92 04/01/93 Montclair Bancorp Inc Collective Bancorp Commercial Banks, Bank Holding Companies
09/23/92 03/08/93 Unibancorp Inc. Chicago, IL GAB Bancorp Commercial Banks, Bank Holding Companies
09/21/92 03/01/93 Dominion Bankshares, Roanoke, VA First Union Corp, Charlotte, NC Commercial Banks, Bank Holding Companies
09/17/92 10/30/92 CONSTAR Internation Inc Crown Cork & Seal Co Rubber and Miscellaneous Plastic
Products
09/17/92 12/23/92 Trans-National leasing Inc Associates Corp of N America Repair Services
09/09/92 07/13/93 Multibank Financial Corp Bank of Boston Corp Commercial Banks, Bank Holding Companies
</TABLE>
<TABLE>
Consideration (%) Premium (%)
Date Transaction ---------------------- -------------------------
Announced Value Cash Common Other 1 Day 1 Week 4 Weeks
- --------- ----------- ------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
02/02/93 139.0 100.0% 0.0% 0.0% 44.8 42.4 37.7
02/02/93 12.8 49.2% 0.0% 50.8% 31.4 26.9 93.7
01/29/93 591.6 0.0% 100.0% 0.0%
01/18/93 151.0 73.5% 0.0% 26.5% 13.2 20.0 15.4
01/14/93 20.4 100.0% 0.0% 0.0% 37.6 27.6 27.6
01/05/93 59.0 100.0% 0.0% 0.0% 5.2 8.5 8.5
01/04/93 5.8 0.0% 100.0% 0.0% (64.0) (64.0) (64.0)
12/24/92 44.4 0.0% 100.0% 0.0% (7.1) (0.8) 17.0
12/23/92 76.1 0.0% 100.0% 0.0%
12/22/92 59.8 100.0% 0.0% 0.0% 111.0 94.3 112.9
12/21/92 60.6 10.7% 89.3% 0.0% 267.8 259.6 478.0
12/18/92 4.2 0.0% 99.0% 1.0% 12.8 7.2 (6.8)
12/18/92 176.5 20.3% 79.7% 0.0% 95.3 95.3 100.0
12/15/92 736.3 43.5% 56.5% (0.0%) 7.8 8.7 (3.5)
12/10/92 25.7 0.0% 100.0% 0.0% 61.3 29.0 7.5
12/04/92 576.7 0.0% 100.0% 0.0% 32.3 37.1 41.0
12/02/92 88.3 0.0% 100.0% 0.0% 2.9 3.3 35.0
12/01/92 103.4 0.0% 100.0% 0.0% 16.2 19.7 25.3
11/30/92 17.4 100.0% 0.0% 0.0%
11/25/92 5.1 0.0% 100.0% 0.0%
11/25/92 20.3 9.9% 0.0% 90.1% 39.4 50.2 62.7
11/24/92 1.5 0.0% 98.3% 1.7%
11/23/92 101.6 100.0% 0.0% 0.0%
11/20/92 192.0 100.0% 0.0% 0.0%
11/20/92 29.5 0.0% 100.0% 0.0%
11/20/92 108.8 21.9% 0.0% 78.1% (37.7) (40.0) (23.3)
11/17/92 397.0 100.0% 0.0% 0.0%
11/17/92 7.4 0.0% 100.0% 0.0% 60.0 50.0 65.5
11/17/92 173.7 0.0% 100.0% 0.0% 65.0 72.2 88.6
11/17/92 68.8 0.0% 100.0% 0.0% 67.2 61.8 69.0
11/16/92 21.5 23.7% 76.3% 0.0% 53.8 66.7 122.2
11/12/92 131.2 0.0% 100.0% 0.0% 27.5 30.8 32.5
11/10/92 23.0 100.0% 0.0% 0.0% 11.4 32.9 47.1
11/09/92 10.7 0.0% 100.0% 0.0%
10/27/92 9.7 0.0% 99.7% 0.3%
10/23/92 50.3 0.0% 100.0% 0.0% 66.3 64.6 71.7
10/22/92 19.6 0.0% 100.0% 0.0% 61.8 63.7 69.5
10/20/92 35.7 100.0% 0.0% 0.0% 15.3 9.7 11.5
10/16/92 109.3 5.7% 15.6% 78.7%
10/16/92 12.6 0.0% 99.6% 0.4%
10/06/92 295.8 0.0% 100.0% 0.0% 20.1 38.4 38.4
10/02/92 5.0 100.0% 0.0% 0.0%
10/01/92 48.4 0.0% 100.0% 0.0%
09/30/92 27.6 0.0% 99.9% 0.1%
09/28/92 6.4 45.0% 55.0% 0.0% 20.0 (14.3)
09/24/92 61.7 100.0% 0.0% 0.0% 24.1 24.1 27.4
09/23/92 10.6 0.0% 99.8% 0.2%
09/21/92 934.3 0.0% 96.9% 3.1% 34.6 67.9 76.3
09/17/92 528.9 100.0% 0.0% 0.0% 33.3 39.0 46.9
09/17/92 6.1 100.0% 0.0% 0.0% 183.3 183.3 183.3
09/09/92 203.7 0.0% 100.0% 0.0% 35.9 44.8 38.0
</TABLE>
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
Analysis of Acquisitions of Public Companies
Premiums and Form of Consideration Paid (a)
(dollars in millions)
<TABLE>
<CAPTION>
Date Date
Announced Effective Target Name Acquiror Name Target Industry
- --------- --------- ---------------------------------- -------------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
09/04/92 12/24/92 Autodie Corp Progressive Tool & Industry Co Machinery
09/02/92 04/01/93 DCB Corp Old Natl Bancorp, Evansville, IN Commercial Banks, Bank Holding Companies
08/31/92 07/09/93 Society for Savings Bancorp Bank of Boston Corp Savings and Loans, Mutual Savings Banks
08/31/92 12/30/92 Sun Electric Corp Snap-On Tools Corp Measuring, Medical, Photo Equipment;
Clocks
08/20/92 02/10/93 Lincoln Financial Corp, IN Norwest Corp, Minneapolis, MN Commercial Banks, Bank Holding Companies
08/20/92 03/01/93 Pioneer Savings Washington Mutual Svgs, Seattle Savings and Loans, Mutual Savings Banks
08/17/92 12/18/92 American Biodyne Inc Medco Containment Services Inc Health Services
08/13/92 12/31/92 Fourth National Corp Fourth Financial Corp Commercial Banks, Bank Holding Companies
08/12/92 08/12/92 Bennett Petroleum Corp Abraxas Petroleum Corp Oil and Gas; Petroleum Refining
08/10/92 09/17/92 American CDI Inc PolyMedica Industries Inc Drugs
07/31/92 11/20/92 Hipotronics Inc Hubbell Inc Electronic and Electrical Equipment
07/30/92 07/30/92 Atlantic Mortgage & Investment Pitney Bowes Credit Corp Real Estate; Mortgage Bankers and
Brokers
07/30/92 01/15/93 Equimark Corp, Pittsburgh, PA Integra Financial Corp Commercial Banks, Bank Holding Companies
07/30/92 02/17/93 Prime Bancshares Inc SouthTrust Corp Commercial Banks, Bank Holding Companies
07/27/92 10/23/92 Horizon Industries Inc Mohawk Industries Inc Textile and Apparel Products
07/24/92 10/19/92 Fleer Corp Marvel Entertainment Group Inc Food and Kindred Products
07/22/92 05/03/93 First Community Bancorp Inc BANC ONE Corp Commercial Banks, Bank Holding Companies
07/20/92 01/22/93 First Fed S&L Assn, Ft Myers, FL Society Corp Savings and Loans, Mutual Savings Banks
07/20/92 10/29/92 Vivigen Inc Genzyme Corp Health Services
07/16/92 07/16/92 Sterling Optical Corp Sterling Vision Inc Wholesale Trade-Durable Goods
07/15/92 07/15/92 Basic American Medical Inc Columbia Hospital Corp Health Services
07/14/92 10/26/92 ANADAC Identix Inc Business Services
07/13/92 03/19/93 Apollo Savings and Loan Co Mid Am Inc Savings and Loans, Mutual Savings Banks
07/13/92 10/15/92 Century MediCorp Inc Foundation Health Corp Health Services
07/10/92 07/10/92 Quantum Learning Systems Inc CCR Inc-Education Division Prepackaged Software
07/09/92 04/16/93 Cherry Hill National Bank, NJ Meridian Bancorp Inc Commercial Banks, Bank Holding Companies
07/08/92 05/20/93 Tago Inc BioSource Industries Inc Drugs
07/05/92 01/29/93 FedFirst Bancshares Inc Southern National, Lumberton, NC Commercial Banks, Bank Holding Companies
07/01/92 11/25/92 Micron Products Inc Arrhythmia Research Technology Measuring, Medical, Photo Equipment;
Clocks
07/01/92 01/04/93 MidAmerican Corp Mercantile Bancorp, St Louis, MO Commercial Banks, Bank Holding Companies
07/01/92 02/26/93 National Savings Bank, Albany KeyCorp, Albany, New York (OLD) Savings and Loans, Mutual Savings Banks
06/29/92 01/15/93 DF Southeastern Inc First Union Corp, Charlotte, NC Savings and Loans, Mutual Savings Banks
06/29/92 02/01/93 First Chattanooga Financial AmSouth Bancorp, Birmingham, AL Savings and Loans, Mutual Savings Banks
06/29/92 07/02/92 General Sciences Corp Science Applications Intl Corp Prepackaged Software
06/22/92 08/31/92 TMBR/Sharp Drilling Inc State Farm Mutual Auto Ins Co Oil and Gas; Petroleum Refining
06/18/92 12/11/92 CK Federal Savings, Concord, NC SouthTrust Corp Savings and Loans, Mutual Savings Banks
06/17/92 09/09/92 Critical Care America Inc Medical Care International Inc Health Services
06/17/92 12/02/92 Tyler Cabot Mortgage Sec Fund Capstead Mortgage Corp Investment & Commodity Firms, Dealers,
Exchang
06/16/92 10/05/92 Arctic Alaska Fisheries Corp Tyson Foods Inc Agriculture, Forestry, and Fishing
06/12/92 01/15/93 Harmonia Bancorp Sovereign Bancorp Savings and Loans, Mutual Savings Banks
06/11/92 01/15/93 South Carolina Federal Corp First Union Corp, Charlotte, NC Savings and Loans, Mutual Savings Banks
06/09/92 10/29/92 Wetterau Inc Super Valu Stores Inc Wholesale Trade-Nondurable Goods
06/08/92 12/31/93 Gulf States Utilities Co Entergy Corp Electric, Gas, and Water Distribution
06/05/92 05/03/93 Key Centurion Bancshares, WV BANC ONE Corp Commercial Banks, Bank Holding Companies
06/03/92 12/04/92 Advanced Telecommunications LDDS Communications Inc Telecommunications
05/27/92 03/09/93 Centel Corp Sprint Corp Telecommunications
05/18/92 12/07/92 First Florida Banks Inc Barnett Banks, Jacksonville, FL Commercial Banks, Bank Holding Companies
05/15/92 12/11/92 Patlex Corp AutoFinance Group Inc Investment & Commodity Firms, Dealers,
Exchang
05/13/92 09/04/92 Nova Pharmaceutical Corp Scios Inc Business Services
05/13/92 06/01/92 Syntrex Inc Phoenix Technologies Inc Computer and Office Equipment
05/04/92 09/30/92 Wiland Services Inc Neodata Corp (Hicks Muse & Co) Business Services
</TABLE>
<TABLE>
Consideration (%) Premium (%)
Date Transaction ---------------------- -------------------------
Announced Value Cash Common Other 1 Day 1 Week 4 Weeks
- --------- ----------- ------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
09/04/92 33.9 100.0% 0.0% 0.0%
09/02/92 57.0 0.0% 100.0% 0.0%
08/31/92 205.4 0.0% 100.0% 0.0%
08/31/92 110.7 100.0% 0.0% 0.0% 13.9 23.3 40.6
08/20/92 163.9 0.0% 100.0% 0.0% (16.7) (8.2) 31.7
08/20/92 170.0 0.0% 100.0% 0.0% 10.7 9.6 14.3
08/17/92 120.2 0.0% 100.0% 0.0% 38.1 37.1 49.8
08/13/92 43.1 0.0% 99.9% 0.1%
08/12/92 2.0 44.6% 55.4% 0.0%
08/10/92 2.6 0.0% 99.6% 0.4%
07/31/92 39.9 100.0% 0.0% 0.0% 20.1 17.7 15.4
07/30/92 38.6 40.4% 0.0% 59.6%
07/30/92 287.9 0.0% 100.0% 0.0% 40.0 36.9 31.1
07/30/92 38.7 2.1% 97.8% 0.2% 55.0 53.8 71.9
07/27/92 86.5 74.0% 26.0% 0.0% 69.0 64.4 81.8
07/24/92 264.2 100.0% 0.0% 0.0% 9.8 20.4 21.7
07/22/92 137.9 0.0% 100.0% 0.0% 86.8 81.8 84.3
07/20/92 141.3 100.0% 0.0% 0.0% 32.4 26.8 36.4
07/20/92 39.3 0.0% 100.0% 0.0% 15.0 35.5 19.5
07/16/92 6.0 100.0% 0.0% 0.0%
07/15/92 150.4 33.0% 67.0% 0.0% 1.6 2.3 (0.5)
07/14/92 6.3 0.0% 99.4% 0.6%
07/13/92 12.7 0.0% 99.9% 0.1% 95.6 95.6 100.4
07/13/92 164.1 0.0% 100.0% 0.0% 66.3 94.1 127.8
07/10/92 8.4 0.0% 100.0% 0.0%
07/09/92 18.7 0.0% 100.0% 0.0%
07/08/92 1.0 0.0% 98.0% 2.0% (76.0) (74.2) (66.4)
07/05/92 89.1 0.0% 84.8% 15.2% 55.9 70.8 84.4
07/01/92 5.4 40.7% 59.1% 0.2%
07/01/92 110.9 0.0% 100.0% 0.0%
07/01/92 64.6 0.0% 100.0% 0.0% 29.4 29.4 34.7
06/29/92 145.7 0.0% 100.0% 0.0% 71.8 74.1 89.7
06/29/92 109.7 2.6% 97.4% 0.0% 67.2 57.2 67.2
06/29/92 10.1 100.0% 0.0% 0.0% (7.0) (10.8)
06/22/92 11.4 0.0% 0.0% 100.0%
06/18/92 32.7 0.0% 100.0% 0.0% 38.4 25.8 38.4
06/17/92 846.3 0.0% 100.0% 0.0% 0.9 6.3 (5.4)
06/17/92 259.4 0.0% 0.0% 100.0%
06/16/92 412.3 9.0% 42.5% 48.5% 85.5 104.0 100.0
06/12/92 92.2 11.6% 88.4% 0.0% 44.9 55.4 81.6
06/11/92 78.2 0.0% 100.0% 0.0% 66.7 70.6 80.2
06/09/92 1,084.3 59.4% 0.0% 40.6% 26.0 33.0 27.4
06/08/92 2,281.0 11.0% 89.0% 0.0% 64.9 64.9 63.3
06/05/92 583.9 0.0% 100.0% 0.0% 28.0 26.3 29.7
06/03/92 585.6 0.0% 100.0% 0.0% 34.6 43.8 75.0
05/27/92 3,967.0 0.0% 72.3% 27.7% (9.3) (6.1) 4.9
05/18/92 882.6 0.0% 100.0% 0.0% 77.0 75.6 72.2
05/15/92 45.0 0.0% 100.0% 0.0% 26.7 15.7 40.0
05/13/92 166.4 0.0% 100.0% 0.0% 0.9 (6.0) (13.8)
05/13/92 13.6 23.5% 0.0% 76.5%
05/04/92 25.0 100.0% 0.0% 0.0% (10.5) (12.0) 20.0
</TABLE>
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
Investment Banking Department
Analysis of Acquisitions of Public Companies
Premiums and Form of Consideration Paid (a)
(dollars in millions)
<TABLE>
<CAPTION>
Date Date
Announced Effective Target Name Acquiror Name Target Industry
- --------- --------- ---------------------------------- -------------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
04/30/92 03/30/93 Home Federal Svgs Bank of AL Colonial BancGroup Inc Savings and Loans, Mutual Savings Banks
04/21/92 02/26/93 First Fincorp Inc BB & T Financial Corp Savings and Loans, Mutual Savings Banks
04/14/92 03/31/93 Valley National Corp, Phoenix BANC ONE Corp Commercial Banks, Bank Holding Companies
04/07/92 12/31/92 First Coml Bancshares Inc, AL Synovus Financial Corp Commercial Banks, Bank Holding Companies
04/06/92 08/24/92 Wicat Systems Inc Jostens Inc Computer and Office Equipment
04/03/92 12/30/92 Thermascan Inc Virology Testing Sciences Drugs
04/02/92 09/01/92 Volunteer Bancshares Inc Bancorp of Mississippi, Tupelo Commercial Banks, Bank Holding Companies
03/31/92 06/30/93 Horizon Financial Services Inc Republic Bancorp Inc Savings and Loans, Mutual Savings Banks
03/25/92 06/30/92 OW Office Warehouse OfficeMax Inc Wholesale Trade-Durable Goods
03/18/92 10/15/92 INB Financial Corp NBD Bancorp, Detroit, Michigan Commercial Banks, Bank Holding Companies
03/13/92 07/27/93 The Circle K Corp CK Acquisitions Corp Retail Trade-Food Stores
03/12/92 06/29/92 MIPS Computer Systems Inc Silicon Graphics Inc Electronic and Electrical Equipment
03/09/92 08/19/92 First American BanCorp, Ohio Charter One Financial Inc Commercial Banks, Bank Holding Companies
03/05/92 10/01/92 Sunwest Finl Svcs, Albuquerque Boatmen's Bancshares Inc Commercial Banks, Bank Holding Companies
03/04/92 01/15/93 Puget Sound Bancorp, Tacoma, WA KeyCorp, Albany, New York(OLD) Commercial Banks, Bank Holding Companies
03/04/92 07/08/92 Stuart Hall Co Inc Newell Co Paper and Allied Products
03/04/92 08/04/92 Worldwide Computer Svcs Inc Computer Horizons Corp Business Services
03/02/92 03/26/92 Unity Healthcare Holding Co Star Multi Care Services Inc Business Services
02/27/92 09/30/92 First Savings Bancorp, Ohio Tristate Bancorp, Cincinnati, OH Savings and Loans, Mutual Savings Banks
02/21/92 08/03/92 First Centennial Corp Citizens Inc Insurance
02/21/92 02/26/92 Sterling Optical Corp Cohen Fashion Optical Inc Wholesale Trade-Duarable Goods
02/20/92 10/13/92 Preferred Homecare of America Home Intensive Care Inc Health Services
02/18/92 08/27/92 Niagara Exchange Corp Selective Insurance Group Inc Insurance
02/17/92 09/30/92 Security Financial Group Inc Metropolitan Financial Corp Commercial Banks, Bank Holding Companies
02/14/92 09/03/92 First Peoples Financial Corp CoreStates Financial Corp Commercial Banks, Bank Holding Companies
02/12/92 06/19/92 Commtron Corp Ingram Entertainment Wholesale Trade-Durable Goods
02/11/92 08/07/92 First Federal S & L, Lenawee Standard Federal Bank Savings and Loans, Mutual Savings Banks
02/10/92 05/29/92 Salem Carpet Mills Inc Shaw Industries Inc Textile and Apparel Products
01/30/92 03/31/92 Flight Dynamics Inc Hughes Flight Dynamics Inc Measuring, Medical, Photo Equipment;
Clocks
01/27/92 07/01/92 FB & T Corp Dauphin Deposit Corp Commercial Banks, Bank Holding Companies
01/22/92 01/22/92 Academy Computing Corp Investor Business Services
01/17/92 11/20/92 Flagship Financial Corp PNC Financial, Pittsburgh, PA Commercial Banks, Bank Holding Companies
01/13/92 10/05/92 Quantronix Corp Excel Technology Inc Electronic and Electric Equipment
</TABLE>
<TABLE>
Consideration (%) Premium (%)
Date Transaction ---------------------- -------------------------
Announced Value Cash Common Other 1 Day 1 Week 4 Weeks
- --------- ----------- ------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
04/30/92 7.9 0.0% 100.0% 0.0% 42.5
04/21/92 18.5 0.0% 100.0% 0.0% 26.5 38.0 38.0
04/14/92 1,186.0 0.0% 100.0% 0.0% 48.8 66.9 68.8
04/07/92 118.7 0.0% 100.0% 0.0% 36.2 41.1 41.1
04/06/92 97.3 0.0% 100.0% 0.0% 45.9 65.3 51.8
04/03/92 7.3 0.0% 38.4% 61.6%
04/02/92 56.2 0.0% 100.0% 0.0%
03/31/92 28.7 0.0% 99.9% 0.1% 47.9 61.4 69.0
03/25/92 74.8 100.0% 0.0% 0.0% 22.2 51.7 57.1
03/18/92 883.3 0.0% 100.0% 0.0% 32.2 30.4 31.3
03/13/92 399.5 100.0% 0.0% 0.0%
03/12/92 217.7 0.0% 100.0% 0.0% (22.6) (25.1) (23.5)
03/09/92 41.9 0.0% 100.0% 0.0% 69.4 77.3 81.5
03/05/92 327.9 0.0% 100.0% 0.0% 32.5 35.8 37.8
03/04/92 889.8 0.0% 100.0% 0.0% 49.3 54.4 64.1
03/04/92 62.6 0.0% 100.0% 0.0% 51.4 72.3 47.4
03/04/92 3.6 0.0% 100.0% 0.0% (9.9) 12.7 69.0
03/02/92 0.5 100.0% 0.0% 0.0%
02/27/92 14.1 0.0% 100.0% 0.0% 2.5 2.5 2.5
02/21/92 5.4 0.0% 99.4% 0.6% 76.0 105.3 76.0
02/21/92 15.0 50.0% 0.0% 50.0%
02/20/92 14.0 0.0% 76.6% 23.4% 38.0 47.2 69.8
02/18/92 31.9 100.0% 0.0% 0.0% 130.0 130.0 119.0
02/17/92 12.8 0.0% 100.0% 0.0% 70.7 94.4 66.7
02/14/92 107.4 0.0% 100.0% 0.0% 11.9 5.7 21.4
02/12/92 78.3 100.0% 0.0% 0.0% 19.2 21.6 14.8
02/11/92 46.2 100.0% 0.0% 0.0% 55.2 59.7 54.2
02/10/92 138.2 47.2% 0.0% 52.8% 45.1 38.8 72.5
01/30/92 14.5 100.0% 0.0% 0.0%
01/27/92 74.6 0.0% 100.0% 0.0% 26.0 27.1 27.1
01/22/92 0.9 100.0% 0.0% 0.0%
01/17/92 45.5 100.0% 0.0% 0.0% 45.0 51.3 45.0
01/13/92 7.3 0.0% 99.5% 0.5% (12.5) 27.3
</TABLE>
-----------------------------------------------------
(a) Screening criteria: completed friendly mergers or acquisitions of
public companies where 100% of the target company was acquired in
the transaction.
<PAGE>
ROPAK CORPORATION
DISCOUNTED CASH FLOW ANALYSIS
BASE CASE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1999 Discount Rate
EBITDA --------------------------------
Multiple 14.0% 15.0% 16.0%
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Present Value of Terminal Value 5.5x $76,481 $73,213 $70,111
6.0x 83,434 79,869 76,485
6.5x 90,387 86,524 82,859
Present Value of Free Cash Flow $19,327 $18,701 $18,102
- --------------------------------------------------------------------------------
Enterprise Value 5.5x $95,808 $91,914 $88,213
6.0x 102,761 98,570 94,587
6.5x 109,714 105,226 100,961
- --------------------------------------------------------------------------------
Less: Total Debt ($33,757) ($33,757) ($33,757)
Plus: Cash and Equivalents 2,653 2,653 2,653
- -------------------------- -------- -------- --------
Net Debt (31,104) (31,104) (31,104)
- --------------------------------------------------------------------------------
Equity Value 5.5x $64,704 $60,810 $57,109
6.0x 71,657 67,466 63,483
6.5x 78,610 74,122 69,857
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Per Share Equity Value 5.5x $12.56 $11.83 $11.14
6.0x $13.86 $13.08 $12.33
6.5x $15.16 $14.32 $13.52
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
ROPAK CORPORATION
DISCOUNTED CASH FLOW ANALYSIS
BASE CASE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
Projected
-----------------------------------------------------
1995 1996 1997 1998 1999
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total Revenue $133,467 $150,739 $167,338 $167,338 $167,338
Costs of Sales (103,531) (114,381) (125,816) (125,504) (125,504)
Operating Expenses (11,046) (12,797) (14,369) (15,060) (15,060)
- ------------------------- -------- -------- -------- -------- --------
EBITDA 18,890 23,561 27,153 26,774 26,774
Depreciation (8,370) (8,430) (8,733) (8,989) (9,175)
Amortization of Goodwill (365) (365) (365) (365) (365)
- ------------------------- -------- -------- -------- -------- --------
EBIT 10,155 14,766 18,055 17,420 17,235
Plus: Non-Deductible
Goodwill Amortization 365 365 365 365 365
Plus: Total Book
Depreciation and
Amortization 8,735 8,795 9,098 9,354 9,540
Less: Total Normal Tax
Depreciation and
Amortization (8,735) (8,795) (9,098) (9,354) (9,540)
- ------------------------- -------- -------- -------- -------- --------
TOTAL TAXABLE EBIT 10,520 15,131 18,420 17,785 17,600
Cash Income Taxes (4,310) (6,316) (7,741) (7,470) (7,392)
- ------------------------- -------- -------- -------- -------- --------
Tax-Adjusted EBIT 5,845 8,450 10,314 9,950 9,843
Plus: Depreciation 8,370 8,430 8,733 8,989 9,175
Plus: Amortization of
Goodwill 365 365 365 365 365
Less: Capital
Expenditures (16,602) (8,260) (9,460) (9,000) (9,000)
Less: Working Capital
Requirements 766 (3,504) (3,061) 113 0
- ------------------------- -------- -------- -------- -------- --------
FREE CASH FLOW OF THE
UNLEVERED FIRM ($1,256) $5,481 $6,891 $10,417 $10,382
======== ======== ======== ======== ========
TERMINAL VALUE (EBITDA
MULTIPLE)
- -------------------------
5.5x $147,257
6.0x 160,644
6.5x 174,032
</TABLE>
<PAGE>
ROPAK CORPORATION
DISCOUNTED CASH FLOW ANALYSIS
BASE CASE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
---------------------------------------------------------------------------------
Pro Projected
Historical Estimated form -----------------------------------------------
OPERATING ASSUMPTIONS 1993 1994 1994 1995 1996 1997 1998 1999
- --------------------------------------------- ---------- --------- ------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue Growth 18.3% 18.3% 7.3% 12.9% 11.0% 0.0% 0.0%
Gross Margin 20.7% 21.6% 21.6% 22.4% 24.1% 24.8% 25.0% 25.0%
EDITDA Margin 13.2% 12.2% 12.2% 14.2% 15.6% 16.2% 16.0% 16.0%
Tax Rate 29.2% 40.0% 40.0% 41.0% 41.7% 42.0% 42.0% 42.0%
INTEREST RATE ASSUMPTIONS
- ---------------------------------------------
Existing Revolver 8.5% 8.5% 8.5% 8.5% 8.5%
Blended Term Debt 9.2% 7.4% 7.6% 7.6% 7.6%
BALANCE SHEET DATA
- ---------------------------------------------
Accounts Receivable
Days 54.3 40.5 40.5 40.6 42.6 43.6 44.0 44.0
Turns 6.7x 9.0x 9.0x 9.0x 8.6x 8.4x 8.3x 8.3x
Inventory
Days 74.2 70.3 70.3 73.3 73.8 74.0 74.0 74.0
Turns 4.9x 5.2x 5.2x 5.0x 4.9x 4.9x 4.9x 4.9x
Accounts Payable
Days 40.2 33.7 33.7 44.7 43.6 43.7 44.0 44.0
Turns 9.1x 10.8x 10.8x 8.2x 8.4x 8.4x 8.3x 8.3x
Other Current Assets 1,383 867 867 867 867 867 867 867
Other Current Liabilities (% of Sales) 2.0% 1.7% 1.7% 1.7% 1.9% 1.9% 2.0% 2.0%
CASH FLOW DATA
- ---------------------------------------------
Capital Expenditures $6,005 $11,357 $11,357 $16,602 $8,260 $9,460 $9,000 $9,000
</TABLE>
<PAGE>
ROPAK CORPORATION
DISCOUNTED CASH FLOW ANALYSIS
DOWNSIDE CASE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1999 Discount Rate
EBITDA --------------------------------
Multiple 14.0% 15.0% 16.0%
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Present Value of Terminal Value 5.5x $61,142 $58,529 $56,049
6.0x 66,700 63,850 61,145
6.5x 72,258 69,171 66,240
Present Value of Free Cash Flow $12,844 $12,408 $11,991
- --------------------------------------------------------------------------------
Enterprise Value 5.5x $73,986 $70,938 $68,041
6.0x 79,544 76,258 73,136
6.5x 85,103 81,579 78,231
- --------------------------------------------------------------------------------
Less: Total Debt ($33,757) ($33,757) ($33,757)
Plus: Cash and Equivalents 2,653 2,653 2,653
- -------------------------- -------- -------- --------
Net Debt (31,104) (31,104) (31,104)
- --------------------------------------------------------------------------------
Equity Value 5.5x $42,882 $39,834 $36,937
6.0x 48,440 45,154 42,032
6.5x 53,999 50,475 47,127
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Per Share Equity Value 5.5x $8.48 $7.91 $7.37
6.0x $9.52 $8.91 $8.32
6.5x $10.56 $9.90 $9.28
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Ropak Corporation
Discounted Cash Flow Analysis
Downside Case
(dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------
Projected
------------------------------------------------------------
1995 1996 1997 1998 1999
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total Revenue $127,245 $137,350 $145,607 $145,607 $145,607
Costs of Sales (100,613) (106,281) (111,661) (111,680) (111,680)
Operating Expenses (10,531) (11,660) (12,503) (12,522) (12,522)
- ----------------------------------------------------- -------- -------- -------- -------- --------
EBITDA 16,101 19,408 21,443 21,404 21,404
Depreciation (8,370) (8,430) (8,733) (8,989) (9,175)
Amortization of Goodwill (365) (365) (365) (365) (365)
- ----------------------------------------------------- -------- -------- -------- -------- --------
EBIT 7,366 10,613 12,345 12,050 11,865
Plus: Non-Deductible Goodwill Amortization 365 365 365 365 365
Plus: Total Book Depreciation and Amortization 8,735 8,795 9,098 9,354 9,540
Less: Total Normal Tax Depreciation and Amortization (8,735) (8,795) (9,098) (9,354) (9,540)
- ----------------------------------------------------- -------- -------- -------- -------- --------
Total Taxable EBIT 7,731 10,978 12,710 12,415 12,230
Cash Income Taxes (3,167) (4,583) (5,341) (5,214) (5,136)
- ----------------------------------------------------- -------- -------- -------- -------- --------
Tax-Adjusted EBIT 4,199 6,031 7,003 6,836 6,728
Plus: Depreciation 8,370 8,430 8,733 8,989 9,175
Plus: Amortization of Goodwill 365 365 365 365 365
Less: Capital Expenditures (16,602) (8,260) (9,460) (9,000) (9,000)
Less: Working Capital Requirements 1,581 (2,340) (1,681) 76 0
- ----------------------------------------------------- -------- -------- -------- -------- --------
Free Cash Flow of the Unlevered Firm ($2,088) $4,225 $4,960 $7,266 $7,268
======== ======== ======== ======== ========
Terminal Value (EBITDA Multiple)
- ----------------------------------------------------------------
5.5x $117,723
6.0x 128,425
6.5x 139,127
</TABLE>
<PAGE>
Ropak Corporation
Discounted Cash Flow Analysis
Downside Case
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
----------------------------------------------------------------------------------------------
Projected
Historical Estimated Pro forma ---------------------------------------------------
OPERATING ASSUMPTIONS 1993 1994 1994 1995 1996 1997 1998 1999
- --------------------------------- ---------- --------- --------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue Growth 18.3% 18.3% 2.3% 7.9% 6.0% 0.0% 0.0%
Gross Margin 20.7% 21.6% 21.6% 20.9% 22.6% 23.3% 23.3% 23.3%
EBITDA Margin 13.2% 12.2% 12.2% 12.7% 14.1% 14.7% 14.7% 24.7%
Tax Rate 29.2% 40.0% 40.0% 41.0% 41.7% 42.0% 42.0% 42.0%
INTEREST RATE ASSUMPTIONS
- ---------------------------------
Existing Revolver 8.5% 8.5% 8.5% 8.5% 8.5%
Blended Term Debt 9.2% 7.4% 7.6% 7.6% 7.6%
BALANCE SHEET DATA
- ---------------------------------
Accounts Receivable
Days 54.3 40.5 40.5 40.6 42.6 43.6 44.0 44.0
Turns 6.7x 9.0x 9.0x 9.0x 8.6x 8.4x 8.3x 8.3x
Inventory
Days 74.2 70.3 70.3 73.3 73.8 74.0 74.0 74.0
Turns 4.9x 5.2x 5.2x 5.0x 4.9x 4.9x 4.9x 4.9x
Accounts Payable
Days 40.2 33.7 33.7 44.7 43.6 43.7 44.0 44.0
Turns 9.1x 10.8x 10.8x 8.2x 8.4x 8.4x 8.3x 8.3x
Other Current Assets 1,383 867 867 867 867 867 867 867
Other Current Assets (% of Sales) 2.0% 1.7% 1.7% 1.7% 1.9% 1.9% 2.0% 2.0%
CASH FLOW DATA
- ---------------------------------
Capital Expenditures $6,005 $11,357 $11,357 $16,602 $8,260 $9,460 $9,000 $9,000
</TABLE>
<PAGE>
ROPAK CORPORATION
Discounted Cash Flow Analysis
Upside Case
(dollars in thousands)
<TABLE>
<CAPTION>
Discount Rate
1999 EBITDA ----------------------------
Multiple 14.0% 15.0% 16.0%
----------- -------- -------- --------
<S> <C> <C> <C> <C>
Present Value of Terminal Value 5.5x $ 84,320 $ 80,717 $ 77,298
6.0x 91,986 88,055 84,325
6.5x 99,651 95,393 91,352
Present Value of Free Cash Flow $ 19,070 $ 18,452 $ 17,861
Enterprise Value 5.5x $103,390 $ 19,169 $ 95,158
6.0x 111,056 106,507 102,185
6.5x 118,721 113,845 109,212
Less: Total Debt $(33,757) $(33,757) $(33,757)
Plus: Cash and Equivalents 2,653 2,653 2,653
- ------------------------------- -------- -------- --------
Net Debt (31,104) (31,104) (31,104)
Equity Value 5.5x $ 72,286 $ 68,065 $ 64,054
6.0x 79,952 75,403 71,081
6.5x 87,617 82,741 78,108
Per Share Equity Value 5.5x $ 13.98 $ 13.19 $ 12.44
6.0x $ 15.41 $ 14.56 $ 13.75
6.5x $ 16.84 $ 15.93 $ 15.07
</TABLE>
<PAGE>
ROPAK CORPORATION
Discounted Cash Flow Analysis
Upside Case
(dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------
Projected
---------------------------------------------------------
1995 1996 1997 1998 1999
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Total Revenue $ 133,467 $ 150,739 $ 167,338 $ 175,705 $ 184,490
Costs of Sales (103,531) (114,381) (125,816) (131,779) (138,368)
Operating Expenses (11,046) (12,797) (14,369) (15,813) (16,604)
- ----------------------------------------------------- --------- --------- --------- --------- ---------
EBITDA 18,890 23,561 27,153 28,113 29,518
Depreciation (8,370) (8,430) (8,733) (8,989) (9,175)
Amortization of Goodwill (365) (365) (365) (365) (365)
- ----------------------------------------------------- --------- --------- --------- --------- ---------
EBIT 10,155 14,766 18,055 18,759 19,979
Plus: Non-Deductible Goodwill Amortization 365 365 365 365 365
Plus: Total Book Depreciation and Amortization 8,735 8,795 9,098 9,354 9,540
Less: Total Normal Tax Depreciation and Amortization (8,735) (8,795) (9,098) (9,354) (9,540)
- ----------------------------------------------------- --------- --------- --------- --------- ---------
Total Taxable EBIT 10,520 15,131 18,420 19,124 20,344
Cash Income Taxes (4,310) (6,316) (7,741) (8,032) (8,544)
- ----------------------------------------------------- --------- --------- --------- --------- ---------
Tax-Adjusted EBIT 5,845 8,450 10,314 10,727 11,434
Plus: Depreciation 8,370 8,430 8,733 8,989 9,175
Plus: Amortization of Goodwill 365 365 365 365 365
Less: Capital Expenditures (16,602) (8,260) (9,460) (9,000) (9,000)
Less: Working Capital Requirements 766 (3,504) (3,061) (1,244) (1,425)
- ----------------------------------------------------- --------- --------- --------- --------- ---------
Free Cash flow of the Unlevered Firm $ (1,256) $ 5,481 $ 6,891 $ 9,837 $ 10,549
- ----------------------------------------------------- ========= ========= ========= ========= =========
Terminal Value (EBITDA Multiple)
- -----------------------------------------------------
5.5x $162,351
6.0x 177,111
6.5x 191,870
</TABLE>
<PAGE>
ROPAK CORPORATION
DISCOUNTED CASH FLOW ANALYSIS
UPSIDE CASE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
--------------------------------------------------------------------------
Projected
Historical Estimated Pro form ---------------------------------------
OPERATING ASSUMPTIONS 1993 1994 1994 1995 1996 1997 1998 1999
- ------------------------------------------------------ ---------- --------- -------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue Growth 18.3% 18.3% 7.3% 12.9% 11.0% 5.0% 5.0%
Gross Margin 20.7% 21.6% 21.6% 22.4% 24.1% 24.8% 25.0% 25.0%
EBITDA Margin 13.2% 12.2% 12.2% 14.2% 15.6% 16.2% 16.0% 16.0%
Tax Rate 29.2% 40.0% 40.0% 41.0% 41.7% 42.0% 42.0% 42.0%
INTEREST RATE ASSUMPTIONS
- ------------------------------------------------------
Existing Revolver 8.5% 8.5% 8.5% 8.5% 8.5%
Blended Term Debt 9.2% 7.4% 7.6% 7.6% 7.6%
BALANCE SHEET DATA
- ------------------------------------------------------
Accounts Receivable
Days 54.3 40.5 40.5 40.6 42.6% 43.6 44.0 44.0
Turns 6.7x 9.0x 9.0x 9.0x 8.6x 8.4x 8.3x 8.3x
Inventory
Days 74.2 70.3 70.3 73.3 73.8 74.0 74.0 74.0
Turns 4.9x 5.2x 5.2x 5.0x 4.9x 4.9x 4.9x 4.9x
Accounts Payable
Days 40.2 33.7 33.7 44.7 43.6 43.7 44.0 44.0
Turns 9.1x 10.8x 10.8x 8.2x 8.4x 8.4x 8.3x 8.3x
Other Current Assets 1,383 867 867 867 867 867 867 867
Other Current Liabilities (% of Sales) 2.0% 1.7% 1.7% 1.7% 1.9% 1.9% 2.0% 2.0%
CASH FLOW DATA
- ------------------------------------------------------
Capital Expenditures $6,005 $11,357 $11,357 $16,602 $8,260 $9,460 $9,000 $9,000
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
TRANSACTION SUMMARY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SOURCES OF CASH AMOUNT PERCENT
- ---------------------------- ----------- ----------
<S> <C> <C>
Existing Revolver $0 0.0%
Existing Senior Term Debt 0 0.0%
Senior Subordinated Debt 41,652 71.0%
Junior Subordinate Debt 0 0.0%
New Preferred 0 0.0%
New Equity 17,013 29.0%
- ---------------------------- ----------- ----------
TOTAL SOURCES $58,665 100.0%
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
USES OF CASH AMOUNT PERCENT
- ---------------------------------- ----------- ----------
<S> <C> <C>
Purchase Price of Existing Equity $56,352 96.1%
Repay Debt 0 0.0%
Working Capital 0 0.0%
Other Intangibles 0 0.0%
Cash 0 0.0%
Transaction Costs 2,313 3.9%
- ---------------------------- ----------- ----------
TOTAL USES $58,665 100.0%
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
ENTERPRISE VALUE AMOUNT PERCENT
- ----------------------------- ----------- ----------
<S> <C> <C>
Existing and Remaining Common $0 0.0%
New Equity 17,013 19.0%
New Preferred 0 0.0%
Exiting Debt 33,757 37.6%
Senior Subordinated Debt 41,652 46.4%
Junior Subordinate Debt 0 0.0%
Less: Cash (2,653) (3.0)%
- ---------------------------- ----------- ----------
IMPLIED ENTERPRISE VALUE $89,769 100.0%
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
PURCHASE ADJUSTMENT AMOUNT
- ---------------------------------- -----------
<S> <C>
Purchase Price per Share $11.00
Fully Diluted Share 5,351
Net Option Exercise Price (2,515)
Purchase Price of Existing Equity 56,352
Less: Existing Tangible Book Value (21,411)
Plus: Change in Deferred Taxes 0
- ---------------------------------- -----------
GOODWILL/INTANGIBLES $34,941
===========
</TABLE>
<TABLE>
<CAPTION>
Pro Forma
---------------------------------------------
MULTIPLE ANALYSIS 1994 Multiple 1995 Multiple
- ------------------------------ ---------------------------------------------
<S> <C> <C> <C> <C>
Enterprise Value (EV) $89,769
EV /EBITDA 15,207 5.9x 16,101 5.6x
EV /EBIT 5,840 15.4x 5,826 15.4x
EV /Revenues 124,439 0.7x 127,245 0.7x
</TABLE>
<TABLE>
<CAPTION>
Coupon/Dividend
INTEREST RATES Term (Yrs.) Amount Book Cash (PIK=0)
- ----------------------- ------------ --------- ------- ------------
<S> <C> <C> <C> <C>
Senior Subordinate Debt 7.0 $41,652 13.5% 13.5%
Junior Subordinate Debt 10.0 0 15.0% 15.0%
New Preferred 0 NA NA
Additional Cash 0 0.0% 0.0%
</TABLE>
<TABLE>
<CAPTION>
Common Shares Percent Ownership
------------------------ -----------------------
OWNERSHIP Primary Fully Diluted Primary Fully Diluted
- ------------------------ --------- ------------- --------- -------------
<S> <C> <C> <C> <C>
New Equity 1,000 1,000 100.0% 85.0%
Senior Term Debt 0 0 0.0% 0.0%
Senior Subordinate Debt 0 59 0.0% 5.0%
New Preferred 0 0 0.0% 0.0%
Junior Subordinate Debt 0 0 0.0% 0.0%
Management 0 118 0.0% 10.0%
- ------------------------ --------- ------------- --------- -------------
TOTAL 1,000 1,176 100.0% 100.0%
========= ============= ========= =============
</TABLE>
<TABLE>
<CAPTION>
TRANSACTION COSTS Spread Amount Fees
- ---------------------- ---------- ---------- --------
<S> <C> <C> <C>
Debt Issuance Costs 3.0% $1,250
Advisory fees 1.0% 564
Legal, Accounting, & Printing Fees $500 500
- ---------------------- --------
TOTAL TRANSACTION COSTS $2,313
========
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
Summary Projected Financial Information
(dollars in thousands)
<TABLE>
<CAPTION>
SUMMARY FINANCIALS
Fiscal Year Ended December 31,
----------------------------------------------------------------------------------------------
Projected
Historical Estimated Pro Forma ------------------------------------------------
1993 1994 1994 1995 1996 1997 1998 1999
---------- --------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $105,193 $124,439 $124,439 $127,245 $137,350 $145,607 $145,607 $145,607
EBITDA 13,860 15,207 15,207 16,101 19,408 21,443 21,404 21,404
EBITA 7,415 8,688 8,688 8,674 12,101 14,184 14,176 14,276
EBIT 6,966 8,239 5,840 5,826 9,253 11,586 11,577 11,677
EBT 5,064 6,073 (1,949) (2,773) 1,060 3,381 3,542 3,946
Net Income Available to Common 3,126 3,135 (2,101) (2,591) (355) 981 1,076 1,311
Cash 0 2,653 2,653 (0) (0) (0) 0 (0)
Existing Revolver 16,271 18,529 18,529 20,361 23,509 24,033 21,029 17,601
Senior Term Debt 10,253 11,342 11,342 7,700 6,357 4,215 3,605 2,995
Senior Subordinate Debt 0 0 41,652 41,652 41,652 41,652 41,652 41,652
Junior Subordinate Debt 0 0 0 0 0 0 0 0
Minority Interest 5,765 5,200 0 0 0 0 0 0
Common Shareholders' Equity 26,401 29,419 22,213 19,621 19,267 20,248 21,324 22,635
- --------------------------------- --------- -------- -------- -------- -------- -------- -------- --------
Total Capitalization $ 58,690 $ 64,490 $ 93,736 $ 89,335 $ 90,785 $ 90,148 $ 87,610 $ 84,883
Existing Revolver 27.7% 28.7% 19.8% 22.8% 25.9% 26.7% 24.0% 20.7%
Senior Term Debt 17.5% 17.6% 12.1% 8.6% 7.0% 4.7% 4.1% 3.5%
Senior Subordinate Debt 0.0% 0.0% 44.4% 46.6% 45.9% 46.2% 47.5% 49.1%
Junior Subordinate Debt 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Minority Interest 9.8% 8.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Common Shareholders' Equity 45.0% 45.6% 23.7% 22.0% 21.2% 22.5% 24.3% 26.7%
- --------------------------------- --------- -------- -------- -------- -------- -------- -------- --------
Total Capitalization 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
</TABLE>
<TABLE>
<CAPTION>
INTEREST COVERAGE
- -----------------------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended December 31,
----------------------------------------------------------------------------------------------
Projected
Historical Estimated Pro Forma ------------------------------------------------
1993 1994 1994 1995 1996 1997 1998 1999
---------- --------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EBITDA/Total Interest 6.2x 6.1x 2.0x 1.9x 2.4x 2.6x 2.7x 2.8x
Total Debt/EBITDA 2.5x 2.6x 5.0x 4.6x 3.8x 3.3x 3.1x 2.9x
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
Investment Return Summary
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
----------------------------------------------------------------------------------------------
Projected
Historical Estimated Pro Forma ------------------------------------------------
1993 1994 1994 1995 1996 1997 1998 1999
---------- --------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EBITDA $ 13,860 $ 15,207 $ 15,207 $ 16,101 $ 19,408 $ 21,443 $ 21,404 $ 21,404
ENTERPRISE VALUE
- ------------------------------------
EBITDA Multiple 5.5x $ 76,230 $ 83,639 $ 83,639 $ 88,554 $106,744 $117,935 $117,723 $117,723
6.0x 83,160 91,242 91,242 96,604 116,448 128,656 128,425 128,425
6.5x 90,090 98,846 98,846 104,655 126,152 139,377 139,127 139,127
Less: Total Debt (29,488) (33,757) (75,409) (73,355) (72,842) (70,542) (66,896) (62,859)
Less: Preferred + Minority Interests (5,765) (5,200) 0 0 0 0 0 0
Plus: Cash and Equivalents 0 2,653 2,653 (0) (0) (0) 0 (0)
Plus: Proceeds From Warrant Exercise 0 0 0 0 0 1,001 1,001 1,001
- ------------------------------------ --------- -------- -------- -------- -------- -------- -------- --------
Net Debt (35,253) (36,304) $(72,756) $(73,355) $(72,842) $(69,541) $(65,895) $(61,858)
EQUITY VALUE (FULLY DILUTED)
- ------------------------------------
EBITDA Multiple 5.5x $ 40,977 $ 47,335 $ 10,882 $ 15,199 $ 33,902 $ 48,394 $ 51,828 $ 55,865
6.0x 47,907 54,938 18,486 23,249 43,606 59,115 62,530 66,567
6.5x 54,837 62,542 26,089 31,300 53,310 69,836 73,232 77,269
</TABLE>
<TABLE>
<CAPTION>
Common Equity Ownership Projected IRR
----------------------- -----------------------
1997 1998 1999 1997 1998 1999
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Equity Investors
- ------------------------------------ ----------------------- -----------------------
5.5x 85.0% 85.0% 85.0% 34.2% 26.9% 22.8%
6.0x 85.0% 85.0% 85.0% 43.5% 32.9% 27.2%
6.5x 85.0% 85.0% 85.0% 51.7% 38.3% 31.0%
----------------------- -----------------------
Senior Subordinated Debt
- ------------------------------------ ----------------------- -----------------------
5.5x 5.0% 5.0% 5.0% 14.5% 14.3% 14.1%
6.0x 5.0% 5.0% 5.0% 14.9% 14.5% 14.3%
6.5x 5.0% 5.0% 5.0% 15.2% 14.8% 14.5%
----------------------- -----------------------
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
Income Statement
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
----------------------------------------------------------------------------------------------
Projected
Actual Estimated Pro Forma ------------------------------------------------
1993 1994 Adjustment 1994 1995 1996 1997 1998 1999
---------- --------- ---------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales $105,193 $124,439 $0 $124,439 $127,245 $137,350 $145,607 $145,607 $145,607
Cost of Sales (83,453) (97,620) 0 (97,620) (100,613) (106,281) (111,661) (111,680) (111,680)
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
GROSS PROFIT 21,740 26,819 0 26,819 26,632 31,068 33,946 33,926 33,926
Operating Expenses (excl. D&A) (7,880) (11,612) 0 (11,612) (10,531) (11,660) (12,503) (12,522) (12,522)
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
EBITDA 13,860 15,207 0 15,207 16,101 19,408 21,443 21,404 21,404
Total Depreciation (6,445) (6,519) 0 (6,519) (7,427) (7,307) (7,259) (7,229) (7,129)
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
EBITA 7,415 8,688 0 8,688 8,674 12,101 14,184 14,176 14,276
Amortization of Goodwill (449) (449) (1,880) (2,329) (2,329) (2,329) (2,329) (2,329) (2,329)
Amortization of Transaction Costs 0 0 (363) (363) (363) (363) (113) (113) (113)
Amortization of Debt Issuance Cost 0 0 (156) (156) (156) (156) (156) (156) (156)
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
EBIT 6,966 8,239 (2,399) 5,840 5,826 9,253 11,586 11,577 11,677
Interest Income 0 0 0 0 0 0 0 0 0
Revolving Bank Debt (1,012) (1,306) 0 (1,306) (1,575) (1,731) (1,998) (2,043) (1,787)
Senior Term Debt (890) (860) 0 (860) (1,401) (839) (584) (369) (320)
Senior Subordinate Debt 0 0 (5,623) (5,623) (5,623) (5,623) (5,623) (5,623) (5,623)
Junior Subordinate Debt 0 0 0 0 0 0 0 0 0
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net Interest Income/(Expense) (1,902) (2,166) (5,623) (7,789) (8,599) (8,193) (8,205) (8,035) (7,731)
EBT 5,064 6,073 (8,022) (1,949) (2,773) 1,060 3,381 3,542 3,946
Income Tax Expense (1,609) (2,609) 2,457 (152) 182 (1,415) (2,400) (2,466) (2,636)
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net Income 3,455 3,464 (5,565) (2,101) (2,591) (355) 981 1,076 1,311
Preferred Dividends (329) (329) 329 0 0 0 0 0 0
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net Income Available to Common $ 3,126 $ 3,135 $ (5,236) $ (2,101) $ (2,591) $ (355) $ 981 $ 1,076 $ 1,311
======== ======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
Margin Analysis
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
----------------------------------------------------------------------------------------------
Projected
Historical Estimated Pro Forma ------------------------------------------------
1993 1994 1994 1995 1996 1997 1998 1999
---------- --------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Sales (79.3)% (78.4)% (78.4)% (79.1)% (77.4)% (76.7)% (76.7)% (76.7)%
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
GROSS PROFIT 20.7% 21.6% 21.6% 20.9% 22.6% 23.3% 23.3% 23.3%
Operating Expenses (excl. D&A) (7.5)% (9.3)% (9.3)% (8.3)% (8.5)% (8.6)% (8.6)% (8.6)%
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
EBITDA 13.2% 12.2% 12.2% 12.7% 14.1% 14.7% 14.7% 14.7%
Total Depreciation (6.1)% (5.2)% (5.2)% (5.8)% (5.3)% (5.0)% (5.0)% (4.9)%
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
EBITA 7.0% 7.0% 7.0% 6.8% 8.8% 9.7% 9.7% 9.8%
Amortization of Goodwill (0.4)% (0.4)% (1.9)% (1.8)% (1.7)% (1.6)% (1.6)% (1.6)%
Amortization of Transaction Costs 0.0% 0.0% (0.3)% (0.3)% (0.3)% (0.1)% (0.1)% (0.1)%
Amortization of Debt Issuance Cost 0.0% 0.0% (0.1)% (0.1)% (0.1)% (0.1)% (0.1)% (0.1)%
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
EBIT 6.6% 6.6% 4.7% 4.6% 6.7% 8.0% 8.0% 8.0%
Interest Income 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Revolving Bank Debt (1.0)% (1.0)% (1.0)% (1.2)% (1.3)% (1.4)% (1.4)% (1.2)%
Senior Term Debt (0.8)% (0.7)% (0.7)% (1.1)% (0.6)% (0.4)% (0.3)% (0.2)%
Senior Subordinate Debt 0.0% 0.0% (4.5)% (4.4)% (4.1)% (3.9)% (3.9)% (3.9)%
Junior Subordinate Debt 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Net Interest Income/(Expense) (1.8)% (1.7)% (6.3)% (6.8)% (6.0)% (5.6)% (5.5)% (5.3)%
EBT 4.8% 4.9% (1.6)% (2.2)% 0.8% 2.3% 2.4% 2.7%
Income Tax Expense (1.5)% (2.1)% (0.1)% 0.1% (1.0)% (1.6)% (1.7)% (1.8)%
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Net Income 3.3% 2.8% (1.7)% (2.0)% (0.3)% 0.7% 0.7% 0.9%
Preferred Dividends (0.3)% (0.3)% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
- --------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Net Income Available to Common 3.0% 2.5% (1.7)% (2.0)% (0.3)% 0.7% 0.7% 0.9%
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
Balance Sheet
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
----------------------------------------------------------------------------------------------
Projected
Historical Estimated Pro Forma ------------------------------------------------
ASSETS 1993 1994 Adjustment 1994 1995 1996 1997 1998 1999
---------- --------- ---------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $0 $ 2,653 $0 $ 2,653 $(0) $(0) $(0) $0 $(0)
Accounts Receivable, Net 15,641 13,800 0 13,800 14,154 16,030 17,393 17,553 17,553
Inventories 16,959 18,800 0 18,800 20,205 21,489 22,638 22,642 22,642
Other Current Assets 1,383 867 0 867 867 867 867 867 867
- --------------------------------- ------- ------- ------- -------- -------- -------- -------- -------- --------
TOTAL CURRENT ASSETS 33,983 36,120 0 36,120 35,226 38,387 40,898 41,062 41,062
Investments $ 580 $ 580 0 580 580 580 580 580 580
PP&E, Net 31,342 36,180 0 36,180 38,753 38,447 38,188 37,960 37,831
Transaction Costs, Net 0 0 1,064 1,064 701 338 225 113 0
Goodwill, Net 8,436 8,008 26,933 34,941 32,611 30,282 27,953 25,623 23,294
Debt Issuance Cost, Net 0 0 1,250 1,250 1,093 937 781 625 469
Other Assets 2,839 2,818 0 2,818 2,818 2,818 2,818 2,818 2,818
TOTAL ASSETS $77,180 $83,706 $29,246 $112,952 $111,783 $111,789 $111,443 $108,780 $106,053
======= ======= ======= ======== ======== ======== ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-Term Borrowing $ 2,964 $ 3,886 $0 $ 3,886 $ 3,642 $ 1,323 $ 642 $ 610 $ 610
Accounts/Trade Payable 9,187 9,000 0 9,000 12,322 12,696 13,369 13,463 13,463
Income Taxes Payable 727 718 0 718 718 718 718 718 718
Other Current Liabilities 2,145 2,145 0 2,145 2,300 2,800 3,100 2,912 2,912
- --------------------------------- ------- ------- ------- -------- -------- -------- -------- -------- --------
TOTAL CURRENT LIABILITIES 15,023 15,749 0 15,749 18,982 17,537 17,829 17,703 17,703
Revolving Bank Debt 16,271 18,529 0 18,529 20,361 23,509 24,033 21,029 17,601
Senior Term Debt 10,253 11,342 0 11,342 7,700 6,357 4,215 3,605 2,995
Senior Subordinate Debt 0 0 41,652 41,652 41,652 41,652 41,652 41,652 41,652
Junior Subordinate Debt 0 0 0 0 0 0 0 0 0
Minority Interest 5,765 5,200 (5,200) 0 0 0 0 0 0
Deferred Income Taxes 3,467 3,467 0 3,467 3,467 3,467 3,467 3,467 3,467
TOTAL LIABILITIES 50,779 54,287 36,452 90,739 92,162 92,522 91,196 87,456 83,419
======= ======= ======= ======== ======== ======== ======== ======== ========
SHAREHOLDERS' EQUITY 26,401 29,419 (7,206) 22,213 19,621 19,267 20,248 21,324 22,635
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $77,180 $83,706 $29,246 $112,952 $111,783 $111,789 $111,443 $108,780 $106,053
======= ======= ======= ======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
Cash Flow Statement
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
----------------------------------------------------------------------------------------------
Projected
Historical Estimated Pro forma ------------------------------------------------
1993 1994 Adjustment 1994 1995 1996 1997 1998 1999
---------- --------- ---------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EBITDA $ 15,207 0 $ 15,207 $ 16,101 $19,408 $ 21,443 $ 21,404 $ 21,404
(INCR.)/DECR. IN WORKING CAPITAL
Accounts Receivable 1,841 (354) (1,877) (1,363) (160) 0
Inventory (1,841) (1,405) (1,284) (1,149) (4) 0
Other Current Assets 516 0 0 0 0 0
Accounts Payable (187) 3,322 374 673 94 0
Other Current Liabilities (9) 155 500 300 (188) 0
- --------------------------------- -------- ------- -------- -------- -------- -------- -------- --------
NET (INCR.)/DECR. IN WORKING CAPITAL 320 0 320 1,717 (2,287) (1,538) (257) 0
CASH FROM INVESTING
Capital Expenditures (11,357) 0 (10,000) (7,000) (7,000) (7,000) (7,000)
Proceeds from Sale of Assets 0 0 0 0 0 0 0
Increase in Other Assets 21 0 0 0 0 0 0
Increase in Investments 0 0 0 0 0 0 0
- --------------------------------- -------- ------- -------- -------- -------- -------- -------- --------
CASH FLOW FROM INVESTING (11,336) 0 (11,336) (10,000) (7,000) (7,000) (7,000) (7,000)
CASH FOR INTEREST, TAXES AND
DIVIDENDS
Cash Interest Paid (2,166) (5,623) (7,789) (8,599) (8,193) (8,205) (8,035) (7,731)
Preferred Dividends - Cash (329) 0 (329) 0 0 0 0 0
Cash Taxes Paid (2,609) 2,457 (152) 182 (1,415) (2,400) (2,466) (2,636)
- --------------------------------- -------- ------- -------- -------- -------- -------- -------- --------
CASH FLOW FOR INTEREST AND TAXES (5,104) (3,166) (8,270) (8,417) (9,608) (10,605) (10,501) (10,367)
CASH FLOW AVAILABLE FOR DEBT
AMORTIZATION (913) (3,166) (4,079) (599) 514 2,300 3,646 4,037
CASH PROVIDED/(USED) BY FINANCING
Common Stock (703) 0 0 0 0 0
Revolving Bank Debt 2,258 1,832 3,148 523 (3,004) (3,427)
Senior Term Debt 2,011 (3,886) (3,662) (2,823) (642) (610)
Senior Subordinate Debt 0 0 0 0 0 0
Junior Subordinate Debt 0 0 0 0 0 0
- --------------------------------- -------- ------- -------- -------- -------- -------- -------- --------
CASH FLOW FROM FINANCING 3,566 0 3,566 (2,054) (514) (2,300) (3,646) (4,037)
INCREASE/(DECREASE) IN CASH $ 2,653 $ (513) $ (2,653) $ 0 $ 0 $ 0 $ (0)
======== ======== ======== ======== ======== ======== ========
BEGINNING CASH BALANCE $ 0 $ 2,653 $ (0) $ (0) $ (0) $ 0
NET CASH FLOW 2,653 (2,653) 0 0 0 (0)
- --------------------------------- -------- -------- -------- -------- -------- --------
ENDING CASH BALANCE $ 2,653 $ (0) $ (0) $ (0) $ 0 $ (0)
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
DEBT SUMMARY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DEBT REPAYMENT SUMMARY 1995 1996 1997 1998 1999
- -------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Cash Flow Available for Debt Amortization ($599) $514 $2,300 $3,646 $4,037
Cash in Excess of Minimum Balance 2,653 (0) (0) (0) 0
Total Scheduled Debt Repayment (3,886) (3,662) (2,823) (642) (610)
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Cash Available for existing Revolver ($1,832) ($3,148) ($523) $3,004 $3,427
DEBT SUMMARY
- ---------------------------------------------
REVOLVING BANK DEBT 1995 1996 1997 1998 1999
---------- ---------- ---------- ---------- ----------
Debt Year-Start $18,529 $20,361 $23,509 $24,033 $21,029
+ Book Interest expense 1,575 1,731 1,998 2,043 1,787
- Cash Interest expense (1,575) (1,731) (1,998) (2,043) (1,787)
(Repayment)/Drawdown 1,832 3,148 523 (3,004) (3,427)
- Amortization 0 0 0 0 0
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Debt Year-End $20,361 $23,509 $24,033 $21,029 $17,601
SENIOR TERM DEBT 1995 1996 1997 1998 1999
---------- ---------- ---------- ---------- ----------
Debt Year-Start $15,228 $11,342 $7,680 $4,857 $4,215
+ Book Interest expense 1,401 839 584 369 320
- Cash Interest expense (1,401) (839) (584) (369) (320)
- Amortization (3,886) (3,662) (2,823) (642) (610)
- Sweep 0 0 0 0 0
- -------------------------------------------- ---------- ---------- ---------- ---------- ----------
Debt Year-End $11,342 $7,680 $4,857 $4,215 $3,605
SENIOR SUBORDINATE DEBT Rate 1995 1996 1997 1998 1999
---------- ---------- ---------- ---------- ---------- ----------
Debt Year-Start $41,652 $41,652 $41,652 $41,652 $41,652
+ Book Interest expense 5,623 5,623 5,623 5,623 5,623
- Cash Interest expense (5,623) (5,623) (5,623) (5,623) (5,623)
- Scheduled Amortization 0 0 0 0 0
- Sweep 0 0 0 0 0
- --------------------------------------------- ---------- ---------- ---------- ---------- ----------
Debt Year-End $41,652 $41,652 $41,652 $41,652 $41,652
Cash Interest rate 13.5%
Book Interest rate 13.5%
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
BOOK DEPRECIATION AND AMORTIZATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
CapEx &
BOOK DEPRECIATION Year Cap. Leases Rate 1995 1996 1997 1998 1999
- ---------------------------------------- ---- ----------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Depreciation from Capital Expenditures 1995 $10,000 14.3% $1,429 $1,429 $1,429 $1,429 $1,429
(7-yr. Depreciation Schedule) 1996 7,000 14.3% 1,000 1,000 1,000 1,000
1997 7,000 14.3% 1,000 1,000 1,000
1998 7,000 14.3% 1,000 1,000
1999 7,000 14.3% 1,000
------- ------ ------ ------ ------ ------ ------
$38,000 71.4% $1,429 $2,429 $3,429 $4,429 $5,429
BOOK AMORTIZATION Amount Term 1995 1996 1997 1998 1999
- ---------------------------------------- ----------- ------ ------ ------ ------ ------ ------
Goodwill $34,941 15.0 yr. $2,329 $2,329 $2,329 $2,329 $2,329
Other Intangibles 0 0.0 yr. 0 0 0 0 0
Advisory Fees 564 5.0 yr. 113 113 113 113 113
Legal Fees 500 2.0 yr. 250 250 0 0 0
Debt Issuance Costs 1,250 8.0 yr. 156 156 156 156 156
- ---------------------------------------- ------- ------------------ ------ ------ ------ ------
TOTAL BOOK AMORTIZATION $37,254 6.0 YR. $2,848 $2,848 $2,598 $2,598 $2,598
EXISTING DEPRECIATION AND AMORTIZATION
- ----------------------------------------
Existing Depreciation of Fixed Assets $5,998 $4,878 $3,830 $2,800 $1,700
Existing Non-Goodwill Amortization 0 0 0 0 0
- ---------------------------------------- ------ ------ ------ ------ ------
TOTAL EXISTING DEPRECIATION AND AMORTIZATION $5,998 $4,878 $3,830 $2,800 $1,700
TOTAL BOOK DEPRECIATION AND AMORTIZATION $10,275 $10,155 $9,857 $9,827 $9,727
======= ======= ====== ====== ======
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
NORMAL TAX DEPRECIATION AND AMORTIZATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
CapEx &
NORMAL TAX DEPRECIATION Year Cap. Leases Rate 1995 1996 1997 1998 1999
- ---------------------------------------- ---- ----------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Depreciation from Maintenance Capital
Expenditures 1995 $10,000 14.3% $1,429 $1,429 $1,429 $1,429 $1,429
(7-yr. Depreciation Schedule) 1996 7,000 14.3% 1,000 1,000 1,000 1,000
1997 7,000 14.3% 1,000 1,000 1,000
1998 7,000 14.3% 1,000 1,000
1999 7,000 14.3% 1,000
------- ------ ------ ------ ------ ------ ------
$38,000 71.4% $1,429 $2,429 $3,429 $4,429 $5,429
NORMAL TAX AMORTIZATION Amount Term 1995 1996 1997 1998 1999
- ---------------------------------------- ----------- ------ ------ ------ ------ ------ ------
Goodwill $34,941 15.0 yr. $2,329 $2,329 $2,329 $2,329 $2,329
Other Intangibles 0 0.0 yr. 0 0 0 0 0
Advisory Fees 564 5.0 yr. 113 113 113 113 113
Legal Fees 500 2.0 yr. 250 250 0 0 0
Debt Issuance Costs 1,250 8.0 yr. 156 156 156 156 156
- ---------------------------------------- ------- ------------------ ------ ------ ------ ------
Total Normal Tax Amortization $37,254 6.0 yr. $2,848 $2,848 $2,598 $2,598 $2,598
EXISTING DEPRECIATION AND AMORTIZATION
- ----------------------------------------
Existing Depreciation of Fixed Assets $5,998 $4,878 $3,830 $2,800 $1,700
Existing Non-Goodwill Amortization 0 0 0 0 0
- ---------------------------------------- ------ ------ ------ ------ ------
Total Existing Depreciation and Amortization $5,998 $4,878 $3,830 $2,800 $1,700
TOTAL NORMAL TAX DEPRECIATION AND AMORTIZATION $10,275 $10,155 $9,857 $9,827 $9,727
======= ======= ====== ====== ======
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
SUMMARY TAX SCHEDULE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
BOOK INCOME TAXES Adjustment 1995 1996 1997 1998 1999
- ----------------------------------------- ---------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
EBT ($8,022) ($2,773) $1,060 $3,381 $3,542 $3,946
Plus: Non-Deductible Goodwill Amortization 1,880 2,329 2,329 2,329 2,329 2,329
Less: Net Operating Loss Carry Forwards 0 0 0 0 0 0
- ----------------------------------------- ---------- --------- -------- -------- -------- --------
Taxable Income for Financial Reporting (6,142) (444) 3,389 5,710 5,872 6,276
Tax Rate 40.0% 41.0% 41.7% 42.0% 42.0% 42.0%
BOOK INCOME TAXES ($2,457) ($182) $1,415 $2,400 $2,466 $2,636
========= ======== ======== ======== ========
CASH INCOME TAXES
- -----------------------------------------
EBT ($2,773) $1,060 $3,381 $3,542 $3,946
Plus: Non-Deductible Goodwill Amortization 2,329 2,329 2,329 2,329 2,329
Plus: Total Book Depreciation and Amortization 10,275 10,155 9,857 9,827 9,727
Less: Total Normal Tax Depreciation and Amortization (10,275) (10,155) (9,857) (9,827) (9,727)
Less: Net Operating Loss 0 0 0 0 0
- ----------------------------------------- --------- -------- -------- -------- --------
Taxable Income (for tax reporting) (444) 3,389 5,710 5,872 6,276
Tax Rate 41.0% 41.7% 42.0% 42.0% 42.0%
- ----------------------------------------- --------- -------- -------- -------- --------
Normal Income Taxes (182) 1,415 2,400 2,466 2,636
CASH INCOME TAXES ($182) $1,415 $2,400 $2,466 $2,636
========= ======== ======== ======== ========
Deferred Income Taxes ($0) ($0) $0 $0 $0
</TABLE>
<PAGE>
ROPAK CORPORATION
LBO MODEL
MODEL ASSUMPTIONS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
-------------------------------------------------------------------------------------------
Projected
Historical Estimated Pro form ------------------------------------------
OPERATING ASSUMPTIONS 1993 1994 Adjustment 1994 1995 1996 1997 1998 1999
- -------------------------------- ---------- --------- ---------- ------- ------ ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue Growth 18.3% 18.3% 2.3% 7.9% 6.0% 0.0% 0.0%
Gross Margin 20.7% 21.6% 21.6% 20.9% 22.6% 23.3% 23.3% 23.3%
EBITDA Margin 13.2% 12.2% 12.2% 12.7% 14.1% 14.7% 14.7% 14.7%
Tax Rate 29.2% 40.0% 40.0% 41.0% 41.7% 42.0% 42.0% 42.0%
INTEREST RATE ASSUMPTIONS
- --------------------------------
Existing Revolver Interest Rate 8.5% 8.5% 8.5% 8.5% 8.5%
Blended Term Debt Interest Rate 9.2% 7.4% 7.6% 7.6% 7.6%
BALANCE SHEET DATA
- --------------------------------
Accounts Receivable
Days 54.3 40.5 40.5 40.6 42.6 43.6 44.0 44.0
Turns 6.7x 9.0x 9.0x 9.0x 8.6x 8.4x 8.3x 8.3x
Inventory
Days 74.2 70.3 70.3 73.3 73.8 74.0 74.0 74.0
Turns 4.9x 5.2x 5.2x 5.0x 4.9x 4.9x 4.9x 4.9x
Accounts Payable
Days 40.2 33.7 33.7 44.7 43.6 43.7 44.0 44.0
Turns 9.1x 10.8x 10.8x 8.2x 8.4x 8.4x 8.3x 8.3x
Other Current Assets 1,383 867 867 867 867 867 867 867
Other Current Liabilities (% of Sales) 2.0% 1.7% 1.7% 1.7% 1.9% 1.9% 2.0% 2.0%
CASH FLOW DATA
- --------------------------------
Capital Expenditures $6,005 $11,357 $11,357 $10,000 $7,000 $7,000 $7,000 $7,000
</TABLE>
<PAGE>
ROPAK CORPORATION
VALUATION BASED ON COMPARABLE MERGER AND ACQUISITION TRANSACTIONS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
ROPAK
LTM AVERAGE
VALUATION MULTIPLE 30-SEP-94 MULTIPLES(a) IMPLIED ENTERPRISE VALUE IMPLIED EQUITY VALUE PRICE PER SHARE
- -------------------------- --------- ------------ ------------------------ -------------------- ---------------
<S> <C> <C> <C> <C> <C>
Enterprise Value/EBIT $7,039 11.6x $81,623 $49,265 $9.68
Enterprise Value/EBITDA 14,551 8.1x 118,113 85,755 16.49
Purchase Price/Net Income 2,978 15.5x 78,507 46,149 9.09
</TABLE>
(a) Includes Mr. Coffee -- Health O Meter, Motor Coach -- Grupo Dina,
Aladdin -- Mohawk, Rexnard -- BTR, Carriage -- Dixie Yarns.
<PAGE>
<TABLE>
<CAPTION>
SELECTED MERGER AND ACQUISITION TRANSACTIONS
(amounts in thousands)
ANNOUNCE-
MENT/ LTM
EFFECTIVE PURCHASE ENTERPRISE REVENUES
DATE TARGET/ACQUIRER TARGET DESCRIPTION PRICE (PP) VALUE (EV) EV/REV.
- --------- ------------------------------- ------------------------------------------------ ----------- ---------- --------
<C> <S> <C> <C> <C> <C>
28-Sep-94 Ropak Corporation Ropak Corporation designs, manufactures, and $ 53,676(a) $ 86,034 $120,520
markets a broad range of plastic shipping
Linpac Mouldings Limited containers and material handling products. 0.7x
26-Oct-94 RB&W Corporation RB&W Corporation is engaged in the manufac- $ 59,565(a) $ 86,372 $161,196
ture and distribution of cold formed parts,
Park-Ohio Industries, Inc. industrial products and value-added services. 0.5x
The product line includes steel and alloy
nuts and screws and other fasteners.
21-Jan-94 Mr. Coffee Mr. Coffee manufactured coffee makers. $129,164 $156,422 $175,045
19-Aug-94 Health O Meter 0.9x
18-May-94 Motor Coach Industries Motor Coach manufactured transit buses. $333,546 $473,425 $417,711
5-Aug-94 Grupo Dina S.A. de C.V. 1.1x
23-Feb-94 Premix/E.M.S. Inc. Premix/E.M.S. was engaged in the business of $ 25,855(a) $ 31,699 $ 57,553
the molding of thermoplastic components and
3-Aug-94 Bailey Corporation the manufacture of compression-molded parts 0.6x
for use in automotive and transportation
industries.
17-May-94 Advanced Plastics, Inc. Advanced Plastics was an Ohio-based S corpora- $ 10,100(a) $ 12,000 $ 10,907
tion that manufactured a variety of injection
20-May-94 Atlantis Group, Inc. molded plastic automotive market. 1.1x
6-Dec-93 Aladdin Mills Aladdin manufactured carpets and bath rugs. $386,761 $464,115 $463,013
25-Feb-94 Mohawk Industries 1.0x
</TABLE>
<TABLE>
<CAPTION>
ANNOUNCE-
MENT/ BOOK
EFFECTIVE LTM EBIT LTM EBITDA LTM NET INCOME VALUE CASH
DATE TARGET/ACQUIRER EV/EBIT EV/EBITDA PP/NET INCOME PP/BV DEBT
- --------- ------------------------------- ----------- ---------- -------------- -------- --------
<C> <S> <C> <C> <C> <C> <C>
28-Sep-94 Ropak Corporation $ 7,039 $ 14,551 $ 2,978 $ 29,347 $ 1,97*
Linpac Mouldings Limited 12.2x 5.9x 18.0x 1.8x 34,32*
26-Oct-94 RB&W Corporation $ 5,183 $ 6,572 $ 1,737 (b) $ 22,555 $ 57*
Park-Ohio Industries, Inc. 16.7x 13.1x 34.3x 2.6x 27,38*
21-Jan-94 Mr. Coffee $ 14,496 $ 19,432 $ 6,677 $ 59,770 $ 32*
19-Aug-94 Health O Meter 10.8x 8.0x 19.3x 2.2x 27,6**
18-May-94 Motor Coach Industries $ 47,372 $ 51,867 $27,853 $101,627 $ 7,24*
5-Aug-94 Grupo Dina S.A. de C.V. 10.0x 9.1x 12.0x 3.3x 147,711
23-Feb-94 Premix/E.M.S. Inc. $ (4,820) $ (2,323) $(3,421) $ 20,269 5*
3-Aug-94 Bailey Corporation NM NM NM 1.3x 5,8**
17-May-94 Advanced Plastics, Inc. $ 1,818 $ 2,211 $ 1,750 (b) $ 1,755 **
20-May-94 Atlantis Group, Inc. 6.6x 5.4x 5.8x 5.8x 1,9**
6-Dec-93 Aladdin Mills $ 37,175 $ 48,871 $19,405 $ 75,303 $ 2,5**
25-Feb-94 Mohawk Industries 12.5x 9.5x 19.9x 5.1x 79,9**
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SELECTED MERGER AND ACQUISITION TRANSACTIONS
(amounts in thousands)
ANNOUNCE-
MENT/ LTM
EFFECTIVE PURCHASE ENTERPRISE REVENUES
DATE TARGET/ACQUIRER TARGET DESCRIPTION PRICE (PP) VALUE (EV) EV/REV.
- --------- ------------------------------- ------------------------------------------------ ----------- ---------- --------
<C> <S> <C> <C> <C> <C>
2-Dec-93 Rexnord Rexnord manufactured power transmission $200,549 $599,550 $533,919
products.
27-Jan-94 BRT Holdings 1.1x
15-Sep-93 Robinson/Fuzere (a) The companies were involved in the thermo- $ 13,207(b) $ 13,428 $ 16,928 (c)
forming industry as manufacturers of thermo-
4-Oct-93 Filtertek, Inc. formed plastic packaging and parts. They are 0.8x
also involved in printing labels on the thermo-
formed parts.
1-Jul-93 Boler Co. - Contour Division The Contour Technologies Division of Boler $ 6,200(a) $ 7,600 $ 13,553
Company manufactures molded plastic exterior
1-Jul-93 Bailey Corporation components for automobile and truck manu- 0.6x
facturers.
26-May-93 Styrex Industries, Inc. Styrex produced custom designed injection $ 4,500(a) $ 12,687 $ 25,264
molded thermoplastic parts and sub-assemblies.
26-May-93 Pure Tech International, Inc. Its customers were in the industrial products, 0.5x
consumer goods, telecommunication and recrea-
tion industries.
10-Jan-92 Van Dorn Company - Plastics This division manufactured injunction molding $ 81,000(a) $ 81,000 $ 94,767
Div. machines.
20-Apr-93 Mannesmann Demag. AG 0.9x
10-Jan-92 Van Dorn Company Van Dorn manufactured metal, plastic, and $177,000(a) $209,829 $312,894
composite containers for the paint, chemical,
16-Apr-93 Crown Cork & Seal Company, Inc. automotive, food, pharmaceutical and household 0.7x
products industries. The company also manu-
factured injection molding machines.
4-Sep-93 Carriage Industries (a) Carriage Industries manufactured carpets. $ 59,503 $ 91,483 $123,079
12-Mar-93 Dixie Yarns 0.7x
</TABLE>
<TABLE>
<CAPTION>
ANNOUNCE-
MENT/ BOOK
EFFECTIVE LTM EBIT LTM EBITDA LTM NET INCOME VALUE CASH/
DATE TARGET/ACQUIRER EV/EBIT EV/EBITDA PP/NET INCOME PP/BV DEBT
- --------- ------------------------------- ----------- ---------- -------------- -------- --------
<C> <S> <C> <C> <C> <C> <C>
2-Dec-93 Rexnord $ 79,728 (a) $106,435 (a) $24,007 (b) $104,031 $ 4,03*
27-Jan-94 BRT Holdings 7.5x 5.6x 8.4x 1.9x 403,03*
15-Sep-93 Robinson/Fuzere (a) $ 409 (c) $ 1,666 (c) $ 520 (c) $ 13,333 $ 2*
4-Oct-93 Filtertek, Inc. 32.9x 8.1x 25.4x 1.0x 24*
1-Jul-93 Boler Co. - Contour Division $ (393) $ 365 $(1,533) NM $ *
1-Jul-93 Bailey Corporation NM 20.8x NM NM 1,4**
26-May-93 Styrex Industries, Inc. $ 53 $ 1,197 $ (433)(b) $ (111) $ *
26-May-93 Pure Tech International, Inc. 237.5x 10.6x NM NM 8,1**
10-Jan-92 Van Dorn Company - Plastics NM NM NM NM $ *
Div.
20-Apr-93 Mannesmann Demag. AG NM NM NM NM *
10-Jan-92 Van Dorn Company $ 12,862 (b) $ 21,578 (b) $ 5,442 (c) $ 89,703 $ 21,5**
16-Apr-93 Crown Cork & Seal Company, Inc. 16.3x 9.7x 32.5x 2.0x 54,3**
4-Sep-93 Carriage Industries (a) $ 5,322 $ 11,051 $ 3,330 $ 34,319 $ 2**
12-Mar-93 Dixie Yarns 17.2x 8.3x 17.9x 1.7x 32,2**
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SELECTED MERGER AND ACQUISITION TRANSACTIONS
(amounts in thousands)
ANNOUNCE-
MENT/ LTM
EFFECTIVE PURCHASE ENTERPRISE REVENUES
DATE TARGET/ACQUIRER TARGET DESCRIPTION PRICE (PP) VALUE (EV) EV/REV.
- --------- ------------------------------- ------------------------------------------------ ----------- ---------- --------
<C> <S> <C> <C> <C> <C>
17-Sep-92 CONSTAR International Inc. CONSTAR manufactured and sold plastic containers $519,000(a) $605,222 $623,460
in the US and Europe. The company focused on the
21-Oct-92 Crown Cork & Seal Company, Inc. soft drink, wine, automotive, food, household 1.0x
products, and industrial chemical industries.
21-Sep-92 Filtertek, Inc. Filtertek develops designs, manufactures $ 53,423(a) $ 60,265 $ 29,850
and sells specialty filtration elements used
21-Sep-92 Schawk, Inc. in automotive, industrial, and consumer markets. 2.0x
The company utilizes insert injection molding
techniques. The company specializes in filters
made from plastic resins.
</TABLE>
<TABLE>
<CAPTION>
ANNOUNCE-
MENT/ BOOK
EFFECTIVE LTM EBIT LTM EBITDA LTM NET INCOME VALUE CASH/
DATE TARGET/ACQUIRER EV/EBIT EV/EBITDA PP/NET INCOME PP/BV DEBT
- --------- ------------------------------- ------- ---------- -------------- -------- --------
<C> <S> <C> <C> <C> <C> <C>
17-Sep-92 CONSTAR International Inc. $39,279 $64,096 $22,477 $169,040 $ 5,08*
21-Oct-92 Crown Cork & Seal Company, Inc. 15.4x 9.4x 23.1x 3.1x 91,30*
21-Sep-92 Filtertek, Inc. $ 3,138 $ 5,617 $ 2,632 $ 20,352 $ 60*
21-Sep-92 Schawk, Inc. 19.2x 10.7x 20.3x 2.6x 7,44*
</TABLE>
<PAGE>
Selected Merger and Acquisition Transactions
(amounts in thousands)
NOTES:
- ------------
General
(1) Net income figures are from continuing operations, before extraordinary
items and cumulative effects of changes in accounting principals, and after
minority interests and preferred dividends.
Ropak
(a) Purchase price consists of $10.50 per share plus purchase of options.
RW&B Corporation
(a) RB&W shareholders will receive 4,293,000 Park-Ohio common shares for all the
outstanding stock of RW&B. Park-Ohio's common stock closed at $13.875 on
October 25, 1994.
(b) Excludes a $700,000 restructuring charge, a special gain of $1.156 million
and a $1.76 million charge from the write-down of real estate assets.
Charges are tax effected for NOL carryforwards.
Premix/E.M.S. Inc.
(a) Purchase price consists of $7 million in promissory notes, $9 million in
debentures, and $9.855 million in cash.
Advanced Plastics, Inc.
(a) The purchase price is given as $12 million less the Advanced Plastic's debt
plus the company's cash plus an amount up to $1.5 million if Advanced
Plastic's 1994 EBITDA is greater than $2786 thousand. Based on first quarter
results, it is assumed that Advanced Plastic does not exceed $2786 in 1994
EBITDA.
(b) Excludes a one-time loss on the sale of fixed assets of $31 thousand.
Rexnord Corporation
(a) Exclude restructuring charge of $11 million ($6.8 million, $0.37 per share)
(b) FY 1993 net income results used to calculate LTM N.I. are pro forma data
reflecting the recapitalization.
Standard Packaging, Inc.
(a) The purchase price consists of $15.0 million in cash and $2.25 million in a
note payable over 3 years.
(b) No income tax was attributed to this division.
Robinson/Fuzere
(a) Includes Fuzere Manufacturing Company, Inc., Robinson Industries, and Fuzere
Midwest.
(b) The purchase price consists of $8.207 million in cash and $5 million in
Filtertek common stock.
(c) LTM data based on nine months ended September 30, 1993 annualized data.
Boler
(a) The purchase price was based on 85% of the carrying value of the fixed
assets, subject to adjustments.
Styrex
(a) The purchase price consists of $2,150,000 in cash, $1,430,330 in Pure Tech
common stock, $945,000 in marketable securities, and less $25,000 in
warrants received by Pure Tech.
(b) Excludes $270 thousand charge for write-off of deferred offering costs.
Van Dorn/Mannesmann
(a) The purchase price for the Plastic Machinery Division was $81 million in
cash.
<PAGE>
Selected Merger and Acquisition Transactions
(amounts in thousands)
Van Dorn/Crown
(a) The purchase price consists of $140 million in newly issued Crown common
stock and $37 million in cash.
(b) Excludes one-time charges relating to Crown Cork & Seal's merger offer,
shareholder litigation, commitments to repurchase equipment, and estimates
relating to inventory totaling $4144.
(c) Excludes gain on sale of equipment of $884,000.
Carriage Industries, Inc.
(a) FY 1993 income statement results used to calculate LTM results are pro forma
data reflecting the acquisition of Bretlin, Inc.
CONSTAR
(a) On September 17, 1992, Crown Cork and Seal made a tender offer of 32.50 for
the shares of Constar. The acquisition was consummated at $34.875 per share.
Filtertek
(a) Schawk paid the purchase price in cash for 56.3% of Filtertek. The LTM
numbers are adjusted for this percentage.
<PAGE>
GRAPHICS APPENDIX
The following Standard OTC Stock Reports were included:
1. Ropak Corp., Vol. 60/No. 114/Sec. 38 (October 5, 1994)
2. AEP Industries, Vol. 60/No. 106/Sec. 2 (September 16, 1994)
3. Furon Co., Vol. 60/No. 116/Sec. 22 (October 12, 1994)
4. Intertape Polymer Group, Vol. 29/No. 75/Sec. 18 (September 20, 1994)
5. Liqui-Box, Vol. 60/No. 95/Sec. 24 (August 19, 1994)
6. Park-Ohio Industries, Vol. 60/No. 126/Sec. 42 (November 4, 1994)
7. Sealright Co., Vol. 60/No. 97/Sec. 21 (August 24, 1994)
<PAGE>
EXHIBIT (C)(1)
AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 25th day of
September, 1994, by and between;
LINPAC MOULDINGS LTD. (the "Parent"), with its principal office at Deykin
Avenue, Witton, Birmingham B6 7HY, England;
LINPAC MOULDINGS, INC., a Delaware corporation in formation ("LinPac") and a
wholly owned subsidiary of the Parent;
WILLIAM H. ROPER and his spouse RUTH ROPER, residents of 12 Rue Biarittz,
Newport Beach, California 92660;
ROBERT E. ROPER and his spouse NANCY ROPER, residents of 3802 Holden Circle,
Los Alamitos, California 90720;
C. RICHARD ROPER and his spouse MARGO ROPER, residents of 1383 N. Mustang,
Orange, California 92667;
C. RICHARD ROPER in his capacity as custodian for certain minor children under
the Uniform Transfers to Minors Act (the "Custodian");
WILLIAM H. ROPER as sole current Trustee for that certain Roper Family Trust
under trust agreement dated September 6, 1977, as amended to date, established
by Frank Roper and Elvere Roper as settlors (the "Roper Family Trust");
WILLIAM H. ROPER as sole current trustee for the ROPER FAMILY TRUST DATED
4/12/94 FBO WILLIAM H. ROPER UTA 9/6/77, AS AMENDED (the "William Trust"); and
ROBERT E. ROPER as sole current trustee for the ROPER FAMILY TRUST DATED
4/12/94 FBO ROBERT E. ROPER AND/OR CHILDREN UTA 9/6/77, AS AMENDED (the
"Robert Trust"); and
C. RICHARD ROPER as sole current trustee for the ROPER FAMILY TRUST DATED
4/12/94 FBO C. RICHARD ROPER AND/OR CHILDREN UTA 9/6/77, AS AMENDED (the
"Richard Trust").
For convenience of reference, William H. Roper and Ruth Roper, Robert E. Roper
and Nancy Roper, C. Richard Roper and Margo Roper, the Custodian, the Roper
Family Trust, the William Trust, the Robert Trust and the Richard Trust are
sometimes herein collectively called the "Shareholders".
<PAGE>
PREAMBLE
WHEREAS, ROPAK CORPORATION is a Delaware corporation (the "Company") with
its principal office located at 660 S. State College Blvd., Fullerton,
California 92631-5138;
WHEREAS, the Shareholders are founders, executive officers and directors of
the Company, and own of record and beneficially the number of issued and
outstanding shares of common stock of the Company (the "Common Stock") listed
below:
William H. Roper and Ruth Roper . . 225,138 shares
Robert E. Roper and Nancy Roper . . 252,554 shares
C. Richard Roper and Margo Roper . 268,279 shares
Custodian . . . . . . . . . . . . . 7,319 shares
Roper Family Trust . . . . . . . . 238,183 shares (a)
- ------------
(a) The Shareholders represent to LinPac and Parent that shares of Common Stock
listed in the table as owned of record by the Roper Family Trust are
currently in the process of being distributed and transferred, in equal
shares, to the William Trust, the Robert Trust and the Richard Trust.
Such distributions and transfers are in accordance with applicable
provisions of trust documents governing the Roper Family Trust
requiring certain distributions upon the death of Elvere Roper, which
death occurred on April 12, 1994.
WHEREAS, each of William H. Roper, Robert E. Roper and C. Richard Roper
also hold the right to purchase 44,000 shares of the Common Stock under stock
options granted by the Company;
WHEREAS, the shares of Common Stock owned by the Custodian are referred to
herein as the "Custodian Shares";
WHEREAS, upon execution and delivery of this Agreement by all of the
Shareholders, as promptly as possible thereafter LinPac and Parent will propose
to the Company's Board of Directors and stockholders of the Company, for their
consideration and approval as required by applicable law, and will agree with
the Shareholders upon terms and conditions set forth herein, an offer for LinPac
to merge with the Company for the consideration and on terms and conditions
described below (the "Merger");
WHEREAS, LinPac and Parent will agree to pay all costs and expenses
incurred by LinPac in proposing the Merger and in seeking to implement and
consummate the same, all without seeking reimbursement of such costs and
expenses from the Company or from
-2-
<PAGE>
the Shareholders if Merger is not successfully consummated for any reason
(other than intentional material misrepresentations on the part of the Company
or the Shareholders, as the case may be) and will further agree to reimburse
the Company and Shareholders for all reasonable costs and expenses incurred by
Company and Shareholders in seeking to implement and consummate the Merger if
LinPac or Parent shall default in performance of their obligations hereunder or
as provided by the Merger Agreement;
WHEREAS, the Shareholders desire to have their shares of Common Stock
converted into cash upon the terms and conditions provided by the Merger and,
for the consideration described below, to enter into other agreements as to
their sale of real property, employment and covenants not to compete as
contemplated by the Merger; and
WHEREAS, upon execution and delivery of this Agreement by LinPac and
Parent, the Shareholders have agreed to propose, favorably recommend, support
and vote for a merger of the Company with LinPac on the terms described herein;
AGREEMENT
NOW, THEREFORE, in consideration of the premises, representations,
warranties, covenants, agreements and promises herein contained, the parties
agree as follows:
SECTION 1. THE MERGER AND THE MERGER AGREEMENT.
For the purposes of this Agreement, the term "Merger" shall mean and be
defined as a corporate merger reorganization transaction between the Company and
LinPac and, subject to the consummation of such corporate reorganization,
agreements to which certain Shareholders are parties, incorporating the
following terms:
1.1. Corporate Merger.
(a) LinPac would be merged into the Company with the Company being the
surviving corporation pursuant to an Agreement and Plan of Merger (the "Merger
Agreement"). The time and date of closing under the Merger Agreement when a
Certificate of Merger is filed with the Secretary of State of Delaware following
ratification and approval of the Merger by Company stockholders is herein called
the "Effective Time".
(b) In the Merger all holders of the Company's Common Stock, other than
Parent and LinPac, and all holders of other
-3-
<PAGE>
securities exercisable or convertible into Common Stock upon the exercise or
conversion thereof in accordance with the terms of governing instruments, will
receive $10.50 per share in cash for their Common Stock at the Effective Time;
provided, however, that Parent, LinPac and Company will arrange for holders of
outstanding stock options and warrants to receive, in consideration of the
cancellation thereof and in lieu of exercising the same prior to the Effective
Time, cash equal to the difference between $10.50 per share issuable upon
exercise less the applicable exercise price per share without regard to whether
such outstanding options and warrants would then be exercisable in the absence
of consummation of the Merger.
(c) The Merger Agreement, when executed, will reflect the terms of this
Agreement and such other terms and conditions as are typical to a corporate
merger transaction. The parties to the Merger Agreement will be the Company,
LinPac, Parent and the Shareholders. The Merger Agreement will contain
appropriate and customary representations and warranties by the parties and
customary and necessary conditions to closing at the Effective Time; provided,
however, that representations and warranties by the Company and the Shareholders
will not survive the closing, and shall expire at the Effective Time of the
merger of LinPac with the Company, except for: (i) representations and
warranties of the Company and Shareholders in agreements contemplated by Section
1.4 hereof; (ii) representations and warranties of the Shareholders as to the
number of shares of the Company's capital stock issued and outstanding and
reserved for issuance pursuant to options, warrants, or other securities
exercisable or convertible into, or any calls or commitments or agreements of
any kind relating to, the Company's capital stock; and (iii) representations and
warranties of the Shareholders as to their ownership, free and clear of all
encumbrances, of shares of the Company's Common Stock.
1.2 LinPac Option. At the time of approval of the Merger Agreement by a
majority of the independent members of the Company's Board of Directors (the
"Board"), if so approved, the Company shall grant Parent or LinPac, as Parent
shall direct an option to purchase previously authorized and unissued shares of
Common Stock from the Company at an option price of $10.50 per share for a
number of shares equal to ten percent (10%) of the total outstanding Common
Stock of the Company calculated on a fully-diluted basis (the "LinPac Option").
The term of the LinPac Option shall expire at the expiration of the second
business date following the date on which there has been a final tabulation of
ballots entitled to be cast at a meeting of stockholders of the Company called
to consider and vote upon the Merger, subject to earlier termination only in the
event of a material breach by Parent or LinPac in the performance of their
obligations under the Merger Agreement. Should the Board elect to
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engage the services of an independent third party to render an opinion as to the
fairness of transactions contemplated by the Merger prior to the vote of
stockholders, the LinPac Option shall remain valid and binding for its term
notwithstanding the opinions expressed in any one or more of such third party
fairness opinions.
1.3. Equitable Price Adjustment. If there shall be any stock split, reverse
stock split, stock dividend, merger or similar reorganization, recapitalization,
reclassification or other transaction affecting generally the Common Stock of
the Company, or any extraordinary or stock dividend paid on or with respect to
the capital stock of the Company, appropriate and equitable adjustments shall be
made hereunder with respect to the price of $10.50 set forth in Sections 1.1(b)
and 1.2 hereof so that the aggregate relative rights and obligations of the
parties hereto shall not be adversely affected by any such action.
1.4. Agreements with Shareholders and Affiliates. At the Effective Time of
the Merger, and subject to the condition that the Merger is consummated, the
Company (with its obligations to be guaranteed by Parent) and the Shareholders
shall enter into the following agreements:
(a) The Company shall purchase from a partnership owned by the
Shareholders certain real property known by the street address of 660 South
State College Boulevard, Fullerton, California, currently leased by the
Company. The purchase price to be paid for such real property shall be payable
in cash and shall be equal to the then current fair market value of such real
property as mutually agreed upon by Parent and the said partnership or, should
they fail to agree, as determined by an independent appraisal. The parties
shall open an escrow for the purchase and sale of such real property not more
than 60 days after the Effective Time, providing for a closing of such real
property purchase and sale within 30 days thereafter.
(b) The Company, on the one hand, and each of William H. Roper, Robert E.
Roper and C. Richard Roper shall enter into an Employment and Noncompetition
Agreement providing for the following:
(i) William H. Roper shall be employed as an executive officer of the
Company for a term of one year with duties relating primarily to strategic
and market planning and business expansion similar to those duties for
which he is now responsible;
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(ii) Robert E. Roper shall be employed as an executive officer of the
Company for a term of three years to perform duties associated with acting
as general manager of United States container operations similar to those
duties for which he is now responsible;
(iii) C. Richard Roper shall be employed as an executive officer of the
Company for a term of four years to perform duties associated with acting
as manager of design and engineering and management of raw materials
purchases similar to those duties for which he is now responsible;
(iv) In each case, the base salary of such person (the "employee")
shall be $250,000 per annum payable in accordance with the Company's normal
payroll periods;
(v) In each case the principal place of business at which the
employee's duties are to be performed shall be located at or within a ten
mile radius of the Company's existing principal office in Fullerton,
California;
(vi) In each case, the employment agreement shall define that the
employee will be deemed to have provided full time service under the
requirements of his employment agreement if he shall devote 180 working
days per year to the business affairs of the Company;
(vii) In each case, the employee will be entitled to receive fringe
benefits comparable to those generally available to all employees
(including, without limitation, health insurance for the employee and his
spouse under the Company's existing health plan or a comparable health
insurance plan and the right of participation in the Company 401(k)
retirement savings plan or a comparable retirement plan), reimbursement
for travel and related expenses incurred for the Company's business, the
right to first class domestic airline and business class international
airline and first class hotel accommodations when traveling on Company
business,
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continuation by the Company during the term of employment of premium
payments on one million dollar life insurance policies for each such
employee as presently constituted, and payment by the Company following
retirement or in the event of pre-retirement death or employment severance
of all benefits provided by the employee's Supplemental Benefits Plan as
presently constituted;
(viii) In the case of Robert E. Roper and C. Richard Roper, the
employment agreement shall provide that the Company will continue to cover
the employee and his spouse under the Company's existing or comparable
health plan at no cost to the employee until he shall attain the age of 65,
notwithstanding termination of employment for any reason prior to attaining
that age;
(ix) During the term of his employment, each such employee will be
eligible to participate in an incentive bonus program providing for a
payment to the employee for each fiscal year of the Company in which he was
employed, commencing with the fiscal year ending December 31, 1995, of not
more than $250,000 per year, with the actual amount of such incentive
bonus, if any, to be calculated in accordance with the formula set forth in
Exhibit A attached hereto. Such incentive bonus shall be payable within 90
days after the end of the fiscal year to which it relates. If the
employment of the employee is terminated for any reason other than (A) acts
of moral turpitude, or (B) failure on the part of the employee to provide
full time service to the Company within the meaning of subparagraph (vi)
above, he will be eligible to receive that percentage of his incentive
bonus attributable to the full year in which his employment was terminated
which is in the same proportion that the number of months worked during
such year bears to twelve months, but he shall not be entitled to an
incentive bonus for any subsequent year.
(x) If the employment of the employee is terminated by the Company for
any reason or for
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no reason prior to the expiration of the term of his employment agreement,
the employee will receive severance payments payable monthly for the
remaining original term of his employment agreement equal to 150% of the
amount of his aggregate base salary for such unexpired term of his
employment agreement; provided, however, the Company shall have no
obligation to make such severance payments to the employee if his
employment was terminated by reason of (A) acts of moral turpitude, or (B)
failure on the part of the employee to provide full time service to the
Company within the meaning of subparagraph (vi) above.
(xi) Should the employee elect to resign or retire voluntarily prior to
the expiration of the original term of his employment agreement, the
employee shall provide at least six months prior written notice to the
Company of the date of his voluntary retirement or resignation except in
the event his retirement or resignation is caused by death or disability.
Except in the event of death or disability, failure to provide such prior
six months notice shall relieve the Company from liability to pay an
incentive bonus for any portion of the year in which he shall retire or
resign and shall also relieve the Company from liability to pay any
incentive bonus for the immediately preceding prior year if the same has
accrued but is not yet payable.
(xii) Each employment agreement shall contain covenants on the part of
the employee against competition with the Company and its subsidiaries
during the period of his employment by the Company and for a term of seven
years thereafter, acceptable in form and substance to the Company and
Parent. In consideration of such covenants against competition, the Company
shall pay the employee the aggregate sum of $1,320,000, payable in equal
monthly installments over a term of six years commencing with the first
month after the latter of (A) the last month in which he was employed, or
(B) the last month in which he is entitled to receive severance payments
required under subparagraph (x) above. Such payments
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shall be made directly to the employee and in the event of his death or
disability while employed or during such six year term, then to his spouse
(and if his spouse shall not survive, then to his heirs, legatees and
devisees) for the remaining term of such six year period and
notwithstanding the death or disability of the employee.
(c) The Company shall continue to be obligated to make payments to members
of the Roper family under the terms of 1985 agreements relating to the sale
of patent rights and related know-how, all as presently constituted, for the
remaining term thereof through the year ended December 31, 1995.
1.5 Presentation to the Board and Stockholders.
(a) The parties agree as soon as reasonably possible to prepare a mutually
acceptable definitive draft of the Merger Agreement with all material exhibits
thereto, including without limitation the form of all other agreements
contemplated herein, for presentation to all independent members of the Board.
Parent and LinPac agree that an authorized representative of Parent and LinPac
will be available in person upon reasonable notice at a meeting of the Board to
respond to any questions reasonably presented by members of the Board as to the
Merger, LinPac's source of financing the Merger, and any other subject which is
proper for inquiry by members of the Board in the discharge of their fiduciary
duties to stockholders, employees and customers of the Company.
(b) At the time of approval of the Merger Agreement by a majority of the
independent members of the Company's Board of Directors (the "Board"), if so
approved, the Board shall authorize the preparation of proxy materials for a
meeting of Company stockholders to be called as promptly as reasonably
practicable for the purpose of enabling Company stockholders entitled to vote
thereon to consider and vote upon a proposal to approve the Merger. Parent and
LinPac acknowledge that the Board may elect that the Board engage the services
of an independent party to render an opinion as to the fairness of the
transactions contemplated by the Merger to the stockholders of the Company.
Those members of the Board voting in favor of the Merger Agreement shall
favorably recommend to stockholders of the Company that stockholders vote in
favor of approval of the Merger, except that any such independent member of the
Board may elect to reconsider such recommendation if: (i) a third party opinion
of a nationally recognized investment banking firm, should the Board elect to
obtain the same, as to the fairness of transactions contemplated by the Merger
to stockholders
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of the Company should be unfavorable, or (ii) there shall arise material legal
impediments to the consummation of the Merger, or (iii) there shall be on the
part of Parent or LinPac any material misrepresentations in the Merger Agreement
or material failure to perform their obligations thereunder.
SECTION 2. GRANT AND EXERCISE OF OPTION
2.1. Option.
(a) Purchase and Sale Options.
(i) Each Shareholder hereby irrevocably grants LinPac an option (the
"Purchase Option") to purchase any or all of the capital stock of the Company
owned by the Shareholder (except the Custodian Shares) together with all options
or other rights to acquire capital stock of the Company (whether now owned or
hereafter acquired) at the Exercise Price set forth below. Each of the
Shareholders represent they will not transfer any options or other rights to
purchase Company capital stock, or shares of Company capital stock acquired upon
exercise thereof, to any third party other than LinPac. At the request of LinPac
upon any exercise in full of the Purchase Option, each Shareholder shall
exercise his stock option under the Company's 1991 stock option plan and shares
issued upon exercise thereof shall be purchased by LinPac in accordance with
this Agreement.
(ii) LinPac hereby irrevocably grants all the Shareholders an option (the
"Sale Option") to sell the Common Stock (the "Roper Stock") and options (the
"Roper Options") listed in the Preamble (except the Custodian Shares) to LinPac
at the exercise Price set forth below; provided, however, that the Sale Option
will only be available if the Shareholders together sell all of the Roper Stock
and Roper Options to LinPac (net of any Roper Stock or Roper Options previously
purchased by LinPac in accordance with its partial exercise of the Purchase
Option, if previously exercised).
(b) Possible Adjustments to Exercise Price. Notwithstanding anything herein to
the contrary, if the Merger is consummated within one year from the date hereof
upon the terms specified herein, any previous exercise of the Purchase Option by
LinPac and/or the Sale Option by the Shareholders shall be adjusted as follows:
in such event the parties shall take all action necessary for Shareholders to
return to LinPac any amount per share previously paid pursuant to exercises of
the Purchase Option and Sale Option in excess of $10.50 per share for the Roper
Stock and in excess of $5.0455 per share for the Roper Options. If the Merger is
not consummated within one year from the date hereof, previous exercises of the
Purchase Option by LinPac and/or the Sale Option by
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the Shareholders may be subject to further adjustment in certain other Change of
Control circumstances as provided by the provisions of Section 2.3 below.
2.2. Exercise.
(a) Exercise(s) of Purchase Option. The Purchase Option may be exercised
by LinPac at any time hereafter through the close of business on February 28,
1995 by written notice to each Shareholder of LinPac's election to exercise
given on or prior to February 28, 1995, specifying the number of shares (and
options) LinPac desires to purchase.
(b) Exercise of Sale Option. The Sale Option may be exercised by the
Shareholders at or prior to the close of business on February 28, 1995 by
written notice from all the Shareholders of the Shareholders' election to
exercise given after the first to occur of the following: (a) the vote of the
Board not to approve the Merger or, so long as the Merger has been presented
for consideration and a vote of the Board at one or more meetings prior to
November 30, 1994, the failure by January 31, 1995 to obtain a favorable vote
of the Board to approve the Merger; (b) the vote of the Company's Common
Stockholders not to approve the Merger or, so long as the Merger has been
presented for consideration and a vote of the Board at one or more meetings
prior to November 30, 1994, the failure by February 23, 1995 to obtain a
favorable vote of the Company's Stockholders to approve the Merger; (c) the
failure to consummate the Merger by February 24, 1995 as a result of a
default by LinPac or Parent under the Merger Agreement or this Agreement; (d) a
Change of Control (as hereafter defined) of the Company; or (e) any other event
occurring prior to February 24, 1995, such as, for example, the effect of legal
proceedings instituted by third parties, which shall preclude any reasonable
possibility of consummating the Merger on or prior to February 24, 1995 except
for LinPac's refusal to consummate the Merger due to a material breach on the
part of the Company or the Shareholders under the Merger Agreement or this
Agreement. A notice of election pursuant to this Section is referred to as an
"Option Notice". For purposes hereof, a "Change of Control" shall mean:
(i) a merger, consolidation or similar transaction involving the Company
other than the Merger;
(ii) a sale, lease, transfer or other disposition of at least a majority
of the property, assets or business of the Company in one or a series of
transactions;
(iii) the acquisition by any person, entity or "group" (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act")), excluding for this purpose the parties hereto, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or
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more of either the then outstanding shares of Common Stock or the combined
voting power of the Company's then outstanding voting securities entitled
to vote generally in the election of directors; and
(iv) a liquidation or dissolution of the Company.
2.3. Exercise Price.
(a) Base Exercise Prices. The Exercise Price for Common Stock provided by
each of the Purchase Option and the Sale Option shall be $14.75 per share of
Common Stock. The Exercise Price for the Roper Options provided by each of the
Purchase Option and the Sale Option shall be $9.2955 per share of Common Stock
represented by the Roper Options. The Exercise Price for any other options or
rights to acquire Common Stock shall be $14.75 per share of Common Stock which
may be acquired thereby less any amounts payable thereunder. Possible
adjustments to the respective Exercise Prices may occur as a result of a
subsequent consummation of the Merger as provided by Section 2.1(b), certain
other Change of Control circumstances as provided by the provisions of
Section 2.3(b) below, or a change affecting the capitalization of the Company
as provided by the provisions of Section 2.4 below.
(b) Adjustment for Other Change in Control. In the event of a Change of
Control at any time prior to June 30, 1996, the aggregate amount payable by
LinPac to each Shareholder upon exercise of the Sale Option and/or Purchase
Option shall be adjusted downward, pursuant to the determination of an
independent appraiser chosen by the parties, by the amount necessary to reflect
any salary, benefits or other compensation or consideration to be received by
such Shareholder in connection with the Change of Control transaction. For this
purpose, the independent appraisal (i) shall not ascribe any value to the
first $250,000 in compensation to be received by such Shareholder in connection
with the Change of Control transaction, and (ii) shall apply a discount to
present value factor for future salary, benefits or other compensation or
consideration to be received by such Shareholder in connection with the Change
of Control transaction calculated from the first date of exercise of the
Purchase Option and/or Sale Option at a discount to present value factor of 7%
per annum. Notwithstanding anything to the contrary herein, the downward
adjustment in the amount per share payable by LinPac to each Shareholder shall
not exceed an amount per share calculated as follows: $4.25 per share, and if
the Change in Control transaction shall result in a payment to LinPac or Parent
of more than $10.50 per share of the Company's Common Stock, said $4.25 per
share shall be reduced by any difference between $10.50 per share and the per
share amount actually realized by LinPac or Parent as a result of the Change in
Control transaction.
2.4. Reorganizations and Changes in Capitalization. If there shall be any
stock split, reverse stock split, merger, or
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similar reorganization, recapitalization or other transaction, affecting
generally the capital stock of the Company, or any extraordinary dividend or
stock dividend paid on or with respect to such stock (other than ordinary and
customary cash dividends), appropriate adjustments shall be made hereunder with
respect to the Exercise Price and the proxies granted herein so that the
aggregate relative rights and obligations of the parties hereto shall not be
affected by any such action.
SECTION 3. OPTION CLOSING
3.1. Closing. The transfer of stock upon exercise of the Option (the
"Closing") shall occur at the offices of McDermott, Will & Emery, 227 West
Monroe Street, Chicago, Illinois on the later of (i) the third business day
following the date of the Option Notice or (ii) the expiration or termination of
the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), if required.
3.2. Deliveries by LinPac. At the Closing, LinPac shall deliver the
following:
(a) a wire transfer to each applicable Shareholder's designated account or
a certified or bank cashier's check to the applicable Shareholder in the
amount of the aggregate Exercise Price for such Shareholder's Stock (the
"LinPac Payments"); and
(b) such other instruments or documents as may be necessary or appropriate
to carry out the transactions contemplated hereby.
3.3. Deliveries by Shareholders. At the Closing, each Shareholder shall
deliver or cause to be delivered the following:
(a) certificates, with fully executed stock powers and signature
guarantees, evidencing the Stock elected to be purchased by LinPac and all
other documentation necessary or appropriate to effect the transfer of
ownership thereof to LinPac;
(b) an assignment of any option or rights to acquire capital stock of the
Company in form acceptable to LinPac, together with any necessary consents
for such assignment;
(c) an assignment of all claims the Shareholder may have against the
Company other than claims for normal compensation and fringe benefits, rights
under this Agreement, rights under the Merger Agreement if executed
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and delivered by all parties thereto, and rights under agreements described
in Schedule 4.5 attached hereto; and
(d) such other endorsements, instruments or documents as may be necessary
or appropriate to carry out the transactions contemplated hereby.
3.4 Escrow. Within 10 days after execution of this Agreement (20 days as
to items requiring the signature of William H. Roper or Ruth Roper), the
Shareholders shall deposit the items listed in Section 3.3(a), (b) and (c) (the
"Escrowed Items") into escrow, pursuant to an Escrow Agreement in form of
Exhibit B. The escrow agent shall be agreed upon by the parties and shall be
authorized to deliver the Escrowed Items to LinPac upon the delivery of the
LinPac Payments.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Except to the extent superseded by the Merger Agreement if authorized,
executed and delivered by all proposed parties thereto, the Shareholders hereby
jointly and severally represent and warrant to Parent and LinPac as of the date
hereof, as of the Closing and as of the Effective Time, as follows:
4.1. Authority. Each Shareholder has all requisite power and authority,
without the consent of any other person, to execute and deliver this Agreement
and the agreements and instruments to be delivered at the consummation of
transactions contemplated after approval of the Merger by the requisite vote of
Company stockholders and immediately prior to the Effective Time, and to carry
out the transactions contemplated hereby and thereby. All acts or proceedings
required to be taken by each Shareholder to authorize the execution and delivery
of this Agreement by the Shareholders and to authorize performance by the
Shareholders in accordance with their obligations under this Agreement have been
duly and properly taken.
4.2. Validity. This Agreement has been duly executed and delivered and
constitutes the lawful, valid and binding obligations of each Shareholder,
enforceable in accordance with its terms, except as enforcement may be limited
by applicable bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors' rights generally and by general equitable principles. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation of any lien,
charge or encumbrance of any kind or the acceleration of any indebtedness or
other obligation of any Shareholder or the Company and are not prohibited by, do
not violate or conflict with any provision of, and do not constitute a default
under or a breach of (a) the charter or by-laws of the Company, (b) any note,
bond, indenture, contract, agreement, permit, license or other instrument to
which any Shareholder or the Company is a party or by which any
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Shareholder or the Company or any of their assets is bound (except that
consummation of the Merger and transactions contemplated therein require the
consent or waiver of Sanwa Bank California under a Credit Facility Agreement as
amended), (c) any order, writ, injunction, decree or judgment of any court or
governmental agency, or (d) any law, rule or regulation applicable to the
Company. No approval, authorization, registration, consent, order or other
action of or filing with any person, including any court, administrative agency
or other government authority, is required for the execution and delivery by the
Shareholders of this Agreement or the performance by the Shareholders of their
obligations hereunder.
4.3. Due Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full power and authority and all requisite rights, licenses, permits and
franchises to own, lease and operate its assets and to carry out the business in
which it is engaged. The Company is duly licensed and qualified to do business
as a foreign corporation and is in good standing in all jurisdictions in which
the nature of its business and the ownership, leasing or operation of its assets
or the conduct of its business requires such qualification except where the
effect of the failure to so qualify would not be material to the operations of
the Company taken as a whole.
4.4. Capitalization.
(a) The authorized capital stock of the Company consists of 10,000,000
shares of Common Stock and 3,000,000 shares of Preferred Stock. As of September
23, 1994, there are 4,299,184 shares of Common Stock issued and outstanding and
no shares of the Company's Preferred Stock have been issued. All of the issued
and outstanding shares of Common Stock are duly authorized, validly issued,
fully paid and nonassessable, were not issued in violation of any preemptive,
subscription or other right of any person to acquire securities of the Company
and constitute in the aggregate all of the issued and outstanding capital stock
of all classes of the Company. Except as set forth on Schedule 4.4, there is no
outstanding subscription, option, convertible or exchangeable security,
preemptive right, warrant, call, agreement, arrangement or other right (other
than this Agreement) relating to the Company's capital stock or other obligation
or commitment of any Shareholder or the Company to issue or transfer any shares
of capital stock. To the best knowledge of the Shareholders, there are no voting
trusts or other agreements, arrangements or understandings applicable to the
exercise of voting or any other rights with respect to the Company's capital
stock.
(b) Except as to shares in the process of being transferred from the Roper
Family Trust to other Shareholders as described in the Preamble to this
Agreement, each Shareholder (and
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his or her spouse, if applicable) is the sole record and beneficial owner of
the number of shares of Common Stock set opposite the Shareholder's name in
the Preamble to this Agreement and, except in the event of the death of any
such Shareholder, will be the sole record and beneficial owner of any capital
stock of the Company acquired after the date hereof (collectively the "Stock"),
has good, marketable and indefeasible title thereto and the absolute right to
sell, assign, transfer and deliver the same, free and clear of all claims,
security interests, liens, pledges, charges, escrows, options, proxies, rights
of first refusal, preemptive rights, mortgages, hypothecations, prior
assignments, title retention agreements, indentures, security agreement or any
other limitation, encumbrance or restriction of any kind (collectively, the
"Adverse Claims") except for the proxies in favor of LinPac granted under this
Agreement.
4.5. Transactions with Affiliates. Since December 31, 1993, there has not
been any dividend declared or paid or other distribution of assets by the
Company to its stockholders or Affiliates (as hereinafter defined) except for
intercompany transactions among the Company and its wholly-owned subsidiaries.
Except as set forth in Schedule 4.5, neither the Shareholders nor any Affiliate,
directly or indirectly:
(a) owns any debt, equity or other interest or investment in any
corporation, association or other entity which is a competitor, lessor,
lessee, customer or supplier of the Company;
(b) has any cause of action or other claim whatsoever against or owes
any amount to, or is owed any amount by, the Company, except for
reimbursement of business expenses incurred in the ordinary course of
employment and payroll and other rights as an employee;
(c) has any interest in or owns any property or right used in the
conduct of the Company's business; or
(d) is a party to any contract, lease, agreement, arrangement or
commitment entered into with the Company or in connection with the
Company's business except as contemplated by this Agreement.
For purposes of this Agreement the term "Affiliate" means any member of the
immediate family of any individual Shareholder, or any corporation, partnership,
trust or other entity in which any of the foregoing individuals is a director,
officer, partner or trustee or has an equity interest in excess of 5%. The term
Affiliate shall also include any entity which controls, or is controlled by,
or is
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under common control with, any of the individuals or entities described in the
preceding sentence.
4.6. Financial Statements; Public Reports.
-------------------------------------
(a) The audited financial statements of the Company for the four years
ended December 31, 1990, 1991, 1992 and 1993 set forth in Public Reports (as
defined below) consisting of the Company's Annual Reports on Form 10-K for those
years (the "Audited Financial Statements") and the unaudited financial
statements of the Company for the six months ended June 30, 1994 set forth in
the Public Report consisting of the Company's Quarterly Report on Form 10-Q for
the quarter then ended (the "Unaudited Financial Statements") are, and will be:
(a) accurate, correct and complete in all material respects; (b) in accordance
with the books of account and records of the Company; (c) fair presentations of
the financial condition and results of operations of the Company as of the dates
and for the periods indicated above; and (d) prepared in accordance with U.S.
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods indicated except for changes made in response to FASB
bulletins as described in footnotes to the Audited Financial Statements. Except
to the extent reflected on the balance sheet included in the Unaudited Financial
Statements, indebtedness incurred in the ordinary course of business thereafter,
$1,400,000 in mortgage indebtedness incurred in July 1994 as part of a
refinancing of real property by Ropak Southwest Inc., funds borrowed on the
Company's bank credit line in September 1994 to repurchase certain outstanding
shares of preferred stock in Ropak Canada Inc., litigation pending or
threatened in the ordinary course of business which is not material to the
operations of the Company taken as a whole, and continuing obligations under
agreements to which the Company and its subsidiaries are parties, the Company
does not have and will not have as of the Closing Date, any indebtedness, duty,
responsibility, liability or obligation of any nature, whether absolute,
accrued, contingent or otherwise.
(b) The Company has made all filings with the Securities and Exchange Act
Commission (the "SEC") that it has been required to make under the Securities
Act of 1933 and the Securities Exchange Act of 1934 (collectively the "Public
Reports"). To the knowledge of the Shareholders, each of the Public Reports at
the time the same was filed with the SEC has complied with the Securities Act of
1933 and the Securities Exchange Act of 1934 in all material respects. To the
knowledge of the Shareholders, none of the Public Reports, as of their
respective dates, contained, and the final proxy statement filed pursuant to the
Merger will not contain, any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. The
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Company has delivered to LinPac or its counsel a correct and complete copy of
each Public Report (together with all material exhibits and schedules thereto
and as amended to date) for the year ended December 31, 1993 and the interim
period through the date hereof, and of each Public Report (without exhibits) for
the two years ended December 31, 1992.
4.7. Books and Records. The books of account, stock records and other
records (financial and otherwise) of the Company are in all material respects
complete and correct and as maintained in accordance with good business
practices.
4.8. Interim Change. Since December 31, 1993, there has not been (a) any
material adverse change in the financial condition, assets, liabilities,
personnel or business of the Company or in its relationships with suppliers,
customers, distributors, lenders, lessors or others; (b) any damage, destruction
or loss, whether or not covered by insurance, materially adversely affecting the
Company; (d) any event or condition or series of events or conditions which
could, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the Company; or (d) any development which could or
will have a material adverse effect on the Company or its business. Since
December 31, 1993, the Company has not incurred or become subject, or agreed to
incur or become subject to, any liability or obligation, contingent or
otherwise, except current liabilities and contractual obligations in the
ordinary course of business in amounts and on terms consistent with past
practices, liabilities and contractual obligations described in Section 4.6(a)
above, and liabilities and contractual obligations under a Reimbursement
Agreement with Bank One, Lexington and related documents as to an Industrial
Revenue Bond financing by the County of Scott, Kentucky in the principal amount
of up to $5,500,000. Since December 31, 1993, the Company has operated in the
ordinary course of business, consistent with past practices.
4.9. Brokers. No Shareholder has retained any broker, finder or agent or
incurred any liability or obligation for any brokerage fees, commissions or
finders' fees with respect to this Agreement or the transactions contemplated
hereby.
4.10. Disclosure. The representations and warranties of the Shareholders
contained in this Agreement and the Schedules, certificates delivered pursuant
to this Agreement, or after the date hereof in connection with the transactions
contemplated herein, are each accurate, correct and complete in all material
respects, and do not contain any untrue statement of a material fact. Each list
and description contained on any Schedule delivered pursuant to this Agreement
is accurate and complete.
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<PAGE>
SECTION 5. REPRESENTATIONS AND WARRANTIES OF LINPAC AND THE PARENT
Except to the extent superseded by the Merger Agreement if authorized,
executed and delivered by all proposed parties thereto, LinPac and the Parent
hereby jointly and severally represent and warrant to the Shareholders as of the
date hereof, as of the Closing, and as of the Effective Time as follows:
5.1. Authorization. LinPac and Parent each have all requisite power and
authority, without the consent of any other person, to execute and deliver this
Agreement and the agreements to be delivered at the consummation of transactions
contemplated after approval of the Merger by the requisite vote of Company
stockholders and immediately prior to the Effective Time, and to carry out the
transactions contemplated hereby and thereby. All corporate and other acts or
proceedings required to be taken by LinPac and Parent to authorize the
execution, delivery and performance of this Agreement and all transactions
contemplated hereby have been duly and properly taken. Parent and LinPac have
either cash resources or financing commitments necessary to fund the cash
payments contemplated by the Merger at the Effective Time, and upon request of
the Company's Board or the Shareholders, will provide written evidence of such
cash resources and/or financing commitments.
5.2. Validity. This Agreement has been, and the documents to be delivered
at Closing by LinPac will be, duly executed and delivered and constitute lawful,
valid and legally binding obligations of LinPac and Parent, enforceable in
accordance with their respective terms except as enforcement may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium and other laws
affecting, creditors' rights generally and by general equitable principles. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation of any lien,
charge or encumbrance of any kind or the acceleration of any indebtedness or
other obligation of LinPac or Parent and are not prohibited by, do not violate
or conflict with any provision of, and do not constitute a default under or a
breach of (a) the charter or By-Laws of LinPac or Parent, (b) any note, bond,
indenture, contract, agreement, permit license or other instrument to which
LinPac or Parent is a party or by which LinPac or Parent or any of its assets is
bound, (c) any order, writ, injunction, decree or judgment of any court or
governmental agency, or (d) any law, rule or regulation applicable to LinPac or
Parent.
5.3. Due Organization. LinPac is a corporation organized and validly
existing under the laws of the State of Delaware, and has full power and
authority to carry on the business in which it is engaged. Parent is a private
company limited by shares organized
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<PAGE>
and validly existing under the laws of the United Kingdom, and has full power
and authority to carry on the business in which it is engaged.
SECTION 6. COVENANTS OF THE SHAREHOLDERS
Each Shareholder hereby agrees to keep, perform and fully discharge the
following covenants and agreements except to the extent superseded by the Merger
Agreement if authorized, executed and delivered by all proposed parties thereto:
6.1. Interim Conduct of Business. From the date hereof through the term of
this Agreement, each Shareholder shall use his best efforts to cause the Company
to preserve, protect and maintain its business, and to operate its business
consistent with prior practice and in the ordinary course. Without limiting the
generality of the foregoing, from the date hereof through the term of this
Agreement, except for transactions expressly approved in writing by LinPac, the
Shareholders shall use their best efforts to cause the Company to:
(a) maintain its properties and assets in good repair, order and condition,
reasonable wear and tear exempted:
(b) maintain and keep in full force and effect all insurance on assets and
property or for the benefit of employees, all liability and other casualty
insurance and all bonds on personnel, presently carried;
(c) preserve intact the organization and reputation of the Company and keep
available the services of the present executives, employees and agents of
the Company and preserve the good will of suppliers, customers and others
having business relationships with the Company;
(d) maintain the Company's books, accounts and records in the usual, regular
and ordinary manner on a basis consistent with prior years;
(e) not enter into, amend or terminate any employment, bonus, severance or
retirement contract or arrangement except consistent with past practice,
nor increase any salary or other form of compensation payable or to become
payable to any Shareholder;
(f) not extend credit in the performance of services, sales of products,
collection of receivables or otherwise, other than in the ordinary and
regular course of business;
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<PAGE>
(g) not declare, set aside or pay any dividend or make any other distribution
with respect to the capital stock of the Company except for the repurchase
or redemption of preferred stock previously issued by Ropak Canada Inc.;
(h) not merge or consolidate with or agree to merge or consolidate with, nor
purchase or agree to purchase all or substantially all of the assets of,
nor otherwise acquire, any corporation, partnership, or other business
organization or division thereof;
(i) not sell, lease or otherwise dispose of or agree to sell, lease or
otherwise dispose of, any of the Company's assets, properties, rights or
claims, except in the ordinary course of business;
(j) not authorize for issuance, issue, sell or deliver any additional shares
of the Company's capital stock of any class (except for the issuance and
delivery of Common Stock upon the exercise of outstanding options or
warrants or the exercise of rights of conversion or exchange in accordance
with agreements in existence prior to the date hereof) or any securities
or obligations convertible into shares of the Company's capital stock of
any class or issue or grant any option, warrant or other right to purchase
any shares of the Company's capital stock of any class; or
(k) not incur or become subject to, nor agree to incur or become subject to,
any debt, obligation or liability, contingent or otherwise, except current
liabilities, borrowings under the Company's bank credit, obligations
incurred in connection with construction of the Company's new plant
facility in Georgetown, Kentucky and equipment and tooling required for
the plant, capital asset acquisitions consistent with amounts in prior
periods and contractual obligations incurred in the ordinary course of
business.
Furthermore, the Shareholders shall not take any action to seek,
encourage, solicit or support any inquiry, proposal, expression of interest or
offer from any other person or entity with respect to an acquisition,
combination or similar transaction involving the Company or substantially all of
the assets or securities related thereto, and the Shareholders will promptly
inform LinPac of the existence of any such inquiry, proposal, expression of
interest or offer. Nothing herein shall be deemed to prohibit the Shareholders,
to the extent required to fulfill their fiduciary duties as executive officers
and directors of the Company
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<PAGE>
from furnishing information to third parties as to the Company and its
operations to the same degree that any such information has been, or
concurrently is being furnished to LinPac.
The provisions of this Section 6.1 shall expire in any event on the first
anniversary of the date of this Agreement if the Merger shall not have been
consummated by such anniversary date or upon the consummation of a Change in
Control event.
6.2. Grant of Proxy. Each Shareholder hereby revokes any and all proxies
heretofore granted with respect to the Shareholder's Stock and, until February
28, 1995 (or such later date as is necessary to effect the closing on any proper
exercise of the Sale Option or the Purchase Option), hereby appoints, in
accordance with Section 212 of the Delaware General Corporation Law, the
Chairman and Chief Executive Officer, the President or any Vice President (from
time to time) of LinPac, and each of them, as attorney-in-fact and proxy of such
Shareholder to attend any and all meetings of the stockholders of the Company
and to vote the Shareholder's Stock, and to represent and otherwise to act for
such Shareholder in the same manner and with the same effect as if such
Shareholder were personally present and to act by consent in the same manner and
with the same effect as if such Shareholder were executing such consent, with
respect to any matter, subject to the following provisions of this Section 6.2.
Except to vote or consent in favor of the Merger, against any transaction that
would interfere with or impair the benefits of the Merger, or on matters
relating or incidental thereto, LinPac will not use proxies herein granted, (i)
to vote for the election of any person as a director of the Company not
nominated by the Company's current directors, or to seek the removal of any of
the Company's current directors, (ii) to call a special meeting of the Company's
shareholders (other than a shareholders' meeting called for the purpose of
seeking approval of the Merger), or (iii) to seek to take any action by means of
a written consent of the Company's shareholders, in each case without the prior
written approval of the Shareholder. Each Shareholder agrees that, so long as
this Agreement remains in effect, such Shareholder will not execute or deliver
to others proxy forms relating to meetings of shareholders of the Company and
will promptly provide LinPac with copies of any shareholders' communications
received by any Shareholder and will not take any other action inconsistent with
the proxy. The foregoing appointment shall (a) be irrevocable for the term of
this Agreement and (b) be deemed coupled with an interest in that LinPac has
agreed to pay all costs and expenses incurred by LinPac in proposing the Merger
and in seeking to implement and consummate the same, all without seeking
reimbursement of such costs and expenses from the Company or from the
Shareholders if the Merger is not successfully consummated for any reason (other
than intentional material misrepresentations on the part of the Company
-22-
<PAGE>
or the Shareholders, as the case may be) and will further agree to reimburse the
Company and Shareholders for all reasonable costs and expenses incurred by them
in seeking to implement and consummate the Merger if LinPac or Parent shall
default in performance of their obligations hereunder or as provided by the
Merger Agreement.
6.3. Stock. During the term of this Agreement, each Shareholder hereby
covenants and agrees that such Shareholder will not sell, transfer, assign,
pledge, hypothecate or otherwise dispose of any of the Stock or grant any rights
with respect to the Stock, or enter into any agreement with respect thereto,
except pursuant to the terms hereof.
6.4. General. The Shareholders agree to propose, advocate, support and
vote for the Merger. Each Shareholder hereby covenants and agrees to take any
and all actions and execute any and all documents in its capacity as a
stockholder of the Company as may be required to effect the Purchase Option
upon exercise by LinPac and to effect the Merger.
6.5. HSR Act. Upon execution hereof, the Shareholders will timely and
promptly make or cause to be made all filings required of them and the Company
under the Hart Scott Rodino Act ("HSR Act") and use their best efforts to cause
the satisfaction or termination of the waiting period under the HSR Act. The
Shareholders will furnish to LinPac such necessary information and reasonable
assistance as may be requested in connection with the preparation of necessary
filings or submissions to any governmental agency, including, without
limitation, any filings necessary under the provisions of the HSR Act.
SECTION 7. INVESTIGATION; SURVIVAL OF REPRESENTATIONS; TERM
7.1 Investigation. Upon the execution of this Agreement by all parties
hereto, Shareholders shall use their best efforts to permit LinPac and its duly
authorized representatives to be provided by the Company with full access to the
properties, books, records and business operations of the Company, which shall
include without limitation copies of all contracts and agreements to which the
Company and its subsidiaries are a party and other records and information which
Lin-Pac reasonably deems of significance in an investigation of the business,
assets, rights, liabilities, obligations and prospects of the Company. This
right of access shall include physical inspection of properties and assets as
well as the review of all pertinent books and records. The Shareholders will use
their best efforts to cause the Company's officers and employees to cooperate
fully in said examination and to cause the Company's public accountants and
outside legal counsel to cooperate
-23-
<PAGE>
fully and to make a full and complete disclosure to LinPac and its
representatives of all material facts regarding the financial records, assets,
obligations, contracts and business operations of the Company.
7.2. Reliance. All representations, warranties, covenants and agreements
contained in this Agreement or in any document, agreement or instrument
delivered pursuant hereto or thereto shall be deemed to be material and to have
been relied upon by the parties hereto, and the accuracy thereof shall be a
condition precedent to the obligation of the other parties hereto to consummate
the Merger contemplated by this Agreement.
7.3. Survival. LinPac and Parent acknowledge that all representations and
warranties by the Shareholders in this Agreement and by the Company and the
Shareholders in the Merger Agreement will not survive the closing of the Merger
Agreement and shall expire at the Effective Time of the Merger of LinPac with
the Company, except for: (i) representations and warranties of the Company and
Shareholders in agreements contemplated by Section 1.4 hereof; (ii)
representations and warranties of the Shareholders as to the number of shares of
the Company's capital stock issued and outstanding and reserved for issuance
pursuant to options, warrants, or other securities exercisable or convertible
into, or any calls or commitments or agreements of any kind relating to, the
Company's capital stock; and (iii) representations and warranties of the
Shareholders as to their ownership, free and clear of all encumbrances, of
shares of the Company's Common Stock.
SECTION 8. GENERAL PROVISIONS
8.1. Amendments and Waiver. No amendment, waiver or consent with respect to
any provision of this Agreement shall in any event be effective, unless the same
shall be in writing and signed by the parties hereto, and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
8.2. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered in person or sent by
registered or certified mail, postage prepaid, commercial overnight courier
(such as Express Mail, Federal Express, etc.) with written verification of
receipt or by telecopy. A notice shall be deemed given: (a) when delivered by
personal delivery (as evidenced by the receipt); (b) five (5) days after deposit
in the mail if sent by registered or certified mail; (c) one (1) day after
having been sent by commercial overnight courier as evidenced by the
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<PAGE>
written verification of receipt; or (d) on the date of confirmation if
telecopied, as set forth below:
(a) If to LinPac or Parent: c/o LinPac Mouldings Limited
Deykin Avenue
Witton
Birmingham B6 7HY
ENGLAND
Attention: David Williams
Telecopy: 011-44-021-327-6757
With copies to: McDermott, Will & Emery
227 West Monroe Street
Chicago, IL 60606-5096
Attention: Stanley H. Meadows, P.C.
Telecopy: (312) 984-3669
(b) If to the Shareholders: William H. Roper
12 Rue Biarittz
Newport Beach, CA 92660
Telecopy: (714) 644-8621
Robert E. Roper
3802 Holden Circle
Los Alamitos, CA 90720
C. Richard Roper
1383 N. Mustang
Orange, California 92667
With a copy to: Law Office of William M. Curtis
25241 Buckskin Drive
Laguna Hills, CA, 92653
Telecopy: (714) 831-4141
Any party may change its address for receiving notice given by written notice
given to the others named above.
8.3. Expenses. Except as otherwise expressly provided herein, each party to
this Agreement shall pay its own costs and expenses in connection with the
transactions contemplated hereby. LinPac and Parent jointly and severally agree
to reimburse the Company and Shareholders for all reasonable out of pocket costs
and expenses incurred by them in seeking to implement and consummate the Merger
if LinPac or Parent shall default in performance of their obligations hereunder
or as provided by the Merger Agreement or any other written agreement or
instrument given pursuant hereto or thereto.
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<PAGE>
8.4. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
8.5. Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties named herein and their respective successors and assigns.
No party to this Agreement shall be entitled to assign its rights and duties
under this Agreement without the consent of the other parties, provided that
Parent shall be entitled to assign its rights and duties under this Agreement to
any corporate affiliate of Parent without the consent of the Shareholders.
8.6. Entire Transaction. This Agreement and the documents referred to
herein contain the entire understanding among the parties with respect to the
actions contemplated hereby and supersedes all other agreements, understandings
and undertakings among the parties on the subject matter hereof.
8.7. Other Rules of Construction. References in this Agreement to
sections, schedules and exhibits are to sections of, and schedules and exhibits
to, this Agreement unless otherwise indicated. Words in the singular include the
plural and in the plural include the singular. The word "or" is not exclusive.
The word "including" shall mean including, without limitation. The section and
other headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
8.8. Announcements. No announcement of this Agreement or any transaction
contemplated hereby shall be made by any party prior to the Closing without the
written approval of the other party hereto (which approval shall not be
unreasonably withheld and may be provided by counsel to such party on its
behalf).
* * *
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed or caused this
Agreement to be executed all as of the date first written above,
LINPAC MOULDINGS, INC.
By: /s/ David A. Williams
------------------------------------
Its: Managing Director
------------------------------------
/s/ William H. Roper
----------------------------------------
William H. Roper
/s/ Ruth Roper
----------------------------------------
Ruth Roper
/s/ C. Richard Roper
----------------------------------------
C. Richard Roper
/s/ Margo Roper
----------------------------------------
Margo Roper
/s/ Robert E. Roper
----------------------------------------
Robert E. Roper
/s/ Nancy Roper
----------------------------------------
Nancy Roper
LINPAC MOULDINGS, LTD.
By: /s/ David A. Williams
------------------------------------
Its: Managing Director
------------------------------------
<PAGE>
/s/ C. Richard Roper
----------------------------------------
C. Richard Roper, as custodian
under the Uniform Transfers to
Minors Act
ROPER FAMILY TRUST
By: /s/ William H. Roper
-------------------------------------
William H. Roper, trustee
ROPER FAMILY TRUST F/B/O WILLIAM H.
ROPER DATED 4/12/94
By: /s/ William H. Roper
-------------------------------------
William H. Roper, trustee
ROPER FAMILY TRUST F/B/O ROBERT E.
ROPER AND/OR CHILDREN UTA 9/6/77
By: /s/ Robert E. Roper
-------------------------------------
Robert E. Roper, trustee
ROPER FAMILY TRUST F/B/O C. RICHARD
ROPER AND/OR CHILDREN UTA 9/6/77
By: /s/ C. Richard Roper
-------------------------------------
C. Richard Roper, trustee
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<PAGE>
EXHIBIT A
Formula for Incentive Compensation
1. In each year during the term of full time employment as defined in the
employee's employment agreement, incentive compensation shall be paid to each
eligible employee if Company Adjusted Earnings for such year (as defined below)
exceeds that year's Target Base (as defined below). If the Company's Adjusted
Earnings for the year shall exceed that year's Target Base, each eligible
employee's incentive compensation shall be 9.26% of the amount by which Company
Adjusted Earnings for the year exceeds the Target Base for the year, but in no
event shall each eligible employee's incentive compensation for any year exceed
the sum of $250,000.
2. Certain Definitions.
(a) "Company Adjusted Earnings" shall mean the Company's income from
operations determined in accordance with generally accepted accounting
principles consistently applied after audit by its independent public
accountants (which shall be a firm of recognized national standing), and then
adjusted as follows. In calculating Company Adjusted Earnings, there shall be
excluded from income or loss: (i) any extraordinary gains and losses from the
sale of intangible or capital assets; (ii) any gains or losses unrelated to
continuing operations of the Company and its consolidated subsidiaries; (iii)
any corporate charges of LinPac allocated to the Company; and (iv) provision for
federal, provincial, state and local taxes based upon income or profits of the
Company and its consolidated subsidiaries.
(b) "Target Base" in each year shall mean:
* for the fiscal year ended December 31, 1995 = the product obtained
by multiplying 1.1 by actual Company Adjusted Earnings for the
fiscal year ended December 31, 1994. The result is called the "1995
Target Base".
* for the fiscal year ended December 31, 1996 = the product obtained
by multiplying 1.1 by (the 1995 Target Base plus $2,700,000). The
result is called the "1996 Target Base".
* for the fiscal year ended December 31, 1997 = the product obtained
by multiplying 1.1 by (the 1996 Target Base plus $2,700,000). The
result is called the "1997 Target Base".
<PAGE>
* for the fiscal year ended December 31, 1998 = the product obtained
by multiplying 1.1 by (the 1997 Target Base plus $2,700,000). The
result is called the "1998 Target Base".
Example of application of Formula for Incentive Compensation, assuming that
Company Adjusted Earnings for the base year 1994 is $6.0 million.
The 1995 Target Base in this example would be $6,600,000
[$6,000,000 x 1.1]
As a result, each eligible employee would receive 9.26% of the first
$2,700,000 in actual 1995 Company Adjusted Earnings, or any part thereof,
to the extent 1995 Company Adjusted Earnings exceeded $6,600,000.
The 1996 Target Base in this example would be $10,230,000
[($6,000,000 + 2,700,000) x 1.1]
As a result, each eligible employee would receive 9.26% of the first
$2,700,000 in actual 1996 Company Adjusted Earnings, or any part thereof,
to the extent 1996 Company Adjusted Earnings exceeded $10,230,000.
The 1997 Target Base in this example would be $14,223,000
[($10,230,000 + 2,700,000) x 1.1]
As a result, each eligible employee would receive 9.26% of the first
$2,700,000 in actual 1997 Company Adjusted Earnings, or any part thereof,
to the extent 1997 Company Adjusted Earnings exceeded $14,223,000.
The 1998 Target Base in this example would be $18,615,300
[($14,223,000 + 2,700,000) x 1.1]
As a result, each eligible employee would receive 9.26% of the first
$2,700,000 in actual 1998 Company Adjusted Earnings, or any part thereof,
to the extent 1998 Company Adjusted Earnings exceeded $18,615,300.
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<PAGE>
EXHIBIT (c)(2)
SIDE LETTER AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 27th day of
February, 1994, by and between;
LINPAC MOULDINGS LTD. (the "Parent"), with its principal office at Deykin
Avenue, Witton, Birmingham B6 7HY, England;
WILLIAM H. ROPER and his spouse RUTH ROPER, residents of 12 Rue Biarittz,
Newport Beach, California 92660;
ROBERT E. ROPER and his spouse NANCY ROPER, residents of 3802 Holden Circle, Los
Alamitos, California 90720;
C. RICHARD ROPER and his spouse MARGO ROPER, residents of 1383 N. Mustang,
Orange, California 92667;
C. RICHARD ROPER in his capacity as custodian for certain minor children under
the Uniform Transfers to Minors Act (the "Custodian");
WILLIAM H. ROPER as sole current trustee for the ROPER FAMILY TRUST DATED
4/12/94 FBO WILLIAM H. ROPER UTA 9/6/77, AS AMENDED (the "William Trust");
ROBERT E. ROPER as sole current trustee for the ROPER FAMILY TRUST DATED 4/12/94
FBO ROBERT E. ROPER AND/OR CHILDREN UTA 9/6/77, AS AMENDED (the "Robert Trust");
and
C. RICHARD ROPER as sole current trustee for the ROPER FAMILY TRUST DATED
4/12/94 FBO C. RICHARD ROPER AND/OR CHILDREN UTA 9/6/77, AS AMENDED (the
"Richard Trust").
For convenience of reference, William H. Roper and Ruth Roper, Robert E. Roper
and Nancy Roper, C. Richard Roper and Margo Roper, the Custodian, the William
Trust, the Robert Trust and the Richard Trust are sometimes herein collectively
called the "Shareholders".
PREAMBLE
WHEREAS, ROPAK CORPORATION is a Delaware corporation (the "Company")
with its principal office located at 660 S. State College Blvd., Fullerton,
California 92631-5138;
WHEREAS, the parties hereto entered into that certain Agreement dated
September 25, 1994 (the "Option Agreement") with respect to the purchase and
sale of shares in the Company and certain other matters;
WHEREAS, due to subsequent events, the parties desire to
<PAGE>
terminate their obligations under the Option Agreement;
NOW, THEREFORE, in consideration of the premises, representations,
warranties, covenants, agreements and promises herein contained, the parties
agree as follows:
1. Effective upon the consummation of the following events, the
obligations of the parties under the Option Agreement shall terminate and be of
no further force and effect:
(a) The purchase by the Parent of all shares and stock options in the Company
owned by the Shareholders for a cash price of $10.50 per share of common
stock and, to the extent any such stock options are not exercised, the
difference between $10.50 per share less the exercise price of the stock
options;
(b) the execution and delivery of this Agreement; and
(c) the execution and delivery of those certain Employment Agreements dated as
of January 1, 1995 between the Company, on the one hand, and each of
William H. Roper, Robert E. Roper and C. Richard Roper, on the other hand,
with a guaranty of the obligations of the Company to be executed and
delivered by the Parent.
The parties hereto agree to cause all of the above matters to be concluded by no
later than February 27, 1995.
2. Within 60 days hereafter, the Parent shall cause the Company to
purchase from a partnership owned by the Shareholders certain real property
known by the street address of 660 South State College Boulevard, Fullerton,
California, currently leased by the Company. The purchase price to be paid for
such real property shall be payable in cash and shall be equal to the then
current fair market value of such real property as mutually agreed upon by
Parent and the said partnership or, should they fail to agree, as determined by
an independent appraisal. The parties shall open an escrow for the purchase and
sale of such real property not more than 60 days hereafter providing for a
closing of such real property purchase and sale within 30 days thereafter.
3. Parent acknowledges that the Company shall continue to be obligated to
make payments to members of the Roper family under the terms of 1985 agreements
relating to the sale of patent rights and related know-how, all as presently
constituted, for the remaining term thereof through the year ended December 31,
1995.
4. Parent undertakes and agrees with the Shareholders that if the Parent
has not, on or before April 30, 1995, commenced a tender offer (subject to
reasonable or customary conditions) or
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<PAGE>
instituted other actions to offer all other stockholders of the Company an
opportunity to sell their shares of the Company's common stock for a cash price
of not less than $10.50 per share or, in the alternative, of voting on a
proposed merger transaction that would provide for payment of a cash price of
not less than $10.50 per share if approved by the requisite vote of Company
stockholders, then the Parent shall thereafter take such action as is necessary
for the Company's other stockholders to be afforded either of such opportunities
at the earliest practicable date consistent with applicable securities laws and
regulations; provided however, that Parent shall not be obligated under this
Section 4 so long as (i) any litigation or other legal or administrative
proceeding is then pending that prevents Parent from engaging in such action or
materially adversely affects Parent's ability to proceed with such action, or
(ii) there shall occur hereafter any event or events, presently unanticipated by
the parties, that shall in the reasonable judgment of the parties materially and
adversely affect the valuation of the Company.
5. The parties hereto agree to maintain this Agreement and the substance
of paragraph 4 above as confidential information at all times prior to April 30,
1995 and shall not disclose the same to any third party prior to such date.
[SIGNATURE PAGE FOLLOWS]
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed or caused this
Agreement to be executed all as of the date first written above.
LINPAC MOULDINGS, LTD.
/s/ David A. Williams
By: _______________________________________________
/s/ William H. Roper
___________________________________________________
William H. Roper
/s/ Ruth Roper
___________________________________________________
Ruth Roper
/s/ C. Richard Roper
___________________________________________________
C. Richard Roper
/s/ Margo Roper
___________________________________________________
Margo Roper
/s/ Robert E.Roper
___________________________________________________
Robert E. Roper
/s/ Nancy Roper
___________________________________________________
Nancy Roper
/s/ C. Richard Roper
___________________________________________________
C. Richard Roper, as custodian
under the Uniform Transfers to Minors Act
ROPER FAMILY TRUST F/B/O WILLIAM H. ROPER DATED 4/12/94
/s/ William H. Roper
By: ______________________________________________
William H. Roper, Trustee
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<PAGE>
ROPER FAMILY TRUST F/B/O ROBERT E. ROPER
AND/OR CHILDREN UTA 9/6/77
/s/ Robert E. Roper
By: _____________________________________________
Robert E. Roper, Trustee
ROPER FAMILY TRUST F/B/O C. RICHARD ROPER
AND/OR CHILDREN UTA 9/6/77
/s/ C. Richard Roper
By: _____________________________________________
C. Richard Roper, Trustee
-5-
<PAGE>
EXHIBIT (c)(3)
STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 27th day of
February, 1995, by and among:
LINPAC MOULDINGS LTD. ("LINPAC"), with its principal office at
Deykin Avenue, Witton, Birmingham B6 7HY, England;
WILLIAM H. ROPER and his spouse RUTH ROPER, residents of 12 Rue
Biarittz, Newport Beach, California 92660;
ROBERT E. ROPER and his spouse NANCY ROPER, residents of 3802 Holden
Circle, Los Alamitos, California 90720;
C. RICHARD ROPER and his spouse MARGO ROPER, residents of 1383 N.
Mustang, Orange, California 92667;
WILLIAM H. ROPER as sole current trustee for the ROPER FAMILY TRUST
DATED 4/12/94 FBO WILLIAM H. ROPER UTA 9/6/77, AS AMENDED
(the "William Trust");
ROBERT E. ROPER as sole current trustee for the ROPER FAMILY TRUST
DATED 4/12/94 FBO ROBERT E. ROPER AND/OR CHILDREN UTA 9/6/77, AS
AMENDED (the "Robert Trust"); and
C. RICHARD ROPER as sole current trustee for the ROPER FAMILY TRUST
DATED 4/12/94 FBO C. RICHARD ROPER AND/OR CHILDREN UTA 9/6/77, AS
AMENDED (the "Richard Trust").
For convenience of reference, William H. Roper and Ruth Roper, Robert E. Roper
and Nancy Roper, C. Richard Roper and Margo Roper, the William Trust, the
Robert Trust and the Richard Trust are sometimes herein collectively called the
"Shareholders".
PREAMBLE
WHEREAS, ROPAK CORPORATION is a Delaware corporation (the "Company") with
its principal office located at 660 S. State College Blvd., Fullerton,
California 92631-5138;
WHEREAS, the Shareholders are founders, executive officers and directors
of the Company, and own of record and beneficially the number of issued and
outstanding shares (collectively, the "Shares") of common stock of the Company
(the "Common Stock") listed below:
William H. Roper and Ruth Roper........................ 225,134 shares
Robert E. Roper and Nancy Roper........................ 252,554 shares
C. Richard Roper and Margo Roper....................... 269,649 shares
William Trust.......................................... 79,395 shares
Robert Trust........................................... 79,394 shares
Richard Trust.......................................... 79,394 shares
<PAGE>
WHEREAS, each of William H. Roper, Robert E. Roper and C. Richard Roper
also hold the right to purchase 44,000 shares of the Common Stock under stock
options granted by the Company (the "Options");
SECTION 1. PURCHASE AND SALE
The purchase price for the Shares shall be $10.50 per share. The
purchase price for the Options shall be $5.0455 per share of Common Stock
represented by the Options.
SECTION 2. CLOSING
2.1. Closing. The transfer of Shares and Options (the "Closing") shall
occur through delivery service or at the offices of McDermott, Will & Emery, 227
West Monroe Street, Chicago, Illinois on the date hereof or such other date as
the parties agree.
2.2 Deliveries by LINPAC. At the Closing, LINPAC shall deliver the
following:
(a) wire transfer of immediately available funds to the applicable
Shareholder in the amounts and to the accounts listed on Schedule 2.2;
(b) wire transfer of immediately available funds to the applicable
Shareholder in the amounts and to the accounts listed on Schedule 2.2; and
(c) such other instruments or documents as may be necessary or
appropriate to carry out the transactions contemplated hereby.
2.3 Deliveries by Shareholder. At the Closing, each Shareholder shall
deliver the following:
(a) certificates for its Shares together with stock powers endorsed
in blank with signature guaranteed;
(b) in the case of William H. Roper, Robert E. Roper and C. Richard
Roper, such instruments as are necessary to cause the surrender and
cancellation of all Options held by each; and
(c) such other endorsements, instruments or documents as may be
necessary or appropriate to carry out the transactions contemplated hereby.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each Shareholder represents and warrants to LINPAC as of the date hereof
and as of the Closing, as follows:
<PAGE>
3.1. Authority. Each Shareholder has all requisite power and authority,
without the consent of any other person, to execute and deliver this Agreement
and the documents to be delivered at the Closing and to carry out the
transactions contemplated hereby and thereby.
3.2. Validity. This Agreement has been duly executed and delivered and
constitutes the lawful, valid and binding obligation of each Shareholder,
enforceable in accordance with its terms. No approval, authorization,
registration, consent, order or other action of or filing with any person,
including any court, administrative agency or other government authority, is
required for the execution and delivery by each Shareholder of this Agreement or
the performance by each Shareholder of its obligations hereunder.
3.3. Shares. The Shares are duly authorized, validly issued, fully paid
and non-assessable, were not issued in violation of any preemptive, subscription
or other right of any person to acquire securities of the Company. Each of the
Shareholders own the Shares attributed to the Shareholder in the Preamble and
has good, marketable and indefeasible title thereto and the absolute right to
sell, assign, transfer and deliver the same, free and clear of all claims,
security interests, liens, pledges, charges, escrows, options, proxies, rights
of first refusal, preemptive rights, mortgages, hypothecations, prior
assignments, title retention agreements, indentures, security agreements or any
other limitation, encumbrance or restriction of any kind.
3.4. Capital Stock. The authorized capital stock of the Company consists
of 10,000,000 shares of Common Stock and 3,000,000 shares of Preferred Stock.
4,386,162 shares of Common Stock are issued and outstanding and no shares of the
Company's Preferred Stock have been issued. Except as owned by LINPAC or as set
forth on Schedule 3.5, there is no outstanding subscription, option, convertible
or exchangeable security, preemptive right, warrant, call, agreement,
arrangement or other right (other than this Agreement) relating to the Company's
capital stock or other obligation or commitment of any Shareholder or the
Company to issue or transfer any shares of capital stock.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF LINPAC
LINPAC hereby represents and warrants to each Shareholder as of the date
hereof and as of the Closing, as follows:
4.1. Authority. LINPAC has all requisite power and authority, without
the consent of any other person, to execute and deliver this Agreement and the
documents to be delivered at the Closing, and to carry out the transactions
contemplated hereby and thereby. LINPAC is a private company limited by shares
organized and validly existing under the laws of the United Kingdom.
<PAGE>
4.2. Validity. This Agreement has been duly executed and delivered and
constitutes the lawful, valid and legally binding obligation of LINPAC. No
approval, authorization, registration, consent, order or other action of or
filing with any person, including any court, administrative agency or other
government authority, is required for the execution and delivery by LINPAC of
this Agreement or the performance by LINPAC of its obligations hereunder.
SECTION 5. SURVIVAL AND INDEMNIFICATION
The representations and warranties in this Agreement will survive the
Closing. Each party shall indemnify and hold harmless the other from any and all
loss, liability, cost, expense, claim or obligation arising from any breach of
any representation and warranty or failure to fulfill any covenant hereunder.
SECTION 6. GENERAL PROVISIONS
6.1. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered in person or sent by
registered or certified mail, postage prepaid, commercial overnight courier
(such as Express Mail, Federal Express, etc.) with written verification of
receipt or by telecopy.
6.2. Expenses. Each party to this Agreement shall pay its own costs and
expenses in connection with the transactions contemplated hereby.
6.3. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts each of which shall be deemed an original, but all of
which together constitute one and the same instrument.
6.4. Entire Transaction. This Agreement and the documents referred to
herein contain the entire understanding among the parties with respect to the
actions contemplated hereby and supersedes all other agreements, understandings
and undertakings among the parties on the subject matter hereof.
* * *
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed or caused
this Agreement to be executed all as of the date first written above.
LINPAC MOULDINGS LIMITED SHAREHOLDERS
By: /s/ David A. Williams /s/ William H. Roper
David A. Williams William H. Roper
Its: Managing Director
By: /s/ Ruth Roper
Ruth Roper
By: /s/ C. Richard Roper
C. Richard Roper
By: /s/ Margo Roper
Margo Roper
By: /s/ Robert E. Roper
Robert E. Roper
By: /s/ Nancy Roper
Nancy Roper
ROPER FAMILY TRUST F/B/O WILLIAM H.
ROPER DATED 4/12/94
By: /s/ William H. Roper
William H. Roper, trustee
ROPER FAMILY TRUST F/B/O ROBERT E.
ROPER AND/OR CHILDREN UTA 9/6/77
By: /s/ Robert E. Roper
Robert E. Roper, trustee
ROPER FAMILY TRUST F/B/O C. RICHARD
ROPER AND/OR CHILDREN UTA 9/6/77
By: /s/ C. Richard Roper
C. Richard Roper, trustee
<PAGE>
EXHIBIT (c)(4)
STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 10th day of
February, 1995, by and between LINPAC MOULDINGS LIMITED ("LINPAC"), with its
principal office at Deykin Avenue, Witton, Birmingham B6 7HY, England on the one
hand and C. Richard Roper, as Custodian for Cathy Diane Roper under the Uniform
Transfers to Minor Act (the "Shareholder").
WHEREAS, ROPAK CORPORATION is a Delaware corporation (the "Company")
with its principal office located at 660 S. State College Blvd., Fullerton,
California 92631-5138;
WHEREAS, the Shareholder owns 3,659 shares (the "Shares") of common
stock of the Company (the "Common Stock");
WHEREAS, the Shareholder desires to sell and LINPAC desires to
purchase the Shares;
NOW, THEREFORE, in consideration of the premises, representations,
warranties, covenants, agreements and promises herein contained, the parties
agree as follows:
SECTION 1. PURCHASE AND SALE
The Purchase Price for the Shares shall be $10.50 per share.
SECTION 2. CLOSING
2.1. Closing. The transfer of stock (the "Closing") shall occur
through delivery service or at the offices of McDermott, Will & Emery, 227 West
Monroe Street, Chicago, Illinois on the date hereof.
2.2. Deliveries by LINPAC. At the Closing, LINPAC shall deliver a
check in the amount of $38,419.50 payable to the Shareholder and such other
instruments or documents as may be necessary or appropriate to carry out the
transactions contemplated hereby.
2.3. Deliveries by Shareholder. At the Closing, Shareholder shall
deliver the following:
(a) a certificate for 3,659 shares of Common Stock together with a
stock power endorsed in blank with signature guaranteed; and
(b) such other endorsements, instruments or documents as may be
necessary or appropriate to carry out the transactions contemplated hereby.
<PAGE>
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder represents and warrants to LINPAC as of the date hereof
and as of the Closing, as follows:
3.1. Authority. Shareholder has all requisite power and authority,
without the consent of any other person, to execute and deliver this Agreement
and the documents to be delivered at the Closing and to carry out the
transactions contemplated hereby and thereby.
3.2 Validity. This Agreement has been duly executed and delivered
and constitutes the lawful, valid and binding obligation of Shareholder,
enforceable in accordance with its terms. No approval, authorization,
registration, consent, order or other action of or filing with any person,
including any court, administrative agency or other government authority, is
required for the execution and delivery by Shareholder of this Agreement or the
performance by Shareholder of its obligations hereunder.
3.4. Common Stock. Shareholder is the owner of the Shares and has
good, marketable and indefeasible title thereto and the absolute right to sell,
assign, transfer and deliver the same, free and clear of all claims, security
interests, liens, pledges, charges, escrows, options, proxies, rights of first
refusal, preemptive rights, mortgages, hypothecations, prior assignments, title
retention agreements, indentures, security agreements or any other limitation,
encumbrance or restriction of any kind.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF LINPAC
LINPAC hereby represents and warrants to Shareholder as of the date
hereof and as of the Closing, as follows:
4.1. Authority. LINPAC has all requisite power and authority,
without the consent of any other person, to execute and deliver this Agreement
and the documents to be delivered at the Closing, and to carry out the
transactions contemplated hereby and thereby. LINPAC is a private company
limited by shares organized and validly existing under the laws of the United
Kingdom.
4.2. Validity. This Agreement has been duly executed and delivered
and constitutes the lawful, valid and legally binding obligation of LINPAC. No
approval, authorization, registration, consent, order or other action of or
filing with any person, including any court, administrative agency or other
government authority, is required for the execution and delivery by LINPAC of
this Agreement or the performance by LINPAC of its obligations hereunder.
SECTION 5. SURVIVAL AND INDEMNIFICATION
<PAGE>
The representations and warranties in this Agreement will survive the
Closing. Each party shall indemnify and hold harmless the other from any and
all loss, liability, cost, expense, claim or obligation arising from any breach
of any representation and warranty or failure to fulfill any covenant hereunder.
SECTION 6. GENERAL PROVISIONS
6.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be delivered in person or
sent by registered or certified mail, postage prepaid, commercial overnight
courier (such as Express Mail, Federal Express, etc.) with written verification
of receipt or by telecopy.
6.2. Expenses. Each party to this Agreement shall pay its own
costs and expenses in connection with the transactions contemplated hereby.
6.3. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts each of which shall be deemed an original, but all of
which together constitute one and the same instrument.
6.4. Entire Transaction. This Agreement and the documents referred
to herein contain the entire understanding among the parties with respect to the
actions contemplated hereby and supersedes all other agreements, understandings
and undertakings among the parties on the subject matter hereof.
IN WITNESS WHEREOF, each of the parties hereto has executed or caused
this Agreement to be executed all as of the date first written above.
LINPAC MOULDINGS LIMITED SHAREHOLDER
By: /s/ David A. Williams /s/ C. Richard Roper
David A. Williams C. Richard Roper as Custodian
Its: Managing Director for Cathy Diane Roper
<PAGE>
EXHIBIT (c)(5)
STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 10th day of
February, 1995, by and between LINPAC MOULDINGS LIMITED ("LINPAC"), with its
principal office at Deykin Avenue, Witton, Birmingham B6 7HY, England on the one
hand and C. Richard Roper, as Custodian for Robert Richard Roper under the
Uniform Transfers to Minor Act (the "Shareholder").
WHEREAS, ROPAK CORPORATION is a Delaware corporation (the "Company") with
its principal office located at 660 S. State College Blvd., Fullerton,
California 92631-5138;
WHEREAS, the Shareholder owns 3,659 shares (the "Shares") of common stock
of the Company (the "Common Stock");
WHEREAS, the Shareholder desires to sell and LINPAC desires to purchase the
Shares;
NOW, THEREFORE, in consideration of the premises, representations,
warranties, covenants, agreements and promises herein contained, the parties
agree as follows:
SECTION 1. PURCHASE AND SALE
The Purchase Price for the Shares shall be $10.50 per share.
SECTION 2. CLOSING
2.1. Closing. The transfer of stock (the "Closing") shall occur through
delivery service or at the offices of McDermott, Will & Emery, 227 West Monroe
Street, Chicago, Illinois on the date hereof.
2.2. Deliveries by LINPAC. At the Closing, LINPAC shall deliver a check in
the amount of $38,419.50 payable to the Shareholder and such other instruments
or documents as may be necessary or appropriate to carry out the transactions
contemplated hereby.
2.3. Deliveries by Shareholder. At the Closing, Shareholder shall deliver
the following:
(a) a certificate for 3,659 shares of Common Stock together with a
stock power endorsed in blank with signature guaranteed; and
(b) such other endorsements, instruments or documents as may be
necessary or appropriate to carry out the transactions contemplated hereby.
<PAGE>
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder represents and warrants to LINPAC as of the date hereof and as
of the Closing, as follows:
3.1. Authority. Shareholder has all requisite power and authority,
without the consent of any other person, to execute and deliver this Agreement
and the documents to be delivered at the Closing and to carry out the
transactions contemplated hereby and thereby.
3.2 Validity. This Agreement has been duly executed and delivered and
constitutes the lawful, valid and binding obligation of Shareholder, enforceable
in accordance with its terms. No approval, authorization, registration,
consent, order or other action of or filing with any person, including any
court, administrative agency or other government authority, is required for the
execution and delivery by Shareholder of this Agreement or the performance by
Shareholder of its obligations hereunder.
3.4. Common Stock. Shareholder is the owner of the Shares and has good,
marketable and indefeasible title thereto and the absolute right to sell,
assign, transfer and deliver the same, free and clear of all claims, security
interests, liens, pledges, charges, escrows, options, proxies, rights of first
refusal, preemptive rights, mortgages, hypothecations, prior assignments, title
retention agreements, indentures, security agreements or any other limitation,
encumbrance or restriction of any kind.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF LINPAC
LINPAC hereby represents and warrants to Shareholder as of the date hereof
and as of the Closing, as follows:
4.1. Authority. LINPAC has all requisite power and authority, without the
consent of any other person, to execute and deliver this Agreement and the
documents to be delivered at the Closing, and to carry out the transactions
contemplated hereby and thereby. LINPAC is a private company limited by shares
organized and validly existing under the laws of the United Kingdom.
4.2. Validity. This Agreement has been duly executed and delivered and
constitutes the lawful, valid and legally binding obligation of LINPAC. No
approval, authorization, registration, consent, order or other action of or
filing with any person, including any court, administrative agency or other
government authority, is required for the execution and delivery by LINPAC of
this Agreement or the performance by LINPAC of its obligations hereunder.
SECTION 5. SURVIVAL AND INDEMNIFICATION
<PAGE>
The representations and warranties in this Agreement will survive the
Closing. Each party shall indemnify and hold harmless the other from any and
all loss, liability, cost, expense, claim or obligation arising from any breach
of any representation and warranty or failure to fulfill any covenant hereunder.
SECTION 6. GENERAL PROVISIONS
6.1. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered in person or sent by
registered or certified mail, postage prepaid, commercial overnight courier
(such as Express Mail, Federal Express, etc.) with written verification of
receipt or by telecopy.
6.2. Expenses. Each party to this Agreement shall pay its own costs and
expenses in connection with the transactions contemplated hereby.
6.3. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
6.4. Entire Transaction. This Agreement and the documents referred to
herein contain the entire understanding among the parties with respect to the
actions contemplated hereby and supersedes all other agreements, understandings
and undertakings among the parties on the subject matter hereof.
IN WITNESS WHEREOF, each of the parties hereto has executed or caused this
Agreement to be executed all as of the date first written above.
LINPAC MOULDINGS LIMITED SHAREHOLDER
By: /s/ David A. Williams /s/ C. Richard Roper
David A. Williams C. Richard Roper as Custodian
Its: Managing Director for Robert Richard Roper
<PAGE>
EXHIBIT (c)(6)
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT ("Agreement") is made as of the 1st day of January,
1995, by and between Ropak Corporation, a Delaware corporation (the "Company"),
and C. Richard Roper (the "Employee").
WHEREAS, Employee was one of the founders of the Company and possesses
intimate knowledge and expertise about all aspects of the business and
operations of the Company;
WHEREAS, Employee owned a substantial equity position in the Company
which he sold to LINPAC MOULDINGS LIMITED concurrent with the execution of this
Agreement; and
WHEREAS, the Company desires to enter into an employment agreement
with Employee in order to assure access to his experience with the Company and
to bind him to certain noncompetition and other covenants.
NOW, THEREFORE, in consideration of the premises and promises
contained herein, the parties agree as follows:
1. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company, as an executive officer of
the Company for a term of four years commencing as of January 1, 1995 through
December 31, 1998 to perform duties associated with acting as manager of design
and engineering and management of raw materials purchases similar to those
duties for which he is now responsible.
2. Performance. The Employee agrees to devote his best efforts,
energies and skills on a full time basis to the performance of his duties
hereunder (except for vacations and reasonable periods of illness or
incapacity). The Employee shall be deemed to have devoted his "full time" under
the requirements of his employment agreement if he devotes at least 180 working
days per year to the business affairs of the Company. The principal place of
business at which the Employee's duties are to be performed shall be located at
or within a ten mile radius of the Company's existing principal office in
Fullerton, California. The Employee may be obliged, from time to time, and for
reasonable periods of time, to travel in the performance of the Employee's
duties.
3. Base Salary. During his employment, for all duties to be
performed by the Employee hereunder, the Employee shall receive an annual base
salary (the "Base Salary") of Two Hundred Fifty Thousand Dollars ($250,000),
payable in accordance with the Company's normal payroll periods (prorated for
any partial calendar year).
<PAGE>
4. Benefits. During his employment, the Employee will be entitled to
receive fringe benefits comparable to those generally available to all employees
of the Company (including, without limitation, health insurance for the Employee
and his spouse under the Company's existing health plan or a comparable health
insurance plan and the right of participation in the Company 401(k) retirement
savings plan or a comparable retirement plan), reimbursement for travel and
related expenses incurred for the Company's business, the right to first class
domestic airline and business class international airline and first class hotel
accommodations when traveling on Company business, continuation by the Company
during the term of employment of premium payments on one million dollar life
insurance policies for the Employee as presently constituted, and payment by the
Company following retirement or in the event of pre-retirement death or
employment severance of all benefits provided by the Employee's Supplemental
Benefits Plan as presently constituted. In addition, the Company will continue
to cover the Employee and his spouse under the Company's existing or comparable
health plan at no cost to the Employee until he shall attain the age of 65,
notwithstanding the termination of his employment or this Agreement for any
reason prior to attaining that age. Upon termination of his employment with the
Company, ownership of the Employee's life insurance policy shall be transferred
to the Employee subject to the Company's right to receive certain proceeds as
presently specified therein and the obligation of the Employee to make payment
of premiums accruing from and after the termination of his employment with the
Company.
5. Performance Bonus. During his employment, the Employee will be
eligible to participate in an incentive bonus program providing for a payment to
the Employee for each fiscal year of the Company in which he was employed,
commencing with the fiscal year ending December 31, 1995, of not more than
$250,000 per year, with the actual amount of such incentive bonus, if any, to be
calculated in accordance with the formula set forth in Exhibit A attached
hereto. Such incentive bonus shall be payable within 90 days after the end of
the fiscal year to which it relates. If the employment of the Employee is
terminated for any reason other than (A) acts of moral turpitude, or (B) failure
on the part of the Employee to provide full time service to the Company within
the meaning of Section 2 above, the Employee will be eligible to receive that
percentage of his incentive bonus attributable to the full year in which his
employment was terminated which is in the same proportion that the number of
months worked during such year bears to twelve months, but he shall not be
entitled to an incentive bonus for any subsequent year.
6. Confidential Information.
(a) Employee acknowledges that in his position as an executive
officer he has had and shall have access to and knowledge
-2-
<PAGE>
of confidential information and trade secrets of the Company. Employee
covenants and agrees that he will not at any time, either during or after the
term of this Agreement, except to the extent use or disclosure is required by
applicable laws, or authorized in writing by the Company, directly or indirectly
disclose or furnish to any other person, firm or corporation or use for his own
benefit, gain or otherwise:
(i) any corporate or trade name or trademark of the Company or its
Affiliates for any purpose whatsoever; or
(ii) any and all trade secrets, confidential or proprietary
information (the "Confidential Information") relating to the business of
the Company, including, without limitation, financial statements, client
lists, methods of doing business, manufacturing practices, techniques and
processes, marketing programs and plans, customer and vendor information,
know how, techniques and other data and information of a proprietary
nature, of the Company and/or its Affiliates. Confidential Information
shall not include information which is public knowledge or which shall
become part of the public domain through no fault of the Employee or which
Employee shall be able to show to have been received from a third party
which shall not itself have received and does not possess the information
on a confidential basis. The parties recognize that the Confidential
Information, whether or not developed by Employee, is the exclusive
property of the Company or its Affiliates.
(b) As used in this Agreement, the term "Affiliate" shall mean any
other corporation or other business entity which directly, or indirectly through
one or more intermediaries, controls, is under common control with or is
controlled by the Company.
7. Covenants Not to Compete or Solicit.
(a) So long as the Employee is employed by the Company and for a
period of seven (7) years thereafter, the Employee shall not, directly or
indirectly, by or for himself or as the agent of another or through others as
his agent:
(i) promote, manufacture, sell, lease, license, distribute or
service anywhere in the world (the "Territory") products, processes or
services in existence or under development, which are similar to or in
competition with those of the Company;
-3-
<PAGE>
(ii) own, manage, operate, be compensated by, participate in,
render advice to, have any right to or interest in any other business
directly or indirectly engaged in the design, manufacture, production, sale
or distribution of products, processes or services competitive with those
of the Company or any Affiliate anywhere in the Territory;
(iii) divulge, communicate, use or disclose any nonpublic
information concerning the Company, its businesses and affairs, including
the Confidential Information; or
(iv) interfere with the business relationships or disparage the
good name or reputation of the Company or any Affiliate or take any action
which brings the Company or the business of the Company into public
ridicule or disrepute.
(b) So long as the Employee is employed by the Company and for a
period of seven (7) years thereafter, the Employee shall not (except in
connection with the rendering of services hereunder), directly or indirectly, by
or for himself, or as the agent of another, or through another as his agent:
(i) solicit or accept any business from any customer, purchaser
or supplier of the Company; provided, however, that after the termination
of the Employee's employment hereunder, he may solicit or accept business
from such a party as an employee of, or other adviser to, a business which
is not engaged in the design, manufacture, production, sale or distribution
of products, processes or services competitive with those of the Company or
any Affiliate;
(ii) solicit for employment or employ or become employed by any
customer, past, present or future employee of the Company, or request,
induce or advise any employee to leave the employ of the Company; provided,
however, that after the termination of the Employee's employment hereunder,
the Employee may be employed by a customer or past employee of the Company
if such participation is not enagaged in the design, manufacture,
production, sale or distribution of products, processes or services
competitive with those of the Company or any Affiliate;
(iii) use or disclose the names and/or addresses of any
customer, purchaser, supplier or employee of the Company to any person for
any purposes whatsoever.
-4-
<PAGE>
(c) If the Employee violates any provision of this Section, then the
Company shall not, as a result of the time involved in obtaining relief, be
deprived of the benefit of the full period of the restrictive covenant.
Accordingly, each restrictive covenant shall be deemed to have the duration
specified in Subsections 7(a) and 7(b) hereof, computed from the date the relief
is granted, but reduced by the time between the period when the restriction
began to run and the date of the first violation of the covenant by the
Employee.
(d) The Employee agrees that if Employee shall violate any of the
provisions of this Section, the Company shall be entitled to an accounting and
repayment of all profits, compensation, remuneration or other benefits that the
Employee, directly or indirectly, may realize arising from or related to any
such violation. These remedies shall be in addition to, and not in limitation
of, any injunctive relief or other rights to which the Company may be entitled.
(e) The parties agree and acknowledge that the duration, scope and
geographic areas applicable to the covenant not to compete described in this
Section are fair, reasonable and necessary, that adequate compensation has been
received by the Employee for such obligations (including compensation
hereunder), and that these obligations do not prevent the Employee from earning
a livelihood. If, however, for any reason any court determines that the
restrictions in this Section 7 are not reasonable, that consideration is
inadequate or that the Employee has been prevented from earning a livelihood,
such restrictions shall be interpreted, modified or rewritten to include as much
of the duration, scope and geographic area identified in this Section as will
render such restrictions valid and enforceable.
(f) Nothing herein shall prohibit the Employee from owning in the
aggregate not more than 1% of the outstanding stock of any corporation which is
publicly traded and engaged in the design, manufacture, production, sale or
distribution of products, processes or services competitive with those of the
Company or any Affiliate, so long as the Employee has no active participation in
the business of such corporation.
8. Consideration for Confidentiality and Noncompetition. In
consideration of the covenants against competition and disclosure of
Confidential Information, the Company shall pay the Employee the aggregate sum
of $1,320,000, payable in equal monthly installments over a term of six years
commencing with the first month after the latter of (A) the last month in which
he was employed, or (B) the last month in which he is entitled to receive
severance payments required under Section 9(a)(ii) below. Such payments shall
be made directly to the employee and in the event of his death or disability
while
-5-
<PAGE>
employed or during such six year term, then to his spouse (and if his spouse
shall not survive, then to his heirs, legatees and devisees) for the remaining
term of such six year payment period and notwithstanding the death or disability
of the Employee.
9. Termination.
(a) Termination by Company.
(i) Notwithstanding any other provision hereof, the Company may
terminate the Employee's employment under this Agreement without prior notice at
any time subject to the provisions of this Section 9. The termination shall be
evidenced by notice thereof to the Employee.
(ii) If the employment of the Employee is terminated by the
Company for any reason or for no reason prior to the expiration of the term of
this Agreement, then the Employee will receive severance payments payable
monthly for the remaining original term of his employment agreement equal to
150% of the amount of his aggregate base salary for such unexpired term of this
Agreement; provided, however, the Company shall have no obligation to make such
severance payments to the employee if his employment was terminated by reason of
(y) acts of moral turpitude, or (z) failure on the part of the employee to
provide full time service to the Company within the meaning of Section 2 above.
For purposes hereof, the term "acts of moral turpitude" shall include, without
limitation, dishonest, fraudulent or illegal conduct; misappropriation of
Company funds; or breach of any statutory or common law duty of loyalty to the
Company.
(b) Resignation and Retirement. Should the Employee elect to resign
or retire voluntarily prior to the expiration of the original term of this
Agreement, the Employee shall provide at least six months prior written notice
to the Company of the date of his voluntary retirement or resignation except in
the event his retirement or resignation is caused by death or disability.
Except in the event of death or disability, failure to provide such prior six
months notice shall relieve the Company from liability to pay an incentive bonus
for any portion of the year in which he shall retire or resign and shall also
relieve the Company from liability to pay any incentive bonus for the
immediately preceding prior year if the same has accrued but is not yet payable.
(c) Board Resignation. Upon termination of this Agreement for any
reason, Employee shall hereby be deemed to have resigned from the Company's
Board of Directors effective as of the date of termination.
-6-
<PAGE>
10. Remedies. The Employee acknowledges that the confidentiality and
non-competition provisions contained in Section 6 and Section 7 herein are
essential to induce the Company to enter into this Agreement, that any breach
thereof will result in serious and irreparable damage to the Company and that
money damages will not afford the Company an adequate remedy. Therefore, if the
Employee breaches any provision of Section 6 or Section 7 herein, the parties
agree that the Company shall be entitled, in addition to all other rights and
remedies as may be provided by law, to specific performance, as well as
injunctive and other equitable relief to prevent or restrain a breach of this
Agreement or to enforce this Agreement. The Company shall also be entitled to
seek a protective order to ensure the continued confidentiality of the
Confidential Information. Employee hereby waives any requirement of proof that
such breach will cause serious or irreparable injury to the Company, or that
there is not an adequate remedy at law. The existence of any claim or cause of
action of the Employee against the Company or any Affiliate, whether or not
predicated on the terms of this Agreement, shall not constitute a defense to the
enforcement of the Employee's obligations under this Agreement. The Employee
shall pay or reimburse the Company for all costs and expenses, including court
costs and reasonable attorneys' fees incurred or paid by the Company in
protecting or enforcing its rights and remedies hereunder.
11. Notice. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered in person or sent by
registered or certified mail, postage prepaid, commercial overnight courier
(such as Express Mail, Federal Express, etc.) with written verification of
receipt or by telecopy. A notice shall be deemed given: (a) when delivered by
personal delivery (as evidenced by the receipt); (b) five (5) days after deposit
in the mail if sent by registered or certified mail; (c) one (1) day after
having been sent by commercial overnight courier as evidenced by the written
verification of receipt; or (d) on the date of confirmation if telecopied, as
set forth below:
To Employee:
-----------
C. Richard Roper
1383 North Mustang
Orange, CA 92667
To Company:
----------
Ropak Corporation
660 South State College Blvd.
Fullerton, CA 92631
Telecopy: (714) 447-3871
-7-
<PAGE>
Attention: Chief Financial Officer
With a copy to:
LINPAC MOULDINGS LIMITED
Deykin Avenue
Witton
Birmingham B6 7HY
ENGLAND
Attention: David Williams
Telecopy : 011-44-021-327-6757
and
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
Attention: Stanley H. Meadows
Telecopy: (312) 984-3669
Any party may change its address for receiving notice given by written notice
given to the others named above.
12. Amendments and Waiver. No amendment, waiver or consent with
respect to any provision of this Agreement shall in any event be effective,
unless the same shall be in writing and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. Failure of the Company
to take action with respect to any breach or violation of any provision of this
Agreement by Employee, whether or not the Company had knowledge thereof, shall
not operate as a waiver of any subsequent breach or violation by Employee.
13. Counterparts. This Agreement may be executed simultaneously in
two counterparts each of which shall be deemed an original, but both of which
together constitute one and the same instrument.
14. Taxes. The Company shall be entitled to withhold the amount of
any tax attributable to any payments hereunder.
15. Transferability. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns and Employee, his
heirs, executors and legal representatives. Except as expressly provided
herein, in no event is the Employee's right to payments hereunder assignable in
any manner.
16. Assignment. This Agreement is for personal services and may not
be assigned or pledged by Employee in any
-8-
<PAGE>
manner, by operation of law or otherwise, without the written consent of the
Company.
17. Entire Agreement. This Agreement and the documents referred to
herein contain the entire understanding among the parties with respect to the
actions contemplated hereby and supersedes all other agreements, understandings
and undertakings among the parties on the subject matter hereof.
18. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
California, and the parties hereby consent to the jurisdiction of California
courts over all matters relating to this Agreement.
19. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
20. Severability. If any provision of this Agreement shall be
prohibited by or invalid under applicable law, or otherwise determined to be
unenforceable, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
21. Cessation of Obligations. All obligations of the Company and
rights of Employee under this Agreement shall cease upon any termination of this
Agreement, except as otherwise provided herein. Notwithstanding anything to the
contrary in this Agreement, the provisions of Sections 4, 5, and 9 which by
their terms survive termination of employment and the provisions of Sections 6,
7, 8, 10 and 18 shall survive any termination of this Agreement or employment
and shall remain in full force and effect.
22. Beneficiary. As the purchaser of Employee's equity interest in
the Company, LINPAC MOULDINGS LIMITED shall be entitled to enforce the
provisions of Sections 6, 7 and 10 in the name of the Company and these Sections
and this Section 22 shall not be amended without the prior written consent of
LINPAC MOULDINGS LIMITED.
-9-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
ROPAK CORPORATION
By: /s/ William H. Roper
------------------------------
Its: Chief Executive Officer
/s/ C. Richard Roper
----------------------------------
C. Richard Roper
-10-
<PAGE>
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT ("Agreement") is made as of the 1st day of January,
1995, by and between Ropak Corporation, a Delaware corporation (the "Company"),
and William H. Roper (the "Employee").
WHEREAS, Employee was one of the founders of the Company and possesses
intimate knowledge and expertise about all aspects of the business and
operations of the Company;
WHEREAS, Employee owned a substantial equity position in the Company
which he sold to LINPAC MOULDINGS LIMITED concurrent with the execution of this
Agreement; and
WHEREAS, the Company desires to enter into an employment agreement
with Employee in order to assure access to his experience with the Company and
to bind him to certain noncompetition and other covenants.
NOW, THEREFORE, in consideration of the premises and promises
contained herein, the parties agree as follows:
1. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company, as an executive officer of
the Company for a term of one year commencing as of January 1, 1995 through
December 31, 1995 with duties relating primarily to strategic and market
planning and business expansion similar to those duties for which he is now
responsible.
2. Performance. The Employee agrees to devote his best efforts,
energies and skills on a full time basis to the performance of his duties
hereunder (except for vacations and reasonable periods of illness or
incapacity). The Employee shall be deemed to have devoted his "full time" under
the requirements of his employment agreement if he devotes at least 180 working
days per year to the business affairs of the Company. The principal place of
business at which the Employee's duties are to be performed shall be located at
or within a ten mile radius of the Company's existing principal office in
Fullerton, California. The Employee may be obliged, from time to time, and for
reasonable periods of time, to travel in the performance of the Employee's
duties.
3. Base Salary. During his employment, for all duties to be
performed by the Employee hereunder, the Employee shall receive an annual base
salary (the "Base Salary") of Two Hundred Fifty Thousand Dollars ($250,000),
payable in accordance with the
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<PAGE>
Company's normal payroll periods (prorated for any partial calendar year).
4. Benefits. During his employment, the Employee will be entitled to
receive fringe benefits comparable to those generally available to all employees
of the Company (including, without limitation, health insurance for the Employee
and his spouse under the Company's existing health plan or a comparable health
insurance plan and the right of participation in the Company 401(k) retirement
savings plan or a comparable retirement plan), reimbursement for travel and
related expenses incurred for the Company's business, the right to first class
domestic airline and business class international airline and first class hotel
accommodations when traveling on Company business, continuation by the Company
during the term of employment of premium payments on one million dollar life
insurance policies for the Employee as presently constituted, and payment by the
Company following retirement or in the event of pre-retirement death or
employment severance of all benefits provided by the Employee's Supplemental
Benefits Plan as presently constituted. Upon termination of his employment with
the Company, ownership of the Employee's life insurance policy shall be
transferred to the Employee subject to the Company's right to receive certain
proceeds as presently specified therein and the obligation of the Employee to
make payment of premiums accruing from and after the termination of his
employment with the Company.
5. Performance Bonus. During his employment, the Employee will be
eligible to participate in an incentive bonus program providing for a payment to
the Employee for each fiscal year of the Company in which he was employed,
commencing with the fiscal year ending December 31, 1995, of not more than
$250,000 per year, with the actual amount of such incentive bonus, if any, to be
calculated in accordance with the formula set forth in Exhibit A attached
hereto. Such incentive bonus shall be payable within 90 days after the end of
the fiscal year to which it relates. If the employment of the Employee is
terminated for any reason other than (A) acts of moral turpitude, or (B) failure
on the part of the Employee to provide full time service to the Company within
the meaning of Section 2 above, the Employee will be eligible to receive that
percentage of his incentive bonus attributable to the full year in which his
employment was terminated which is in the same proportion that the number of
months worked during such year bears to twelve months, but he shall not be
entitled to an incentive bonus for any subsequent year.
6. Confidential Information.
(a) Employee acknowledges that in his position as an executive
officer he has had and shall have access to and
-12-
<PAGE>
knowledge of confidential information and trade secrets of the Company.
Employee covenants and agrees that he will not at any time, either during or
after the term of this Agreement, except to the extent use or disclosure is
required by applicable laws, or authorized in writing by the Company, directly
or indirectly disclose or furnish to any other person, firm or corporation or
use for his own benefit, gain or otherwise:
(i) any corporate or trade name or trademark of the Company or its
Affiliates for any purpose whatsoever; or
(ii) any and all trade secrets, confidential or proprietary
information (the "Confidential Information") relating to the business of
the Company, including, without limitation, financial statements, client
lists, methods of doing business, manufacturing practices, techniques and
processes, marketing programs and plans, customer and vendor information,
know how, techniques and other data and information of a proprietary
nature, of the Company and/or its Affiliates. Confidential Information
shall not include information which is public knowledge or which shall
become part of the public domain through no fault of the Employee or which
Employee shall be able to show to have been received from a third party
which shall not itself have received and does not possess the information
on a confidential basis. The parties recognize that the Confidential
Information, whether or not developed by Employee, is the exclusive
property of the Company or its Affiliates.
(b) As used in this Agreement, the term "Affiliate" shall mean any
other corporation or other business entity which directly, or indirectly through
one or more intermediaries, controls, is under common control with or is
controlled by the Company.
7. Covenants Not to Compete or Solicit.
(a) So long as the Employee is employed by the Company and for a
period of seven (7) years thereafter, the Employee shall not, directly or
indirectly, by or for himself or as the agent of another or through others as
his agent:
(i) promote, manufacture, sell, lease, license, distribute or
service anywhere in the world (the "Territory") products, processes or
services in existence or under development, which are similar to or in
competition with those of the Company;
-13-
<PAGE>
(ii) own, manage, operate, be compensated by, participate in,
render advice to, have any right to or interest in any other business
directly or indirectly engaged in the design, manufacture, production, sale
or distribution of products, processes or services competitive with those
of the Company or any Affiliate anywhere in the Territory;
(iii) divulge, communicate, use or disclose any nonpublic
information concerning the Company, its businesses and affairs, including
the Confidential Information; or
(iv) interfere with the business relationships or disparage the
good name or reputation of the Company or any Affiliate or take any action
which brings the Company or the business of the Company into public
ridicule or disrepute.
(b) So long as the Employee is employed by the Company and for a
period of seven (7) years thereafter, the Employee shall not (except in
connection with the rendering of services hereunder), directly or indirectly, by
or for himself, or as the agent of another, or through another as his agent:
(i) solicit or accept any business from any customer, purchaser
or supplier of the Company; provided, however, that after the termination
of the Employee's employment hereunder, he may solicit or accept business
from such a party as an employee of, or other adviser to, a business which
is not engaged in the design, manufacture, production, sale or distribution
of products, processes or services competitive with those of the Company or
any Affiliate;
(ii) solicit for employment or employ or become employed by any
customer, past, present or future employee of the Company, or request,
induce or advise any employee to leave the employ of the Company; provided,
however, that after the termination of the Employee's employment hereunder,
the Employee may be employed by a customer or past employee of the Company
if such participation is not enagaged in the design, manufacture,
production, sale or distribution of products, processes or services
competitive with those of the Company or any Affiliate;
(iii) use or disclose the names and/or addresses of any
customer, purchaser, supplier or employee of the Company to any person for
any purposes whatsoever.
-14-
<PAGE>
(c) If the Employee violates any provision of this Section, then the
Company shall not, as a result of the time involved in obtaining relief, be
deprived of the benefit of the full period of the restrictive covenant.
Accordingly, each restrictive covenant shall be deemed to have the duration
specified in Subsections 7(a) and 7(b) hereof, computed from the date the relief
is granted, but reduced by the time between the period when the restriction
began to run and the date of the first violation of the covenant by the
Employee.
(d) The Employee agrees that if Employee shall violate any of the
provisions of this Section, the Company shall be entitled to an accounting and
repayment of all profits, compensation, remuneration or other benefits that the
Employee, directly or indirectly, may realize arising from or related to any
such violation. These remedies shall be in addition to, and not in limitation
of, any injunctive relief or other rights to which the Company may be entitled.
(e) The parties agree and acknowledge that the duration, scope and
geographic areas applicable to the covenant not to compete described in this
Section are fair, reasonable and necessary, that adequate compensation has been
received by the Employee for such obligations (including compensation
hereunder), and that these obligations do not prevent the Employee from earning
a livelihood. If, however, for any reason any court determines that the
restrictions in this Section 7 are not reasonable, that consideration is
inadequate or that the Employee has been prevented from earning a livelihood,
such restrictions shall be interpreted, modified or rewritten to include as much
of the duration, scope and geographic area identified in this Section as will
render such restrictions valid and enforceable.
(f) Nothing herein shall prohibit the Employee from owning in the
aggregate not more than 1% of the outstanding stock of any corporation which is
publicly traded and engaged in the design, manufacture, production, sale or
distribution of products, processes or services competitive with those of the
Company or any Affiliate, so long as the Employee has no active participation in
the business of such corporation.
8. Consideration for Confidentiality and Noncompetition. In
consideration of the covenants against competition and disclosure of
Confidential Information, the Company shall pay the Employee the aggregate sum
of $1,320,000, payable in equal monthly installments over a term of six years
commencing with the first month after the latter of (A) the last month in which
he was employed, or (B) the last month in which he is entitled to receive
severance payments required under Section 9(a)(ii) below. Such payments shall
be made directly to the employee and in the event of his death or disability
while
-15-
<PAGE>
employed or during such six year term, then to his spouse (and if his spouse
shall not survive, then to his heirs, legatees and devisees) for the remaining
term of such six year payment period and notwithstanding the death or disability
of the Employee.
9. Termination.
(a) Termination by Company.
(i) Notwithstanding any other provision hereof, the Company may
terminate the Employee's employment under this Agreement without prior notice at
any time subject to the provisions of this Section 9. The termination shall be
evidenced by notice thereof to the Employee.
(ii) If the employment of the Employee is terminated by the
Company for any reason or for no reason prior to the expiration of the term of
this Agreement, then the Employee will receive severance payments payable
monthly for the remaining original term of his employment agreement equal to
150% of the amount of his aggregate base salary for such unexpired term of this
Agreement; provided, however, the Company shall have no obligation to make such
severance payments to the employee if his employment was terminated by reason of
(y) acts of moral turpitude, or (z) failure on the part of the employee to
provide full time service to the Company within the meaning of Section 2 above.
For purposes hereof, the term "acts of moral turpitude" shall include, without
limitation, dishonest, fraudulent or illegal conduct; misappropriation of
Company funds; or breach of any statutory or common law duty of loyalty to the
Company.
(b) Resignation and Retirement. Should the Employee elect to resign
or retire voluntarily prior to the expiration of the original term of this
Agreement, the Employee shall provide at least six months prior written notice
to the Company of the date of his voluntary retirement or resignation except in
the event his retirement or resignation is caused by death or disability.
Except in the event of death or disability, failure to provide such prior six
months notice shall relieve the Company from liability to pay an incentive bonus
for any portion of the year in which he shall retire or resign and shall also
relieve the Company from liability to pay any incentive bonus for the
immediately preceding prior year if the same has accrued but is not yet payable.
(c) Board Resignation. Upon termination of this Agreement for any
reason, Employee shall hereby be deemed to have resigned from the Company's
Board of Directors effective as of the date of termination.
-16-
<PAGE>
10. Remedies. The Employee acknowledges that the confidentiality and
non-competition provisions contained in Section 6 and Section 7 herein are
essential to induce the Company to enter into this Agreement, that any breach
thereof will result in serious and irreparable damage to the Company and that
money damages will not afford the Company an adequate remedy. Therefore, if the
Employee breaches any provision of Section 6 or Section 7 herein, the parties
agree that the Company shall be entitled, in addition to all other rights and
remedies as may be provided by law, to specific performance, as well as
injunctive and other equitable relief to prevent or restrain a breach of this
Agreement or to enforce this Agreement. The Company shall also be entitled to
seek a protective order to ensure the continued confidentiality of the
Confidential Information. Employee hereby waives any requirement of proof that
such breach will cause serious or irreparable injury to the Company, or that
there is not an adequate remedy at law. The existence of any claim or cause of
action of the Employee against the Company or any Affiliate, whether or not
predicated on the terms of this Agreement, shall not constitute a defense to the
enforcement of the Employee's obligations under this Agreement. The Employee
shall pay or reimburse the Company for all costs and expenses, including court
costs and reasonable attorneys' fees incurred or paid by the Company in
protecting or enforcing its rights and remedies hereunder.
11. Notice. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered in person or sent by
registered or certified mail, postage prepaid, commercial overnight courier
(such as Express Mail, Federal Express, etc.) with written verification of
receipt or by telecopy. A notice shall be deemed given: (a) when delivered by
personal delivery (as evidenced by the receipt); (b) five (5) days after deposit
in the mail if sent by registered or certified mail; (c) one (1) day after
having been sent by commercial overnight courier as evidenced by the written
verification of receipt; or (d) on the date of confirmation if telecopied, as
set forth below:
To Employee:
-----------
William H. Roper
12 Rue Biarritz
Newport Beach, CA 92660
Telecopy: (714) 644-8621
To Company:
----------
Ropak Corporation
660 South State College Blvd.
Fullerton, CA 92631
-17-
<PAGE>
Telecopy: (714) 447-3871
Attention: Chief Financial Officer
With a copy to:
LINPAC MOULDINGS LIMITED
Deykin Avenue
Witton
Birmingham B6 7HY
ENGLAND
Attention: David Williams
Telecopy : 011-44-021-327-6757
and
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
Attention: Stanley H. Meadows
Telecopy: (312) 984-3669
Any party may change its address for receiving notice given by written notice
given to the others named above.
12. Amendments and Waiver. No amendment, waiver or consent with
respect to any provision of this Agreement shall in any event be effective,
unless the same shall be in writing and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. Failure of the Company
to take action with respect to any breach or violation of any provision of this
Agreement by Employee, whether or not the Company had knowledge thereof, shall
not operate as a waiver of any subsequent breach or violation by Employee.
13. Counterparts. This Agreement may be executed simultaneously in
two counterparts each of which shall be deemed an original, but both of which
together constitute one and the same instrument.
14. Taxes. The Company shall be entitled to withhold the amount of
any tax attributable to any payments hereunder.
15. Transferability. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns and Employee, his
heirs, executors and legal representatives. Except as expressly provided
herein, in no event is the Employee's right to payments hereunder assignable in
any manner.
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<PAGE>
16. Assignment. This Agreement is for personal services and may not
be assigned or pledged by Employee in any manner, by operation of law or
otherwise, without the written consent of the Company.
17. Entire Agreement. This Agreement and the documents referred to
herein contain the entire understanding among the parties with respect to the
actions contemplated hereby and supersedes all other agreements, understandings
and undertakings among the parties on the subject matter hereof.
18. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
California, and the parties hereby consent to the jurisdiction of California
courts over all matters relating to this Agreement.
19. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
20. Severability. If any provision of this Agreement shall be
prohibited by or invalid under applicable law, or otherwise determined to be
unenforceable, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
21. Cessation of Obligations. All obligations of the Company and
rights of Employee under this Agreement shall cease upon any termination of this
Agreement, except as otherwise provided herein. Notwithstanding anything to the
contrary in this Agreement, the provisions of Sections 4, 5, and 9 which by
their terms survive termination of employment and the provisions of Sections 6,
7, 8, 10 and 18 shall survive any termination of this Agreement or employment
and shall remain in full force and effect.
22. Beneficiary. As the purchaser of Employee's equity interest in
the Company, LINPAC MOULDINGS LIMITED shall be entitled to enforce the
provisions of Sections 6, 7 and 10 in the name of the Company and these Sections
and this Section 22 shall not be amended without the prior written consent of
LINPAC MOULDINGS LIMITED.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
ROPAK CORPORATION
By: /s/ C. Richard Roper
---------------------------------
/s/ William H. Roper
-------------------------------------
William H. Roper
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<PAGE>
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT ("Agreement") is made as of the 1st day of January,
1995, by and between Ropak Corporation, a Delaware corporation (the "Company"),
and Robert E. Roper (the "Employee").
WHEREAS, Employee was one of the founders of the Company and possesses
intimate knowledge and expertise about all aspects of the business and
operations of the Company;
WHEREAS, Employee owned a substantial equity position in the Company
which he sold to LINPAC MOULDINGS LIMITED concurrent with the execution of this
Agreement; and
WHEREAS, the Company desires to enter into an employment agreement
with Employee in order to assure access to his experience with the Company and
to bind him to certain noncompetition and other covenants.
NOW, THEREFORE, in consideration of the premises and promises
contained herein, the parties agree as follows:
1. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company, as an executive officer of
the Company for a term of three years commencing as of January 1, 1995 through
December 31, 1997 with duties associated with acting as general manager of the
United States container operations similar to those duties for which he is now
responsible.
2. Performance. The Employee agrees to devote his best efforts,
energies and skills on a full time basis to the performance of his duties
hereunder (except for vacations and reasonable periods of illness or
incapacity). The Employee shall be deemed to have devoted his "full time" under
the requirements of his employment agreement if he devotes at least 180 working
days per year to the business affairs of the Company. The principal place of
business at which the Employee's duties are to be performed shall be located at
or within a ten mile radius of the Company's existing principal office in
Fullerton, California. The Employee may be obliged, from time to time, and for
reasonable periods of time, to travel in the performance of the Employee's
duties.
3. Base Salary. During his employment, for all duties to be
performed by the Employee hereunder, the Employee shall receive an annual base
salary (the "Base Salary") of Two Hundred Fifty Thousand Dollars ($250,000),
payable in accordance with the Company's normal payroll periods (prorated for
any partial calendar year).
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<PAGE>
4. Benefits. During his employment, the Employee will be entitled to
receive fringe benefits comparable to those generally available to all employees
of the Company (including, without limitation, health insurance for the Employee
and his spouse under the Company's existing health plan or a comparable health
insurance plan and the right of participation in the Company 401(k) retirement
savings plan or a comparable retirement plan), reimbursement for travel and
related expenses incurred for the Company's business, the right to first class
domestic airline and business class international airline and first class hotel
accommodations when traveling on Company business, continuation by the Company
during the term of employment of premium payments on one million dollar life
insurance policies for the Employee as presently constituted, and payment by the
Company following retirement or in the event of pre-retirement death or
employment severance of all benefits provided by the Employee's Supplemental
Benefits Plan as presently constituted. In addition, the Company will continue
to cover the Employee and his spouse under the Company's existing or comparable
health plan at no cost to the Employee until he shall attain the age of 65,
notwithstanding the termination of his employment or this Agreement for any
reason prior to attaining that age. Upon termination of his employment with the
Company, ownership of the Employee's life insurance policy shall be transferred
to the Employee subject to the Company's right to receive certain proceeds as
presently specified therein and the obligation of the Employee to make payment
of premiums accruing from and after the termination of his employment with the
Company.
5. Performance Bonus. During his employment, the Employee will be
eligible to participate in an incentive bonus program providing for a payment to
the Employee for each fiscal year of the Company in which he was employed,
commencing with the fiscal year ending December 31, 1995, of not more than
$250,000 per year, with the actual amount of such incentive bonus, if any, to be
calculated in accordance with the formula set forth in Exhibit A attached
hereto. Such incentive bonus shall be payable within 90 days after the end of
the fiscal year to which it relates. If the employment of the Employee is
terminated for any reason other than (A) acts of moral turpitude, or (B) failure
on the part of the Employee to provide full time service to the Company within
the meaning of Section 2 above, the Employee will be eligible to receive that
percentage of his incentive bonus attributable to the full year in which his
employment was terminated which is in the same proportion that the number of
months worked during such year bears to twelve months, but he shall not be
entitled to an incentive bonus for any subsequent year.
6. Confidential Information.
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<PAGE>
(a) Employee acknowledges that in his position as an executive
officer he has had and shall have access to and knowledge of confidential
information and trade secrets of the Company. Employee covenants and agrees
that he will not at any time, either during or after the term of this Agreement,
except to the extent use or disclosure is required by applicable laws, or
authorized in writing by the Company, directly or indirectly disclose or furnish
to any other person, firm or corporation or use for his own benefit, gain or
otherwise:
(i) any corporate or trade name or trademark of the Company or its
Affiliates for any purpose whatsoever; or
(ii) any and all trade secrets, confidential or proprietary
information (the "Confidential Information") relating to the business of
the Company, including, without limitation, financial statements, client
lists, methods of doing business, manufacturing practices, techniques and
processes, marketing programs and plans, customer and vendor information,
know how, techniques and other data and information of a proprietary
nature, of the Company and/or its Affiliates. Confidential Information
shall not include information which is public knowledge or which shall
become part of the public domain through no fault of the Employee or which
Employee shall be able to show to have been received from a third party
which shall not itself have received and does not possess the information
on a confidential basis. The parties recognize that the Confidential
Information, whether or not developed by Employee, is the exclusive
property of the Company or its Affiliates.
(b) As used in this Agreement, the term "Affiliate" shall mean any
other corporation or other business entity which directly, or indirectly through
one or more intermediaries, controls, is under common control with or is
controlled by the Company.
7. Covenants Not to Compete or Solicit.
(a) So long as the Employee is employed by the Company and for a
period of seven (7) years thereafter, the Employee shall not, directly or
indirectly, by or for himself or as the agent of another or through others as
his agent:
(i) promote, manufacture, sell, lease, license, distribute or
service anywhere in the world (the "Territory") products, processes or
services in
-23-
<PAGE>
existence or under development, which are similar to or in competition with
those of the Company;
(ii) own, manage, operate, be compensated by, participate in,
render advice to, have any right to or interest in any other business
directly or indirectly engaged in the design, manufacture, production, sale
or distribution of products, processes or services competitive with those
of the Company or any Affiliate anywhere in the Territory;
(iii) divulge, communicate, use or disclose any nonpublic
information concerning the Company, its businesses and affairs, including
the Confidential Information; or
(iv) interfere with the business relationships or disparage the
good name or reputation of the Company or any Affiliate or take any action
which brings the Company or the business of the Company into public
ridicule or disrepute.
(b) So long as the Employee is employed by the Company and for a
period of seven (7) years thereafter, the Employee shall not (except in
connection with the rendering of services hereunder), directly or indirectly, by
or for himself, or as the agent of another, or through another as his agent:
(i) solicit or accept any business from any customer, purchaser
or supplier of the Company; provided, however, that after the termination
of the Employee's employment hereunder, he may solicit or accept business
from such a party as an employee of, or other adviser to, a business which
is not engaged in the design, manufacture, production, sale or distribution
of products, processes or services competitive with those of the Company or
any Affiliate;
(ii) solicit for employment or employ or become employed by any
customer, past, present or future employee of the Company, or request,
induce or advise any employee to leave the employ of the Company; provided,
however, that after the termination of the Employee's employment hereunder,
the Employee may be employed by a customer or past employee of the Company
if such participation is not enagaged in the design, manufacture,
production, sale or distribution of products, processes or services
competitive with those of the Company or any Affiliate;
-24-
<PAGE>
(iii) use or disclose the names and/or addresses of any
customer, purchaser, supplier or employee of the Company to any person for
any purposes whatsoever;
(c) If the Employee violates any provision of this Section, then the
Company shall not, as a result of the time involved in obtaining relief, be
deprived of the benefit of the full period of the restrictive covenant.
Accordingly, each restrictive covenant shall be deemed to have the duration
specified in Subsections 7(a) and 7(b) hereof, computed from the date the relief
is granted, but reduced by the time between the period when the restriction
began to run and the date of the first violation of the covenant by the
Employee.
(d) The Employee agrees that if Employee shall violate any of the
provisions of this Section, the Company shall be entitled to an accounting and
repayment of all profits, compensation, remuneration or other benefits that the
Employee, directly or indirectly, may realize arising from or related to any
such violation. These remedies shall be in addition to, and not in limitation
of, any injunctive relief or other rights to which the Company may be entitled.
(e) The parties agree and acknowledge that the duration, scope and
geographic areas applicable to the covenant not to compete described in this
Section are fair, reasonable and necessary, that adequate compensation has been
received by the Employee for such obligations (including compensation
hereunder), and that these obligations do not prevent the Employee from earning
a livelihood. If, however, for any reason any court determines that the
restrictions in this Section 7 are not reasonable, that consideration is
inadequate or that the Employee has been prevented from earning a livelihood,
such restrictions shall be interpreted, modified or rewritten to include as much
of the duration, scope and geographic area identified in this Section as will
render such restrictions valid and enforceable.
(f) Nothing herein shall prohibit the Employee from owning in the
aggregate not more than 1% of the outstanding stock of any corporation which is
publicly traded and engaged in the design, manufacture, production, sale or
distribution of products, processes or services competitive with those of the
Company or any Affiliate, so long as the Employee has no active participation in
the business of such corporation.
8. Consideration for Confidentiality and Noncompetition. In
consideration of the covenants against competition and disclosure of
Confidential Information, the Company shall pay the Employee the aggregate sum
of $1,320,000, payable in equal monthly installments over a term of six years
-25-
<PAGE>
commencing with the first month after the latter of (A) the last month in which
he was employed, or (B) the last month in which he is entitled to receive
severance payments required under Section 9(a)(ii) below. Such payments shall
be made directly to the employee and in the event of his death or disability
while employed or during such six year term, then to his spouse (and if his
spouse shall not survive, then to his heirs, legatees and devisees) for the
remaining term of such six year payment period and notwithstanding the death or
disability of the Employee.
9. Termination.
(a) Termination by Company.
(i) Notwithstanding any other provision hereof, the Company may
terminate the Employee's employment under this Agreement without prior notice at
any time subject to the provisions of this Section 9. The termination shall be
evidenced by notice thereof to the Employee.
(ii) If the employment of the Employee is terminated by the
Company for any reason or for no reason prior to the expiration of the term of
this Agreement, then the Employee will receive severance payments payable
monthly for the remaining original term of his employment agreement equal to
150% of the amount of his aggregate base salary for such unexpired term of this
Agreement; provided, however, the Company shall have no obligation to make such
severance payments to the employee if his employment was terminated by reason of
(y) acts of moral turpitude, or (z) failure on the part of the employee to
provide full time service to the Company within the meaning of Section 2 above.
For purposes hereof, the term "acts of moral turpitude" shall include, without
limitation, dishonest, fraudulent or illegal conduct; misappropriation of
Company funds; or breach of any statutory or common law duty of loyalty to the
Company.
(b) Resignation and Retirement. Should the Employee elect to resign
or retire voluntarily prior to the expiration of the original term of this
Agreement, the Employee shall provide at least six months prior written notice
to the Company of the date of his voluntary retirement or resignation except in
the event his retirement or resignation is caused by death or disability.
Except in the event of death or disability, failure to provide such prior six
months notice shall relieve the Company from liability to pay an incentive bonus
for any portion of the year in which he shall retire or resign and shall also
relieve the Company from liability to pay any incentive bonus for the
immediately preceding prior year if the same has accrued but is not yet payable.
-26-
<PAGE>
(c) Board Resignation. Upon termination of this Agreement for any
reason, Employee shall hereby be deemed to have resigned from the Company's
Board of Directors effective as of the date of termination.
10. Remedies. The Employee acknowledges that the confidentiality and
non-competition provisions contained in Section 6 and Section 7 herein are
essential to induce the Company to enter into this Agreement, that any breach
thereof will result in serious and irreparable damage to the Company and that
money damages will not afford the Company an adequate remedy. Therefore, if the
Employee breaches any provision of Section 6 or Section 7 herein, the parties
agree that the Company shall be entitled, in addition to all other rights and
remedies as may be provided by law, to specific performance, as well as
injunctive and other equitable relief to prevent or restrain a breach of this
Agreement or to enforce this Agreement. The Company shall also be entitled to
seek a protective order to ensure the continued confidentiality of the
Confidential Information. Employee hereby waives any requirement of proof that
such breach will cause serious or irreparable injury to the Company, or that
there is not an adequate remedy at law. The existence of any claim or cause of
action of the Employee against the Company or any Affiliate, whether or not
predicated on the terms of this Agreement, shall not constitute a defense to the
enforcement of the Employee's obligations under this Agreement. The Employee
shall pay or reimburse the Company for all costs and expenses, including court
costs and reasonable attorneys' fees incurred or paid by the Company in
protecting or enforcing its rights and remedies hereunder.
11. Notice. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered in person or sent by
registered or certified mail, postage prepaid, commercial overnight courier
(such as Express Mail, Federal Express, etc.) with written verification of
receipt or by telecopy. A notice shall be deemed given: (a) when delivered by
personal delivery (as evidenced by the receipt); (b) five (5) days after deposit
in the mail if sent by registered or certified mail; (c) one (1) day after
having been sent by commercial overnight courier as evidenced by the written
verification of receipt; or (d) on the date of confirmation if telecopied, as
set forth below:
To Employee:
-----------
Robert E. Roper
3802 Holden Circle
Los Alamitos, CA 90720
To Company:
----------
-27-
<PAGE>
Ropak Corporation
660 South State College Blvd.
Fullerton, CA 92631
Telecopy: (714) 447-3871
Attention: Chief Financial Officer
With a copy to:
LINPAC MOULDINGS LIMITED
Deykin Avenue
Witton
Birmingham B6 7HY
ENGLAND
Attention: David Williams
Telecopy : 011-44-021-327-6757
and
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
Attention: Stanley H. Meadows
Telecopy: (312) 984-3669
Any party may change its address for receiving notice given by written notice
given to the others named above.
12. Amendments and Waiver. No amendment, waiver or consent with
respect to any provision of this Agreement shall in any event be effective,
unless the same shall be in writing and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. Failure of the Company
to take action with respect to any breach or violation of any provision of this
Agreement by Employee, whether or not the Company had knowledge thereof, shall
not operate as a waiver of any subsequent breach or violation by Employee.
13. Counterparts. This Agreement may be executed simultaneously in
two counterparts each of which shall be deemed an original, but both of which
together constitute one and the same instrument.
14. Taxes. The Company shall be entitled to withhold the amount of
any tax attributable to any payments hereunder.
15. Transferability. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns and Employee, his
heirs, executors and legal representatives. Except as expressly provided
herein, in no event
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<PAGE>
is the Employee's right to payments hereunder assignable in any manner.
16. Assignment. This Agreement is for personal services and may not
be assigned or pledged by Employee in any manner, by operation of law or
otherwise, without the written consent of the Company.
17. Entire Agreement. This Agreement and the documents referred to
herein contain the entire understanding among the parties with respect to the
actions contemplated hereby and supersedes all other agreements, understandings
and undertakings among the parties on the subject matter hereof.
18. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
California, and the parties hereby consent to the jurisdiction of California
courts over all matters relating to this Agreement.
19. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
20. Severability. If any provision of this Agreement shall be
prohibited by or invalid under applicable law, or otherwise determined to be
unenforceable, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
21. Cessation of Obligations. All obligations of the Company and
rights of Employee under this Agreement shall cease upon any termination of this
Agreement, except as otherwise provided herein. Notwithstanding anything to the
contrary in this Agreement, the provisions of Sections 4, 5 and 9 which by their
terms survive termination of employment and the provisions of Sections 6, 7, 8,
10 and 18 shall survive any termination of this Agreement or employment and
shall remain in full force and effect.
22. Beneficiary. As the purchaser of Employee's equity interest in
the Company, LINPAC MOULDINGS LIMITED shall be entitled to enforce the
provisions of Sections 6, 7 and 10 in the name of the Company and these Sections
and this Section 22 shall not be amended without the prior written consent of
LINPAC MOULDINGS LIMITED.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
ROPAK CORPORATION
By: /s/ William H. Roper
--------------------------------
Its: Chief Executive Officer
/s/ Robert E. Roper
------------------------------------
Robert E. Roper
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<PAGE>
Exhibit(c)(7)
CONTINUING GUARANTY
This AGREEMENT made as of the 20th day of February, 1995 is by and
between LINPAC MOULDINGS LIMITED, with its principal office at Deykin Avenue,
Witton, Birmingham B6 7HY, England (the "Guarantor") and C. RICHARD ROPER, an
individual ("Roper").
WHEREAS, Roper owned a substantial equity position in ROPAK
CORPORATION, a Delaware corporation (the "Employer") which he sold to the
Guarantor concurrent with the execution of this Agreement; and
WHEREAS, Roper and the Employer have executed that certain Employment
Agreement dated as of January 1, 1995 (the "Employment Agreement") in order to
assure Employer with access to Roper's experience and to bind Roper to certain
noncompetition and other covenants which are expressly enforceable by the
Guarantor; and
WHEREAS, to induce Roper to enter into the foregoing agreements and to
sell his equity position in the Employer to the Guarantor, the parties have
agreed to enter into this Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto covenant and agree as follows:
The Guarantor hereunder unconditionally and absolutely guarantees the
full and prompt payment when due to, and collection by, Roper and (in the event
of his death or disability) to his successors and assigns, of all sums due and
payable and to become due and payable to Roper under the provisions of the
Employment Agreement. The Guarantor's obligations hereunder (i) are absolute
and unconditional, and (ii) constitute a guaranty of payment and not merely a
guaranty of collection.
If the Employer should breach any of its obligations under the
Employment Agreement to Roper or otherwise be incapable of making payments of
its obligations thereunder when due, and such breach or nonpayment thereof
remains uncured by the Employer for more than ten (10) business days after the
Employer and the Guarantor have received written notice of breach or nonpayment
from Roper, then the Guarantor shall forthwith pay or cause to be paid to Roper
all sums then due and past due under the terms of the Employment Agreement.
The Guarantor hereby waives notice of the acceptance of this Guaranty
by Roper and the Guarantor hereby consents without further notice to (i) any
extension of time that may be given by Roper to the Employer for payment or
performance under the Employment Agreement or (ii) any failure, omission or
delay on the part of
<PAGE>
Roper, whether intentional or unintentional, in enforcing, assenting to or
exercising any right, remedy or power of Roper under the Employment Agreement or
this Agreement.
Notwithstanding anything to the contrary set forth herein, the
Guarantor shall be subrogated to the rights of the Employer under the Employment
Agreement and may assert any defense to a claim hereunder that could be asserted
by the Employer under the terms of the Employment Agreement. The Employment
Agreement shall not be modified or amended by Roper and the Employer in any
material respects without the prior consent in writing of the Guarantor.
If an action is brought by either party to enforce its rights
hereunder, the prevailing party shall be entitled to recover, in addition to
such other relief as may be granted, its reasonable costs and attorney's fees.
This Agreement is governed by and shall be construed in accordance
with the laws of the State of California. The parties to this agreement submit
to the jurisdiction of the Superior Court of the County of Orange, State of
California in the event any action shall be brought by Roper or the Guarantor
hereunder.
IN WITNESS WHEREOF, this Guaranty has been executed and delivered by
the undersigned as of the day and year first written above.
"Guarantor" LINPAC MOULDINGS LIMITED
By: /s/ David A. Williams
------------------------------------
Title: Managing Director
---------------------------------
"Roper"
/s/ C. Richard Roper
-----------------------------------------
C. RICHARD ROPER
-2-
<PAGE>
CONTINUING GUARANTY
This AGREEMENT made as of the 20th day of February, 1995 is by and
between LINPAC MOULDINGS LIMITED, with its principal office at Deykin Avenue,
Witton, Birmingham B6 7HY, England (the "Guarantor") and ROBERT E. ROPER, an
individual ("Roper").
WHEREAS, Roper owned a substantial equity position in ROPAK
CORPORATION, a Delaware corporation (the "Employer") which he sold to the
Guarantor concurrent with the execution of this Agreement; and
WHEREAS, Roper and the Employer have executed that certain Employment
Agreement dated as of January 1, 1995 (the "Employment Agreement") in order to
assure Employer with access to Roper's experience and to bind Roper to certain
noncompetition and other covenants which are expressly enforceable by the
Guarantor; and
WHEREAS, to induce Roper to enter into the foregoing agreements and to
sell his equity position in the Employer to the Guarantor, the parties have
agreed to enter into this Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto covenant and agree as follows:
The Guarantor hereunder unconditionally and absolutely guarantees the
full and prompt payment when due to, and collection by, Roper and (in the event
of his death or disability) to his successors and assigns, of all sums due and
payable and to become due and payable to Roper under the provisions of the
Employment Agreement. The Guarantor's obligations hereunder (i) are absolute
and unconditional, and (ii) constitute a guaranty of payment and not merely a
guaranty of collection.
If the Employer should breach any of its obligations under the
Employment Agreement to Roper or otherwise be incapable of making payments of
its obligations thereunder when due, and such breach or nonpayment thereof
remains uncured by the Employer for more than ten (10) business days after the
Employer and the Guarantor have received written notice of breach or nonpayment
from Roper, then the Guarantor shall forthwith pay or cause to be paid to Roper
all sums then due and past due under the terms of the Employment Agreement.
The Guarantor hereby waives notice of the acceptance of this Guaranty
by Roper and the Guarantor hereby consents without further notice to (i) any
extension of time that may be given by Roper to the Employer for payment or
performance under the Employment Agreement or (ii) any failure, omission or
delay on the part of
-3-
<PAGE>
Roper, whether intentional or unintentional, in enforcing, assenting to or
exercising any right, remedy or power of Roper under the Employment Agreement or
this Agreement.
Notwithstanding anything to the contrary set forth herein, the
Guarantor shall be subrogated to the rights of the Employer under the Employment
Agreement and may assert any defense to a claim hereunder that could be asserted
by the Employer under the terms of the Employment Agreement. The Employment
Agreement shall not be modified or amended by Roper and the Employer in any
material respects without the prior consent in writing of the Guarantor.
If an action is brought by either party to enforce its rights
hereunder, the prevailing party shall be entitled to recover, in addition to
such other relief as may be granted, its reasonable costs and attorney's fees.
This Agreement is governed by and shall be construed in accordance
with the laws of the State of California. The parties to this agreement submit
to the jurisdiction of the Superior Court of the County of Orange, State of
California in the event any action shall be brought by Roper or the Guarantor
hereunder.
IN WITNESS WHEREOF, this Guaranty has been executed and delivered by
the undersigned as of the day and year first written above.
"Guarantor" LINPAC MOULDINGS LIMITED
By: /s/ David A. Williams
-----------------------------------
Title: Managing Director
--------------------------------
"Roper"
/s/ Robert E. Roper
----------------------------------------
ROBERT E. ROPER
-4-
<PAGE>
CONTINUING GUARANTY
This AGREEMENT made as of the 20th day of February, 1995 is by and
between LINPAC MOULDINGS LIMITED, with its principal office at Deykin Avenue,
Witton, Birmingham B6 7HY, England (the "Guarantor") and WILLIAM H. ROPER, an
individual ("Roper").
WHEREAS, Roper owned a substantial equity position in ROPAK
CORPORATION, a Delaware corporation (the "Employer") which he sold to the
Guarantor concurrent with the execution of this Agreement; and
WHEREAS, Roper and the Employer have executed that certain Employment
Agreement dated as of January 1, 1995 (the "Employment Agreement") in order to
assure Employer with access to Roper's experience and to bind Roper to certain
noncompetition and other covenants which are expressly enforceable by the
Guarantor; and
WHEREAS, to induce Roper to enter into the foregoing agreements and to
sell his equity position in the Employer to the Guarantor, the parties have
agreed to enter into this Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto covenant and agree as follows:
The Guarantor hereunder unconditionally and absolutely guarantees the
full and prompt payment when due to, and collection by, Roper and (in the event
of his death or disability) to his successors and assigns, of all sums due and
payable and to become due and payable to Roper under the provisions of the
Employment Agreement. The Guarantor's obligations hereunder (i) are absolute
and unconditional, and (ii) constitute a guaranty of payment and not merely a
guaranty of collection.
If the Employer should breach any of its obligations under the
Employment Agreement to Roper or otherwise be incapable of making payments of
its obligations thereunder when due, and such breach or nonpayment thereof
remains uncured by the Employer for more than ten (10) business days after the
Employer and the Guarantor have received written notice of breach or nonpayment
from Roper, then the Guarantor shall forthwith pay or cause to be paid to Roper
all sums then due and past due under the terms of the Employment Agreement.
The Guarantor hereby waives notice of the acceptance of this Guaranty
by Roper and the Guarantor hereby consents without further notice to (i) any
extension of time that may be given by Roper to the Employer for payment or
performance under the Employment Agreement or (ii) any failure, omission or
delay on the part of
-5-
<PAGE>
Roper, whether intentional or unintentional, in enforcing, assenting to or
exercising any right, remedy or power of Roper under the Employment Agreement or
this Agreement.
Notwithstanding anything to the contrary set forth herein, the
Guarantor shall be subrogated to the rights of the Employer under the Employment
Agreement and may assert any defense to a claim hereunder that could be asserted
by the Employer under the terms of the Employment Agreement. The Employment
Agreement shall not be modified or amended by Roper and the Employer in any
material respects without the prior consent in writing of the Guarantor.
If an action is brought by either party to enforce its rights
hereunder, the prevailing party shall be entitled to recover, in addition to
such other relief as may be granted, its reasonable costs and attorney's fees.
This Agreement is governed by and shall be construed in accordance
with the laws of the State of California. The parties to this agreement submit
to the jurisdiction of the Superior Court of the County of Orange, State of
California in the event any action shall be brought by Roper or the Guarantor
hereunder.
IN WITNESS WHEREOF, this Guaranty has been executed and delivered by
the undersigned as of the day and year first written above.
"Guarantor" LINPAC MOULDINGS LIMITED
By: /s/ David A. Williams
-----------------------------------
Title: Managing Director
--------------------------------
"Roper"
/s/ William H. Roper
----------------------------------------
WILLIAM H. ROPER
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<PAGE>
EXHIBIT (c)(8)
SHARE PURCHASE AGREEMENT
between
National Bank of Canada
and
Linpac Mouldings Limited
Date: October 14, 1994
<PAGE>
SHARE PURCHASE AGREEMENT made and entered into at Montreal, Canada this 14th day
of October, 1994,
BY AND BETWEEN NATIONAL BANK OF CANADA, a Canadian chartered bank duly
constituted under the laws of Canada, having its head office
and principal place of business at 600 de La Gauchetiere
Street West, Montreal, Quebec, H3B 4L2, herein acting and
represented by Ms. Patricia Curadeau-Grou and Mr. Jacques
Maurice, duly authorized as they so declare;
(hereinafter referred to as the "BANK")
AND: LINPAC MOULDINGS LIMITED, a body corporate, duly
incorporated and having its head office at Deykin Avenue,
Witton Birmingham, England, B6 7HY, herein acting and
represented by David A. Williams, duly authorized as he so
declares,
(hereinafter referred to as "LINPAC")
WITNESSETH
WHEREAS the Bank wishes to sell an aggregate of 5,200 of 7.5% Sinking Fund
Preferred Shares in the capital of Ropak Canada Inc. ("Ropak") together with all
rights and obligations attached to such shares, including without limitation a
right to exchange said shares into Common Shares of the capital of Ropak
Corporation ("Ropak US"), pursuant to the terms and conditions of an Exchange
Agreement between Vulcan Packaging Inc. and Ropak US dated June 8, 1993 and the
agreement of Guaranty & Undertaking dated June 8, 1993 (the "Guaranty") between
Ropak US and the Vendor to the extent it applies to the rights and obligations
of Ropak under the Sinking Fund Preferreds;
WHEREAS Linpac wishes to purchase such shares together with such right of
exchange, on and subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are mutually acknowledged, the parties hereto agree as
follows:
<PAGE>
ARTICLE 1
PURCHASE AND SALE
1.1 SUBJECT AND PURCHASE PRICE
--------------------------
Subject to the terms of this Agreement, the Bank sells and Linpac
purchases, 5,200 of 7.5% Sinking Fund Preferred Shares in the capital stock of
Ropak, including a right of exchange pursuant to which said shares may be
converted, at the option of the holder, into Common Shares of the capital of
Ropak US together with the Guaranty to the extent it applies to the rights and
obligations of Ropak under the Sinking Fund Preferred Shares (collectively the
"Shares"), the whole in accordance with the terms and conditions of an Exchange
Agreement entered into between Vulcan Packaging Inc. and Ropak US on June 8,
1993 (the "Exchange Agreement"), a copy of which is annexed as Schedule "A" as
an integral part of the present Agreement. The bank hereby assigns to Linpac
all rights under the Share Purchase Agreement with Vulcan Packaging Inc. dated
April 29, 1994.
The purchase and sale of the Shares is made for an aggregate price
payable cash of FIVE MILLION NINE HUNDRED TWENTY-TWO THOUSAND TWO HUNDRED AND
TWENTY-TWO U.S. DOLLARS ($5,922,222 US) (the "Purchase Price") or the equivalent
of $10.25 US per Common Share of Ropak US at the price of $9.00 US per share (as
provided for in the Exchange Agreement) the receipt and sufficiency thereof
being hereby expressly acknowledged by the Bank, whereof quit.
ARTICLE 2
REPRESENTATIONS, WARRANTIES, COVENANTS AND UNDERTAKINGS
2.1 REPRESENTATIONS AND WARRANTIES BY THE BANK
------------------------------------------
The Bank represents and warrants to Linpac as follows and acknowledges
that Linpac is relying upon the following representations and warranties in
connection with its purchase of the Shares:
2.1.1 The Bank is a valid and subsisting Canadian chartered bank duly
constituted according to law with full power and authority to own
its assets and to carry on its business;
2.1.2 the fulfillment of the terms of this Agreement is not in
contravention of any charter documents or by-laws of the Bank;
-2-
<PAGE>
2.1.3 the Bank has the corporate power and authority to enter into this
Agreement and perform its obligations hereunder;
2.1.4 the Shares are owned by the Bank as the registered and beneficial
owner, free and clear of any encumbrances, hypothecs, prior
claims, rights of resolution or cancellation, seizures or any
other charges whatsoever and the Bank has the full right and
authority to sell the Shares in accordance with the provisions
hereof and transfers to Linpac a good and valid title to the
Shares;
2.1.5 the execution, delivery and performance of this Agreement by the
Bank has been duly authorized by all necessary corporate actions
and no consent, authorization, license, approval or order of any
court or governmental agency or regulatory body is required to
permit the Bank to fulfil the terms of this Agreement;
2.1.6 there are no actions, suits, claims, investigations or other
proceedings pending or to the knowledge of the Bank threatened
with respect to or any manner affecting the Shares;
2.1.7 the Bank has complied with all the requirements under the
securities laws of the Province of Quebec necessary to permit the
sale and delivery of the Shares to Linpac and no authorization,
approval, consent, permit or license is required to be filed or
obtained in order to permit the sale and delivery of the Shares
to Linpac in the Province of Quebec; and
2.1.8 this Agreement is a valid and binding obligation of the Bank
enforceable against it in accordance with its terms.
2.1.9 Schedule A contains an accurate and complete copy of the Vulcan
Share Purchase Agreement, the Exchange Agreement and the
Guaranty. The Shares are immediately convertible into 577,777.78
shares of Common Stock of Ropak US, in accordance with the terms
and conditions of the Exchange Agreement.,
-3-
<PAGE>
2.2 REPRESENTATIONS AND WARRANTIES BY LINPAC
----------------------------------------
Linpac represents and warrants to the Bank as follows and acknowledges that
the Bank is relying upon the following representations and warranties in
connection with its sale of the Shares:
2.2.1 Linpac is a corporation duly organized under the laws of England
and is a valid and subsisting corporation with full power and
authority to own its assets and to carry on its business;
2.2.2 the fulfillment of the terms of this Agreement is not in
contravention of any charter documents or by-laws of Linpac;
2.2.3 Linpac has the corporate power and authority to enter into this
Agreement and perform its obligations hereunder; and
2.2.4 the execution, delivery and performance of this Agreement by
Linpac has been duly authorized by all necessary corporate
actions and no consent, authorization, license, approval or order
of any court or governmental agency or regulatory body is
required to permit Linpac to fulfil the terms of this Agreement;
and
2.2.5 this Agreement is a valid and binding obligation of Linpac
enforceable against it in accordance with its terms, subject
however to:
(i) limitations with respect to enforcement imposed by law in
connection with bankruptcy, insolvency and other laws
affecting creditors' rights generally; and
(ii) general principles of equity including the availability of
equitable remedies, such as specific performance and
injunction, which are remedies in the discretion of a court
of competent jurisdiction from which they are sought.
2.3 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
-----------------------------------------------------
The representations and warranties of the Bank and Linpac contained in this
Agreement and any document or certificate given pursuant hereto shall survive
its execution and, notwithstanding
-4-
<PAGE>
such execution, shall continue in full force and effect for a period of one year
from the execution thereof.
2.4 CLOSING
-------
The closing of the transactions contemplated herein shall take place at the
offices of counsel of the Bank, DESJARDINS DUCHARME STEIN MONAST, 600 de La
Gauchetiere St. West, Suite 2400, Montreal (Quebec) Canada at the time and on
the date agreed upon by the parties but in any event no later than October 28,
1994.
ARTICLE 3
GENERAL MATTERS
3.1 GOVERNING LAW
-------------
This Agreement should be governed by and interpreted by the laws of the
Province of Quebec and the laws of Canada applicable therein.
IN WITNESS WHEREOF the Purchaser hereto has fully executed first this agreement
on the date hereinabove mentioned.
LINPAC MOULDINGS LIMITED
per:/s/ David A. Williams
---------------------
David A. Williams
and, upon having taken cognizance of such execution, the Vendor signed in its
turn in Montreal, Canada on the same date.
NATIONAL BANK OF CANADA
per:/s/ Patricia Curadeau-Grou
--------------------------
Patricia Curadeau-Grou
per:/s/ Jacques Maurice
-------------------
Jacques Maurice
-5-
<PAGE>
INTERVENTIONS
AND CAME HERETO AND INTERVENED:
ROPAK CANADA INC. ("ROPAK"), a corporation incorporated under the laws of
British Columbia, herein acting and represented by Ronald W. Cameron, duly
authorized as he so declares;
WHO DECLARES AND REPRESENTS AS FOLLOWS:
1. That Ropak has taken cognizance of the terms and conditions of the
present Purchase Agreement;
2. That pursuant to the "Agreement for Purchase of Assets" executed on
April 8, 1993, between Ropak and Ropak Corporation, Vulcan Packaging Inc. and
R & M Metal Inc., it has filed, as required by the Ontario Securities Commission
and within the prescribed period, a report on Form 20 with respect to the sale
and delivery of the Shares, together with the appropriate filing fee as required
by the Regulation made under the Securities Act (Ontario);
3. Subject to approval by the Board of Directors of Ropak, which approval
has been granted, and subject to the present Share Purchase Agreement, the
Shares of its capital stock are freely transferable without restriction; and
4. That in the event Linpac elects to avail itself of the right of
exchange pursuant to the Exchange Agreement (as hereinafter defined), Ropak
undertakes to fulfil all applicable requirements and file all applicable
documentation, including those required by any securities regulations, the whole
within the prescribed period and at the expense of Linpac.
AND CAME HERETO AND INTERVENED;
ROPAK CORPORATION ("ROPAK US"), a corporation incorporated under the laws
of the State of Delaware, herein acting and represented by Ronald W.
Cameron, duly authorized as he so declares;
WHO DECLARES AND REPRESENTS AS FOLLOWS:
1. That Ropak US has taken cognizance of the terms and conditions of the
present Purchase Agreement;
2. That it recognizes that in accordance with the terms of said Exchange
Agreement, Linpac upon acquisition of the Shares, may avail itself immediately
of the right of exchange and
-6-
<PAGE>
exchange the Shares into 577,777.78 common shares or Ropak US, upon the same
terms and conditions of said Exchange Agreement;
3. That in the event Linpac elects to avail itself of the right of
exchange pursuant to said Exchange Agreement, Ropak US undertakes to fulfil all
applicable requirements and file all documentation, including that required by
any securities regulation, the whole within the prescribed period, except that
Ropak US shall have no obligation to register any securities under the U.S.
Securities Act of 1933;
4. Subject to applicable law, in the event Linpac elects to avail itself
of the right of exchange pursuant to said Exchange Agreement, Ropak US
represents that the shares of its capital stock to be owned by Linpac upon
exercise of said right of exchange are transferable as contemplated on the
Exchange Agreement.
Dated and signed in California, ROPAK CANADA INC.
on October 12, 1994
per:/s/ Ronald W. Cameron
---------------------
Ronald W. Cameron
Vice President, Finance
Dated and signed in California, ROPAK CORPORATION INC.
on October 12, 1994
per:/s/ Ronald W. Cameron
---------------------
Ronald W. Cameron
Vice President, Finance
-7-
<PAGE>
SCHEDULE "A"
------------
1. EXCHANGE AGREEMENT
2. SHARE PURCHASE AGREEMENT
3. ROPAK GUARANTY AND UNDERTAKING
<PAGE>
EXCHANGE AGREEMENT
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE TRANSFERRED TO
ANY U.S. PERSON FOR THE RESTRICTED PERIOD, IF ANY, PROVIDED BY REGULATION S
UNDER THE ACT. ACCORDINGLY, NO TRANSFER OF THESE SECURITIES OR ANY INTEREST
THEREIN MAY BE MADE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT UNLESS THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT
THAT SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THE ACT.
THIS AGREEMENT (the "Agreement"), dated June 8, 1993, between:
ROPAK CORPORATION, a body corporate of the State of Delaware, United States
of America (herein called "ROPAK"); and
VULCAN PACKAGING, INC., a body corporate of the laws of Canada, having its
registered office at 230 New Toronto Street, Toronto, Ontario, Canada M8V
2E8 (herein called "VULCAN")
W I T N E S S E T H:
WHEREAS, simultaneously herewith, certain assets have been purchased by
Ropak Canada Inc. (the "BUYER") pursuant to that certain Agreement for Purchase
of Assets dated April 8, 1993 among, inter alia, the BUYER and VULCAN (the
"Purchase Agreement"); and
WHEREAS, the BUYER is a wholly-owned subsidiary of ROPAK; and
WHEREAS, pursuant to the Purchase Agreement, VULCAN has acquired and owns
of record and beneficially 5,200 shares of the 7.5% Sinking Fund Preferred
shares of the BUYER (herein collectively called the "Canada Preferred Shares");
WHEREAS, ROPAK and VULCAN desire to provide for certain rights and
obligations of exchange or conversion of the parties hereto and their respective
successors and assigns with respect to the Canada Preferred Shares; and
WHEREAS, ROPAK has agreed to guarantee, inter alia, the obligations of
BUYER with respect to the payment of mandatory sinking fund and redemption
payments and dividends on the Canada Preferred Shares;
<PAGE>
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements hereinafter set forth, and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto covenant and agree
as follows:
1. DEFINITIONS.
Unless the context clearly requires otherwise, the following terms used in
this Agreement shall be defined as follows:
"ROPAK Common Stock" shall mean the common stock of ROPAK, par value $.01
per share, as such common stock was constituted on March 31, 1993, and as the
same shall be constituted thereafter including any capital reorganization or
reclassification thereof; and
"Threshold Price" shall mean, subject to possible adjustment in accordance
with the provisions of Section 3 of this Agreement, the amount of $9.00 per
share (United States funds) of ROPAK Common Stock.
2. EXCHANGE OF CANADA PREFERRED SHARES FOR ROPAK COMMON STOCK AT THE OPTION OF
THE HOLDER OF CANADA PREFERRED SHARES.
2.1 At any time up to and including the 20th business day (a business day
being any day other than a Saturday, Sunday or a statutory holiday, in the
Province of British Columbia or the State of California) before the redemption
of such Canada Preferred Shares in accordance with Paragraph 20.08 or 20.09 of
the Articles of BUYER (or if BUYER and ROPAK shall default in payment due upon
the date fixed for redemption therefor, then until the actual date of such
redemption), at the election of the respective registered holder of Canada
Preferred Shares (and subject to the terms and conditions set forth herein), any
and all of the Canada Preferred Shares may be exchanged for fully paid and non-
assessable shares of ROPAK Common Stock at the Threshold Price then in effect
(after taking into account any adjustment thereof as hereinafter set forth).
2.2 The value of Canada Preferred Shares, for the purpose of determining
the number of shares of ROPAK Common Stock to be issued in accordance with any
such exchange, shall be deemed to be $1,000 (United States funds) per Canada
Preferred Share plus any accrued and unpaid dividends thereon, whether declared
or undeclared, to the date such shares are tendered to ROPAK for exchange
hereunder.
2.3 In order to exercise this exchange privilege, the holder of Canada
Preferred Shares shall surrender certificates for the Canada Preferred Shares to
be converted at the principal
-2-
<PAGE>
offices of ROPAK in the State of California, duly endorsed for transfer to ROPAK
free and clear of any liens or other encumbrances, and shall give written notice
to ROPAK at said office that the holder elects to convert such Canada Preferred
Shares or a specified portion thereof into ROPAK Common Stock. Such notice
shall also state the name or names (with addresses) in which the certificates
for shares of ROPAK Common Stock issuable on such exchange shall be issued.
2.4 No certificates for fractional shares of ROPAK Common Stock shall be
issued upon any such exchange of the Canada Preferred Shares, and in lieu
thereof ROPAK shall pay the registered holder the cash equivalent of such
fractional share based upon the closing sale price of ROPAK Common Stock as
quoted in the NASDAQ Automated Quotation National Market System on the date such
Canada Preferred Shares are tendered for exchange (or if there is no such
quotation, the most recent bid price for ROPAK Common Stock quoted in the NASDAQ
over-the-counter market).
2.5 So long as there is outstanding any Canada Preferred Shares, there
shall be reserved unissued, out of the authorized but unissued shares of ROPAK
Common Stock, that number of shares sufficient to provide for exchange of all
the Canada Preferred Shares then outstanding for ROPAK Common Stock as provided
for herein.
3. CERTAIN ADJUSTMENTS AND NOTICES RELATING TO THE THRESHOLD PRICE AND ROPAK
COMMON STOCK
The Threshold Price and number of shares of ROPAK Common Stock issuable
upon conversion of Canada Preferred Shares shall be subject to adjustment from
time to time hereafter as follows:
(A) In case ROPAK at any time after December 31, 1992 shall issue a stock
dividend on its outstanding shares of ROPAK Common Stock or shall subdivide
or combine the outstanding shares of ROPAK Common Stock, the Threshold
Price and number of shares issuable upon conversion of the Canada Preferred
Shares shall be proportionately and equitably adjusted as if the holder of
record of Canada Preferred Shares had converted shares of Canada Preferred
Shares into Common Stock immediately prior to such event. Any such
adjustment shall become effective at the close of business on the date that
such stock dividend, subdivision or combination relating to the Common
Stock shall become effective. For the purposes of such adjustment, the
Threshold Price in effect immediately prior to such stock dividend,
subdivision or combination shall forthwith be changed to a Threshold Price
determined by:
-3-
<PAGE>
(i) dividing the total number of shares of ROPAK Common Stock outstanding
immediately after the stock dividend, subdivision or combination, by
an amount equal to the total number of shares of ROPAK Common Stock
outstanding immediately prior to such stock dividend, subdivision or
combination; and
(ii) multiplying the result of clause (i) above by the actual Threshold
Price in effect immediately prior to such stock dividend, subdivision
or combination.
and the total shares of ROPAK Common Stock thereafter issuable and
deliverable on conversion of the Canada Preferred Shares shall be the
number of shares obtained by applying the Threshold Price as so adjusted.
(B) In case of any capital reorganization or any reclassification of the shares
of ROPAK Common Stock (other than as a result of a stock dividend,
subdivision or combination, as aforesaid), or in case of any consolidation
with or merger of ROPAK into or with another corporation, or the sale,
lease or other disposition of the properties of ROPAK as an entirety or
substantially as an entirety, then as a part of such reorganization,
reclassification, consolidation, merger, sale, lease or other disposition,
as the case may be, lawful provision shall be made so that the holders of
record of the Canada Preferred Shares shall have the right thereafter to
receive upon conversion thereof the kind and amount of shares of stock or
other securities or property which such holders would have been entitled to
receive if, immediately prior to such reorganization, reclassification,
consolidation, merger, sale, lease or other disposition, such holders had
held the number of shares of ROPAK Common Stock which were then issuable
upon the conversion of the Canada Preferred Shares then held by them. In
any such case, appropriate adjustment shall be made in the application of
the provisions set forth herein with respect to the rights and interests
thereafter of the holders of record of the Canada Preferred Shares, to the
end that the provisions set forth herein (including provisions with respect
to adjustments of the Threshold Price) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the conversion of such Canada
Preferred Shares.
(C) Whenever the Threshold Price is adjusted, as herein provided, ROPAK shall
forthwith deliver to the registered holders of the Canada Preferred Shares
a statement signed by the Secretary or the Treasurer of ROPAK, stating the
-4-
<PAGE>
adjusted Threshold Price determined as herein provided. Such statement
shall specify in detail the facts requiring such adjustment.
SECTION 4. REQUIRED NOTICES. In case at any time:
----------------
(a) ROPAK shall declare or pay any dividend payable in stock or other
consideration or make any distribution to the holders of ROPAK Common
Stock; or
(b) ROPAK shall offer to the holders of ROPAK Common Stock any additional
shares of stock of any class or other rights;
(c) there shall be any capital reorganization or reclassification of the
capital stock of ROPAK, or any consolidation or merger of ROPAK with,
or sale of all or substantially all of its assets to, another
corporation; or
(d) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of ROPAK;
then, in any one or more of such cases, ROPAK shall cause to be mailed to the
holders of record of then outstanding shares of Canada Preferred Shares (i) at
least 30 days' prior written notice of the date on which the books of ROPAK
shall close or a record shall be taken for such dividend, distribution or
subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, at least 30 days' prior written notice of the date when the same
shall take place. Such notice in accordance with the foregoing clause (i) shall
also specify, in the case of any such dividend, distribution or subscription
rights, the date on which the holders of ROPAK Common Stock shall be entitled
thereto, and such notice in accordance with the foregoing clause (ii) shall also
specify the date on which the holders of ROPAK Common Stock shall be entitled to
exchange their ROPAK Common Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up, as the case may be.
SECTION 5. AMENDMENTS AND ADDITIONAL COVENANTS.
-----------------------------------
5.1 So long as any Canada Preferred Shares shall be outstanding, ROPAK
shall maintain its books of account and financial statements and records in
accordance with generally
-5-
<PAGE>
accepted accounting principles, and all determinations hereunder, if any, which
are dependent upon a calculation of the Corporation's financial condition shall
be determined in accordance with generally accepted accounting principles.
5.2 So long as ROPAK shall remain subject to the reporting obligations of
Sections 13 and 14 of the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act"), ROPAK shall promptly mail to each holder of record
of Canada Preferred Shares a copy of any document filed by the Corporation with
the Securities and Exchange Commission under the provisions of Sections 13 and
14 of the Exchange Act (except that exhibits to such documents need only be
furnished upon the request of a holder of Canada Preferred Shares), and a copy
of any document mailed to holders of record of the Parent's Common Stock. None
of the information contained in such documents will contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made, in light of the circumstances under which they will be
made, not misleading.
5.3 Promptly after the execution and delivery of this Agreement, Ropak
shall prepare and submit to the National Association of Securities Dealers--the
NASDAQ Stock Market--a listing application for the Ropak Common Stock which may
be issued upon exchange of the Canada Preferred Shares and shall use its best
efforts to obtain, prior to June 30, 1993, approval for the listing of such
shares of Ropak Common Stock.
6. SECURITIES LAW RESTRICTIONS.
6.1 VULCAN, by its acceptance hereof, represents that VULCAN is not, and
during the terms of this Agreement will not become, a "U. S. Person" as that
term is defined in Regulation S under the U.S. Securities Act of 1933 and that
VULCAN understands that this Agreement and any shares of ROPAK Common Stock
acquired upon the exercise of exchange rights hereunder may not be transferred
to any U. S. Person for the restricted period, if any, provided by Regulation S.
7. MISCELLANEOUS.
7.1 The issue of any stock or other certificate upon the exercise of
exchange rights hereunder shall be made without charge to the registered holder
hereof for any tax in respect of the issue of such certificate in the United
States. ROPAK shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of VULCAN, and ROPAK shall not be required
to issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof
-6-
<PAGE>
shall have paid the amount of such tax or shall have established to the
satisfaction of ROPAK that such tax has been paid.
7.2 This Agreement shall not entitle VULCAN to any rights of a stockholder
of ROPAK, either at law or in equity, including, without limitation, the right
to vote, to receive dividends and other distributions, to exercise any
preemptive rights or to receive any notice of meetings of stockholders or of any
other proceedings of ROPAK. Notwithstanding the foregoing, ROPAK shall forward
to VULCAN for its information copies of any information transmitted by ROPAK to
stockholders of record of ROPAK Common Stock.
7.3 Entire Agreement. This Agreement and the agreements described herein
contain the entire agreement among ROPAK and VULCAN with respect to the
transactions contemplated hereby, and supersedes all prior arrangements or
understandings, written or oral, among the parties with respect thereto.
7.4 Notices. Any notice, request, demand, or other communication required
or permitted under this Agreement, shall be in writing and deemed to be properly
given (a) if personally delivered; (b) seven (7) days after deposit in the mails
if mailed by registered air mail, postage prepaid; or (c) one business day after
being sent by facsimile with confirmation sent as provided in (b) above,
addressed as follows, and in the case of facsimile transmission, to the
appropriate facsimile number shown below:
If to ROPAK:
-----------
Ropak Corporation
Attention: Chief Financial Officer
660 S. State College Blvd.
Fullerton, California 92631
U.S.A.
FAX (714) 447-3871
If to VULCAN:
------------
Vulcan Packaging Inc.
Attention: Alex Telfer, Chief Operating Officer
230 New Toronto Street
Toronto, Ontario
CANADA M8V 2E8
FAX (416) 255-3328
or to such other address or facsimile number as from time to time may be given
in the manner permitted above.
-7-
<PAGE>
7.5 Amendment and Modification. This Agreement may be amended or modified
only by a writing executed by the party or parties to be bound by such amendment
or modification.
7.6 No Waiver. No waiver of any breach of any of the provisions of this
Agreement shall be construed to be a waiver of any succeeding breach of the same
or any other provision.
7.7 Applicable Law. This Agreement shall be governed by the laws of the
Province of Ontario.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
undersigned as of this 8th day of June, 1993, in the Province of Ontario,
Canada.
ROPAK CORPORATION
By: /s/ William H. Roper
--------------------------------
William H. Roper, Chairman and
Chief Executive Officer
[CORPORATE SEAL]
Attest:
/s/ William M. Curtis
- ---------------------------
William M. Curtis,
Assistant Secretary
VULCAN PACKAGING INC.
By: /s/ Alex Telfer
----------------------------
Alex Telfer,
Chief Operating Officer
-8-
<PAGE>
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made as of this 29th day of April, 1994,
BETWEEN: VULCAN PACKAGING INC., a corporation incorporated under the laws of
Canada, having its registered office at 230 New Toronto Street,
Toronto, Ontario, M8V 2E8, represented by Mr. Alex Telfer, its
president and Mr. Christopher Winn, its secretary, duly authorized as
they so declare;
(the "Vendor")
- and -
NATIONAL BANK OF CANADA, a Canadian chartered bank duly constituted
according to law, having its head office at 600 De La Gauchetiere
Street West, Montreal, Quebec H3B 4L2, represented by a duly
authorized representative, as he so declares;
(the "Purchaser")
PREAMBLE
WHEREAS the Vendor wishes to sell an aggregate of 5,200 of 7.5%
Sinking Fund Preferred shares in the capital of Ropak Canada Inc. ("Ropak")
together with all rights and obligations attached to such shares, including
without limitation a right to exchange said shares into common shares of the
capital of Ropak Corporation ("Ropak US"), pursuant to the terms and conditions
of an Exchange Agreement entered into between the Vendor and Ropak US on June 8,
1993 and the agreement of Guaranty & Understanding dated June 8, 1993 (the
"Guaranty") between Ropak US and the Vendor to the extent it applies to the
rights and obligations of Ropak under the Sinking Fund Preferreds;
WHEREAS the Purchaser wishes to purchase such shares together with
such right of exchange, on and subject to the terms and conditions of this
Agreement;
NOW THEREFORE in consideration of the mutual covenants and agreements
contained in this Agreement and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
agree as follows:
<PAGE>
ARTICLE 1
PURCHASE AND SALE
-----------------
1.1 AGREEMENT TO PURCHASE AND SELL AND PURCHASE PRICE
Subject to the terms of this Agreement, the Vendor sells and the
Purchaser purchases, 5,200 of 7.5% Sinking Fund Preferred shares in the capital
stock of Ropak, including a right of exchange pursuant to which said shares may
be converted, at the option of the holder, into common shares of the capital of
Ropak US together with the Guaranty to the extent it applies to the rights and
obligations of Ropak under the Sinking Fund Preferreds (collectively the
"Purchased Shares"), the whole in accordance with the terms and conditions of an
Exchange Agreement entered into between the Vendor and Ropak US on June 8, 1993,
a copy of which is annexed as Schedule "A" as an integral part of the present
Agreement.
The purchase and sale of the Purchased Shares is made for an aggregate
price of FIVE MILLION TWO HUNDRED THOUSAND U.S. DOLLARS ($5,200,000 US) or ONE
THOUSAND U.S. DOLLARS ($1,000 US) per Share (the "Purchase Price") the receipt
and sufficiency thereof being hereby expressly acknowledged by the Vendor, where
quit.
ARTICLE 2
REPRESENTATIONS, WARRANTIES, COVENANTS AND UNDERTAKINGS
-------------------------------------------------------
2.1 REPRESENTATIONS AND WARRANTIES BY THE VENDOR
The Vendor represents and warrants to the Purchaser as follows and
acknowledges that the Purchaser is relying upon the following representations
and warranties in connection with its purchase of the Purchased Shares:
2.1.1 the Vendor is a corporation duly organized under the laws of
Canada and is a valid and subsisting corporation with full
power and authority to own its assets and to carry on its
business;
2.1.2 the fulfillment of the terms of this Agreement is not in
contravention of any charter documents or by-laws of the
Vendor nor any agreements to which the Vendor is a party or
is bound;
-2-
<PAGE>
2.1.3 the Vendor has the corporate power and authority to enter
into this Agreement and perform its obligations hereunder;
2.1.4 the Purchased Shares are owned by the Vendor as the
registered and beneficial owner, free and clear of all
liens, charges, mortgages, security interests, adverse
claims, pledges, encumbrances or other demands whatsoever,
except those in favor of the Purchase, Montreal Trust
Company and 2833849 Canada Inc. and the Vendor has the full
right and authority to sell the Purchased Shares in
accordance with the provisions hereof and transfers to the
Purchaser a good and valid title to the Purchased Shares,
free and clear of all liens or other charges whatsoever;
2.1.5 the execution, delivery and performance of this Agreement by
the Vendor has been duly authorized by all necessary
corporate actions and no consent, authorization, license,
approval or order of any court or governmental agency or
regulatory body is required to permit the Vendor to fulfill
the terms of this Agreement;
2.1.6 this Agreement is a valid and binding obligation of the
Vendor enforceable against it in accordance with its terms,
subject however to:
(i) limitations with respect to enforcement imposed by law
in connection with bankruptcy, insolvency and other
laws affecting creditors' rights generally; and
(ii) general principles of equity including the availability
of equitable remedies, such as specific performance and
injunction, which are remedies in the discretion of a
court of competent jurisdiction from which they are
sought;
2.1.7 there are no actions, suits, claims, investigations or other
proceedings pending or to the knowledge of the Vendor
threatened with respect to or any manner affecting the
Purchased Shares;
-3-
<PAGE>
2.1.8 to the best of the Vendor's knowledge, the Vendor, as
regards to its ownership of the Purchased Shares, is in
compliance with all applicable securities legislation.,
2.2 REPRESENTATIONS AND WARRANTIES BY PURCHASER
The Purchaser represents and warrants to the Vendor as follows and
acknowledges that the Vendor is relying upon the following representations and
warranties in connection with its sale of the Purchased Shares:
2.2.1 the Purchaser is a valid and subsisting Canadian chartered
bank duly constituted according to law with full power and
authority to own its assets and to carry on its business;
2.2.2 the fulfillment of the terms of this Agreement is not in
contravention of any charter documents or by-laws of the
Purchaser nor any agreements to which the Purchaser is a
party or is bound;
2.2.3 the Purchaser has the corporate power and authority to enter
into this Agreement and perform its obligations hereunder;
2.2.4 the execution, delivery and performance of this Agreement by
the Purchaser has been duly authorized by all necessary
corporate actions and no consent, authorization, license,
approval or order of any court or governmental agency or
regulatory body is required to permit the Purchaser to
fulfil the terms of this Agreement; and
2.2.5 this Agreement is a valid and binding obligation of the
Purchaser enforceable against it in accordance with its
terms.
2.3 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Vendor and the Purchaser
contained in this Agreement and any document or certificate given pursuant
hereto shall survive its execution and, notwithstanding such execution, shall
continue in full force and effect for a period of one year from the execution
thereof.
-4-
<PAGE>
2.4 UNDERTAKINGS
2.4.1 At the request of one party, the other party covenants and
agrees to file any notice, execute all required
documentation and perform all necessary act which may be
required pursuant to any applicable legislation, to properly
give effect to the present transaction;
2.4.2 the Vendor shall deliver to the Purchaser all documents as
counsel for the Purchaser, acting reasonably, considers
necessary or desirable in the circumstances.
ARTICLE 3
GENERAL MATTERS
---------------
3.1 EXPENSES
The Vendor shall be responsible for all expenses in connection with
the purchaser and transfer of the Purchased Shares, including legal reasonable
fees for the preparation and execution of the present Agreement.
3.2 NOTICES
Any notices or other communication required or permitted to be given
hereunder shall be in writing and shall be given by prepaid first-class mail, by
facsimile or other means of electronic communication or by hand-delivery as
hereinafter provided. Any such notice or other communication, if mailed by
prepaid first-class mail at any time other than during a general discontinuance
of postal service due to strike, lockout or otherwise, shall be deemed to have
been received on the fourth business day after the post-marked date thereof, or
if sent by facsimile or other means of electronic communication, shall be deemed
to have been received on the business day following the sending, or if delivered
by hand shall be deemed to have been received at the time it is delivered to
the applicable address noted below either to the individual designated below or
to an individual at such address having apparent authority to accept delivery on
behalf of the addressee. Notice of change or address shall also be governed by
this section. In the event of a general discontinuance of postal service due to
strike, lockout or otherwise, notices or other communications shall be delivered
by hand or sent by facsimile or other means of electronic communication and
shall be deemed to have been received in
-5-
<PAGE>
accordance with this section. Notices and other communications shall be
addressed as follows:
(a) if to the Vendor:
Vulcan Packaging Inc.
230 New Toronto Street
Toronto, Ontario
M8V 2E8
Attention: Mr. Alex Telfer, President
Telecopier Number: (416) 255-3328
with a copy to: Heenan Blaikie
Suite 3350, 200 Bay Street
South Tower, Royal Bank
Toronto, Ontario
Canada M5J 2J4
Attention: Mr. Bryan W. Loeppky
Telecopier Number: (416) 360-8425
(b) if to the Purchaser:
National Bank of Canada
600, de La Gauchetiere Street West
Montreal, Quebec
H3B 4L2
Attention: Mr. Robert Savoie
Telecopier Number: (514) 394-8811
The failure to send or deliver a copy of a notice to the Purchaser's
counsel or to the Vendor's counsel, as the case may be, shall not invalidate any
notice given under this section.
3.3 GOVERNING LAW
This Agreement should be governed by and interpreted by the laws of
the Province of Quebec and the laws of Canada applicable therein.
3.4 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which once so executed shall be deemed original, and such counterparts together
shall constitute one and the same instrument.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
VULCAN PACKAGING INC.
Dated and signed in Toronto, per:/s/ Alex Telfer
on April 29, 1994 ---------------
Alex Telfer
Dated and signed in Montreal, per:/s/ Christopher Winn
on April 29, 1994 --------------------
Christopher Winn
NATIONAL BANK OF CANADA
Dated and signed in Montreal, per:/s/ National Bank of Canada
on April 29, 1994 ---------------------------
INTERVENTIONS
AND CAME HERETO AND INTERVENED:
ROPAK CANADA INC. ("ROPAK"), a corporation incorporated under the laws of
Ontario, herein acting and represented by William H. Roper, duly authorized
as he so declares;
WHO DECLARES AND REPRESENTS AS FOLLOWS:
1. Ropak has taken cognizance of the terms and conditions of the
present Purchase Agreement;
2. That pursuant to that agreement for purchase of assets executed on
April 8, 1993, between Ropak and Ropak Corporation, Vulcan Packaging Inc. and R
& M Metal Inc., it has filed, as required from the Ontario Securities Commission
and within the prescribed period, a report on Form 20 with respect to the sale
and delivery of the Purchased Shares, together with the appropriate filing fee
as required by the Regulation made under the Securities Act (Ontario);
3. Subject to Ropak's charter documents and applicable securities
legislation, that the shares of its capital stock, subject to the present
Purchase Agreement and any other corporate requirements, are freely transferable
without restriction; and
-7-
<PAGE>
4. That in the event the Purchaser elects to avail himself of the
right of exchange pursuant to the Exchange Agreement entered into on June 8,
1993, between the Vendor and Ropak US (as hereinafter defined), Ropak undertakes
to fulfil all requirements and file all documentation, including those required
by the Regulation made under the Securities Act (Ontario), the whole within the
prescribed period and at the expense of the Purchaser;
AND CAME HERETO AND INTERVENED:
ROPAK CORPORATION ("ROPAK-US"), a corporation incorporated under the laws
of the State of Delaware, herein acting and represented by William H.
Roper, duly authorized as he so declares;
WHO DECLARES AND REPRESENTS AS FOLLOWS:
1. Ropak US has taken cognizance of the terms and conditions of the
present Purchase Agreement;
2. That pursuant to that Exchange Agreement executed on June 8, 1993
between Ropak-US and the Vendor, it has filed, as required by the Securities Act
(Ontario) and within the prescribed period, a report on Form 20, with respect to
the sale of the right of exchange contemplated in said Exchange Agreement,
together with the appropriate filing fee as required by the Regulation made
under the Securities Act (Ontario);
3. That it recognizes that in accordance with the terms of said
Exchange Agreement, the Purchaser upon acquisition of the Purchased Shares, may
avail himself of the right of exchange and exchange the Purchased Shares into
shares of Ropak US, upon the same terms and conditions of said Exchange
Agreement;
4. That in the event the Purchaser elects to avail himself of the
right of exchange pursuant to said Exchange Agreement, Ropak US undertakes to
fulfil all requirements and file all documentation, including those required by
any securities regulation, the whole within the prescribed period except that
Ropak US shall have no obligation to register any securities under the U.S.
Securities Act of 1933;
5. Subject to applicable law, that in the event the Purchaser elect
to avail himself of the right of exchange pursuant to said Exchange Agreement,
Ropak US represents that the shares of its capital stock to be owned by the
Purchaser upon exercise of said right of exchange are freely transferable
-8-
<PAGE>
without restriction except for restrictions under applicable securities laws;
6. If, on the date hereof, the right of exchange was exercised, the
Ropak US shares to be so acquired by the Purchaser would represent approximately
11.9% of voting rights attached to the aggregate of all voting shares of Ropak
US.
ROPAK CANADA INC.
Dated and signed in California, per: /s/ William H. Roper
on April 29, 1994 ---------------------
William H. Roper,
Chairman and Chief
Executive Officer
ROPAK CORPORATION INC.
Dated and signed in California, per:/s/ William H. Roper
on April 29, 1994 --------------------
William H. Roper,
Chairman and Chief
Executive Officer
-9-
<PAGE>
GUARANTY AND UNDERTAKING
THIS GUARANTY AND UNDERTAKING dated for reference as of June 8, 1993,
BETWEEN: ROPAK CORPORATION, a company incorporated under the laws of the State
of California, having its principal office at 660 S. State College
Blvd., Fullerton, California 92631, U.S.A. (herein called the
"Company")
OF THE FIRST PART
AND: VULCAN PACKAGING INC., a company incorporated under the laws of
Canada, having its office at 230 New Toronto Street, Toronto, Ontario,
Canada M8V 2E8 (herein called the "Beneficiary")
OF THE SECOND PART
WHEREAS, the Company, Beneficiary, Ropak Canada Inc. ("Ropak Canada") and R
& M Metal Inc. ("R & M") have entered into that certain Agreement for Purchase
of Assets dated April 8, 1993 (the "Asset Agreement"), as to the sale by
Beneficiary to Ropak Canada of certain assets identified therein as the "Toronto
Purchased Assets"; and
WHEREAS, the Company owns all of the issued and outstanding common stock of
Ropak Canada and accordingly, has a financial interest in the rights, benefits
and obligations of Ropak Canada under the Asset Agreement; and
WHEREAS, pursuant to the Asset Agreement, Ropak Canada has issued to the
Beneficiary 5,200 Exchangeable Preferred Shares (as described therein) (the
"Exchangeable Preferred Shares"); and
WHEREAS, the said Exchangeable Preferred Shares are part of the
consideration paid to the Beneficiary for the sale by it to Ropak Canada of the
Toronto Purchased Assets; and
WHEREAS, the Exchangeable Preferred Shares give the right to the
Beneficiary to receive, inter alia, certain fixed cumulative cash dividends and
mandatory sinking fund redemption payments; and
WHEREAS, it is an essential consideration to the Beneficiary and R & M that
all obligations to be performed and all amounts contemplated to be paid under
and in respect of the said Exchangeable Preferred Shares and the Asset Agreement
be so performed and paid; and
<PAGE>
WHEREAS, as a material inducement for the Beneficiary and R & M to enter
into the Asset Agreement and to consummate the transactions contemplated
therein, the Company has agreed to execute and deliver this guaranty and
undertaking (for the purposes of convenience, referred to hereinafter as this
"Guaranty").
NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS.
1. Guaranty of Payment and Performance
-----------------------------------
(a) The Company hereby guaranties the payment and performance by Ropak Canada
of each and every one of its obligations to the Beneficiary under the Asset
Agreement and in respect of the Exchangeable Preferred Shares. In
particular, and without limiting the generality of the foregoing, the
Company hereby guaranties the payment to the Beneficiary of those amounts
due and payable pursuant to the terms of the Exchangeable Preferred Shares,
in particular fixed cumulative cash dividends at the rate of $75.00 (US
funds) per Exchangeable Preferred Share per annum payable in quarter-annual
installments (whether declared or not declared) and, subject to the
holders' rights of exchange pursuant to an exchange agreement of even date
between the Beneficiary and the Company (the "Rights of Exchange"),
mandatory sinking fund redemption payments of $1,000 (US funds) per share
as to 1,200 shares on April 1, 1996; as to 2,000 shares on April 1, 1997;
and as 2,000 shares on April 1, 1998.
(b) If Ropak Canada should breach any of its obligations to the Beneficiary,
whether for payment or for performance of any actions on its part to be
paid or performed, under the Asset Agreement or in respect of the
Exchangeable Preferred Shares, and such breach or other failure of
performance remains uncured by Ropak Canada for more than five (5) days
after the Company has received written notice of breach from the
Beneficiary, then the Company shall forthwith pay or cause to be paid or
performed al sums then due and past due or other acts to be performed on
the part of Ropak Canada under the terms of the Asset Agreement and the
Exchangeable Preferred Shares.
2. Direct Undertaking of the Company
---------------------------------
(a) Notwithstanding anything herein contained, the Company hereby obliges
itself, as principal debtor and not as guarantor, as follows. In the event
that Ropak Canada shall not pay to the Beneficiary any of the following
amounts:
-2-
<PAGE>
(i) an amount of $75.00 (US funds) per annum per Exchangeable Preferred
Share outstanding, in quarter-annual installments commencing on July
1, 1993 and on each October 1, January 1, April 1 and July 1
thereafter,
(ii) an amount of $1,200,000 (US funds) on April 1, 1996,
(iii) an amount of $2,000,000 (US funds) on April 1, 1997,
(iv) an amount of $2,000,000 (US funds) on April 1, 1998, or
(v) other amounts of any nature whatsoever contemplated to be paid to the
holder of Exchangeable Preferred Shares pursuant to the rights,
privileges and preferences attaching thereto.
for any reason whatsoever, including without limitation, by virtue of the
operation of law and in particular, because the laws of the jurisdiction of
incorporation of Ropak Canada prevent or prohibit it from so doing, then,
irrespective of such reason, the Company irrevocably and unconditionally agrees
to pay such amount(s) directly to the Beneficiary, subject only to the exercise
of Rights of Exchange or other credits contemplated by Section 20.8(b) of the
Memorandum recorded with the British Columbia Registrar of Companies on June 8,
1993 in respect of the Exchangeable Preferred Shares and Section 4 hereof.
(b) Payment of any amount(s) to be paid by the Company pursuant to paragraph
(a) shall be made within five (5) days after the Company has received
demand therefor from the Beneficiary.
3. Waiver and Consent. The Company hereby waives notice of the acceptance of
this Guaranty by the Beneficiary and consents to any extension of time that may
be given by the Beneficiary to Ropak Canada for payment or performance under the
Asset Agreement or under the terms of the Exchangeable Preferred Shares. No
waiver of any breach of any of the provisions of this Guaranty shall be
construed to be a waiver of any succeeding breach of the same or any other
provision.
4. Set-Off Provision. Beneficiary, by its acceptance hereof, acknowledges
that the Asset Agreement provides that the Company and Ropak Canada are entitled
to the benefits of a right of set-off under the provisions of Section 11 and
related provisions of the Asset Agreement, and the obligations of the Company
hereunder and the rights of the Beneficiary and any assignee of this Guaranty
are subject to such set-off provisions, if applicable.
-3-
<PAGE>
5. Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Guaranty is intended to be exclusive of any other remedy
available to the Beneficiary, and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder and by the Asset
Agreement and/or the Exchangeable Preferred Shares or now or hereafter existing
in law or in equity or by statute or otherwise. The election of any one or more
remedies shall not constitute a waiver of the right to pursue other available
remedies.
6. Choice of Law. This Guaranty shall be deemed to have been made and
executed, and all performance shall be deemed to take place, within the Province
of Ontario. All aspects of this Guaranty shall be governed by and interpreted
by the laws of the Province of Ontario.
7. Captions. The headings and captions appearing in this Agreement are
inserted for convenience of reference only and shall not constitute a part
thereof and shall not be used in construction or interpretation.
8. The Company agrees that the Beneficiary shall not be bound to seek or
exhaust its recourses against Ropak Canada or any other person or to realize on
any security it may hold in respect of the obligations of Ropak Canada before
being entitled to payment hereunder. Should the Beneficiary elect to realize on
any security it may hold, either before, concurrently with or after demand for
payment thereunder, the Company shall have no right of discussion or division.
[SIGNATURE PAGE FOLLOWS]
-4-
<PAGE>
IN WITNESS WHEREOF, this Guaranty has been executed and delivered by the
undersigned as of this 8th day of June, 1993, in the Province of Ontario,
Canada.
ROPAK CORPORATION
By:/s/ William H. Roper
--------------------
William H. Roper, Chairman
Chief Executive Officer
[CORPORATE SEAL]
Attest:
/s/ William M. Curtis
- --------------------------------------
William M. Curtis, Assistant Secretary
VULCAN PACKAGING INC.
By:/s/ Alex Telfer
-----------------------------------
Alex Telfer, Chief
Operating Officer
-5-
<PAGE>
EXHIBIT (c)(9)
STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 12th day of
January, 1995, by and between LINPAC MOULDINGS LIMITED ("LINPAC"), with its
principal office at Deykin Avenue, Witton, Birmingham B6 7HY, England on the one
hand and Chesapeake Partners Limited Partnership, Chesapeake Partners
Institutional Fund Limited Partnership and Chesapeake Partners International,
Ltd. on the other hand (collectively, the "Shareholder on a joint and several
basis").
WHEREAS, ROPAK CORPORATION is a Delaware corporation (the "Company")
with its principal office located at 660 S. State College Blvd., Fullerton,
California 92631-5138;
WHEREAS, the Shareholder owns 281,000 shares (the "Shares") of common
stock of the Company (the "Common Stock");
WHEREAS, the Shareholder desires to sell and LINPAC desires to
purchase the Shares;
NOW, THEREFORE, in consideration of the premises, representations,
warranties, covenants, agreements and promises herein contained, the parties
agree as follows:
SECTION 1. PURCHASE AND SALE
1.1. Purchase Price. The Purchase Price for the Shares shall be
$11.00 per share.
1.2. Additional Consideration. If LINPAC purchases any Common Stock
for a per share price in excess of $11.00 per share during the period beginning
on the date hereof and ending on September 30, 1995, then LINPAC shall, on or
before October 31, 1995, pay the Shareholder, as additional consideration for
the Shares, an amount per share equal to the difference between the highest per
share price paid and $11.00. Notwithstanding the foregoing, LINPAC shall not be
required to make any payment of additional consideration as a result of the
purchase of any Common Stock pursuant to any existing agreement to which LINPAC
is a party, including the purchase of any Common Stock pursuant to LINPAC's
Agreement with certain Roper family members.
SECTION 2. CLOSING
2.1. Closing. The transfer of stock (the "Closing") shall occur at
the offices of McDermott, Will & Emery, 227 West Monroe Street, Chicago,
Illinois on the date hereof.
<PAGE>
2.2. Deliveries by LINPAC. At the Closing, LINPAC shall deliver the
following:
(a) $2,779,700 to:
$155,100 to:
(b) such other instruments or documents as may be necessary or
appropriate to carry out the transactions contemplated hereby.
2.3. Deliveries by Shareholder. At the Closing, Shareholder shall
deliver the following:
(a) 281,000 shares of Common Stock by free delivery to the following
account:
(b) such other endorsements, instruments or documents as may be
necessary or appropriate to carry out the transactions contemplated hereby.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder represents and warrants to LINPAC as of the date hereof
and as of the Closing, as follows:
3.1. Authority. Shareholder has all requisite power and authority,
without the consent of any other person, to execute and deliver this Agreement
and the documents to be delivered at the Closing and to carry out the
transactions contemplated hereby and thereby. Each of the three Shareholder
entities is a validly existing limited partnership or corporation, as
applicable, in good standing under its jurisdiction of organization. Chesapeake
Partners Management Co., Inc. has authority to execute this Agreement on behalf
of each Shareholder entity.
3.2 Validity. This Agreement has been duly executed and delivered
and constitutes the lawful, valid and binding obligation of Shareholder,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors rights generally, or by general equitable
principles, and except to the extent that indemnification for certain matters
pertaining to Federal and state securities laws may not be enforceable on the
grounds that such indemnification is contrary to public policy. No approval,
authorization, registration, consent, order or other action of or filing with
any person, including any court, administrative agency or other government
authority, is required for the execution and delivery by Shareholder of this
Agreement or the performance by Shareholder of its obligations hereunder.
3.4. Common Stock. Shareholder is the owner of the Shares and has
good, marketable and indefeasible title thereto and the absolute right to
<PAGE>
sell, assign, transfer and deliver the same, free and clear of all claims,
security interests, liens, pledges, charges, escrows, options, proxies, rights
of first refusal, preemptive rights, mortgages, hypothecations, prior
assignments, title retention agreements, indentures, security agreements or any
other limitation, encumbrance or restriction of any kind.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF LINPAC
LINPAC hereby represents and warrants to Shareholder as of the date
hereof and as of the Closing, as follows:
4.1. Authority. LINPAC has all requisite power and authority,
without the consent of any other person, to execute and deliver this Agreement
and the documents to be delivered at the Closing, and to carry out the
transactions contemplated hereby and thereby. LINPAC is a private company
limited by shares organized and validly existing under the laws of the United
Kingdom.
4.2. Validity. This Agreement has been duly executed and delivered
and constitutes the lawful, valid and legally binding obligation of LINPAC,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors rights
generally, or by general equitable principles, and except to the extent that
indemnification for certain matters pertaining to Federal and state securities
laws may not be enforceable on the grounds that such indemnification is contrary
to public policy. No approval, authorization, registration, consent, order or
other action of or filing with any person, including any court, administrative
agency or other government authority, is required for the execution and delivery
by LINPAC of this Agreement or the performance by LINPAC of its obligations
hereunder.
SECTION 5. SURVIVAL AND INDEMNIFICATION
The representations and warranties in this Agreement will survive the
Closing. Each party shall indemnify and hold harmless the other from any and
all loss, liability, cost, expense, claim or obligation arising from any breach
of any representation and warranty or failure to fulfill any covenant hereunder.
The representations and warranties in Section 3 hereof are the only
representations and warranties made by Shareholder, and LINPAC is not relying on
any other statements made by Shareholder and has conducted its own review of the
Company for purposes of its investment in the Shares.
SECTION 6. GENERAL PROVISIONS
6.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be delivered in person or
sent by registered or certified mail, postage prepaid, commercial overnight
courier (such as Express Mail, Federal Express, etc.) with written verification
of receipt or by telecopy.
<PAGE>
6.2. Expenses. Each party to this Agreement shall pay its own costs
and expenses in connection with the transactions contemplated hereby.
6.3. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts each of which shall be deemed an original, but all of
which together constitute one and the same instrument.
6.4. Entire Transaction. This Agreement and the documents referred
to herein contain the entire understanding among the parties with respect to the
actions contemplated hereby and supersedes all other agreements, understandings
and undertakings among the parties on the subject matter hereof.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed or caused
this Agreement to be executed all as of the date first written above.
LINPAC MOULDINGS LIMITED SHAREHOLDER
CHESAPEAKE PARTNERS LIMITED
PARTNERSHIP
By: /s/ David A. William By: CHESAPEAKE PARTNERS
David A. Williams MANAGEMENT CO., INC.,
Its: Managing Director General Partner
By: /s/ Mark D. Lerner
Name: Mark D. Lerner
Title: Vice President
CHESAPEAKE PARTNERS INSTITUTIONAL FUND
LIMITED PARTNERSHIP
By: CHESAPEAKE PARTNERS MANAGEMENT CO.,
INC., General Partner
By: /s/ Mark D. Lerner
Name: Mark D. Lerner
Title: Vice President
CHESAPEAKE PARTNERS INTERNATIONAL LTD.
By: CHESAPEAKE PARTNERS MANAGEMENT CO.,
INC., Investment Manager
By: /s/ Mark D. Lerner
Name: Mark D. Lerner
Title: Vice President
<PAGE>
EXHIBIT (c)(10)
WILLIAM H. ROPER
12 Rue Biarritz
Newport Beach, California 92660
Date: February 27, 1995
ROPAK Corporation
660 S. State College Blvd.
Fullerton, CA 92631-5138
Attention: Ronald W. Cameron, Chief Financial Officer
RE: CANCELLATION OF STOCK OPTION
Gentlemen:
This letter will confirm my agreement to the cancellation of that certain
stock option granted to me on February 19, 1991 under the 1991 Stock Option Plan
of Ropak Corporation covering 44,000 shares of the Company's common stock. The
option has been cancelled in consideration of the payment to the undersigned of
$222,002.00 by LinPac Mouldings Ltd., receipt of which is hereby acknowledged.
Sincerely,
/s/ William H. Roper
---------------------------
William H. Roper
cc: Scott M. Williams
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606-5096
<PAGE>
EXHIBIT (c)(11)
C. RICHARD ROPER
1383 North Mustang
Orange, California 92667
Date: February 27, 1995
ROPAK Corporation
660 S. State College Blvd.
Fullerton, CA 92631-5138
Attention: Ronald W. Cameron, Chief Financial Officer
RE: CANCELLATION OF STOCK OPTION
Gentlemen:
This letter will confirm my agreement to the cancellation of that certain
stock option granted to me on February 19, 1991 under the 1991 Stock Option Plan
of Ropak Corporation covering 44,000 shares of the Company's common stock. The
option has been cancelled in consideration of the payment to the undersigned of
$222,002.00 by LinPac Mouldings Ltd., receipt of which is hereby acknowledged.
Sincerely,
/s/ C. Richard Roper
-----------------------
C. Richard Roper
cc: Scott M. Williams
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606-5096
<PAGE>
EXHIBIT (c)(12)
ROBERT E. ROPER
3802 Holden Circle
Los Alamitos, California 90720
Date: February 27, 1995
ROPAK Corporation
660 S. State College Blvd.
Fullerton, CA 92631-5138
Attention: Ronald W. Cameron, Chief Financial Officer
RE: CANCELLATION OF STOCK OPTION
Gentlemen:
This letter will confirm my agreement to the cancellation of that certain
stock option granted to me on February 19, 1991 under the 1991 Stock Option Plan
of Ropak Corporation covering 44,000 shares of the Company's common stock. The
option has been cancelled in consideration of the payment to the undersigned of
$222,002.00 by LinPac Mouldings Ltd., receipt of which is hereby acknowledged.
Sincerely,
/s/ Robert E. Roper
--------------------------
Robert E. Roper
cc: Scott M. Williams
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606-5096
<PAGE>
EXHIBIT (c)(13)
FORM OF
INDEMNIFICATION AGREEMENT
This Agreement dated January 18, 1995 by and between ROPAK CORPORATION, a
Delaware corporation (the "Company") and [Director] (the "Indemnified Party").
WHEREAS, the Indemnified Party has acted, and may continue to act, as a member
of the Board of Directors of the Company and has served on committees of the
Board of Directors including, without limitation, a Special Committee formed in
September and October 1994 as described in minutes of proceedings of the Board
of Directors; and
WHEREAS, in consideration of such services, and pursuant to authority of its
Board of Directors, the Company has agreed to enter into this Agreement and to
amend its By-Laws to incorporate the following provisions into the By-Laws of
the Company:
NOW, THEREFORE, the parties hereto agree as follows:
1. (a) To the extent permitted by the Delaware General Corporation Law and by
the Company's certificate of incorporation, the Company hereby agrees to
indemnify and hold harmless the Indemnified Party against any and all losses,
claims, damages, judgments, liabilities or costs, including related attorneys'
fees and other costs of investigation, preparation, defense and providing
evidence, whether or not in connection with litigation in which the Indemnified
Party is a party, as and when such losses, claims, damages, judgments,
liabilities or costs are incurred, which are directly or indirectly caused by,
related to, based upon or arising out of any act or omission on the part of the
Indemnified Party in his capacity as a director, agent or fiduciary of the
Company or in connection with any transactions undertaken as a result of such
relationships, including without limitation any actions taken or decisions made
as a director or as a member of any committee of the Board of Directors with
respect thereto.
(b) Notwithstanding the foregoing, the obligation of the Company to
advance expenses pursuant hereto shall be subject to the condition that if, when
and to the extent that a final judicial determination is made (as to which all
rights of appeal therefrom have been exhausted or lapsed) to the effect that
the Indemnified Party is not permitted to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by the Indemnified Party
(who, with reference to Section 9(a) of Article Sixth of the Company's
certificate of incorporation, hereby agrees to so reimburse the Company) for all
amounts theretofore paid.
2. The Indemnified Party shall promptly notify the Company in writing of any
action or proceeding (including any governmental investigation) brought or
asserted against the Indemnified Party in respect of which indemnity is sought
from the Company hereunder, and (subject to clause (c) below) the Company shall
promptly assume the defense thereof with counsel of the Company's choice
reasonably acceptable to the Indemnified Party and the payment of all fees and
expenses incurred in connection with the defense thereof. The Indemnified Party
shall have the right to employ separate counsel in any such action and to
participate in the
<PAGE>
defense thereof if: (a) the Indemnified Party shall pay the fees and expenses of
such separate counsel, or (b) the Company shall have failed to assume the
defense of such action within a reasonable time after notice from the
Indemnified Party, or (c) the named parties to any such action or proceeding
(including any impleaded parties) including both the Indemnified Party and the
Company shall have been advised in writing by counsel that there maybe one or
more legal defenses available to the Indemnified Party which are different from
or additional to those available to the Company, in which case the Indemnified
Party may elect in writing to employ separate counsel reasonably acceptable to
the Company at the expense of the Company (after which the Company shall not
have the right to defense of such action or proceeding on behalf of such
Indemnified Party), it being understood, however, that the Company shall not, in
connection with any one such action or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with appropriate
local counsel) at any time. The Company shall not be liable for any settlement
of any such action or proceeding effected without its written consent (which
shall not be unreasonably withheld), but if any such action or proceeding is
settled with its written consent, the Company agrees to indemnify and hold
harmless the Indemnified Party from and against any loss, claim, damage, or
liability (to the extent stated above) by reason of such settlement or judgment.
3. In order to provide for just and equitable contribution, if a claim for
indemnification hereunder is found unenforceable in a final judgment by a court
of competent jurisdiction (not subject to further appeal), even though the
express provisions hereof provide for indemnification in such case, then the
Company shall contribute to the losses, claims, damages, judgments, liabilities
or costs to which the Indemnified Parties may be subject in accordance with the
relative benefits received by, and the relative fault of, the Company in
connection with the statements, acts or omissions which resulted in such losses,
claims, damages, judgments, liabilities, or costs.
4. In the event the Indemnified Party shall be required to give evidence by
way of deposition or as a witness at trial, the Company agrees to compensate the
Indemnified Party at the per diem rate of $600 per day for each day or portion
of a day devoted to attendance at depositions or as a witness at trial. The
Company shall have no obligation to compensate the Indemnified Party for time
devoting to preparation as a witness.
5. These indemnification provisions shall (i) remain operative and in full
force and effect regardless of any termination of the relationship between the
Company and the Indemnified Party; (ii) inure to the benefit of any successors,
assigns, heirs or personal representative of the Indemnified Party; and (iii) be
in addition to any other rights that the Indemnified Party may have.
6. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in such state without giving effect to Delaware principles
of conflicts of laws.
2
<PAGE>
IN WITNESS WHEREAS, this Agreement has been executed by the parties hereto on
the date first written above.
"Company" ROPAK CORPORATION
By: ____________________
William H. Roper,
Chairman and Chief Executive Officer
"Indemnified Party" ____________________
[Director]
3
<PAGE>
EXHIBIT (c)(14)
March 15, 1995
FAX NUMBER (714) 831-0400
Ropak Corporation
c/o William M. Curtis
Assistant Secretary
25241 Buckskin Drive
Laguna Hills, California 92653
Gentlemen:
This will refer to the tender offer to purchase all outstanding common
stock of Ropak Corporation at $11.00 per share in cash announced by LINPAC
Mouldings Ltd. ("LINPAC"). You and LINPAC are authorized to indicate in
materials mailed to stockholders of Ropak that I intend to accept LINPAC's
tender offer as to the following shares of common stock in Ropak held by the
undersigned.
Shares of Common Stock: 7,260 shares owned by Admac Holdings Ltd.
Very truly yours,
/s/ Douglas H. MacDonald
-----------------------------------------
DOUGLAS H. MacDONALD
<PAGE>
EXHIBIT (c)(15)
March 15, 1995
FAX NUMBER (714) 831-0400
Ropak Corporation
c/o William M. Curtis
Assistant Secretary
25241 Buckskin Drive
Laguna Hills, California 92653
Gentlemen:
This will refer to the tender offer to purchase all outstanding common
stock of Ropak Corporation at $11.00 per share in cash announced by LINPAC
Mouldings Ltd. ("LINPAC"). You and LINPAC are authorized to indicate in
materials mailed to stockholders of Ropak that I intend to accept LINPAC's
tender offer as to the following shares of common stock in Ropak held by the
undersigned.
Shares of Common Stock: 17,800 shares owned by me
22,002 shares owned by my spouse
Shares of Common Stock issuable upon exercise of stock options:
10,890 stock options granted 5/17/90
11,500 stock options granted 2/19/91
5,000 stock options granted 2/7/94
Very truly yours,
/s/ James R. Connell
-----------------------------------
JAMES R. CONNELL
<PAGE>
EXHIBIT (c)(16)
March 15, 1995
FAX NUMBER (714) 831-0400
Ropak Corporation
c/o William M. Curtis
Assistant Secretary
25241 Buckskin Drive
Laguna Hills, California 92653
Gentlemen:
This will refer to the tender offer to purchase all outstanding common
stock of Ropak Corporation at $11.00 per share in cash announced by LINPAC
Mouldings Ltd. ("LINPAC"). You and LINPAC are authorized to indicate in
materials mailed to stockholders of Ropak that I intend to accept LINPAC's
tender offer as to the following shares of common stock in Ropak held by the
undersigned.
Shares of Common Stock: 25,251 shares owned by me
Shares of Common Stock issuable upon exercise of stock options:
10,890 stock options granted 5/17/90
17,500 stock options granted 2/19/91
2,500 stock options granted 2/7/94
Very truly yours,
/s/ Ronald W. Cameron
-----------------------------
RONALD W. CAMERON
<PAGE>
EXHIBIT (c)(17)
March 15, 1995
FAX NUMBER (714) 831-0400
Ropak Corporation
c/o William M. Curtis
Assistant Secretary
25241 Buckskin Drive
Laguna Hills, California 92653
Gentlemen:
This will refer to the tender offer to purchase all outstanding common
stock of Ropak Corporation at $11.00 per share in cash announced by LINPAC
Mouldings Ltd. ("LINPAC"). You and LINPAC are authorized to indicate in
materials mailed to stockholders of Ropak that I intend to accept LINPAC's
tender offer as to the following shares of common stock in Ropak held by the
undersigned.
Shares of Common Stock: 12,840 shares owned by me
255 shares owned by my spouse
Shares of Common Stock issuable upon exercise of stock options:
10,890 stock options granted 5/17/90
27,500 stock options granted 2/19/91
Very truly yours,
/s/ James R. Dobell
-----------------------
JAMES R. DOBELL
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ROPAK CORPORATION
AT
$11.00 NET PER SHARE
BY
LINPAC MOULDINGS LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, MAY 2, 1995, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO
PURCHASE. SEE "INTRODUCTION," "THE OFFER--TERMS OF THE OFFER" AND "THE OFFER--
CERTAIN CONDITIONS OF THE OFFER."
----------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
shares of common stock, par value $.01 per share ("Shares"), of Ropak
Corporation, pursuant to this Offer should either (i) complete and sign the
enclosed Letter of Transmittal (or a facsimile copy thereof) in accordance with
the instructions in the Letter of Transmittal, have such stockholder's
signature thereon guaranteed if required by Instruction 1 to the Letter of
Transmittal, mail or deliver the Letter of Transmittal (or such facsimile) and
any other required documents to First Chicago Trust Company of New York (the
"Depositary") and either deliver the certificate(s) for such Shares to the
Depositary along with the Letter of Transmittal (or facsimile) or deliver such
Shares pursuant to the procedure for book-entry transfer set forth in "THE
OFFER--Procedure for Tendering Shares" or (ii) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. A stockholder having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee if
such stockholder desires to tender the Shares held by the nominee.
ANY STOCKHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE CERTIFICATE(S) FOR
SUCH SHARES ARE NOT IMMEDIATELY AVAILABLE, OR WHO CANNOT COMPLY IN A TIMELY
MANNER WITH THE PROCEDURE FOR BOOK-ENTRY TRANSFER, OR WHO CANNOT DELIVER ALL
REQUIRED DOCUMENTS TO THE DEPOSITARY PRIOR TO THE EXPIRATION OF THE OFFER, MAY
TENDER SUCH SHARES BY FOLLOWING THE PROCEDURES FOR GUARANTEED DELIVERY SET
FORTH IN "THE OFFER--PROCEDURE FOR TENDERING SHARES."
Purchaser makes no recommendation to any stockholder as to whether to tender
or refrain from tendering Shares. Stockholders must make their own decisions
whether to tender Shares and, if so, how many Shares to tender.
Questions and requests for assistance may be directed to the Information
Agent at its address or telephone numbers, which are set forth on the back
cover of this Offer to Purchase. Additional copies of this Offer to Purchase,
the Letter of Transmittal, the Notice of Guaranteed Delivery and other related
materials may be obtained from the Information Agent.
----------------
THE TRANSACTIONS DESCRIBED HEREIN HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") NOR HAS THE
COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTIONS NOR
UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
----------------
THE INFORMATION AGENT FOR THE OFFER IS:
LOGO
March 21, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION.............................................................. 1
SPECIAL FACTORS........................................................... 2
1. Background of the Offer............................................. 2
2. Fairness of the Offer............................................... 7
3. Interests of Certain Persons in the Offer; Contacts with the
Company................................................................ 11
4. Reasons for the Offer and Plans for the Company..................... 12
5. Appraisal Rights; Fair Price Provisions............................. 13
THE OFFER................................................................. 13
1. Terms of the Offer.................................................. 13
2. Procedure for Tendering Shares...................................... 15
3. Withdrawal Rights................................................... 18
4. Acceptance for Payment and Payment.................................. 18
5. Certain Income Tax Consequences..................................... 20
6. Options............................................................. 20
7. Price Range of Shares; Dividends on the Shares...................... 21
8. Effect of the Offer on the Market for the Shares; Stock Quotation
and Exchange Act Registration........................................ 22
9. Certain Information Concerning the Company.......................... 23
10. Certain Information Concerning Purchaser............................ 25
11. Source and Amount of Funds.......................................... 26
12. Dividends and Distributions......................................... 26
13. Arrangements with Officers of the Company and Other Agreements...... 27
14. Certain Conditions of the Offer..................................... 28
15. Certain Legal Matters............................................... 31
16. Fees and Expenses................................................... 32
17. Miscellaneous....................................................... 33
ANNEXES:
Annex A Directors and Executive Officers of Purchaser and LINPAC Group.... A-1
Annex B Rights of Dissenting Stockholders Under Section 262 of the
Delaware General Corporation Law.................................. B-1
Annex C Article Ninth to the Certificate of Incorporation of Ropak
Corporation....................................................... C-1
Annex D Consolidated Financial Statements of Ropak Corporation for the
year ended December 31, 1994 and related Notes thereto............ D-1
</TABLE>
<PAGE>
To the Holders of Common Stock
(and Options to Purchase Common Stock)
of Ropak Corporation:
INTRODUCTION
LINPAC Mouldings Ltd., an United Kingdom corporation ("Purchaser"), hereby
offers to purchase any and all outstanding shares of common stock, par value
$.01 per share ("Shares"), of Ropak Corporation, a Delaware corporation (the
"Company"), that are not currently owned by Purchaser (the "Publicly Held
Shares"), at a price of $11.00 per share, net to the seller in cash, without
interest (the "Offer Price"), upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Publicly Held Shares pursuant to
the Offer. Purchaser will pay all fees and expenses of Kissel-Blake Inc., which
is acting as Information Agent (the "Information Agent"), and First Chicago
Trust Company of New York, which is acting as the Depositary (the
"Depositary"), incurred in connection with the Offer. See "THE OFFER--Fees and
Expenses."
The Offer is subject to certain terms and conditions. See "THE OFFER--Terms
of the Offer" and "THE OFFER--Certain Conditions of the Offer."
According to the Company's Form 10-K for the year ended December 31, 1994 as
filed with the Securities and Exchange Commission on March 8, 1995 (the "Form
10-K"), as of March 1, 1995, there were 2,122,636 Publicly Held Shares
outstanding (and 218,950 Shares issuable upon the exercise of all existing
options to purchase Shares) which are held by approximately 225 record holders
other than Purchaser (the "Public Stockholders"). As of March 1, 1995, there
were 2,841,303 Shares beneficially owned by Purchaser (including 577,777 Shares
obtainable upon exchange of certain preferred stock of Ropak Canada, Inc. held
by Purchaser), or approximately 57.2% of the total Shares outstanding (assuming
exchange of the preferred stock).
The purpose of the Offer is for Purchaser to acquire Publicly Held Shares. It
is the present intention of Purchaser to cause the Company to make an
application for termination of the registration of the Shares on the Nasdaq
National Market and under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as soon as practicable after the purchase of all validly
tendered Shares pursuant to the Offer if the requirements for termination of
registration are met. See "THE OFFER--Effect of the Offer on the Market for the
Shares; Stock Quotation and Exchange Act Registration."
The Public Stockholders do not have dissenters' rights as a result of the
Offer.
Following completion of the Offer, Purchaser will consider all of its
alternatives for further increasing its ownership of Publicly Held Shares,
including acquiring Publicly Held Shares not tendered pursuant to the Offer
through purchases or a merger in which Publicly Held Shares would be converted
into cash. Under Section 203 of the Delaware General Corporation Law, as
currently in effect (the "DGCL"), prior to September 25, 1997, any such merger
would require approval at a meeting of the Company's stockholders by the
affirmative vote of at least 66 2/3% of the Shares of the Company not owned by
Purchaser. After September 25, 1997, Purchaser could effect a merger without a
vote of the Company's stockholders pursuant to the short form merger provisions
of the DGCL if Purchaser then owns 90% or more of the outstanding Shares. If
Purchaser then owns less than 90% of the outstanding Shares, any merger would
have to be approved by the vote of holders of a majority of the outstanding
Shares. If, at some later date, Purchaser decides to propose a merger involving
the Company, then the Public Stockholders may have certain appraisal rights
under
<PAGE>
Delaware law. In addition, the "fair price provisions" contained in the
Company's certificate of incorporation might apply to certain business
combinations involving the Company. See "SPECIAL FACTORS--Appraisal Rights;
Fair Price Provisions." There can be no assurance that any merger or other
business combination involving the Company will be proposed or consummated by
Purchaser.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
SPECIAL FACTORS
1. BACKGROUND OF THE OFFER
Purchaser and the Company have had a limited trading relationship for over
ten years in which each entity has sold the other's material handling
containers in certain markets. See "Interests of Certain Persons in the Offer;
Contacts with the Company." In early 1992, the Company and Purchaser discussed
forming a joint venture to sell collapsible material handling containers. In
connection with this discussion, the Company indicated that there was a
possibility that two institutional stockholders desired to sell their Shares.
On May 15, 1992, Purchaser agreed to purchase 366,032 Shares in a privately
negotiated transaction with Massachusetts Mutual Life Insurance Company and
MassMutual Corporate Investors for a price of $4 1/2 per share. This purchase
was consummated on June 12, 1992.
In October 1992, David A. Williams, Managing Director of Purchaser, was
elected to the Board of Directors of the Company.
An exploratory meeting was held in Chicago on October 21, 1993 among
representatives of Purchaser and the Company. The representatives discussed
potential techniques for combining the resources of the two entities, including
a joint venture, merger or other combination. No actual proposals or plans for
a joint venture, merger or other combination were made at this meeting.
From time to time between May and August 1994, David A. Williams and William
H. Roper, the Chief Executive Officer and Chairman of the Company, had
infrequent and informal discussions relating to possible transactions involving
Purchaser, the Company and/or the Roper family stockholders. During these
informal discussions, David A. Williams indicated that, based upon the
Company's historical earnings and stock trading prices, Purchaser might be
willing to purchase the entire equity interest of the Company at a price of $8
1/2 per share as long as William H. Roper, C. Richard Roper and Robert E. Roper
(collectively, the "Roper Brothers") would continue to be active in the
management of the Company and enter into noncompetition agreements. In early
August 1994, after analyzing the value of the Company, William H. Roper advised
David A. Williams that Purchaser would have to offer a per share price of
$10.00 or more for a sale or merger of the Company to be considered. When
discussing his analysis with David A. Williams, William H. Roper indicated that
he had based his valuation upon the Company's 1994 earnings projections and the
value of publicly traded companies which he considered comparable.
On August 19, 1994, the three Roper Brothers and their counsel met with
Purchaser's counsel. The Roper Brothers indicated that they would be willing to
sell their Shares if acceptable terms were negotiated. William H. Roper
indicated that he was seeking to retire as Chief Executive Officer and Chairman
of the Company in one year. Counsel for Purchaser indicated that Purchaser
would require that the Roper Brothers enter into consulting and non-competition
agreements as part of any transaction to purchase Shares.
David A. Williams and the Roper Brothers held numerous discussions throughout
late August and early September 1994. On September 6, 1994, David A. Williams
advised William H. Roper that David A. Williams had received authorization from
Purchaser's Board of Directors to proceed with negotiating a possible
transaction. David A. Williams indicated that Purchaser was willing to consider
proposing to the Company's Board of Directors an acquisition of all outstanding
Shares for $10.50 per share, subject to the
2
<PAGE>
Roper Brothers entering into employment and non-competition agreements to help
ensure their ongoing commitment to the Company's business. On September 6,
1994, the last reported sale price for Shares on the Nasdaq National Market was
$7 3/4 per share.
On or about September 9, 1994, after David A. Williams had indicated that
Purchaser was willing to consider proposing a merger at $10.50 per share,
William H. Roper advised David A. Williams that at least two other potential
acquirors were also being pursued by the Company. Mr. William H. Roper
requested, and Purchaser agreed, that the Company and Purchaser would suspend
negotiations while the Company pursued other acquirors. Purchaser was informed
in December 1994, that two other corporations had meetings with representatives
of the Company in the Summer and early Fall of 1994. In addition, the Company
informed Purchaser that Terry L. Nagelvoort, a director of the Company,
contacted these two potential acquirors during the weekend of September 10,
1994 and advised the potential acquirors that the Roper Brothers would agree to
sell their Shares on acceptable terms and that another potential acquiror had
made a tentative offer to purchase the Shares held by the Roper Brothers. The
Company stated that, immediately following the weekend, one potential acquiror
indicated that it might be willing to offer a per share price of up to $10.00
(subject to further due diligence) and the other potential acquiror withdrew
from negotiations before making an offer.
During the week of September 12, 1995, Purchaser and the Roper Brothers began
negotiating an agreement (the "Option Agreement") whereby Purchaser would have
an option to purchase Shares held by the Roper Brothers, relatives and related
trusts and accounts (the "Roper Family Members"). The Option Agreement was
signed on September 25, 1994. The last reported sale price for Shares on the
Nasdaq National Market on September 27, 1994, the date immediately prior to the
first public announcement of the Option Agreement, was $9.00 per Share.
The Option Agreement obligated Purchaser to propose a merger (the "Proposed
Merger") of the Company with a subsidiary of Purchaser whereby all Public
Stockholders would receive $10.50 per share in cash in exchange for their
Shares. Under the terms of the Option Agreement, assuming Purchaser
successfully consummated its Proposed Merger, the Roper Brothers would have
been required to remain in their current executive management positions with an
annual salary of $250,000 per year and with other compensation specified in the
Option Agreement for minimum periods ranging from one to four years after
consummation of the Proposed Merger. Each Roper Brother would also have been
required to enter into a seven year non-competition covenant after eventual
termination of full time employment that would have provided for additional
deferred payments over six years at $220,000 per year (a total of $1,320,000
each).
The Option Agreement granted Purchaser an option, exercisable at any time
through the close of business on February 28, 1995, to purchase up to 985,520
Shares (the "Roper Shares") owned by the Roper Family Members. Purchaser could
also exercise an option to purchase up to 132,000 Shares covered by stock
options (the "Roper Options") held by the Roper Brothers. At any time prior to
the close of business on February 28, 1995, if the Proposed Merger was not
consummated and subject to various conditions specified in the Option
Agreement, the Roper Family Members had the right and option to require
Purchaser to purchase all of the Roper Shares and Roper Options. The Shares
subject to the purchase and sale options under the Option Agreement then
represented approximately 25.2% of the outstanding Shares (assuming exercise of
the Roper Options).
If the Proposed Merger had been successfully consummated, then the Roper
Family Members would have received the $10.50 per share merger price for their
Shares and the Roper Brothers would have been required to enter into employment
and noncompetition agreements. If either the purchase or sale option was
exercised, because the Proposed Merger was not successfully consummated or
otherwise, then the Roper Family Members would have received $14.75 per share
for their Shares. However, the Option Agreement provided that all or a portion
of the option exercise price in excess of $10.50 per share might be refunded by
the Roper Family Members to Purchaser under certain circumstances and formulas
provided in the Option
3
<PAGE>
Agreement if the three Roper Brothers received certain continuing employment
and noncompetition agreements and benefits from the Company as a result of a
transaction with Purchaser or with another party.
Pursuant to and during the term of the Option Agreement, Purchaser received
proxies to vote all Shares owned by the Roper Family Members, which included
all Shares covered by Purchaser's purchase option plus 7,318 Shares held by a
Roper Family Member as custodian for his children. With certain exceptions, the
proxies did not permit Purchaser (i) to vote for the election of any person as
a director of the Company not nominated by the Company's current directors,
(ii) to seek the removal of any of the Company's current directors, (iii) to
call a special meeting of the Company's stockholders (other than a
stockholders' meeting called for the purpose of seeking approval of a proposed
merger of the Company with a wholly-owned subsidiary of Purchaser), or (iv) to
seek to take any action by means of a written consent of the Company's
stockholders. Proxies granted under the Option Agreement on September 25, 1994
increased Purchaser's voting power from 8.6% to 33.7% of the outstanding voting
power on matters covered by the proxies (assuming the Roper Options were
exercised).
On September 30, 1994, a special committee of the Board of Directors of the
Company (the "Special Committee") was established, consisting of Messrs.
Douglas H. MacDonald, Terry L. Nagelvoort and John H. Stafford, to review and
evaluate and, as appropriate, to respond to the Proposed Merger and to report
to the Board its recommendations. The Special Committee engaged independent
legal counsel and Wertheim Schroder & Co. Incorporated ("Wertheim Schroder") as
its financial advisor.
On October 7, 1994, Purchaser formally proposed a merger at a price of $10.50
per share in accordance with the Option Agreement.
During October and November 1994, the Special Committee and its advisors
evaluated the terms of the Proposed Merger. Representatives of the Special
Committee had limited discussions with representatives of Purchaser to clarify
the terms of the Proposed Merger.
During the period beginning in June 1992, after Purchaser's initial purchase
of Shares, through September 28, 1994, when the Proposed Merger was publicly
announced, Purchaser had refrained from purchasing Shares. At various times
during this period, discussions and negotiations involving Purchaser and others
with respect to a transaction relating to the Company were in process. During
the period from September 28, 1994 (after the Proposed Merger was publicly
announced) through November 29, 1994, Purchaser acquired 469,250 additional
shares of the Company's common stock not covered by the Option Agreement in
open market and private transactions and also purchased, in a private
transaction with an unaffiliated third party, preferred stock of Ropak Canada,
Inc. which is exchangeable at the holder's option for 577,777 Shares.
At a special meeting of the Board of Directors held on December 1, 1994, the
Special Committee reported that it had concluded that the Proposed Merger price
of $10.50 per share was inadequate. The Special Committee stated that it had
reached this conclusion after review of a confidential report from Wertheim
Schroder indicating that the price of $10.50 per share was not within the
minimum price range determined by Wertheim Schroder to be fair to the Public
Stockholders. Neither the confidential report prepared for the Special
Committee by Wertheim Schroder nor the minimum to maximum price range
recommended by Wertheim Schroder was disclosed to the full Board of Directors
of the Company or Purchaser at this time. In addition, the Special Committee
requested authorization to the extent authorized by law to have all powers of
the Board of Directors in connection with the proposed sale of the Company.
After lengthy discussion, the Board of Directors resolved to empower the
Special Committee to consider and take appropriate actions in the best
interests of the Company's stockholders, including negotiating with Purchaser
and/or soliciting alternative acquisition proposals. The Special Committee was
not given authority to adopt a stockholder rights plan or take other action
involving the issuance of additional securities of the Company with dilutive
effect to any stockholder without first submitting any such plan for review and
consideration by the entire Board of Directors.
4
<PAGE>
At the December 1, 1994 meeting, David A. Williams agreed that Purchaser
would not purchase additional Shares from December 2, 1994 through, and
including, December 16, 1994, while negotiations were to take place between the
Special Committee and Purchaser or other potential acquirors. As of December 1,
1994, Purchaser beneficially owned 50.6% of the outstanding Shares (assuming
the exchange of the preferred stock of Ropak Canada, Inc. into 577,777 Shares).
The next meeting of the Board of Directors was held on December 17, 1994, and
reconvened December 20, 1994. At this meeting, the Special Committee
recommended as follows:
The Special Committee should be vested with the full authority permitted
under Delaware law to take any and all actions necessary to obtain the
highest price reasonably available for Ropak's stockholders. By way of
illustration and not of limitation, this authority should include the
ability to solicit other proposals, deliver confidential information, adopt
a stockholder rights plan or other plan commonly referred to as a "poison
pill," issue securities which are dilutive to existing stockholders,
commence "litigation" and issue press releases.
The Board of Directors did not take action on this recommendation and agreed
to reconvene again on December 22, 1994, pending a meeting between Wertheim
Schroder and Purchaser on December 19, 1994, in London.
Purchaser agreed to extend its agreement not to purchase additional Shares
through December 22, 1994, when the Board of Directors meeting would again be
reconvened.
At the December 19, 1994 meeting in London, David A. Williams met with
representatives of Wertheim Schroder to discuss price and other terms of the
Proposed Merger. These discussions were inconclusive.
When the Company's Board of Directors meeting was again reconvened on
December 22, 1994, after lengthy discussion, David A. Williams announced that
Purchaser was withdrawing its merger proposal for $10.50 per share. Both David
A. Williams and William H. Roper stated that continued and prolonged
negotiation and uncertainty regarding the Proposed Merger would be detrimental
to the Company and its stockholders. At this meeting, the Special Committee was
disbanded with David A. Williams and the Roper Brothers voting in favor of, and
each member of the Special Committee voting against, disbanding the Special
Committee.
In January 1995, Purchaser was informed that Wertheim Schroder had concluded
in its confidential report that $12.50 to $13.50 per share was fair from a
financial point of view to the Public Stockholders in connection with the
Proposed Merger. The confidential report of Wertheim Schroder is available for
inspection and copying at the principal executive offices of the Company by any
interested Public Stockholder or his representative (at the Public
Stockholder's expense) who has been so designated in writing. Purchaser's
counsel received a copy of the Wertheim Schroder report for filing as an
exhibit to Purchaser's Form 13E-3 with the Commission in connection with the
Offer. The Wertheim Schroder report reflects a series of presentations and
meetings between Wertheim Schroder and the Special Committee that were not
attended by Purchaser or its representatives. Purchaser did not review the
Wertheim Schroder report in connection with the Offer.
Wertheim Schroder was originally retained pursuant to an engagement letter
dated November 8, 1994 that provided for a fee payable to Wertheim Schroder of
$200,000 for its services plus $50,000 payable at the closing, or upon
termination, of the Proposed Merger. The engagement letter further provided
that if the Company elected to pursue a business combination with any entity
other than Purchaser prior to June 30, 1995, Wertheim Schroder would receive a
contingent fee equal to 1.25% of the aggregate consideration received by the
Company and its stockholders less any fees previously paid under the engagement
letter (the "Initial Contingent Fee"). The engagement letter also provides that
the Company will indemnify Wertheim Schroder against certain liabilities,
including liabilities under federal securities laws.
The Special Committee amended the initial engagement letter by a letter
agreement dated December 13, 1994. The compensation arrangement was amended to
provide that, in lieu of the Initial Contingent Fee, Wertheim Schroder would
receive a contingent fee equal to 5% of any consideration received by the
Company
5
<PAGE>
and its stockholders to the extent that such consideration exceeded $10.50 per
share, less a credit for fees previously paid of $10,000 for each $0.50
increment over a $10.50 per share price, with a maximum credit of $50,000.
On January 23, 1995, two members of the Special Committee resigned as
directors of the Company. The resigning members were Terry L. Nagelvoort and
John H. Stafford. After resigning, in March 1995, Terry L. Nagelvoort sold to
the Company warrants to purchase Shares held by an affiliate of his for the
difference between the warrant's exercise price and $11.00 per share. Douglas
H. MacDonald, the third Special Committee member, continues to serve as a
director of the Company.
Purchaser purchased 435,406 Shares in open market and private transactions
during the period from December 23, 1994 (after the expiration of its agreement
not to purchase additional Shares) through January 17, 1995. Pursuant to its
purchase of 281,000 Shares at a per share price of $11.00 from Chesapeake
Partners Limited Partnership, Chesapeake Partners Institutional Fund Limited
Partnership and Chesapeake Partners International Ltd. (collectively, the
"Chesapeake Group"), Purchaser agreed that in the event Purchaser acquired any
additional Shares prior to October 1, 1995 at a per share price above $11.00,
Purchaser would pay additional amounts to the Chesapeake Group to adjust the
price paid for its Shares upward to equal the higher price.
On January 26, 1995, at a Board of Directors meeting, the directors of the
Company unanimously resolved to increase the size of the Board of Directors
from 7 to 9 directors and appoint the following persons as directors effective
February 1, 1995:
John L. Doughty
Robert Alexander Lang
Nigel Victor David Roe
John Thorp
All four of these newly appointed directors are employees of Purchaser or its
affiliates.
On February 10, 1995, Purchaser purchased an additional 7,318 Shares for
$10.50 per share in a private transaction with C. Richard Roper in his capacity
as custodian for his children.
Pursuant to a written consent dated February 24, 1995, after the
recommendation of the Company's compensation committee, the Board of Directors
unanimously approved employment and non-competition arrangements for the three
Roper Brothers on terms substantially similar to those set forth in the Option
Agreement (the "Employment Agreements"). See "THE OFFER--Arrangements with
Officers of the Company and Other Agreements."
On February 27, 1995, Purchaser purchased 985,520 Shares from the Roper
Family Members at a price of $10.50 per share. In connection with this
purchase, Purchaser paid the Roper Brothers the difference between $10.50 per
share and the exercise price in return for the Roper Brothers' agreement to
cancel the Roper Options. Purchaser and the Roper Family Members simultaneously
terminated the Option Agreement. In addition, Purchaser agreed to guarantee all
payments required to be made to the Roper Brothers by the Company pursuant to
the Employment Agreements. As a condition to the sale of their Shares, pursuant
to a Side Letter Agreement (the "Side Letter Agreement"), the Roper Brothers
required Purchaser to agree that if Purchaser had not, on or before April 30,
1995, commenced a tender offer or instituted other actions to offer all other
stockholders of the Company an opportunity to sell their Shares for a cash
price of not less than $10.50 per share or, in the alternative, to vote on a
proposed merger transaction that would provide for payment of a cash price of
not less than $10.50 per share if approved by the requisite vote of Company
stockholders, then Purchaser would thereafter take such action as is necessary
for the Company's other stockholders to be afforded either of such
opportunities at the earliest practicable date consistent with applicable
securities laws and regulations (the "Opportunity to Stockholders"). Such
obligations of Purchaser were to be suspended so long as (i) any litigation or
other legal or administrative proceeding was pending that prevented Purchaser
from engaging in such action or materially and adversely affected Purchaser's
ability to proceed with such action, or (ii) there were to have occurred any
event or events, unanticipated by the parties, that in the reasonable judgment
of the parties materially and adversely affected the valuation of the Company.
Pursuant to the Side Letter Agreement, Purchaser also agreed to cause the
Company to purchase certain real property currently leased by the Company for
use as its principal executive offices from a partnership owned by the Roper
Family Members.
6
<PAGE>
As of March 21, 1995, Purchaser beneficially owned 2,841,303 Shares
(including 577,777 Shares obtainable upon exchange of Ropak Canada, Inc.
preferred stock held by Purchaser), or approximately 57.2% of the issued and
outstanding Shares (assuming exchange of the preferred stock).
On March 15, 1995, Purchaser issued a press release in which it announced its
intention to commence the Offer. On the same day, Douglas H. MacDonald, an
independent director, James R. Connell, a Company Vice President, James R.
Dobell, a Company Vice President, and Ronald W. Cameron, a Company Vice
President and Chief Financial Officer, all executed letters indicating that
they intended to accept Purchaser's Offer at $11.00 per share as to all Shares
held by them.
2. FAIRNESS OF THE OFFER
Purchaser has not engaged an independent financial advisor to evaluate the
fairness of the Offer and believes that its experience in the plastic container
and material handling industry provides Purchaser with sufficient data and
experience to evaluate the fairness of the Offer without such assistance. In
reaching its determination of the Offer Price, Purchaser considered a variety
of factors, including but not limited to the following:
(i) Purchaser's familiarity with the Company's business, current and
historical financial condition and results of operations, future prospects,
and the current and anticipated competitive and new developments in the
plastic container and material handling industry;
(ii) current and historical trading in the Company's Shares;
(iii) Purchaser's current majority stockholder position and current
intent not to sell its Shares or approve a business combination between the
Company and any other third party; and
(iv) circumstances set forth in "SPECIAL FACTORS--Background of the
Offer" discussed above.
COMPANY BUSINESS. Under Purchaser's analysis, the Company continues to face
business, strategic and financial barriers to long-term growth and
profitability, despite the Company's recent return to profitability. Purchaser
believes that to increase the Company's production, and to fund operations if
raw material prices continue to increase, the Company will need to obtain
additional working capital through increased borrowing or other means.
Purchaser has had a limited trading relationship with the Company since the
early 1980s when Purchaser and the Company each began selling the material
handling containers of the other in certain markets. See "SPECIAL FACTORS--
Interests of Certain Persons in the Offer; Contacts with the Company."
Purchaser first acquired an equity interest in the Company in June 1992 with
its purchase of 366,032 Shares at a price of $4 1/2 per share. At the time of
this initial Share acquisition, the Company was not consistently profitable and
was facing a number of exceptional costs relating to noncore activities and new
business start up costs. After reporting $800,000 in net income in 1989, the
Company reported net losses in 1990 and 1991. It was also involved in a costly
and lengthy legal action with Xytex relating to patents on collapsible material
handling containers. During the second quarter of 1992, the reported selling
price for Shares on the Nasdaq National Market ranged from a high of $6 1/4 per
share to a low of $4 per share.
Certain selected financial information of the Company as reported in its Form
10-K for the three fiscal years prior to Purchaser's initial Share acquisition
is as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
-------------------------
1991 1990 1989
------- ------- -------
<S> <C> <C> <C>
Sales (in millions)............................ $ 94.0 $ 91.2 $ 89.8
Net income (loss) (in millions)................ (1.3) (0.2) 0.8
Stockholders' equity (in thousands)............ 22,567 23,611 23,703
Average shares outstanding (in thousands)...... 3,851 3,820 3,841
Net income (loss) per share ................... $ (0.33) $ (0.06) $ 0.21
Net income (loss) per share fully diluted...... -- -- --
</TABLE>
In 1992, the Company returned to profitability, reporting net income of $1.3
million after writing off extraordinary costs in excess of $1.7 million.
7
<PAGE>
In 1993, the Company reported net income of $3.5 million, but this included
the after tax benefit of $1.5 million of extraordinary gains resulting from the
sale of InVitro International common stock owned by the Company.
The Company reported the following financial information for 1992 and 1993:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
---------------
1993 1992
------- -------
<S> <C> <C>
Sales (in millions)...................................... $ 105.2 $ 94.8
Net income (loss) (in millions).......................... 3.5 1.3
Stockholders' equity (in thousands)...................... 26,401 23,962
Average shares outstanding (in thousands)................ 4,398 4,169
Net income per share..................................... $ 0.73 $ 0.31
Net income per share fully diluted....................... 0.72 0.30
</TABLE>
The financial information provided above should be read in conjunction with
the Consolidated Financial Statements of the Company and Notes thereto set
forth in Annex D to this Offer to Purchase.
During the first half of 1994, the Company's results of operations continued
to show improvement with net income for the first six months increasing from
$1.3 million in 1993 to $2.0 million in 1994. Net income continued to increase
in the third and fourth quarters of 1994. The Company reported net income of
$4.1 million for the year ended December 31, 1994, compared to $3.5 million for
the year ended December 31, 1993. During the period from June 12, 1992, when
Purchaser first acquired Shares, to September 6, 1994, when Purchaser notified
William H. Roper that it was authorized to proceed with negotiating a possible
transaction to acquire all of the outstanding Shares, the highest reported
selling price on the Nasdaq National Market was $8 1/2 per share.
Purchaser believes that the improvements in the Company's results of
operations are primarily attributable to the combined benefits of:
(i) approximately $1 million of non-recurring profits resulting from
sales of inventory produced with raw materials purchased prior to increased
resin costs which led to higher selling prices;
(ii) relatively lower interest rates paid by the Company in 1994, 1993
and 1992 than in 1991 and 1990;
(iii) increased business activity across the Company's business segments
with all plants reporting higher utilization of plant capacity;
(iv) improved results of operations from the Company's Canadian
operations; and
(v) the introduction of new product lines.
During the second, third and fourth quarters of 1994, the price of high
density polyethylene resin, the Company's principal raw material, increased by
80%. In its Form 10-K, the Company reported that it was initially able to
recover these price increases from its customers; however, by the end of the
year, the Company was unable to pass all of its increased raw material costs
through to customers. The price for high density polyethylene resin in the
United States at April 30, 1994 was $0.25 per pound as compared to $0.45 per
pound at December 31, 1994.
The Company reported that its results of operations for the year ended
December 31, 1994 were adversely affected by $592,000 of unusual non-operating
expenses relating to the Proposed Merger, and improved by a $314,000 workmen's
compensation experience premium rebate.
The Company reported per share net income of $0.83, or $0.81 on a fully
diluted basis, for the year ended December 31, 1994. As of December 31, 1994,
the reported net tangible book value of the Company, excluding goodwill, was
$4.97 per share ($4.20 per share, fully diluted). Between the withdrawal of the
Proposed Merger on December 22, 1994 and March 14, 1995, the last full trading
day before Purchaser
8
<PAGE>
publicly announced its intention to commence the Offer, the reported selling
price for the Shares on the Nasdaq National Market ranged from a low price of
$7 3/4 per share to a high price of $10 3/4 per share. The last reported
selling price on the Nasdaq National Market on March 14, 1995, the last full
trading day before Purchaser publicly announced its intention to commence the
Offer, was $10 1/4 per share (with no trades on March 14, but with bid/ask
prices of $10 1/4/$10 1/2, respectively on that date).
Although the Company's results of operations have improved in the last fiscal
year, Purchaser believes that the Company's long-term value is adversely
affected by the following risks and market conditions.
Raw Material Costs. During the last three quarters of 1994, the Company's
costs per pound of high density polyethylene resin increased approximately 80%
and the Company was forced to purchase some resin at premiums on the spot
market in December 1994. According to the Company's Form 10-K, high density
polyethylene resin is the Company's principal raw material. Purchaser agrees
with the Company's management analysis in its Form 10-K indicating that the
Company may not be able to maintain the profit margins experienced in 1994
because (i) its inventories will now reflect the higher cost of resin price
increases experienced in 1994 and (ii) some customers have already indicated an
unwillingness to absorb the resulting price increases from increased plastic
resin costs.
Competition for New Products. The Company's sales of, and margins on,
recently introduced products may decline as competition develops for these
products. For example, the Company's EZ Covers(TM), introduced in late 1994,
features a tear tab and peel strip that allows the cover to be removed simply
without tools and to be replaced securely as a dust cover after the container
has been opened. According to its Form 10-K, the Company has successfully
introduced this new cover to retailers who package detergents, pet foods, cat
litter and other bulk commodities for distribution through mass merchandisers
and club stores. Purchaser believes that the Company's competitors are not
currently selling a product with all of the features of the EZ Covers(TM).
Ability to Maintain Profitability. There is no guarantee that the Company's
level of profitability in 1994 will continue or that the Company will sustain
long-term growth. The Company's 1994 increase in earnings is largely
attributable to the non-recurring profit on sales of inventory produced with
lower cost raw materials and sold after raw material prices increased and also
to the general growth in the plastic container industry in 1994. Based on
Purchaser's experience in the plastic container and material handling industry,
the industry's growth reflected increased demand after a long recessionary
period in the Company's United States and Canadian markets. Profitability in
the plastic container industry may decrease if demand becomes more stable and
if price competition reduces profit margins.
Limited Plant Capacity. The Company currently has limited plant capacity
available to significantly increase its production. The Company reported in its
Form 10-K that it is currently utilizing plant capacity at approximately 71% on
seven day work weeks. Because the Company's current utilization is viewed by
Purchaser as close to the Company's optimum capacity level, the Company may
lack the facilities to significantly increase production without substantial
capital expenditures.
Indebtedness. The Company is significantly leveraged. The Company had
approximately $38 million of long-term indebtedness outstanding as of December
31, 1994. In 1996, approximately $24.9 million of long-term debt will become
due. Additional funds beyond the Company's current borrowing capacity may be
needed to permit the Company to meet expanded market requirements. The
Company's most recent Form 10-K for its fiscal year ended 1994 stated that
management of the Company expects that internally generated funds and available
borrowings will be sufficient to meet future operating needs, capital
expenditures and interest and principal payments on its outstanding
indebtedness on a timely basis. However, the degree to which the Company is
leveraged could affect the Company's ability to obtain future financing for raw
materials, capital expenditures or general corporate purposes. The Company's
total debt-to-equity ratio at December 31, 1994 was 1.89 to 1. Further, a
significant percentage of the Company's indebtedness is at variable interest
rates and its financial results are therefore sensitive to interest rate
increases.
Management. William H. Roper has indicated his desire to retire in January
1996 and his brothers have indicated that they desire to retire two and three
years later. The Roper Brothers founded the Company in
9
<PAGE>
1978. They have occupied key management positions since the Company was formed
and have significant experience in the materials handling and plastic container
industry. After they retire, the Company will lose the benefit of their
management.
Globalization. Purchaser believes markets are becoming increasingly global
and customers, such as automotive, food and pharmaceutical companies, may
demand world wide service from suppliers which the Company currently does not
provide. The Company will need to evaluate its links outside the United States
and Canadian markets. Growth outside the United States and Canada will place
additional pressure on the Company's cash and investment programs.
CURRENT AND HISTORICAL TRADING IN THE COMPANY'S SHARES. Purchaser has
reviewed the current and historical trading range in the Company's Shares as
quoted on the Nasdaq National Market, as well as its own privately negotiated
purchases. See "THE OFFER--Price Range of Shares; Dividends on the Shares" for
a recent history of trading reported on the Nasdaq National Market. See "THE
OFFER--Certain Information Concerning Purchaser" for a description of
Purchaser's transactions in Shares during 1994. Since the announcement of the
Proposed Merger, Purchaser has acquired Shares in open market and privately
negotiated transactions with institutional investors, Company employees and the
Roper Family Members at prices ranging from $9 3/4 to $11 per share.
PURCHASER'S OWNERSHIP POSITION. Purchaser does not currently intend to sell
its interest in the Company or approve any business combination involving the
Company and any unrelated party. Purchaser believes its current intent not to
sell its Shares may discourage other tender offers for the Shares or business
combinations involving the Company.
BACKGROUND FACTORS. Several factors reflected in the "SPECIAL FACTORS--
Background of the Offer" particularly influenced Purchaser's determination of
the Offer Price. First, to the knowledge of Purchaser, neither the Company nor
its stockholders have received any competing firm offers since the announcement
of the Proposed Merger. The Special Committee was authorized for almost two
months to receive competing offers. Of the two potential acquirors approached
by the Company, the Company indicated that one potential acquiror declined to
make an offer and the other potential acquiror was not then willing to make an
offer in excess of $10.00 per share. Second, both third party and affiliated
stockholders holding significant blocks of Shares have elected to sell their
Shares to Purchaser for $11.00 or less. During the last quarter of 1994 and the
first quarter of 1995, Fidelity Management & Research Co., Harvest Management
Group, and Bear Stearns Securities Corp. sold 284,000, 33,500 and 25,000
Shares, respectively, to Purchaser for $10.50 per share. Moreover, Terry L.
Nagelvoort, the Chairman of the Special Committee who resigned as a director of
the Company on January 23, 1995, recently sold to the Company warrants to
purchase Shares held by an affiliate of his for the difference between the
warrant's exercise price and $11.00 per share. Finally, Douglas H. MacDonald,
an independent director, James R. Connell, a Company Vice President, James R.
Dobell, a Company Vice President, and Ronald W. Cameron, a Company Vice
President and Chief Financial Officer, all executed letters indicating that
they intended to accept Purchaser's Offer at $11.00 per share as to all Shares
held by them.
In addition to the items discussed above, Purchaser compared the Offer Price
to the trading prices of comparable companies in the packaging industry,
evaluated prospects for the rigid plastic packaging field in particular, and
examined various market and financial data concerning comparable companies
including, among others, the ratio of their trading price to earnings, cash
flow and book value along with their ratio of debt to tangible equity.
CONCLUSION. Based on its evaluation, Purchaser believes that the Offer Price
is fair to the holders of Shares. In view of the wide variety of factors
considered by Purchaser in connection with its determination of the Offer
Price, Purchaser did not find it feasible or practicable to assign relative
weights to the specific factors considered by Purchaser in determining the
fairness of its Offer Price. The Offer Price represents approximately a 22%
premium over the last reported sale price on September 27, 1994, the last full
trading day prior to the public announcement of the execution of the Option
Agreement, and approximately a 7% premium over the last reported sale price on
March 14, 1995, the last full trading day before Purchaser publicly announced
its intention to commence the Offer. The Offer price represents a premium of
10
<PAGE>
approximately 121% over the tangible book value per share at December 31, 1994.
See "The OFFER--Price Range of the Shares; Dividends on the Shares." Public
Stockholders selling their Shares pursuant to the Offer will, however, lose any
right to participate in any future growth of the Company.
PURCHASER HAS NOT ENGAGED AN INDEPENDENT FINANCIAL ADVISOR TO EVALUATE THE
FAIRNESS OF THE OFFER. THE INDEPENDENT FINANCIAL ADVISOR ENGAGED BY THE SPECIAL
COMMITTEE OF THE COMPANY DETERMINED THAT A PER SHARE PRICE OF $10.50 FOR THE
PUBLICLY HELD SHARES WAS INADEQUATE. IN ADDITION, THE BOARD OF DIRECTORS OF THE
COMPANY HAS NOT VOTED ON THE OFFER. TO THE KNOWLEDGE OF PURCHASER, AFTER MAKING
REASONABLE INQUIRY, NO EXECUTIVE OFFICER, DIRECTOR OR AFFILIATE OF THE COMPANY
HAS MADE A RECOMMENDATION IN SUPPORT OF OR IN OPPOSITION TO THE OFFER. THE
DIRECTORS OF THE COMPANY WHO ARE EMPLOYED BY PURCHASER OR ITS UNITED STATES
SUBSIDIARY ARE UNABLE TO TAKE A POSITION WITH RESPECT TO THE OFFER GIVEN THEIR
AFFILIATION WITH PURCHASER. THE COMPANY HAS INFORMED PURCHASER THAT THE
REMAINING DIRECTORS (THE ROPER BROTHERS AND DOUGLAS H. MACDONALD) WILL MAKE A
DETERMINATION AS TO THEIR POSITION WITH RESPECT TO THE OFFER IN THE NEAR
FUTURE.
3. INTERESTS OF CERTAIN PERSONS IN THE OFFER; CONTACTS WITH THE COMPANY
Purchaser has had a limited trading relationship with the Company since the
early 1980s when Purchaser and the Company each began selling the material
handling containers of the other in certain markets. The following table sets
forth the aggregate dollar value of sales and purchases between the Company and
Purchaser for the three full calendar years prior to the date of this Offer to
Purchase (and the interim period prior to March 1, 1995).
<TABLE>
<CAPTION>
TOTAL PURCHASES
TOTAL SALES BY PURCHASER BY PURCHASER
TO THE COMPANY FROM THE COMPANY
------------------------ ----------------
<S> <C> <C>
1992............................ $562,000 $176,000
1993............................ 135,000 891,000
1994............................ 151,000 276,000
1995 (to March 1, 1995)......... 221,000 151,000
</TABLE>
Purchaser currently beneficially owns 2,841,303 Shares (including 577,777
Shares obtainable upon exchange of certain preferred stock of Ropak Canada,
Inc. held by Purchaser), or approximately 57.2% of the issued and outstanding
Shares (assuming exchange of the preferred stock). See "SPECIAL FACTORS--
Background of the Offer." Purchaser does not currently intend to sell its
interest in the Company or approve a business combination involving the Company
and any unrelated party.
Purchaser currently has, and following the Offer will continue to have, the
ability to elect a majority of the Board of Directors of the Company and to
control the vote on certain matters submitted to a vote of the Company's
stockholders. The Board of Directors of the Company currently consists of nine
members, five of whom are officers and/or directors of Purchaser or its United
States subsidiary. Three of the remaining directors, William H. Roper, the
Chairman and Chief Executive Officer of the Company, C. Richard Roper, the Vice
President and Secretary of the Company, and Robert E. Roper, the President of
the Company, have sold all of their Shares to Purchaser for $10.50 per share
and entered into Employment Agreements with the Company. The final, independent
director, Douglas H. MacDonald, has agreed to tender Shares held by a family
corporation that he and his wife own. See "SPECIAL FACTORS--Background of the
Offer" and "THE OFFER--Arrangements with Officers of the Company and Other
Agreements."
The nine members of the Company's Board of Directors are as follows:
John L. Doughty, who is the Finance Director of Purchaser;
Robert Alexander Lang, who is the President of LINPAC, Inc., an affiliate
of Purchaser;
Douglas H. MacDonald, who is an independent Director;
Nigel Victor David Roe, who is the Secretary and Treasurer of LINPAC,
Inc.;
C. Richard Roper, who is Vice President and Secretary of the Company;
Robert E. Roper, who is President of the Company and General Manager of
U.S. Container Group;
William H. Roper, who is the Chairman and Chief Executive Officer of the
Company;
John Thorp, who is a Director of Purchaser; and
David A. Williams, who is the Managing Director of Purchaser.
11
<PAGE>
4. REASONS FOR THE OFFER AND PLANS FOR THE COMPANY
The purpose of the Offer is for Purchaser to acquire Publicly Held Shares.
Purchaser considered and decided to make the Offer in part as a result of the
rejection by the Special Committee of the Proposed Merger. Purchaser has
decided to proceed with the Offer at this time to increase its ownership
position, to eliminate uncertainty as to its intent with respect to the
Company, to permit the Public Stockholders to sell Shares at the Offer Price
and to satisfy its commitment to provide an Opportunity to Stockholders as
required by the Side Letter Agreement. Also influencing Purchaser's decision to
proceed with the Offer was Purchaser's current intent not to sell its interest
in the Company or approve any business combination with any unrelated third
party. See "Special Factors--Background of the Offer" and "Special Factors--
Fairness of the Offer."
Following completion of the Offer, Purchaser intends to conduct a detailed
review of the Company and its business, assets, corporate structure,
certificate of incorporation and bylaws, capitalization, operations,
properties, policies, management and personnel and to consider if any changes
would be desirable in light of the circumstances then existing. Purchaser
reserves the right to take such actions or effect such changes as it deems
desirable. Current anticipated plans, which may change, include the appointment
of a new chief executive officer and chairman of the Board of Directors in the
event William H. Roper retires in January 1996. The other Roper Brothers will
also need to be replaced if they retire in subsequent years. In addition, it is
the present intention of Purchaser to cause the Company to make an application
for the termination of its registration of the Shares on the Nasdaq National
Market and under the Exchange Act as soon as practicable after the purchase of
all validly tendered Shares pursuant to the Offer if the requirements for
termination of registration are met. See "THE OFFER--Effect of the Offer on the
Market for the Shares; Stock Quotation and Exchange Act Registration."
Following completion of the Offer, Purchaser will also consider all of its
alternatives to increase its ownership of Publicly Held Shares, including
acquiring Publicly Held Shares not tendered pursuant to the Offer through
purchases or a merger in which Publicly Held Shares would be converted into
cash. Under Section 203 of the DGCL, prior to September 25, 1997, any such
merger would require approval at a meeting of the Company's stockholders by the
affirmative vote of at least 66 2/3% of the Shares of the Company not owned by
Purchaser. After September 25, 1997, Purchaser could effect a merger without a
vote of the Company's stockholders pursuant to the short-form merger provisions
of the DGCL if Purchaser then owns 90% or more of the outstanding Shares. If
Purchaser then owns less than 90% of the outstanding Shares, then any merger
would have to be approved by the vote of holders of a majority of the
outstanding Shares. In addition, if Purchaser owns less than 80% of the
outstanding Shares, then any merger or other business combination may be
subject to the "Fair Price Provisions" in Article Ninth of the Company's
certificate of incorporation. See "Special Factors--Appraisal Rights; Fair
Price Provisions." There can be no assurance that any merger or other business
combination involving the Company will be proposed or consummated by Purchaser.
Except as otherwise described in this Offer to Purchase, Purchaser has no
current plans or proposals that would relate to, or result in, any
extraordinary corporate transaction involving the Company, such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries,
a sale or transfer of a material amount of assets of the Company or any of its
subsidiaries, any change in the Company's capitalization or dividend policy or
any other material change in the Company's business, corporate structure or
personnel.
Purchaser believes that the Offer is fair to the Public Stockholders.
Purchaser believes that the primary benefit of the Offer to the Public
Stockholders is that they will be afforded the opportunity to sell their Shares
without payment of brokerage commissions at a price that Purchaser believes is
fair and that represents a 22% premium over the last reported sale price on the
Nasdaq National Market on September 27, 1994, the last full trading day prior
to public announcement of the execution of the Option Agreement and a 7%
premium over the last reported sale price on March 14, 1995, the last full day
of trading before the Purchaser publicly announced its intention to commence
the Offer. The Offer Price represents a premium of 121% over the tangible book
value per share at December 31, 1994. See "THE OFFER--Price Range of the
Shares; Dividends on the Shares."
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5. APPRAISAL RIGHTS; FAIR PRICE PROVISIONS
Public Stockholders do not have dissenters' rights as a result of the Offer.
However, if at some later date, the Company is involved in a merger with
Purchaser or otherwise, then Public Stockholders may have certain rights
pursuant to the provisions of Section 262 of the DGCL to dissent and demand
appraisal of, and to receive payment in cash of the fair value of, their
Shares. If the statutory procedures were complied with, such rights could lead
to a judicial determination of the fair value required to be paid in cash to
such dissenting holders for their Shares. Any such judicial determination of
the fair value of Shares could be based upon considerations other than or in
addition to the Offer Price or the market value of the Shares, including asset
values and the investment value of the Shares. The value so determined could be
more or less than the Offer Price. See "SPECIAL FACTORS--Reasons for the Offer
and Plans for the Company."
The foregoing summary of the rights of dissenting stockholders does not
purport to be a complete statement of the procedures to be followed by
stockholders desiring to exercise any available dissenters' rights. The
preservation and exercise of dissenters' rights are conditioned on strict
adherence to the applicable provisions of the DGCL. See Annex B for the text of
the appraisal rights required to be provided to dissenting stockholders under
Section 262 of the DGCL.
Article Ninth of the Company's certificate of incorporation includes certain
provisions (the "Fair Price Provisions") that impose certain minimum price and
procedural requirements in connection with certain business combinations (as
defined in the Fair Price Provisions) with an interested stockholder (as
defined in the Fair Price Provisions) of the Company. The Offer is not subject
to the Fair Price Provisions, because, among other reasons, it does not involve
a business combination. As long as it owns in excess of 5% of the outstanding
Shares, Purchaser will be considered an interested stockholder for purposes of
the Fair Price Provisions. Depending on the circumstances, the Fair Price
Provisions might apply to certain business combinations involving the Company
that Purchaser may consider or propose in the future.
The Fair Price Provisions require that in order to complete a business
combination, an interested stockholder must satisfy certain minimum price and
procedural requirements. These requirements are not applicable, however, to
proposed business combinations approved by a majority of the continuing
directors or by holders of at least 80% of the outstanding Shares (including
Shares held by the interested stockholder).
The continuing directors include only those members of the Board who are not
affiliated with an interested stockholder. Five of the nine directors on the
Company's Board are employees of Purchaser or its subsidiary and thus would not
be considered continuing directors for purposes of the Fair Price Provisions.
The current members on the Company's Board who are continuing directors include
Messrs. Douglas H. MacDonald, William H. Roper, Robert E. Roper and C. Richard
Roper.
If Purchaser owns at least 80% of the outstanding Shares after completion of
the Offer, then Purchaser would have sufficient voting power to approve either
(i) a business combination without the necessity of satisfying the minimum
price and procedural requirements of the Fair Price Provisions, or (ii) an
amendment to the Company's certificate of incorporation to eliminate the Fair
Price Provisions. See Annex C for the text of the Fair Price Provisions.
THE OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and pay for all Publicly Held
Shares validly tendered prior to the Expiration Date and not theretofore
withdrawn in accordance with "THE OFFER--Withdrawal Rights." The term
"Expiration Date" means 12:00 Midnight, New York City Time, on Tuesday, May 2,
1995, unless and until Purchaser, in its sole discretion shall have extended
the period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by Purchaser, shall expire.
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This Offer is subject to various terms and conditions described herein. See
"THE OFFER--Certain Conditions of the Offer."
Subject to the applicable rules and regulations of the Commission, Purchaser
expressly reserves the right, in its sole discretion, at any time and from time
to time, and regardless of whether or not any of the events set forth in "THE
OFFER--Certain Conditions of the Offer" shall have occurred or shall have been
determined by Purchaser to have occurred, to (i) extend the period of time
during which the Offer is open, and thereby delay acceptance for payment of,
and the payment for any Publicly Held Shares, by giving oral or written notice
of such extension to the Depositary, and (ii) amend the Offer in any other
respect by giving oral or written notice of such amendment to the Depositary.
PURCHASER SHALL NOT HAVE ANY OBLIGATION TO PAY INTEREST ON THE OFFER PRICE FOR
TENDERED PUBLICLY HELD SHARES, WHETHER OR NOT PURCHASER EXERCISES ITS RIGHT TO
EXTEND THE OFFER. The rights reserved by Purchaser in this paragraph are in
addition to Purchaser's right to terminate the Offer pursuant to the provisions
of "THE OFFER--Certain Conditions of the Offer."
If by 12:00 Midnight, New York City Time on Tuesday, May 2, 1995 (or any
other day or time then set as the Expiration Date), any or all conditions to
the Offer have not been satisfied or waived, then Purchaser reserves the right
(but shall not be obligated), in its sole discretion subject to the applicable
rules and regulations of the Commission, to (i) terminate the Offer and not
accept for payment any Publicly Held Shares and return all tendered Publicly
Held Shares to the tendering Public Stockholders, (ii) waive all of the
unsatisfied conditions and, subject to the applicable rules and regulations of
the Commission, accept for payment and pay for all Publicly Held Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn, (iii)
extend the Offer and, subject to the right of Public Stockholders to withdraw
Publicly Held Shares until the Expiration Date, retain the Publicly Held Shares
that have been tendered during the period or periods for which the Offer is
extended, or (iv) amend the Offer in any respect by giving oral and written
notice of such termination, waiver, extension, delay or amendment to the
Depositary or by making public announcement thereof.
There can be no assurance that Purchaser will exercise its right to extend
the Offer. Any extension, delay, amendment, waiver or termination will be
followed as promptly as practicable by a public announcement. In the case of an
extension, Rule 14e-1(d) under the Exchange Act requires that the announcement
be made no later than 9:00 a.m., New York City Time, on the next business day
after the previously scheduled Expiration Date in accordance with the public
announcement requirements of Rule 14d-4(c) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change), and without limiting the manner in which Purchaser may choose to make
any public announcements, Purchaser will not have any obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a press release to the Dow Jones News Service.
If Purchaser extends the Offer or if Purchaser (whether before or after its
acceptance for payment of the Publicly Held Shares) is delayed in its
acceptance for payment or payment for the Publicly Held Shares or Purchaser is
unable to accept for payment or pay for the Publicly Held Shares pursuant to
the Offer for any reason, then, without prejudice to Purchaser's rights under
the Offer, the Depositary may retain tendered Publicly Held Shares on behalf of
Purchaser, and such Publicly Held Shares may not be withdrawn except to the
extent tendering stockholders are entitled to withdrawal rights as described in
"THE OFFER--Withdrawal Rights." However, the ability of Purchaser to delay the
payment for the Publicly Held Shares that Purchaser has accepted for payment is
limited by Rule 14e-1(c) under the Exchange Act, which requires that a bidder
pay the consideration offered or return the securities deposited by or on
behalf of holders of securities promptly after the termination or withdrawal of
such bidder's offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
then Purchaser will disseminate additional tender offer materials and extend
the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under
the Exchange Act.
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The minimum period during which the Offer must remain open following material
changes in the terms of the Offer or information concerning the Offer, other
than a change in price or a change in the percentage of securities sought, will
depend upon the facts and circumstances then existing, including the relative
materiality of the changed terms or information. In the Commission's view, the
Offer should remain open for a minimum of five business days from the date a
material change is first published, sent or given to security holders, and, if
material changes are made with respect to information that approaches the
significance of price and share levels, then a minimum of ten business days may
be required to allow for adequate dissemination and investor response. As used
herein, a "business day" means any day other than a Saturday, Sunday or federal
holiday and consists of the time period from 12:01 a.m. through midnight, New
York City Time.
Consummation of the Offer is conditioned upon satisfaction of the conditions
set forth in "THE OFFER--Certain Conditions of the Offer." Purchaser reserves
the right (but shall not be obligated) to waive any or all such conditions, to
the extent permitted under applicable law.
The Company has provided Purchaser with the Company's stockholder lists and
security position listings for the purpose of disseminating the Offer to Public
Stockholders. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed by Purchaser to Public Stockholders and
will be furnished by Purchaser to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on such stockholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Publicly Held Shares.
2. PROCEDURE FOR TENDERING SHARES
Valid Tender. For a stockholder to validly tender Publicly Held Shares
pursuant to the Offer, either (i) a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), together with any required signature
guarantees or an Agent's Message (as defined below) in connection with a book-
entry delivery of Publicly Held Shares, and any other required documents, must
be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase and certificates for tendered Publicly Held
Shares must be received by the Depositary at one of such addresses or such
Publicly Held Shares must be delivered pursuant to the procedures for book-
entry transfer set forth below (and a Book-Entry Confirmation (as defined
below) received by the Depositary), in each case on or prior to the Expiration
Date, or (ii) the tendering stockholder must comply with the guaranteed
delivery procedures set forth below.
Book-Entry Delivery. The Depositary will make a request to establish an
account with respect to the Publicly Held Shares at each of The Depository
Trust Company, the Midwest Securities Trust Company and the Philadelphia
Depository Trust Company (each a "Book-Entry Transfer Facility") for purposes
of the Offer within two business days after the date of this Offer to Purchase.
Any financial institution that is a participant in a Book-Entry Transfer
Facility may make book-entry delivery of Publicly Held Shares by causing the
book-entry transfer system to transfer such Publicly Held Shares into the
Depositary's account at a Book-Entry Transfer Facility in accordance with the
Book-Entry Transfer Facility's procedures for such transfer. However, although
delivery of Publicly Held Shares may be effected through book-entry transfer
into the Depositary's account at a Book-Entry Transfer Facility, the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees or an Agent's Message (as defined below)
in connection with a book-entry transfer, and any other required documents,
must, in any case, be transmitted to, and received by, the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date, or the tendering stockholder must comply with the
guaranteed delivery procedures described below. The confirmation of a book-
entry transfer of Publicly Held Shares into the Depositary's account at a Book-
Entry Transfer Facility as described above is referred to herein as a "Book-
Entry Confirmation."
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-
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Entry Transfer Facility has received an express acknowledgement from each
participant in the Book-Entry Transfer Facility tendering the Publicly Held
Shares and that such participants have received the Letter of Transmittal and
agree to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against such participants.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
ITS BOOK-ENTRY PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
THE METHOD OF DELIVERY OF PUBLICLY HELD SHARES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER AND DELIVERY, INCLUDING ANY DELIVERY THROUGH A BOOK-ENTRY TRANSFER
FACILITY, WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal if (i) the Letter of Transmittal is signed by the registered
holder(s) of the Publicly Held Shares (which term, for purposes of this
Section, includes any participant in the Book-Entry Transfer Facility system
whose name appears on a security position listing as the owner of the Publicly
Held Shares) tendered therewith and such registered holder(s) has not completed
either the box entitled "Special Delivery Instructions" or the box entitled
"Special Payment Instructions" on such Letter of Transmittal or (ii) such
Publicly Held Shares are tendered for the account of a commercial bank, broker,
dealer, credit union, savings association or other entity that is a participant
in the Security Transfer Agents Medallion Program, the New York Stock Exchange
Signature Guarantee Medallion Program or the Stock Exchange Medallion Program
or identified as an "eligible guarantor institution" as such term is defined in
Rule 17Ad-15 under the Exchange Act (each an "Eligible Institution"). In all
other cases, all signatures on the Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.
If the certificates for Publicly Held Shares are registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made or certificates for Publicly Held Shares not validly tendered or not
accepted for payment or not purchased are to be issued or returned to a person
other than the registered holder of the certificates surrendered, the tendered
certificates must be endorsed or accompanied by appropriate stock powers,
signed exactly as the name or names of the registered holder or holders appear
on the certificates with signatures on such certificates or stock powers
guaranteed by an Eligible Institution. See Instruction 5 to the Letter of
Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Publicly Held Shares
pursuant to the Offer and such stockholder's certificates for Publicly Held
Shares are not immediately available or the procedures for book-entry transfer
cannot be completed on a timely basis or time will not permit all required
documents to reach the Depositary on or prior to the Expiration Date, such
Publicly Held Shares may be tendered provided that all of the following
guaranteed delivery procedures are duly complied with:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail, telegram or facsimile
transmission) on or prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form
provided by Purchaser; and
(c) the certificates for all tendered Publicly Held Shares, in proper
form for transfer (or a Book-Entry Confirmation with respect to such
Publicly Held Shares), together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees (or in the case of Book-Entry Transfer, an Agent's Message) and
any other documents required by the Letter of Transmittal, are received by
the Depositary within five trading days after the date of execution of such
Notice of Guaranteed Delivery. A "trading day" is any day on which the
Nasdaq National Market is open for business.
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The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or by mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Publicly Held Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (i) certificates for (or a timely Book-
Entry Confirmation with respect to) such Publicly Held Shares, (ii) a Letter of
Transmittal (or facsimile thereof) for such Publicly Held Shares, properly
completed and duly executed, with any required signature guarantees (or in the
case of Book-Entry Transfer, an Agent's Message), and (iii) any other documents
required by the Letter of Transmittal. Accordingly, tendering stockholders may
be paid at different times depending upon when certificates for Publicly Held
Shares or Book-Entry Confirmation of such Publicly Held Shares and such other
documents are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE OFFER PRICE FOR THE PUBLICLY HELD SHARES TO ANY
TENDERING STOCKHOLDER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PAYMENT.
Purchaser's acceptance for payment of Publicly Held Shares validly tendered
pursuant to any of the procedures described above is intended to constitute a
binding agreement between the tendering stockholder and Purchaser upon the
terms and subject to the conditions of the Offer.
Appointment. By executing a Letter of Transmittal as set forth above, the
tendering stockholder will irrevocably appoint designees of Purchaser as such
stockholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by Purchaser and with respect to any and
all other Shares or other securities or rights issued or issuable in respect of
such Shares on or after March 1, 1995. All such proxies shall be considered
coupled with an interest in the tendered Shares. Such appointment will be
effective when, and only to the extent that, Purchaser accepts for payment
Shares tendered by such stockholder as provided herein. Upon such acceptance
for payment, all prior powers of attorney and proxies given by such stockholder
with respect to such Shares or other securities or rights will, without further
action, be revoked and no subsequent powers of attorney and proxies may be
given (and, if given, will not be deemed effective). The designees of Purchaser
will thereby be empowered to exercise all voting and other rights with respect
to such Shares or other securities or rights in respect of any annual, special
or adjourned meeting of the Company's stockholders, or otherwise, as they in
their sole discretion deem proper. Purchaser reserves the right to require
that, in order for Shares to be deemed validly tendered, immediately upon
Purchaser's acceptance for payment of such Shares, Purchaser must be able to
exercise full voting and other rights with respect to such Shares and other
securities or rights, including voting at any meeting of stockholders then
scheduled.
Determination of Validity; Rejection of Publicly Held Shares; Waiver of
Defects; No Obligation to Give Notice of Defects. All questions as to the
validity, form, eligibility (including time of receipt) and acceptance of any
tender of Publicly Held Shares will be determined by Purchaser, in its sole
discretion, whose determination will be final and binding. Purchaser reserves
the absolute right to reject any or all tenders determined by it not to be in
proper form or the acceptance for payment of or payment for which may, in the
opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in any tender with respect to any particular Publicly Held Shares,
or with respect to those Publicly Held Shares held by any particular
stockholder whether or not similar conditions, defects or irregularities are
waived in the case of other Publicly Held Shares. No tender of Publicly Held
Shares will be deemed to have been validly made until all defects or
irregularities relating thereto have been cured or waived. None of Purchaser,
any of its affiliates or assigns, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto) will
be final and binding.
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Backup Withholding. In order to avoid backup withholding of federal income
tax on payments of cash pursuant to the Offer, a stockholder surrendering
Publicly Held Shares in the Offer must provide the Depositary with such
stockholder's correct taxpayer identification number ("TIN") on a Substitute
Form W-9 and certify under penalties of perjury that such TIN is correct and
that such stockholder is not subject to backup withholding. Certain
stockholders (including, among others, all corporations and certain foreign
individuals and entities) are not subject to backup withholding. If a
stockholder does not provide its correct TIN or fails to provide the
certification described above, under federal income tax laws, the Depositary
will be required to withhold 31% of the amount of any payment made to certain
stockholders pursuant to the Offer. All stockholders tendering Publicly Held
Shares pursuant to the Offer should complete and sign the main signature form
and Substitute Form W-9 included as part of the Letter of Transmittal to
provide the information and certification necessary to avoid backup withholding
(unless an applicable exemption exists and is provided in a manner satisfactory
to Purchaser and the Depositary). Noncorporate foreign stockholders should
complete and sign the main signature form and a Form W-8, Certificate of
Foreign Status, a copy of which may be obtained from the Depositary, in order
to avoid backup withholding. See Instructions 9 and 10 to the Letter of
Transmittal.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Publicly Held
Shares made pursuant to the Offer are irrevocable, provided that Publicly Held
Shares tendered pursuant to the Offer may be withdrawn pursuant to the
procedures set forth below at any time prior to the Expiration Date and, unless
theretofore accepted for payment by Purchaser pursuant to the Offer, may also
be withdrawn at any time after May 20, 1995.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Publicly Held Shares to
be withdrawn, the number of Publicly Held Shares to be withdrawn, and the name
of the registered holder of the Publicly Held Shares to be withdrawn, if
different from the name of the persons who tendered the Publicly Held Shares.
If certificates for the Publicly Held Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted
to the Depositary and, unless such Publicly Held Shares have been tendered by
an Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Publicly Held Shares have been
delivered pursuant to the procedures for book-entry transfer as set forth in
"THE OFFER--Procedure for Tendering Shares," any notice of withdrawal must also
specify the name and number of the account at the appropriate financial
institution that is a participant in a Book-Entry Transfer Facility to be
credited with the withdrawn Publicly Held Shares and otherwise comply with such
Book-Entry Transfer Facility's procedures for such withdrawal, in which case a
notice of withdrawal will be effective if delivered to the Depositary by any
method of delivery described in the first sentence of this paragraph.
Withdrawals of tenders of Publicly Held Shares may not be rescinded, and any
Publicly Held Shares properly withdrawn will thereafter be deemed not validly
tendered for purposes of the Offer. However, withdrawn Publicly Held Shares may
be retendered by again following one of the procedures described above in "THE
OFFER--Procedure for Tendering Shares" at any time on or prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding. None of Purchaser, any of its
affiliates or assigns, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and condition of any such extension or
amendment), Purchaser will purchase, by accepting for payment, and will pay
for, all Publicly Held Shares validly tendered on or prior to the Expiration
Date and
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not properly withdrawn in accordance with "THE OFFER--Withdrawal Rights"
promptly after the Expiration Date. Any determination concerning the
satisfaction or waiver of such terms and conditions will be within the sole
discretion of Purchaser, and such determination will be final and binding on
all holders of Publicly Held Shares. See "THE OFFER--Terms of the Offer" and
"THE OFFER--Procedure for Tendering Shares." Purchaser expressly reserves the
right, in its sole discretion, to delay acceptance for payment of or payment
for Publicly Held Shares in order to comply in whole or in part with any
applicable law. Any such delays will be effected in compliance with Purchaser's
obligation under Rule 14e-1(c) under the Exchange Act to pay for or return
tendered Publicly Held Shares promptly after the termination or withdrawal of
the Offer.
In all cases, payment for Publicly Held Shares accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Publicly Held Shares (or timely Book-Entry Confirmation
of the book-entry transfer of such Publicly Held Shares into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedures set forth
in "THE OFFER--Procedure for Tendering Shares"), (ii) a Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, with any
required signature guarantees, or an Agent's Message in connection with a book-
entry transfer and (iii) any other documents required by such Letter of
Transmittal.
If, prior to the Expiration Date, Purchaser increases the consideration
offered to the holders of Publicly Held Shares pursuant to the Offer, then
Purchaser will pay such increased consideration for all Publicly Held Shares
purchased pursuant to the Offer, whether or not such Publicly Held Shares were
tendered prior to such increase in the consideration.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Publicly Held Shares validly tendered to
Purchaser and not withdrawn as, if and when Purchaser gives oral or written
notice to the Depositary of Purchaser's acceptance for payment of such Publicly
Held Shares. Payment for Publicly Held Shares accepted for payment pursuant to
the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payment from Purchaser and transmitting payment to such validly
tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY
PURCHASER ON THE OFFER PRICE FOR THE PUBLICLY HELD SHARES TENDERED PURSUANT TO
THE OFFER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If Purchaser is delayed in its acceptance for payment of or payment for
Publicly Held Shares or is unable to accept for payment or pay for Publicly
Held Shares pursuant to the Offer for any reason, then, without prejudice to
Purchaser's rights under the Offer (but subject to Purchaser's obligations
under Rule 14e-1(c) under the Exchange Act to pay for or return the Publicly
Held Shares promptly after the termination or withdrawal of the Offer), the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Publicly
Held Shares, and such Publicly Held Shares may not be withdrawn except to the
extent tendering stockholders are entitled to exercise, and duly exercise,
withdrawal rights as described in "THE OFFER--Withdrawal Rights."
If any tendered Publicly Held Shares are not purchased pursuant to the Offer
because of an invalid tender or otherwise, certificates for any such Publicly
Held Shares will be returned, without expense, to the tendering stockholder
(or, in the case of Publicly Held Shares delivered by book-entry transfer of
such Publicly Held Shares into the Depositary's account at a Book-Entry
Transfer Facility pursuant to the procedures set forth in "THE OFFER--Procedure
for Tendering Shares," such Publicly Held Shares will be credited to an account
maintained at such Book-Entry Transfer Facility), as promptly as practicable
after the expiration, termination or withdrawal of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of Purchaser's subsidiaries or affiliates, the
right to purchase all or any portion of the Publicly Held Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Purchaser of its
19
<PAGE>
obligations under the Offer or prejudice the rights of tendering stockholders
to receive payment for Publicly Held Shares validly tendered and accepted for
purchase pursuant to the Offer.
5. CERTAIN INCOME TAX CONSEQUENCES
The summary of tax consequences set forth below is for general information
only and is based on Purchaser's understanding of the law as currently in
effect. The tax consequences to each stockholder will depend in part upon such
stockholder's particular situation. Special tax consequences not described
herein may be applicable to particular classes of taxpayers, such as financial
institutions, broker-dealers, persons who are not citizens or residents of the
United States and stockholders who acquired their Publicly Held Shares through
the exercise of an employee stock option or otherwise as compensation. ALL
PUBLIC STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES OF THE OFFER, INCLUDING THE APPLICABILITY AND
EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL OR FOREIGN INCOME
AND OTHER TAX LAWS AND OF CHANGES IN SUCH TAX LAWS.
Sales of Publicly Held Shares pursuant to the Offer will be taxable
transactions for federal income tax purposes under the Internal Revenue Code of
1986, as amended (the "Code"), and may also be taxable transactions under
applicable state, local, foreign and other tax laws. For federal income tax
purposes, a tendering stockholder will generally recognize gain or loss equal
to the difference between the amount of cash received by the stockholder
pursuant to the Offer and the aggregate tax basis in the Publicly Held Shares
tendered by the stockholder and purchased pursuant to the Offer. Gain or loss
will be calculated separately for each block of Shares tendered and purchased
pursuant to the Offer.
If tendered Publicly Held Shares are held by a tendering stockholder as
capital assets, gain or loss recognized by the tendering stockholder will be
capital gain or loss, which will be long-term capital gain or loss if the
tendering stockholder's holding period for the Publicly Held Shares exceeds one
year. Under present law, long-term capital gains recognized by a tendering
individual stockholder will generally be taxed at a maximum federal marginal
tax rate of 28%, and long-term capital gains recognized by a tendering
corporate stockholder will be taxed at a maximum federal marginal rate of 35%.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals) that tenders Publicly
Held Shares may be subject to a 31% backup withholding unless the stockholder
provides its TIN and certifies that such number is correct or properly
certifies that it is awaiting a TIN. A stockholder that does not furnish its
TIN may be subject to a penalty imposed by the IRS. Each stockholder should
complete and sign the Substitute Form W-9 included as part of the Letter of
Transmittal so as to provide the information and certification necessary to
avoid backup withholding.
If backup withholding applies to a stockholder, the Depositary is required to
withhold 31% of the amount payable to such stockholder for the stockholder's
Shares. Backup withholding is not an additional tax. Rather, the amount of the
backup withholding can be credited against the federal income tax liability of
the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an
overpayment of tax, a refund can be obtained by the stockholder upon filing an
income tax return.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO PUBLICLY HELD
SHARES RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE
AS COMPENSATION OR WITH RESPECT TO HOLDERS OF PUBLICLY HELD SHARES WHO ARE
SUBJECT TO SPECIAL TAX TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE
INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND
MAY NOT APPLY TO A HOLDER OF PUBLICLY HELD SHARES IN LIGHT OF ITS INDIVIDUAL
CIRCUMSTANCES. STOCKHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION
AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE
OFFER.
6. OPTIONS
As an accommodation to employees holding vested options to purchase Shares
(the "Options") who would like to participate in the Offer but who do not
desire to pay the exercise price and comply with other requirements to exercise
their Options, Purchaser will pay to each employee holder of an Option, the
20
<PAGE>
difference between the Offer Price less the per share exercise price for the
Option multiplied by the number of Shares for which each such Option is
exercisable; provided, however, that the employee must deliver a duly executed
Notice of Cancellation by hand delivery or regular mail to the Chief Financial
Officer of the Company at Company's principal office prior to the Expiration
Date. A copy of the Offer to Purchase, the Notice of Cancellation and related
materials shall be delivered to each holder of Options. According to the
Company's Form 10-K, as of March 1, 1995, Options to purchase 218,950 Shares
were outstanding. Purchaser's obligation to make payment for the Options shall
be subject to all conditions and other terms of the Offer relating to the
Shares, including Purchaser's right to determine in its sole discretion whether
any and each Notice of Cancellation is timely and properly delivered. Any
withdrawal of the Notice of Cancellation must be made in accordance with the
procedures for withdrawal of Shares. Payment shall be made directly by
Purchaser and not through the Depositary. Nothing in this paragraph shall
prevent a holder of an Option from exercising the Option and tendering Shares
pursuant to the Offer. See "THE OFFER--Terms of the Offer; Withdrawal Rights;
Acceptance for Payment and Payment; Certain Conditions of the Offer."
ALL OPTION HOLDERS SHOULD CONSULT A TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES OF THE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF ANY
FEDERAL, STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND OF CHANGES TO
SUCH TAX LAWS.
7. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are traded in the over-the-counter market and prices are quoted on
the Nasdaq National Market under the symbol "ROPK." The following table sets
forth, for each of the periods indicated, the high and low reported sales
prices per share as reported by the Nasdaq National Market and the Dow Jones
News Retrieval Service.
<TABLE>
<CAPTION>
HIGH LOW
------- ------
<S> <C> <C>
1992:
First Quarter........................................... $ 7 1/8 $3 3/4
Second Quarter.......................................... $ 6 1/4 $4
Third Quarter........................................... $ 7 1/2 $4 7/8
Fourth Quarter.......................................... $ 7 1/4 $5 3/4
1993:
First Quarter........................................... $ 8 $5 3/4
Second Quarter.......................................... $ 6 1/4 $4 1/2
Third Quarter........................................... $ 6 1/2 $4
Fourth Quarter.......................................... $ 7 1/4 $5 3/4
1994:
First Quarter........................................... $ 7 1/4 $5
Second Quarter.......................................... $ 7 $5 3/8
Third Quarter........................................... $10 1/4 $5 1/2
Fourth Quarter.......................................... $11 1/2 $7 3/4
1995:
First Quarter (through March 20, 1995).................. $11 $9 1/2
</TABLE>
On March 14, 1995, the last full trading day before Purchaser publicly
announced its intention to commence the Offer, the last reported sale price of
the Shares on the Nasdaq National Market was $10 1/4 per share (with no trades
on March 14, but with bid/ask prices of $10 1/4/$10 1/2, respectively on that
date). On September 27, 1994, the last full day of trading before the Company
publicly announced the execution of the Option Agreement, the last reported
sale price of the Shares on the Nasdaq National Market was $9 per share.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
According to the Company's Form 10-K, no cash dividends on its Common Stock
have been declared or paid by the Company since inception, and the Company
intends to employ all available funds for
21
<PAGE>
development of its business and accordingly, does not intend to pay cash
dividends in the foreseeable future. Further, the Company's agreement relating
to its current line of credit and term loan with its bank and its reimbursement
agreement securing certain industrial revenue bonds issued by the County of
Scott, Kentucky, place certain restrictions on the Company's ability to pay
cash dividends on the Shares.
8. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION AND
EXCHANGE ACT REGISTRATION
The purchase of Shares pursuant to the Offer will reduce the number of
holders of Shares and the number of Shares that might otherwise trade publicly
and could adversely affect the liquidity and market value of the remaining
Shares held by the public.
Nasdaq Registration. The Shares are currently included on the Nasdaq National
Market. Depending upon the number of Shares purchased pursuant to the Offer,
the Shares may no longer meet the requirements of the National Association of
Securities Dealers, Inc. ("NASD") for continued inclusion in the Nasdaq
National Market (the top tier market of the Nasdaq Stock Market) which requires
that an issuer have at least 200,000 publicly held shares, held by at least 400
stockholders or 300 stockholders of round lots, with a market value of
$1,000,000, and have net tangible assets of at least either $2,000,000 or
$4,000,000, depending on profitability levels during the issuer's four most
recent fiscal years. If these standards are not met, the Shares might
nevertheless continue to be quoted with quotations published in the Nasdaq
"additional list" or in one of the "local lists," but if the number of holders
of the Shares were to fall below 300, or if the number of publicly held Shares
were to fall below 100,000 or there were not at least two registered and active
market makers for the Shares, NASD rules provide that the Shares would no
longer be "qualified" for Nasdaq reporting and Nasdaq would cease to provide
any quotations. Shares held directly or indirectly by an officer or director of
the Company, or by any beneficial owner of more than 10 percent of the
outstanding Shares, ordinarily will not be considered publicly held for this
purpose. According to the Company's Form 10-K, as of March 1, 1995, there were
approximately 225 holders of record of Shares and 4,386,162 Shares were
outstanding (and 218,950 Shares were issuable upon exercise of the Options).
If, after the purchase of Shares pursuant to the Offer, the Shares do not meet
the requirements of the NASD for continued inclusion in the Nasdaq Stock Market
or the Nasdaq National Market, as the case may be, the market for Shares could
be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD for
quotation through Nasdaq and the Shares are no longer included in the Nasdaq
Stock Market, it is possible that the Shares would continue to trade in the
over-the-counter market and that price quotations would be reported by other
sources. The extent of the public market for the Shares and the availability of
such quotations would, however, depend upon the number of holders of Shares
remaining at such time, the interests in maintaining a market in Shares on the
part of securities firms, the possible termination of registration of the
Shares under the Exchange Act, as described below, and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. The purchase of the Shares pursuant to the Offer may result in
the Shares becoming eligible for deregistration under the Exchange Act.
Registration of the Shares under the Exchange Act may be terminated upon
application by the Company to the Commission if the Shares are neither listed
on a national securities exchange nor held by 300 or more holders of record.
Termination of registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company to
its stockholders and to the Commission by making certain provisions of the
Exchange Act no longer applicable to the Company, such as the short-swing
profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act in connection with stockholders' meetings, the related
requirements of furnishing annual and transition reports to stockholders
pursuant to Section 15(d) of the Exchange Act and the requirements of Rule 13e-
3 under the Exchange Act with respect to "going private" transactions.
Furthermore, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant
to Rule 144 or 144A
22
<PAGE>
promulgated under the Securities Act of 1933, as amended, may be impaired or
eliminated. Additionally, if registration of the Shares under the Exchange Act
is terminated, then the Shares would no longer be eligible for listing on the
Nasdaq National Market.
Purchaser intends to seek delisting of the Shares from the Nasdaq National
Market and termination of registration of the Shares under the Exchange Act as
soon after the completion of the Offer as the requirements for delisting and
termination are met.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon
factors similar to those described above regarding listing and market
quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers. If registration of Shares under the
Exchange Act were terminated, then the Shares would no longer be "margin
securities" or be eligible for Nasdaq reporting.
9. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation with its principal executive offices
located at 660 South State College Boulevard, Fullerton, California 92631.
According to the Company's Form 10-K, the Company designs, manufactures and
markets a broad range of rigid plastic shipping containers for use in food,
specialty chemical and a wide variety of other industries. The Company also
designs, manufactures and markets a variety of plastic products for specialized
packaging, storage and material handling applications.
Financial Information. Set forth below is a summary of certain selected
consolidated financial information with respect to the Company and its
subsidiaries, excerpted or derived from the information contained in the
Company's audited financial statements contained in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994. More comprehensive
financial information is included in such reports and other documents filed by
the Company with the Commission, and the following summary is qualified in its
entirety by reference to such reports and such other documents and all the
financial information (including any related notes) contained therein. Such
reports and other documents should be available for inspection and copies
thereof should be obtainable in the manner set forth below under "Available
Information." The Company's audited financial statements as of December 31,
1994 and 1993 and for the three years in the period ended December 31, 1994
contained in the Company's Annual Report on Form 10-K are included in Annex D
to this Offer to Purchase.
ROPAK CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------
1994 1993 1992 1991 1990
-------- -------- ------- ------- -------
(EXPRESSED IN THOUSANDS, OTHER THAN PER
SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net sales......................... $128,398 $105,192 $94,803 $94,103 $91,187
Net income (loss)................. $ 4,120 $ 3,455 $ 1,318 $(1,272) $ (219)
Net income (loss) per share....... $ 0.83 $ 0.73 $ 0.31 $ (0.33) $ (0.06)
Net income (loss) per share fully
diluted.......................... $ 0.81 $ 0.72 $ 0.30 -- --
Number of shares used in the per
share computation:
Primary......................... 4,443 4,398 4,169 3,851 3,820
Fully diluted................... 5,084 4,784 4,428 3,851 3,820
</TABLE>
The Company has not declared or paid any cash dividends on the Shares during
the periods covered above. On June 15, 1991, the Company declared a 10% stock
dividend which was paid on June 28, 1991.
23
<PAGE>
Shares and per share amounts for 1990 have been adjusted to give effect to the
10% stock dividend paid in 1991. Dividends on preferred shares of the Company's
wholly-owned Canadian subsidiary amounted to $426,000, $261,000, and $43,000 in
1994, 1993 and 1992, respectively. Primary earnings per share are calculated on
net income less preferred dividends, representing earnings applicable to
Shares.
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------
1994 1993 1992 1991 1990
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
<CAPTION>
(EXPRESSED IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Total assets........................... $94,316 $77,180 $64,040 $65,899 $74,531
Long-term debt (less current
maturities) .......................... $34,014 $26,524 $23,563 $27,927 $30,770
</TABLE>
- --------
Reference is made to the Consolidated Financial Statements and Notes thereto
set forth in Annex D to this Offer to Purchase.
Share Ownership. According to the Company's Form 10-K or as otherwise
expressly indicated below, the following table sets forth information as of
March 1, 1995, as to Shares owned by (i) each of the Company's directors and
executive officers, and (ii) all executive officers and directors of the
Company as a group, and (iii) each person known by the Company to beneficially
own more than 5% of the outstanding Shares. Each of the directors and executive
officers named below has agreed to tender all of their Shares and Options
pursuant to the Offer.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(1)
-------------------------------
NAME OR GROUP AMOUNT PERCENT
------------- ---------------- --------------
<S> <C> <C>
DIRECTORS:
John L. Doughty(2)...................... -- --
Robert Alexander Lang(2)................ -- --
Douglas H. MacDonald(3)................. 7,260 0.2%
Nigel V. Roe(2)......................... -- --
William H. Roper(4)..................... -- --
Robert E. Roper(4)...................... -- --
C. Richard Roper(4)..................... -- --
John Thorp(2)........................... -- --
David A. Williams(2).................... -- --
EXECUTIVE OFFICERS:
James R. Connell(5)..................... 67,192 1.5%
James R. Dobell(6)...................... 51,485 1.2%
Ronald W. Cameron(7).................... 56,141 1.3%
All executive officers and directors as
a group
(12 in number)(8)...................... 182,078 4.1%
FIVE PERCENT STOCKHOLDERS:
LINPAC Mouldings Ltd(2)................. 2,841,303 57.2%
Mentor Partners LP(9)................... 237,100 5.4%
</TABLE>
- --------
(1) The above table does not include Shares held by the Company's 401(k)
Incentive Savings Plan in which certain executive officers have an
interest. Approximately 142,681 Shares are held for the account of the
Company's employees under its 401(k) Incentive Savings Plan.
(2) Includes 577,777 Shares obtainable upon exchange of certain preferred stock
of Ropak Canada, Inc. held by Purchaser. Beneficial ownership listed in the
above table for directors of the Company does not include shares
beneficially owned by Purchaser; Messrs. Doughty, Lang, Roe, Thorp and
Williams are all associated with Purchaser or its affiliates. As directors
of Purchaser, Messrs. Doughty, Thorp and Williams may be deemed to control
voting and disposition power of Shares owned by Purchaser. Messrs. Doughty,
Lang, Roe, Thorp and Williams each disclaim beneficial ownership of Shares
owned by Purchaser.
24
<PAGE>
(3) Includes 7,260 Shares owned by Admac Holdings Ltd., a corporation owned by
Mr. MacDonald and his spouse.
(4) Each of Messrs. William, Robert and Richard Roper recently sold all of
their Shares to Purchaser. See "SPECIAL FACTORS--Background of the Offer."
(5) Includes Options to purchase 27,390 Shares which are fully exercisable on
the date of this Offer to Purchase.
(6) Includes Options to purchase 38,390 Shares which are fully exercisable on
the date of this Offer to Purchase.
(7) Includes Options to purchase 30,890 Shares which are fully exercisable on
the date of this Offer to Purchase.
(8) Does not include Shares owned by Purchaser as described in Note 2 above.
Includes Shares described in Note 3 above plus 55,891 Shares beneficially
owned by other executive officers, 22,257 Shares beneficially owned by the
spouses of two executive officers, and 96,670 Shares issuable upon exercise
of stock options granted to executive officers that are fully exercisable
on the date of this Offer to Purchase.
(9) Based upon the Form 13D of Mentor Partners LP as filed with the Commission
on March 6, 1995.
Available Information. The Company is subject to the reporting requirements
of the Exchange Act and, in accordance therewith, is required to file reports
and other information with the Commission relating to its business, financial
condition and other matters. Information as of particular dates concerning the
Company's directors and officers (including their remuneration and stock
options granted to them), Shares held by them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company and certain other matters is required to be disclosed in proxy
statements distributed to the Company's stockholders and filed with the
Commission. Such reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the regional offices of the Commission located in the
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York
10048. Copies should be obtainable, by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Such
information should also be on file at the Nasdaq Stock Market, 1735 K Street,
N.W., Washington, D.C. 20006.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although Purchaser does not have any knowledge that any
such information is untrue, Purchaser does not take any responsibility for the
accuracy or completeness of such information or for any failure by the Company
to disclose events that may have occurred and may affect the significance or
accuracy of any such information.
10. CERTAIN INFORMATION CONCERNING PURCHASER
Purchaser's principal business is injection moulding for plastic products and
the manufacture of a wide variety of plastic, paper and metal packaging
products. Purchaser operates approximately 50 manufacturing facilities,
including eight in the United States, with over 7,000 employees worldwide.
Purchaser is a privately-held United Kingdom corporation with its principal
offices located at Deykin Avenue, Witton, Birmingham B6 7HY. Purchaser is a
wholly-owned subsidiary of LINPAC Group Ltd, an United Kingdom corporation
("LINPAC Group"). The address of LINPAC Group's principal offices is Evan
Cornish House, Windsor Road, Louth, Lincolnshire, LN11 OLX, United Kingdom.
LINPAC Group's principal business is to serve as a holding company of Purchaser
and its subsidiaries.
Purchaser currently beneficially owns 2,841,303 Shares (including 577,777
Shares obtainable upon exchange of certain preferred stock of Ropak Canada,
Inc. held by Purchaser), or approximately 57.2% of
25
<PAGE>
the issued and outstanding Shares (assuming exchange of the preferred stock).
During the third quarter of 1994, Purchaser acquired a total of 22,500 Shares
for $10 1/4 per share. During the fourth quarter of 1994, Purchaser acquired a
total of 1,112,183 Shares (assuming exchange of the preferred stock) at per
share prices ranging from $9 3/4 to $10 1/2. The average purchase price paid by
Purchaser during this period was approximately $10 1/3 per share. During the
first quarter of 1995, Purchaser acquired a total of 1,340,588 Shares at per
share prices ranging from $10 to $11. The average purchase price paid by
Purchaser during this period was approximately $10 3/5 per share. See "SPECIAL
FACTORS--Background of the Offer."
In the sixty days prior to the date of this Offer to Purchase, Purchaser has
acquired a total of 992,838 shares. On February 10, 1995, Purchaser acquired
7,318 shares for a per share price of $10.50 in a private transaction with C.
Richard Roper in his capacity as custodian for his children. On February 27,
1995, Purchaser purchased 985,520 Shares from the Roper Family Members at a
price of $10.50 per share. In connection with the purchase, Purchaser paid the
Roper Brothers the difference between $10.50 per share and the exercise price
in return for the Roper Brothers' agreement to cancel the Roper Options to
purchase 132,000 Shares. In addition, Purchaser agreed to guarantee all
payments required to be made to the Roper Brothers by the Company pursuant to
the Employment Agreements and to provide the Opportunity to Stockholders. See
"SPECIAL FACTORS--Background of the Offer."
Except as otherwise stated in this Offer to Purchase, to the best of
Purchaser's knowledge, none of Purchaser's or LINPAC Group's directors,
executive officers or subsidiaries beneficially owns any equity security of the
Company, and except as otherwise stated in this Offer to Purchase, neither
LINPAC Group nor, to the best of Purchaser's knowledge, any of the directors,
executive officers or subsidiaries of Purchaser or LINPAC Group has effected
any transaction in any equity security of the Company during the past 60 days.
Except as set forth in this Offer to Purchase, (a) there have not been any
contacts, transactions or negotiations between Purchaser, LINPAC Group, its
subsidiaries or, to the best knowledge of Purchaser, any of the persons listed
in Annex A, on the one hand, and the Company or any of the Company's directors,
officers or affiliates, on the other hand, that are required to be disclosed
pursuant to the rules and regulations of the Commission and (b) none of
Purchaser or LINPAC Group or, to the best knowledge of Purchaser, any of the
persons listed in Annex A, has any contract, arrangement, understanding or
relationship with any person with respect to any securities of the Company. See
"SPECIAL FACTORS--Background of the Offer." The name, business address, present
principal occupation or employment of each of the directors and officers of
Purchaser and LINPAC Group are set forth on Annex A hereto.
11. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by Purchaser to purchase any and all
outstanding Publicly Held Shares pursuant to the Offer and to pay fees and
expenses related to the Offer is estimated to be approximately $26.5 million.
Purchaser has sufficient funds in cash accounts to purchase any and all of the
outstanding Publicly Held Shares. No arrangements or plans have been made by
Purchaser to finance or borrow any of the amounts required to purchase the
Publicly Held Shares pursuant to this Offer to Purchase. Because Purchaser
plans to use funds it has available in its cash accounts to purchase the
Publicly Held Shares, Purchaser has not conditioned the Offer on obtaining
financing.
12. DIVIDENDS AND DISTRIBUTIONS
If on or after the date hereof, the Company should (a) split, combine or
otherwise change the Shares or its capitalization, (b) acquire Shares or
otherwise cause a reduction in the number of outstanding Shares, or (c) issue
or sell additional Shares (other than Shares issued or sold upon the exercise
of employee stock options outstanding on the date hereof in accordance with
their terms) or Shares of any other class of capital stock, other voting
securities or any securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, or (d) disclose
that it has taken any such action, then without
26
<PAGE>
prejudice to Purchaser's rights under the provisions of "THE OFFER--Terms of
the Offer" and "THE OFFER--Certain Conditions of the Offer," Purchaser, in its
sole discretion, may make such adjustments as it deems appropriate in the Offer
Price and other terms of the Offer, including, without limitation, the number
or type of securities offered to be purchased.
If, on or after the date hereof, the Company should declare or pay any cash
dividend on the Shares or make any other distribution on the Shares, or issue
with respect to the Shares any additional Shares, shares of any other class of
capital stock, other voting securities or any securities convertible into, or
rights, warrants or options, conditional or otherwise, to acquire, any of the
foregoing, payable or distributable to stockholders of record on a date prior
to the transfer of the Shares purchased pursuant to the Offer to Purchaser or
its nominee or transferee on the Company's stock transfer records, then,
subject to the provisions of "THE OFFER--Terms of the Offer" and "THE OFFER--
Certain Conditions of the Offer" below, (a) the Offer Price may, in the sole
discretion of Purchaser, be reduced by the amount of any such cash dividend or
cash distribution and (b) the whole of any such noncash dividend, distribution
or issuance to be received by the tendering stockholders will (i) be received
and held by the tendering stockholders for the account of Purchaser and will be
required to be promptly remitted and transferred by each tendering stockholder
to the Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer, or (ii) at the direction of Purchaser, be exercised
for the benefit of Purchaser, in which case the proceeds of such exercise will
promptly be remitted to Purchaser. Pending such remittance and subject to
applicable law, Purchaser will be entitled to all rights and privileges as
owner of any such noncash dividend, distribution, issuance, proceeds or rights
and may withhold the entire Offer Price or deduct from the Offer Price the
amount of value thereof, as determined by Purchaser in its sole discretion.
According to the Company's Form 10-K, no cash dividends have been declared or
paid by the Company since inception and the Company intends to employ all
available funds for development of its business and accordingly, does not
intend to pay cash dividends in the foreseeable future.
13. ARRANGEMENTS WITH OFFICERS OF THE COMPANY AND OTHER AGREEMENTS
Each of the Roper Brothers have entered into Employment Agreements with the
Company which became effective January 1, 1995 and contain the following terms:
(i) William H. Roper is employed as an executive officer of the Company
for a term of one year beginning January 1, 1995 with duties relating
primarily to strategic and market planning and business expansion;
(ii) Robert E. Roper is employed as an executive officer of the Company
for a term of three years beginning January 1, 1995 to perform duties
associated with acting as general manager of United States container
operations;
(iii) C. Richard Roper is employed as an executive officer of the Company
for a term of four years beginning January 1, 1995 to perform duties
associated with acting as manager of design and engineering and management
of raw materials purchases;
(iv) The base salary of each Roper Brother is $250,000 per annum;
(v) During the term of his employment, each Roper Brother is eligible to
participate in an incentive bonus program providing for a payment of not
more than $250,000 per year, with the actual amount of such incentive
bonus, if any, based on the financial performance of the Company;
(vi) Upon an early termination, other than for cause or upon voluntary
resignation or retirement, each Roper Brother is entitled to severance
payments payable monthly for the remaining original term of his Employment
Agreement equal to 150% of the amount of his aggregate base salary for the
unexpired term of his Employment Agreement; and
(vii) Each Employment Agreement contains covenants on the part of each
Roper Brother against competition with the Company and its subsidiaries
during the period of his employment by the Company
27
<PAGE>
and for a term of seven years thereafter. In consideration of such
covenants against competition, the Company must pay each Roper Brother the
aggregate sum of $1,320,000, payable in equal monthly installments over a
term of six years.
In connection with the purchase of the Shares held by the Roper Family
Members on February 27, 1995, Purchaser agreed to guarantee all payments
required to be made to the Roper Brothers by the Company pursuant to the
Employment Agreements. See "SPECIAL FACTORS--Background of the Offer."
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of this Offer, and in addition to (and
not in limitation of) Purchaser's right to extend and amend the Offer at any
time in its sole discretion, Purchaser shall not be required to accept for
payment or, subject to Rule 14e-1(c) under the Exchange Act which requires
Purchaser to pay for or return tendered Publicly Held Shares promptly after the
termination or withdrawal of the Offer, pay for any Shares tendered pursuant to
the Offer and may postpone the acceptance for payment of and payment for
Shares, if, prior to the time of acceptance of such Shares for payment, any one
of the following conditions exists:
(a) any change (or any condition, event or development involving a
prospective change) shall have occurred or have been threatened in the
business, properties, assets, liabilities, capitalization, stockholders'
equity, condition (financial or otherwise), operations, licenses or
franchises, results of operations or prospects of the Company or any of its
subsidiaries or affiliates, which, in the sole judgment of Purchaser, is or
may be materially adverse to the Company or any of its subsidiaries or
affiliates, or Purchaser shall have become aware of any fact which, in the
sole judgment of Purchaser, has or may have material significance with
respect to the value of the Company or any of its subsidiaries or
affiliates or the value of the Shares to Purchaser; or
(b) (i) any general suspension of trading in, or limitation on prices
for, securities on any national securities exchange or in the over-the-
counter market, (ii) a declaration of a banking moratorium or any
suspension of payments with respect to banks in the United States or the
United Kingdom (whether or not mandatory), (iii) a commencement of a war,
armed hostilities or other national or international crisis directly or
indirectly involving the United States or the United Kingdom, (iv) any
significant change in the United States, United Kingdom or any other
currency exchange rates or a suspension of, or limitation on, the markets
therefor (whether or not mandatory), (v) any limitation (whether or not
mandatory) by any governmental authority on, or any other event having a
reasonable likelihood of affecting, the extension of credit by banks or
other lending institutions in the United States or the United Kingdom, (vi)
any significant adverse changes in the market price of the Shares or in
United States securities or financial markets, or (vii) in the case of any
of the foregoing existing at the time of the commencement of the Offer, in
the sole judgment of Purchaser, a material acceleration or worsening
thereof; or
(c) there shall have been threatened, instituted, or pending any action,
proceeding, application, claim or counterclaim by any government or
governmental authority or agency, domestic or foreign, or by any other
person, domestic or foreign (whether brought by the Company, an affiliate
of the Company or any other person), before any court or governmental
regulatory or administrative agency, authority or tribunal, domestic or
foreign, which (i) challenges or seeks to challenge the acquisition by
Purchaser or any affiliate of Purchaser of the Shares, restrains or
prohibits or seeks to restrain or prohibit the making or consummation of
the Offer or other subsequent business transaction, restrains or prohibits
or seeks to restrain or prohibit the performance of any of the contracts or
other arrangements entered into by Purchaser or any of its affiliates in
connection with the acquisition of the Company or any Shares, or obtains or
seeks to obtain any material damages or otherwise directly or indirectly
relates to the transactions contemplated by the Offer, (ii) makes or seeks
to make the purchase of, or payment for, some or all of the Shares pursuant
to the Offer illegal or results in a delay in the ability of Purchaser to
accept for payment or pay for some or all of the Shares, (iii) prohibits or
limits or seeks to prohibit or
28
<PAGE>
limit the ownership or operation by Purchaser or any other affiliate of
Purchaser of all or any portion of the business or assets of the Company
and its subsidiaries or of Purchaser and its affiliates or compels or seeks
to compel Purchaser to dispose of or to hold separately all or any portion
of the business or assets of Purchaser or any of its affiliates or of the
Company or any of its subsidiaries, or imposes or seeks to impose any
limitation on the ability of Purchaser or any affiliate of Purchaser to
conduct their business or own such assets, (iv) imposes or seeks to impose
limitations on the ability of Purchaser (or any affiliate of Purchaser) to
acquire or hold or to exercise full rights of ownership of the Shares,
including, but not limited to, the right to vote the Shares purchased by
them on all matters properly presented to the stockholders of the Company,
(v) in the sole judgment of Purchaser might result in a limitation of the
benefits expected to be derived by Purchaser as a result of the
transactions contemplated by the Offer or the value of the Shares to
Purchaser, or (vi) otherwise directly or indirectly relates to the Offer or
which otherwise, in the sole judgment of Purchaser, might adversely affect
the Company or any of its subsidiaries or affiliates, Purchaser or any of
their respective affiliates or subsidiaries or the value of the Shares; or
(d) there shall be any action taken, or any statute, rule, regulation,
order or injunction shall be sought, proposed, enacted, promulgated,
entered, enforced or deemed applicable to the Offer, or any other action
shall have been taken, proposed or threatened, by any government,
governmental authority or court, domestic, foreign or supranational that,
in the sole judgment of Purchaser, might, directly or indirectly, result in
any of the consequences referred to in clauses (i) through (vi) of
paragraph (c) above; or
(e) the Company or any of its subsidiaries shall have (i) split, combined
or otherwise changed, or authorized or proposed the split, combination, or
other change, of the Shares or its capitalization, (ii) purchased, acquired
or otherwise caused a reduction in the number of, or authorized or proposed
the purchase, acquisition or other reduction in the number of, any
presently outstanding Shares or other securities, (iii) issued,
distributed, sold or pledged, or authorized, proposed or announced the
issuance, distribution, sale or pledge of (A) additional Shares, shares of
any other class of capital stock, other voting securities, debt securities
or any securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, other than
Shares issued or sold upon the exercise (in accordance with the present
terms thereof) of employee stock options outstanding on March 1, 1995 or
(B) any other securities in respect of, in lieu of, or in substitution for
Shares outstanding on March 1, 1995, (iv) declared, paid or proposed to
declare or pay any dividend or distribution on any shares of capital stock
of the Company or issued, authorized, recommended or proposed the issuance
of, any other distribution with respect to the Shares, whether payable in
cash, securities or other property, (v) altered or proposed to alter any
material term of any outstanding security, (vi) incurred any debt other
than in the ordinary course of business and consistent with past practice
or any debt containing burdensome covenants, (vii) authorized, recommended,
proposed, entered into, or publicly announced its intention to enter into
or effect any merger, consolidation, liquidation, dissolution, business
combination, acquisition of assets or securities, disposition of assets or
securities, release or relinquishment of any material contractual or other
right of the Company or any of its subsidiaries or any agreement
contemplating any of the foregoing or any comparable events not in the
ordinary course of business, (viii) authorized, recommended, proposed or
entered into, or announced its intention to authorize, recommend, propose
or enter into, any transaction which in Purchaser's sole opinion could
adversely affect either the value of the Company or any of its subsidiaries
or the value of the Shares, (ix) entered into any employment, severance or
similar agreement, arrangement or plan with any of its employees other than
in the ordinary course of business and consistent with past practice or
entered into or amended any agreements, arrangements or plans so as to
provide for increased benefits to the employees as a result of or in
connection with the transactions contemplated by the Offer or any other
change in control of the Company, (x) except as may be required by law,
taken any action to terminate or amend any employee benefit plan (as
defined in Section 3(2) of the Employment Retirement Income Security Act of
1974, as amended) of the Company or any of its subsidiaries, or Purchaser
shall have become aware of any such action which was not previously
disclosed in publicly available filings, (xi)
29
<PAGE>
adopted, authorized or proposed any amendment to the certificate of
incorporation or by laws of the Company or any of its subsidiaries, or
Purchaser shall become aware that the Company or any of its subsidiaries
shall have proposed or adopted any such amendment which shall not have been
previously disclosed or (xii) agreed, in writing or otherwise, to take any
of the foregoing actions; or
(f) Purchaser shall become aware (i) that any material right of the
Company or any of its subsidiaries shall be impaired or otherwise adversely
affected or that any material amount of indebtedness of the Company or any
of its subsidiaries shall become accelerated or otherwise become due prior
to its stated due date, in either case with or without notice or the lapse
of time or both, as a result of the transactions contemplated by the Offer,
or (ii) of any covenant, term or condition in any of the Company's or any
of its subsidiaries' instruments or agreements that are or may be
materially adverse to the value of the Shares in the hands of Purchaser
(including, but not limited to, any event of default that may ensue as a
result of the consummation of the Offer or the acquisition of control of
the Company); or
(g) a tender or exchange offer for any Shares shall have been commenced
or publicly proposed to be made by another person (including the Company or
any of its subsidiaries or affiliates), or it shall have been publicly
disclosed or Purchaser shall have otherwise learned that (i) any person,
entity (including the Company or its subsidiaries) or "group" (as defined
in Section 13(d)(3) of the Exchange Act) shall have acquired or proposed or
be attempting to acquire beneficial ownership of more than five percent of
any class or series of capital stock of the Company (including the Shares),
or shall have been granted any option, warrant or right, conditional or
otherwise, to acquire beneficial ownership of more than five percent of any
class or series of capital stock of the Company (including the Shares),
other than acquisitions for bona fide arbitrage purposes and other than
acquisitions by persons or groups who have publicly disclosed such
ownership in a Schedule 13D or 13G (or amendments thereto) on file with the
Commission on or prior to March 1, 1995, (ii) any such person, entity or
group which prior to March 1, 1995 has publicly disclosed any such
ownership shall have acquired or proposed to acquire additional Shares
constituting more than one percent of any class or series of capital stock
of the Company (including the Shares), or shall have been granted any
option, warrant or right, conditional or otherwise, to acquire more than
one percent of any class or series of capital stock of the Company
(including the Shares), (iii) any new group was, or is, formed which
beneficially owns more than five percent of the outstanding Shares, (iv)
any person, entity or group shall have entered into a definitive agreement
or an agreement in principle or made a proposal with respect to a tender
offer or exchange offer for some portion or all of the Shares or a merger,
consolidation or other business combination with or involving the Company,
or (v) any person shall have filed a Notification and Report Form under the
HSR Act (as defined herein) or made a public announcement reflecting an
intent to acquire the Company or assets or securities of the Company; or
(h) the Company or Purchaser shall have reached an agreement or
understanding that the Offer be terminated or amended or Purchaser (or one
of its affiliates) shall have entered into a definitive agreement or an
agreement in principle to acquire the Company by merger or other similar
business combination, or by purchase of Shares of capital stock or assets
of the Company;
which, in the sole judgment of Purchaser, in any case, and regardless of the
circumstances (including any action or inaction by Purchaser) giving rise to
any such condition, makes it inadvisable to proceed with the Offer or with such
acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted by Purchaser regardless of the circumstances giving rise to any such
condition and may be waived by Purchaser, in whole or in part, at any time and
from time to time, in the sole discretion of Purchaser. The failure by
Purchaser at any time to exercise any of the foregoing rights will not be
deemed a waiver of any other right and each right will be deemed an ongoing
right which may be asserted at any time and from time to time. Notwithstanding
the fact that Purchaser reserves the right to assert the occurrence of a
condition following acceptance for payment but prior to payment in order to
delay payment or cancel its obligation to pay for properly tendered Shares,
Purchaser will either promptly pay for such Shares or promptly return such
Shares after the Expiration Date. Any determination by Purchaser with respect
to the foregoing conditions will be final and binding on all parties.
30
<PAGE>
15. CERTAIN LEGAL MATTERS
General. Except as described in this Section 15, based on its review of
publicly available filings of the Company with the Commission and other
publicly available information regarding the Company, Purchaser is not aware of
any license or regulatory permit that appears to be material to the business of
the Company and its subsidiaries, taken as a whole, that might be adversely
affected by Purchaser's acquisition of Publicly Held Shares (and/or the
indirect acquisition of the stock of the Company's subsidiaries) as
contemplated herein or of any approval or other action by or with any domestic,
foreign, or international government authority or administrative or regulatory
agency that would be required for the acquisition or ownership of the Publicly
Held Shares (and/or the indirect acquisition of the stock of the Company's
subsidiaries) by Purchaser. Should any such approval or other action be
required, Purchaser currently contemplates that such approval or other action
will be sought, except as described below under "State Takeover Laws." While,
except as otherwise expressly described in this Section 15, Purchaser does not
presently intend to delay the acceptance for payment of or payment for Publicly
Held Shares tendered pursuant to the Offer pending the outcome of any such
matter, there can be no assurance that any such approval or other action, if
needed, would be obtained without substantial conditions or that failure to
obtain any such approval or other action might not result in consequences
adverse to the Company's business or that certain parts of the Company's
business might not have to be divested if such approvals were not obtained or
such other actions were not taken, any of which could cause Purchaser to
decline to accept for payment or pay for any Publicly Held Shares tendered.
Purchaser's obligations to accept for payment or pay for the Publicly Held
Shares tendered pursuant to the Offer is subject to certain conditions set
forth in this Offer, including the conditions set forth above in this paragraph
and with respect to litigation and governmental action as contemplated herein.
See "THE OFFER--Certain Conditions of the Offer."
Federal Regulatory Approval. No regulatory approval is required for Purchaser
to complete the Offer.
State Takeover Laws. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places of business in such states.
In Edgar v. MITE Corp., the Supreme Court of the Untied States held that the
Illinois Business Takeover Act, which involved state securities laws that made
the takeover of certain corporations more difficult, imposed a substantial
burden on interstate commerce and therefore was unconstitutional. In CTS Corp.
v. Dynamics Corp. of America, however, the Supreme Court of the United States
held that a state may, as a matter of corporate law and, in particular, those
laws concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions.
Section 203 of the DGCL limits the ability of a Delaware corporation to
engage in business combinations with "interested stockholders" (defined as any
direct or indirect beneficial owner of 15% or more of the outstanding voting
stock of the corporation) for the three years following the date such person
became an "interested stockholder," unless, among other things, either (i) the
corporation's board of directors has given its prior approval to either the
business combination or the transaction which resulted in the stockholder
becoming an "interested stockholder" or (ii) the transaction is approved by the
board of directors and authorized at a meeting by the affirmative vote of at
least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder. Since the Offer does not constitute a "business
combination" with the Company, Section 203 of DGCL is inapplicable to the
Offer.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted "takeover"
statutes. Purchaser does not know whether any of these state takeover statutes
will, by their terms, apply to the Offer. Purchaser has not currently complied
with any state takeover statute or regulation. To the extent that certain
provisions of these statutes purport to apply to the Offer, Purchaser believes
that there are reasonable bases for contesting such statutes. Purchaser
reserves the right to challenge the applicability or validity of any state law
purportedly applicable to the Offer
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<PAGE>
and nothing in this Offer to Purchase or any action taken in connection with
the Offer is intended as a waiver of such right. If it is asserted that any
state takeover statute is applicable to the Offer and an appropriate court does
not determine that such statute is inapplicable or invalid as applied to the
Offer, then Purchaser may be required to file certain information with, or to
receive approvals from, the relevant state authorities, and Purchaser may be
unable to accept for payment or pay for Shares tendered pursuant to the Offer,
or be delayed in consummating the Offer. In such case Purchaser may not be
obliged to accept for payment or pay for any Shares tendered pursuant to the
Offer. See "THE OFFER--Certain Conditions of the Offer."
Antitrust. Purchaser and the Company have made the required filings under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), to permit the consummation of the purchase of Shares pursuant to the
Offer. Purchaser did not receive any request for additional information or
documentary material from the Antitrust Division of United States Department of
Justice (the "Antitrust Division") or the Federal Trade Commission ("FTC")
during the waiting period after filing, and the waiting period has expired.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as Purchaser's Offer for the Shares.
Normally, objections are raised during the HSR Act waiting period. On rare
occasions, however, after the waiting period has expired, the Antitrust
Division or FTC has taken such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of Shares pursuant to the Offer or seeking the divestiture of Shares
acquired by Purchaser or the divestiture of substantial assets of Purchaser.
Private parties may also bring legal action under the antitrust laws under
certain circumstances. 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, of the
results thereof.
16. FEES AND EXPENSES
Purchaser has retained Kissel-Blake Inc. to act as the Information Agent and
First Chicago Trust Company of New York to act as the Depositary in connection
with the Offer. The Information Agent may contact Public Stockholders by mail,
telephone, telex, telegraph and personal interview and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward the
Offer material to beneficial owners. Purchaser has agreed to pay the
Information Agent and the Depositary fees of approximately $15,000 and $5,000,
respectively, for their services; each of them will also be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith, including certain
liabilities under the federal securities laws. Neither the Information Agent
nor the Depositary has been retained to, or is authorized to, make
solicitations or recommendations in connection with the Offer.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person to solicit tenders of Publicly Held Shares pursuant to the Offer.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser upon request for customary mailing and handling expenses incurred by
them in forwarding material to their customers.
It is estimated that the expenses incurred by Purchaser in connection with
the Offer will be approximately as set forth below:
<TABLE>
<S> <C>
Filing fees..................................................... $ 5,152
Legal Fees and Expenses......................................... 75,000
Accounting Fees and Expenses.................................... --
Depositary and Information Agent................................ 20,000
Printing and Mailing Fees....................................... 120,000
Miscellaneous................................................... 25,000
--------
Total....................................................... $245,152
========
</TABLE>
The above estimate of fees does not include any fees and expenses incurred by
Purchaser or the Company in connection with the Proposed Merger. The Company
will not be responsible or pay for any of the expenses incurred by Purchaser in
connection with the Offer.
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<PAGE>
The Company has also entered into indemnification agreements with each member
of the Board of Directors in which it agrees to indemnify each director to the
full extent permitted by the DGCL, to advance expenses in certain circumstances
and to pay each director a fee of $600 per day as compensation for time spent
as a witness or in depositions related to proceedings involving the Company.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) stockholders residing in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. Purchaser is not aware of any
jurisdiction in which the making of the Offer or the tender of Publicly Held
Shares in connection therewith would not be in compliance with the laws of such
jurisdiction. If Purchaser becomes aware of any valid state law prohibiting the
making of the Offer or the acceptance of Publicly Held Shares pursuant thereto
in such state, Purchaser will make a good faith effort to comply with any such
state statute or seek to have such statute declared inapplicable to the Offer.
If, after such good faith effort, Purchaser cannot comply with any such state
statute, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Publicly Held Shares in such state.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED HEREIN OR IN THE LETTER OF
TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THE OFFER TO
PURCHASE NOR ANY PURCHASE PURSUANT TO THE OFFER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
PURCHASER OR THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS FURNISHED OR
THE DATE OF THIS OFFER TO PURCHASE.
Purchaser has filed with the Commission a Schedule 14D-1, together with
exhibits, pursuant to Rule 14d-3 under the Exchange Act, a Schedule 13E-3,
together with exhibits, pursuant to Rule 13E-3 under the Exchange Act and
Amendment Number 10 to its Schedule 13D, together with exhibits pursuant to
Regulation 13D under the Exchange Act, that provide certain additional
information with respect to the Offer. In addition, the Company is required to
file with the Commission a Schedule 14D-9, together with exhibits, pursuant to
Rule 14d-9 under the Exchange Act, setting forth its recommendation and the
recommendations of the members of the Board of Directors with respect to the
Offer and the reasons for such recommendations and furnishing certain
additional related information. Such Schedules and any amendments thereto,
including exhibits, may be inspected and copies may be obtained from the
Commission in the manner set forth in "THE OFFER--Certain Information
Concerning the Company" (except that they will not be available at the regional
offices of the Commission).
LINPAC MOULDINGS LTD.
March 21, 1995
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<PAGE>
ANNEX A
DIRECTORS AND EXECUTIVE OFFICERS OF
PURCHASER AND LINPAC GROUP
1. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER AND LINPAC GROUP. The name,
business address, present principal occupation or employment and employment
history for the five years prior to the date hereof (the "Five Year Period") of
each of the directors and executive officers of Purchaser and LINPAC Group are
set forth below. All directors and executive officers listed below are citizens
of the United Kingdom. Unless otherwise indicated, each person has held the
position listed below for at least five years.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS FIVE YEAR EMPLOYMENT HISTORY
------------------------- -----------------------------------
<S> <C>
M.J. Cornish............ Mr. Cornish is the Chairman & Managing Director of
LINPAC Group Ltd LINPAC Group, a position he has held since May 1992.
Evan Cornish House He is also President of LINPAC Inc. and Chairman of
Windsor Road LINPAC Mouldings Ltd, LINPAC Plastics Ltd and LINPAC
Louth LN11 OLX Containers Ltd. During the portion of the Five Year
United Kingdom Period occurring prior to May 1992, he was Managing
Director of LINPAC Containers International Ltd and
a Director of LINPAC Group.
D.A. Williams........... Mr. Williams has been the Managing Director of LINPAC
LINPAC Mouldings Ltd Mouldings Ltd since 1983. He was appointed a
Deykin Avenue, Director of LINPAC Group Ltd in June 1992, and
Witton, Birmingham B6 became a Director of Ropak Corporation in November
7HY 1992.
United Kingdom
J.L. Doughty............ Mr. Doughty has been the Financial Director of LINPAC
LINPAC Mouldings Ltd Mouldings Ltd since 1983. He was appointed a
Deykin Avenue, Director of Ropak Corporation in January 1995.
Witton, Birmingham B6
7HY
United Kingdom
R. Heaton............... Mr. Heaton has been a Director of LINPAC Mouldings
LINPAC Mouldings Ltd Ltd since May 1993. During the portion of the Five
Deykin Avenue, Year Period occurring prior to May 1993, he was
Witton, Birmingham B6 General Manager of LINPAC WCB, a division of LINPAC
7HY Mouldings Ltd.
United Kingdom
B. Taylor............... Mr. Taylor has been a Director of LINPAC Mouldings
LINPAC Mouldings Ltd Ltd since May 1993. During the portion of the Five
Deykin Avenue, Year Period occurring prior to May 1993, he was
Witton, Birmingham B6 General Manager of LINPAC Ekco, a division of LINPAC
7HY Mouldings Ltd.
United Kingdom
J. Thorp................ Mr. Thorp has been a General Manager of LINPAC GPG, a
LINPAC Mouldings Ltd division of LINPAC Mouldings Ltd, since 1989. He was
Deykin Avenue, appointed a Director of LINPAC Mouldings Ltd in May
Witton, Birmingham B6 1993.
7HY
United Kingdom
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS FIVE YEAR EMPLOYMENT HISTORY
------------------------- -----------------------------------
<S> <C>
H.M. Paisner............ Mr. Paisner has been a Senior Partner in Paisner &
Paisner & Co. Co, a British firm of solicitors since prior to the
Bouverie House beginning of the Five Year Period. Throughout the
154 Fleet Street last five years, he has also been a non-Executive
London Director of LINPAC Group Ltd.
EC4A 2DQ
United Kingdom
S.F. Robin.............. Mr. Robin is a solicitor and was formerly a Senior
5 Kensington Partner in Paisner & Co. He has been a non-Executive
High Street Director of LINPAC Group throughout the Five Year
London Period. He holds other non-executive positions
W8 5NP including that of Deputy Chairman of Ascot Holdings
United Kingdom Plc of which he was formerly Executive Chairman.
A.T. Smith.............. Mr. Smith has been the Financial Director of LINPAC
LINPAC Group Ltd Group since March 1993. During the portion of the
Evan Cornish House Five Year Period occurring prior to March 1993, he
Windsor Road was Company Secretary of LINPAC Group.
Louth LN11 OLX
United Kingdom
R.A. Lang............... Mr. Lang has held the position of Vice President of
LINPAC Inc. LINPAC Inc, supervising all LINPAC activities in the
6400 Powers Ferry Rd NW United States throughout the Five Year Period. He
Suite 345 was appointed a Director of LINPAC Group in May 1994
Atlanta, Georgia 30339- and in January 1995 was appointed a Director of
2097 Ropak Corporation.
USA
M.C. Anderson........... Mr. Anderson is the Managing Director of LINPAC
LINPAC Plastics Ltd Plastics Ltd, a position he has held since 1983. He
Al Business Park is also a Vice President of LINPAC Inc. He was
Knottingley WF11OBS appointed a Director of LINPAC Group in June 1992.
United Kingdom
R.V. Redding............ Mr. Redding has been the Managing Director of LINPAC
LINPAC Containers Containers International Ltd since February 1993.
International Ltd During the portion of the Five Year Period occurring
Evan Cornish House prior to February 1993, he was Manufacturing
Windsor Road Director of LINPAC Containers International Ltd. He
Louth LN11 OLX was made a Director of LINPAC Group in May 1994.
United Kingdom
</TABLE>
A-2
<PAGE>
ANNEX B
RIGHTS OF DISSENTING STOCKHOLDERS UNDER SECTION 262
OF THE DELAWARE GENERAL CORPORATION LAW
(S)262 APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to (S)228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of his shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words "stock" and "share"
mean and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or series
of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to (S)251, 252, 254, 257, 258, 263 or 264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock,
or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the holders of the surviving corporation as
provided in subsection (f) of (S)251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
(S)(S)251, 252, 254, 257, 258, 263 and 264 of this title to accept for such
stock anything except:
a. Shares of stock of the corporation surviving or resulting from such
merger or consolidation or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts in
respect thereof which shares of stock or depository receipts at the
effective date of the merger or consolidation will be either listed
on a national securities exchange or designated as a national market
system security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or held of record by more
than 2,000 holders;
c. Cash in lieu of fractional shares of fractional depository receipts
described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and cash
in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under (S)253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
B-1
<PAGE>
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets
of the corporation. If the certificate of incorporation contains such a
provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are
available pursuant to subsections (b) or (c) hereof that appraisal rights
are available for any or all of the shares of the constituent corporation,
and shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of his shares shall deliver to the
corporation, before the taking of the vote on the merger or consolidation,
a written demand for appraisal of his shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to (S)228 or 253
of this title, the surviving or resulting corporation, either before the
effective date of the merger or consolidation or within 10 days thereafter,
shall notify each of the stockholders entitled to appraisal rights of the
effective date of the merger or consolidation and that appraisal rights are
available for any or all of the shares of the constituent corporation, and
shall include in such notice a copy of this section. The notice shall be
sent by certified or registered mail, return receipt requested, addressed
to the stockholder at his address as it appears on the records of the
corporation. Any stockholder entitled to appraisal rights may, within 20
days after the date of mailing of the notice, demand in writing from the
surviving or resulting corporation the appraisal of his shares. Such demand
will be sufficient if it reasonably informs the corporation of the identity
of the stockholder and that the stockholder intends thereby to demand the
appraisal of his shares.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw his demand for
appraisal and to accept the terms offered upon the merger or consolidation.
Within 120 days after the effective date of the merger or consolidation, any
stockholder who has complied with the requirements of subsections (a) and (d)
hereof, upon written request, shall be entitled to receive from the corporation
surviving the merger or resulting from the consolidation a statement setting
forth the aggregate number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal have been
received and the aggregate number of holders of such shares. Such written
statement shall be mailed to the stockholder within 10 days after his written
request for such a statement is received by the surviving or resulting
corporation or within 10 days after expiration of the period for delivery of
demands for appraisal under subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing
B-2
<PAGE>
of such petition by registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the address therein
stated. Such notice shall also be given by 1 or more publications at least 1
week before the day of the hearing, in a newspaper of general circulation
published in the city of Wilmington, Delaware or such publication as the Court
deems advisable. The forms of the notices by mail and by publication shall be
approved by the Court, and the costs thereof shall be borne by the surviving or
resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court may,
in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on the
list filed by the surviving or resulting corporation pursuant to subsection (f)
of this section and who has submitted his certificates of stock to the Register
in Chancery, if such is required, may participate fully in all proceedings
until it is finally determined that he is not entitled to appraisal rights
under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to
the stockholders entitled thereto. Interest may be simple or compound, as the
Court may direct. Payment shall be so made to each such stockholder, in the
case of holders of uncertified stock forthwith, and the case of holders of
shares represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed upon
the parties as the Court deems equitable in the circumstances. Upon application
of a stockholder, the Court may order all or a portion of the expenses incurred
by any stockholder in connection with the appraisal proceeding, including,
without limitation, reasonable attorney's fees and the fees and expenses of
experts, to be charged pro rata against the value of all shares entitled to an
appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall
deliver to the surviving or resulting corporation a written withdrawal of his
demand for an appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the merger or consolidation
as provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the
Court of Chancery shall be dismissed as to any stockholder without the approval
of the Court, and such approval may be conditioned upon such terms as the Court
deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
B-3
<PAGE>
ANNEX C
ARTICLE NINTH TO THE CERTIFICATE
OF INCORPORATION OF ROPAK CORPORATION
NINTH: Certain Business Combinations.
9.1 In addition to any affirmative vote required by law or this Certificate
of Incorporation, and except as otherwise expressly provided in Section 9.2 of
this Article NINTH:
(a) any merger or consolidation of the Corporation or any Subsidiary (as
that term is hereinafter defined) with (1) an Interested Stockholder (as
that term is hereinafter defined) or (2) any other corporation or other
Person (whether or not itself an Interested Stockholder) which is, or after
such merger or consolidation would be, an Affiliate or Associate (as such
terms are hereinafter defined) of an Interested Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge, grant of a security
interest, transfer or other disposition, either in one transaction or in a
series of transactions, to or with (1) an Interested Stockholder or (2) any
other Person (whether or not itself an Interested Stockholder) which is, or
after such sale, lease, exchange, mortgage, pledge, grant of a security
interest, transfer or other disposition would be, an Affiliate or Associate
of an Interested Stockholder, directly or indirectly, of assets of the
Corporation (including, without limitation, any voting securities of a
Subsidiary) or any Subsidiary, or both, having an aggregate Fair Market
Value (as such term is hereinafter defined) of $25,000,000 or more; or
(c) the issuance or transfer by the Corporation or any Subsidiary, either
in one transaction or in a series of transactions, of any securities of the
Corporation or any Subsidiary, or both, to (1) an Interested Stockholder or
(2) Any other Person (whether or not itself any Interested Stockholder)
which is, or after such issuance or transfer would be, an Affiliate or
Associate of an Interested Stockholder in exchange for cash, securities or
other property, or a combination thereof, having an aggregate Fair Market
Value of $25,000,000 or more, other than the issuance of securities upon
the conversion of convertible securities of the Corporation or any
Subsidiary which were not acquired by such Interested Stockholder (or such
Affiliate or Associate) from the Corporation or a Subsidiary; or
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate or Associate of an Interested Stockholder; or
(e) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an
Interested Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class
of equity or convertible securities of the Corporation or any Subsidiary
directly or indirectly beneficially owned by (1) an Interested Stockholder
or (2) any other Person (whether or not itself an Interested Stockholder)
which is, or after such reclassification, recapitalization, merger or
consolidation or other transaction would be, an Affiliate or Associate of
an Interested Stockholder,
shall not be consummated unless such consummation shall have been approved by
the affirmative vote of the holders of at least 80% of the combined voting
power of the then outstanding shares of Voting Stock (as such term is
hereinafter defined), voting together as a single class. Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that a lesser percentage may be specified, by law, by this Certificate of
Incorporation or in any agreement to which the Corporation is a party.
9.2 The provisions of Section 9.1 of this Article NINTH shall not be
applicable to any particular Business Combination (as such term is hereinafter
defined) and such Business Combination shall require only such affirmative vote
as is required by law and any other provision of this Certificate of
Incorporation, if the
C-1
<PAGE>
Business Combination shall have been approved by a majority of the Continuing
Directors (as hereinafter defined) or all of the following conditions shall
have been met:
A. The transaction constituting the Business Combination shall provide
for a consideration to be received by all holders of Common Stock in
exchange for all their shares of Common Stock, and the aggregate amount of
the cash and the Fair Market Value as of the date of the consummation of
the Business Combination of consideration other than cash to be received
per share by holders of Common Stock in such Business Combination shall be
at least equal to the higher of the following:
(1) (if applicable) the highest per-share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of Common Stock beneficially owned
by an Interested Stockholder (i) within the two-year period immediately
prior to the Announcement Date (as hereinafter defined), (ii) within
the two year period immediately prior to the Determination Date (as
hereinafter defined) or (iii) in the transaction in which it became an
Interested Stockholder, whichever is highest; or
(2) the Fair Market Value per share of Common Stock on the
Announcement Date or on the Determination Date, whichever is higher;
B. If the transaction constituting the Business Combination shall provide
for a consideration to be received by holders of any class or series of
outstanding Voting Stock other than Common Stock, the aggregate amount of
the cash and the Fair Market Value as of the date of the consummation of
the Business Combination of consideration other than cash to be received
per share by holders of shares of such class or series of Voting Stock
shall be at least equal to the highest of the following (it being intended
that the requirements of this paragraph B shall be required to be met with
respect to every class and series of outstanding Voting Stock, whether or
not an Interested Stockholder has previously acquired any shares of a
particular class of Voting Stock):
(1) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of such class or series of Voting
Stock beneficially owned by an Interested Stockholder (i) within the
two-year period immediately prior to the Announcement Date, (ii) within
the two-year period immediately prior to the Determination Date or
(iii) in the transaction in which it became an Interested Stockholder,
whichever is highest; or
(2) the Fair Market Value per share of such class of series of Voting
Stock on the Announcement Date or the Determination Date, whichever is
higher; or
(3) (if applicable) the highest preferential amount per share to
which the holders of shares of such class or series of Voting Stock are
entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
C. The consideration to be received by holders of a particular class or
series of outstanding Voting Stock (including Common Stock) shall be in
cash or in the same form as was previously paid in order to acquire shares
of such class or series of Voting Stock which are beneficially owned by an
Interested Stockholder and, if an Interested Stockholder beneficially owns
shares of any class or series of Voting Stock which were acquired with
varying forms of consideration, the form of consideration for such class or
series of Voting Stock shall be either cash or the form used to acquire the
largest number of shares of such class or series of Voting Stock
beneficially owned by it. The price determined in accordance with
paragraphs A and B of this Section 9.2 shall be subject to appropriate
adjustment in the event of any recapitalization, stock dividend, stock
split, combination of shares or similar event;
D. After such Interested Stockholder has become an Interested Stockholder
and prior to the consummation of such Business Combination:
(i) except as approved by a majority of the Continuing Directors,
there shall have been no failure to declare and pay at the regular date
therefor the full amount of any dividends (whether or not cumulative)
payable on any outstanding Preferred Stock;
C-2
<PAGE>
(2) there shall have been (i) no reduction in the annual rate of cash
dividends paid on the Common Stock, if any, except as necessary to
reflect any subdivision of the Common Stock) other than as approved by
a majority of the Continuing Directors and (ii) an increase in such
annual rate of cash dividends as necessary to prevent any such
reduction in the event of any reclassification (including any reverse
stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure so to increase such
annual rate is approved by a majority of the Continuing Directors; and
(3) such Interested Stockholder shall not have become the beneficial
owner of any additional shares of Voting Stock except as part of the
transaction in which it became an Interested Stockholder;
E. After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the
benefit, directly or indirectly (except proportionately as a stockholder),
of any loans, advances, guarantees, pledges or other financial assistance
or any tax credits or other tax advantages provided by the Corporation,
whether in anticipation of or in connection with such Business Combination
or otherwise; and
F. A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the United States
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder (or any subsequent provisions replacing such Act, rules or
regulations) shall be mailed to the stockholders of the Corporation, no
later than the earlier of (a) 30 days prior to any vote on the proposed
Business Combination or (b) if no vote on such Business Combination is
required, 60 days prior to the consummation of such Business Combination
(whether or not such proxy or information statement is required to be
mailed pursuant to such Act or subsequent provisions). Such proxy statement
shall contain at the front thereof, in a prominent place, any
recommendations as to the advisability (or inadvisability) of the Business
Combination which the Continuing Directors, or any of them, may have
furnished in writing and, if deemed advisable by a majority of the
Continuing Directors, an opinion of a reputable investment banking firm as
to the fairness (or lack of fairness) of the terms of such Business
Combination, from the point of view of the holders of Voting Stock other
than an Interested Stockholder (such investment banking firm to be selected
by a majority of the Continuing Directors, to be furnished with all
information it reasonably requests and to be paid a reasonable fee for its
services upon receipt by the Corporation of such opinion).
9.3. For the purposes of this Article NINTH, the following terms shall be
defined as follows:
9.3.1. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the United States Securities Exchange Act of 1934, as amended
and as in effect on June 1, 1989.
9.3.2. "Announcement Date" shall mean the date of the first public
announcement of the proposed Business Combination (as such term is hereinafter
defined).
9.3.3. "Business Combination" shall mean any transaction which is referred to
in any one or more of paragraphs (a), (b), (c), (d) and/or (e) of Section 9.1
of this Article NINTH.
9.3.4. "Continuing Director" shall mean any member of the Board of Directors
of the Corporation who is unaffiliated with, and not a nominee of, an
Interested Stockholder (as such term is hereinafter defined) and was a member
of the Board of Directors prior to the time that such Interested Stockholder
became an Interested Stockholder, and any successor of a Continuing Director
who is unaffiliated with, and not a nominee of, an Interested Stockholder and
is recommended to succeed a Continuing Director by a majority of Continuing
Directors then on the Board of Directors.
9.3.5. "Determination Date" shall mean the date on which an Interested
Stockholder (as such term is hereinafter defined) first became an Interested
Stockholder.
9.3.6. "Fair Market Value" shall mean:
C-3
<PAGE>
(i) in the case of stock, the highest price per share for such stock
during the 30-day period immediately preceding the day in question, as
determined by reference to the following:
(A) if such stock is listed and traded on a national securities
exchange, the highest closing sale price per share on any day during
such period as reported by such national securities exchange; or (B) if
such stock is not listed and traded on a national securities exchange,
but is publicly traded in the over-the-counter market, the highest
closing sale or bid price per share on any day during such period as
reported by the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or if not quoted by NASDAQ, as reported by
securities dealers actively making a market in such stock, or (C) if
such stock is not listed and traded on a national securities exchange
and is not publicly traded in the over-the-counter market, the fair
market value per share of such stock on the date in question shall be
determined in good faith by a majority of the Continuing Directors; and
(ii) in the case of property other than cash or stock, the fair market
value of such property on the date in question as determined by a majority
of the Continuing Directors in good faith.
9.3.7. "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(A) is the beneficial owner, directly or indirectly, of more than five
percent (5%) of the combined voting power of the then outstanding Voting
Stock (as such term is hereinafter defined); or
(B) is an Affiliate of the Corporation and at any time within the two-
year period immediately prior to the date in question was the beneficial
owner, directly or indirectly, of more than five percent (5%) of the
combined voting power of the then outstanding Voting Stock; or
(C) is an assignee of or has otherwise succeeded to the beneficial
ownership of any shares of Voting Stock which were at any time within the
two-year period immediately prior to the date in question beneficially
owned by an Interested Stockholder, unless such assignment or succession
shall have occurred pursuant to a Public Transaction or any series of
transactions involving a Public Transaction.
For the purpose of determining whether any Person is an Interested
Stockholder, the number of shares of Voting Stock deemed to be outstanding
shall include shares deemed owned through the application of Section 9.3.9
below, but shall not include any other shares of Voting Stock which may be
issuable to other parties pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, exchange rights, warrants
or options, or otherwise.
9.3.8. "Person" shall mean any individual, firm, trust, Partnership,
association, corporation or other entity.
9.3.9. A Person shall be deemed a "beneficial owner" of any Voting Stock:
(i) which such Person or any of its Affiliates or Associates beneficially
owns, directly or indirectly; or
(ii) which such Person or any of its Affiliates or Associates has either
(A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (B) the right to vote or to direct
the voting thereof pursuant to any agreement, arrangement or understanding;
or
(iii) which is beneficially owned, directly or indirectly, by any other
person with which such Person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
9.3.10. "Public Transaction" shall mean any (i) purchase of shares offered
pursuant to an effective registration statement under the United States
Securities Act of 1933 or (ii) open market purchase of
C-4
<PAGE>
shares on a national securities exchange or in the over-the-counter market if,
in either such case, the price and other terms of sale are not negotiated by
the purchaser and the seller of the beneficial interest in the shares.
9.3.11. "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules and
Regulations promulgated under the United States Securities Exchange Act of
1934, as in effect on December 31, 1989) is owned, directly or indirectly, by
the Corporation; provided, however, that for purposes of the definition of
Interested Stockholder set forth above in this Article NINTH, the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the Corporation.
9.3.12. "Voting Stock" shall mean stock of all classes and series of the
Corporation entitled to vote generally in the election of Common Directors.
9.4. A majority of the Continuing Directors shall have the power and duty to
determine for the purposes of this Article NINTH, on the basis of information
known to them after reasonable inquiry, all facts necessary to determine
compliance with this Article NINTH, including without limitation (a) whether
any Person is an Interested Stockholder, (b) the number of shares of Voting
Stock beneficially owned by any Person, (c) whether any Person is an Affiliate
or Associate of another, (d) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $25,000,000 or more, (e)
whether the requirement of Section 9.2 of this Article NINTH have been met, and
(f) such other matters with respect to which a determination is required under
this Article NINTH. The good faith determination of a majority of the
Continuing Directors on such matters shall be conclusive and binding for all
purposes of this Article NINTH.
9.5. Nothing contained in this Article NINTH shall be construed to relieve an
Interested Stockholder from any fiduciary obligation imposed by law.
9.6. Notwithstanding any other provisions of this Certificate of
Incorporation or the By-Laws of the Corporation or the fact that a lesser
percentage may be specified by law, in addition to any affirmative vote
required by applicable law and any voting rights granted to or held by the
holders of Preferred Stock, the affirmative vote of a majority of the
Continuing Directors and of the holders of at least eighty percent (80%) of the
combined voting power of the then outstanding Voting Stock, voting together as
a single class, shall be required to amend, alter, adopt any provision
inconsistent with or repeal this Article NINTH."
C-5
<PAGE>
ANNEX D
CONSOLIDATED FINANCIAL STATEMENTS OF ROPAK CORPORATION
FOR THE YEAR ENDED DECEMBER 31, 1994
Page No.
--------
Consolidated Financial Statements of Ropak Corporation:
Independent Auditors' Report of Deloitte & Touche LLP............ D-2
Consolidated Balance Sheets at December 31, 1994 and 1993........ D-3
Consolidated Statement of Operations for the Years Ended
December 31, 1994, 1993 and 1992............................ D-4
Consolidated Statement of Shareholders' Equity for the Years
Ended December 31, 1994, 1993 and 1992...................... D-5
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994, 1993 and 1992............................ D-6
D-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Ropak Corporation:
We have audited the accompanying consolidated balance sheets of Ropak
Corporation and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the three years in the period ended December 31, 1994. Our audits also
included the consolidated financial statement schedule for the years ended
December 31, 1994, 1993 and 1992 listed in the index at item 14(a)(2). These
consolidated financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
statement schedule are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and the financial statement schedule. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement and
financial statement schedule presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Ropak Corporation
and subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1994 in conformity with generally accepted accounting principles.
Also in our opinion, such consolidated financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/ Deloitte & Touche LLP
March 1, 1995
Costa Mesa, California
D-2
<PAGE>
Ropak Corporation
and Subsidiaries
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
As of December 31, (in thousands, except number of shares) 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash & cash equivalents $ 1,470 $ ---
Accounts receivable, less allowance for doubtful accounts
of $477 in 1994 and $342 in 1993 21,178 15,641
Income taxes receivable (Note 4) 177 753
Inventories (Note 2) 22,158 16,959
Prepaid expenses 1,075 467
Deferred income taxes (Note 4) 382 163
- --------------------------------------------------------------------------------
Total current assets 46,440 33,983
- --------------------------------------------------------------------------------
Property, plant and equipment, net (Notes 3, 5 and 6) 36,576 31,342
Investments in joint ventures (Note 14) 568 580
Goodwill, less accumulated amortization of $1,998 in 1994 and
$1,635 in 1993 (Note 15) 7,856 8,436
Other assets, less accumulated amortization of $552 in 1994
and $457 in 1993 (Note 9) 2,876 2,839
- --------------------------------------------------------------------------------
$94,316 $77,180
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt (Note 5) $ 3,976 $ 2,964
Accounts payable 14,997 9,187
Income taxes payable (Note 4) --- 727
Accrued liabilities 2,986 2,145
- --------------------------------------------------------------------------------
Total current liabilities 21,959 15,023
- --------------------------------------------------------------------------------
Long-term debt, less current maturities (Note 5) 34,014 26,524
Deferred income taxes (Note 4) 3,501 3,467
Minority interest (Note 15) 5,200 5,765
Shareholders' equity (Notes 5, 7, 8, 14 and 15):
Preferred stock, par value $.01 per share, authorized
3,000,000 shares, none issued or outstanding --- ---
Common stock, par value $.01 per share, authorized
10,000,000 shares, issued and outstanding shares
4,386,162 in 1994 and 4,293,984 in 1993 44 43
Paid-in capital 23,807 23,149
Treasury stock (176) (176)
Retained earnings 7,218 3,524
Cumulative foreign currency translation (1,251) (139)
- --------------------------------------------------------------------------------
Total shareholders' equity 29,642 26,401
- --------------------------------------------------------------------------------
$94,316 $77,180
================================================================================
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
Ropak Corporation
and Subsidiaries
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------------------------
Years ended December 31, (in thousands, except per share data) 1994 1993 1992
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $128,398 $105,192 $94,803
- ----------------------------------------------------------------------------------------------
Cost of sales 98,936 83,509 73,025
- ----------------------------------------------------------------------------------------------
Gross profit 29,462 21,683 21,778
- ----------------------------------------------------------------------------------------------
Operating expenses:
Distribution 2,875 2,846 1,911
Selling 6,054 5,871 5,191
General and administrative (Note 6) 10,025 8,136 8,012
Research and development 729 534 305
- ----------------------------------------------------------------------------------------------
19,683 17,387 15,419
- ----------------------------------------------------------------------------------------------
Operating profit (loss) 9,779 4,296 6,359
Other (income) expense:
Interest (net of capitalized interest of $127, $57, and
$108, respectively) 2,248 1,902 1,608
(Gain) on exchange of subordinated note (Note 15) -- (2,500) --
(Gain) loss on In Vitro International transactions
(Note 15) -- (155) 1,444
Other 368 32 286
(Gain) loss on foreign currency exchange 327 (47) 31
Equity in losses of unconsolidated joint ventures (Note 14) -- -- 104
- ----------------------------------------------------------------------------------------------
2,943 (768) 3,473
- ----------------------------------------------------------------------------------------------
Income before income taxes 6,836 5,064 2,886
Income taxes (Note 4) 2,716 1,609 1,568
- ----------------------------------------------------------------------------------------------
Net income $4,120 $3,455 $1,318
==============================================================================================
Net income per share (Note 9):
Primary $ 0.83 $ 0.73 $ 0.31
Fully diluted $ 0.81 $ 0.72 $ 0.30
==============================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Ropak Corporation
and Subsidiaries
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands, except number of shares)
Cumulative
Foreign
Common Stock Currency
---------------- Paid-In Treasury Retained Translation
Shares Amount Capital Stock Earnings Gain (Loss) Total
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1992 3,860,726 $39 $21,586 $(176) $ (945) $ 2,063 $22,567
Exercise of stock options 52,732 1 196 -- -- -- 197
Conversion of subordinated notes 366,022 3 1,247 -- -- -- 1,250
Dividend on preferred shares of subsidiary -- -- -- -- (43) -- (43)
Net income -- -- -- -- 1,318 -- 1,318
Foreign currency translation loss -- -- -- -- -- (1,327) (1,327)
- --------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1992 4,279,480 43 23,029 (176) 330 736 23,962
Exercise of stock options 14,504 -- 58 -- -- -- 58
Tax benefit on incentive stock options -- -- 62 -- -- -- 62
Dividend on preferred shares of subsidiary
(Note 15) -- -- -- -- (261) -- (261)
Net income -- -- -- -- 3,455 -- 3,455
Foreign currency translation loss -- -- -- -- -- (875) (875)
- --------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1993 4,293,984 43 23,149 (176) 3,524 (139) 26,401
Exercise of stock options 92,178 1 489 -- -- -- 490
Tax benefit on incentive stock options -- -- 169 -- -- -- 169
Dividend on preferred shares of subsidiary -- -- -- -- (426) -- (426)
Net income -- -- -- -- 4,120 -- 4,120
Foreign currency translation loss -- -- -- -- -- (1,112) (1,112)
- --------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1994 4,386,162 $44 $23,807 $(176) $7,218 $(1,251) $29,642
===================================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
Ropak Corporation
and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, (in thousands) 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flow from operating activities:
Net income $ 4,120 $ 3,455 $ 1,318
Adjustments to reconcile net income to net cash provided by operating
activities:
(Gain) on exchange of subordinated note --- (2,500) ---
(Gain) loss on InVitro International transactions --- (155) 1,444
(Gain) on sale of manufacturing facility --- --- (126)
(Gain) loss on investments (21) (4) 104
Depreciation and amortization 7,439 7,180 6,599
Deferred income taxes 29 141 (46)
Increase in cash surrender value of life insurance (20) (78) ---
(Gain) loss on disposal of equipment (40) 25 (259)
Changes in operating accounts, net of assets purchased from
CRS and Vulcan:
Accounts receivable, net (5,537) (2,704) 54
Income taxes receivable 576 (188) 246
Inventories (5,199) (1,066) (193)
Prepaid expenses (608) 59 144
Accounts payable and accrued liabilities 6,551 386 90
Income taxes payable (727) 385 32
Other assets (323) (212) (143)
- -----------------------------------------------------------------------------------------------------------------------------------
6,240 4,724 9,264
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flow from investing activities:
Acquisitions of property, plant and equipment (12,419) (6,005) (6,137)
Proceeds from sale of equipment 165 159 335
Proceeds from sale of manufacturing facility --- --- 414
Investment in Clamar Plastics --- --- (20)
Proceeds from sale of investments 33 387 ---
Purchase price adjustments on acquisitions --- (364) ---
- -----------------------------------------------------------------------------------------------------------------------------------
(12,221) (5,823) (5,408)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flow from financing activities:
Redemption of preferred stock of subsidiary (565) --- (40)
Issuance of long-term debt 18,237 7,781 391
Repayment of long-term debt (10,022) (6,056) (3,850)
Repayment of capital leases (433) (107) ---
Exercise of stock options 490 58 197
Payment of preferred stock dividend (328) (261) (43)
- -----------------------------------------------------------------------------------------------------------------------------------
7,379 1,415 (3,345)
- -----------------------------------------------------------------------------------------------------------------------------------
Effect of foreign currency translation exchange rate changes 72 (316) (511)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 1,470 --- ---
Cash and cash equivalents at beginning of year --- --- ---
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 1,470 $ --- $ ---
===================================================================================================================================
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest (net of capitalized interest of $127, $57, and $108,
respectively) $ 2,295 $ 1,659 $ 1,621
Income taxes $ 3,610 $ 2,105 $ 1,660
===================================================================================================================================
</TABLE>
<PAGE>
In June 1992, $1,250 of unsecured Series B Convertible Subordinated Notes
were converted to common stock of the Company.
In September 1992, the Company entered into a $1,400 license agreement
financed by a cash payment of $500 and a $900 note payable to the licensor
(Note 5).
In April and June of 1993, the Company purchased the assets of two Canadian
companies, Vulcan Packaging and CRS Plastics. The Company financed the asset
purchases with a $3.5 million 7.0% exchangeable subordinated promissory note and
$5.2 million of 7.5% preferred shares of a Canadian subsidiary (Note 15).
During 1993 and 1994, the Company financed the purchase of approximately $1.6
million and $.7 million in fixed assets through capital leases (Notes 3 and 6),
respectively.
In November 1993, Vulcan exercised its option to acquire 1.0 million shares
of InVitro International in exchange for the $3.5 million 7.0% exchangeable
subordinated promissory note. This transaction resulted in a $2.5 million gain
(Note 15).
At December 31, 1994, the Company had accrued $98 for preferred stock
dividends.
See accompanying notes to consolidated financial statements.
<PAGE>
Ropak Corporation
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 1994, 1993, and 1992
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries. Intercompany balances and
transactions have been eliminated.
Accounts Receivable
The Company sells its containers and materials-handling products
primarily throughout North America to the agriculture, fishing, dairy and food
processing as well as chemical, automotive, paint, petroleum and other
industries. The Company performs ongoing credit evaluations of its customers,
and generally does not require collateral. The Company maintains reserves for
potential credit losses and such losses have been within management's
expectations.
Inventories
Inventories are valued at the lower of cost or market, cost being
determined under standard costs which approximate actual costs (on a first-in,
first-out basis).
Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation and amortization are computed using the straight-line method
at rates based on the estimated useful lives of the respective properties. When
assets are retired or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts and any resulting gain or loss is
recognized in income for the period. The cost of maintenance and repairs is
charged to expense as incurred; significant renewals and betterments are
capitalized.
Income Taxes
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. Deferred
taxes are recorded to reflect the tax consequences in future years of
differences between the tax bases of assets and liabilities and their financial
reporting amounts.
Goodwill and Other Assets
The excess of the aggregate purchase price over the fair value of the net
assets acquired is included in the accompanying consolidated balance sheets as
goodwill. Goodwill is being amortized over 20 and 30 years using the straight-
line method. The Company assesses the recoverability of goodwill at each
balance sheet date by determining whether the amortization of the balance over
its remaining useful life can be recovered through projected undiscounted future
operating cash flows from each business acquisition.
Other assets include a licensing agreement and other patent costs that
are being amortized over their estimated economic lives of 5 to 12 years using
the straight-line method.
Investments in Joint Ventures
The Company accounts for its investments in joint ventures that are 50%
or less owned, and over whose operating and financial policies the Company is
not able to exercise significant influence, under the equity method. The cost
method is used to account for investments in joint ventures in which the Company
owns less than 20%.
Cash and Cash Equivalents
For purposes of the consolidated statements of cash flows, all highly
liquid debt instruments purchased with original maturities of three months or
less are considered to be cash equivalents.
Reclassifications
<PAGE>
Certain reclassifications have been made to the 1992 and 1993 financial
statements to conform them to the 1994 presentation.
<PAGE>
Ropak Corporation
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Years ended December 31, 1994, 1993, and 1992
NOTE 2 -- INVENTORIES
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Raw materials $ 7,309 $ 3,725
Finished goods 14,849 13,234
- -------------------------------------------------------------------------------
$22,158 $16,959
===============================================================================
</TABLE>
NOTE 3 -- PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following (in thousands):
<TABLE>
<CAPTION>
Estimated December 31
Description Userful Life 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Land $ 397 $ 239
Buildings and improvements 5 - 30 years 7,305 4,496
Machinery and equipment 3 - 10 years 34,521 31,124
Tooling 3 - 10 years 28,773 26,715
Transportation equipment 4 - 7 years 81 86
Furniture and fixtures 3 - 10 years 1,421 1,212
Computer equipment 5 years 982 766
Computer equipment financed under capital
leases 652 418
Leasehold improvements Lesser of life of lease or asset 2,669 2,503
Tooling in process 4,799 3,178
- -------------------------------------------------------------------------------
81,600 70,737
Less accumulated depreciation and amortization 45,024 39,395
- -------------------------------------------------------------------------------
$36,576 $31,342
===============================================================================
</TABLE>
Depreciation and amortization charged to expense was $6,770, $6,394, and
$5,699 in 1994, 1993, and 1992, respectively.
NOTE 4 -- INCOME TAXES
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. This
statement supersedes SFAS No. 96, Accounting for Income Taxes, which was adopted
by the Company in 1987. SFAS 109 requires the recognition of deferred tax
liabilities and assets for the future consequences of events that have been
recognized in the Company's financial statements or tax returns. The
measurement of deferred items is based on enacted tax laws. In the event the
future consequences of differences between financial reporting bases and tax
bases of the Company's assets and liabilities result in a deferred tax asset,
SFAS 109 requires an evaluation of the probability of being able to realize the
future benefits indicated by such asset. A valuation allowance related to a
deferred tax asset is recorded when it is more likely than not that some portion
or all of the deferred tax asset will not be realized. The impact at January 1,
1993 of adopting this new statement was not significant.
The income tax provision (benefit) consisted of the following (in
thousands):
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Year Ended December 31, 1994 1993 1992
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------
Current income taxes:
Federal $2,419 $1,117 $ 272
State 266 130 130
Foreign 164 241 1,079
Deferred income taxes:
Federal (472) 386 384
Foreign 339 (265) (297)
- -----------------------------------------------------------------------
$2,716 $1,609 $1,568
- -----------------------------------------------------------------------
</TABLE>
The reconciliation of the income tax provision to the provision that
would result from applying the U.S. Federal statutory income tax rate to pretax
income is as follows (in thousands):
<TABLE>
<CAPTION>
Year Ended December 31 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
% % %
Pretax Pretax Pretax
Amount Income Amount Income Amount Income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tax provision at U.S. Federal statutory rates $2,394 35.0% $1,773 35.0% $982 34.0%
State income taxes, net of Federal benefit 173 2.5% 85 1.7% 84 2.9%
Goodwill 127 1.9% 131 2.6% 96 3.3%
Foreign rates in excess of U.S. Federal statutory rate 109 1.6% 111 2.2% 100 3.4%
Minority interest in unconsolidated subsidiaries
and investees for which no benefit has been recognized -- -- -- -- 265 9.2%
Difference in carrying value of disposed equity
investment -- -- (363) (7.2%) -- --
Other (87) (1.3%) (128) (2.5%) 41 1.5%
- ------------------------------------------------------------------------------------------------------------------------------------
$2,716 39.7% $1,609 31.8% $1,568 54.3%
====================================================================================================================================
</TABLE>
<PAGE>
Ropak Corporation
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Years ended December 31, 1994, 1993, and 1992
Deferred income taxes reflect the net tax effects of (a) temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes, and (b) operating loss
carryforwards. Significant components of the Company's net deferred tax
liability of $3,119 and $3,304 at December 31, 1994 and 1993, respectively, are
as follows (in thousands):
<TABLE>
<CAPTION>
Year Ended December 31 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Foreign net operating loss carryforward $ 303 $ 453
Accrued vacation 204 147
Accrued pension cost 184 139
Reserve for bad debts 124 19
Other assets 181 92
------ ------
Total deferred tax assets 996 850
------ ------
Liabilities:
Difference between book and tax basis of fixed assets 3,937 3,967
Other liabilities 178 187
------ ------
Total deferred tax liabilities 4,115 4,154
------ ------
Net deferred tax liability $3,119 $3,304
====== ======
</TABLE>
The Company's foreign subsidiaries have accumulated undistributed earnings of
$6,405 on which U.S. taxes have not been provided. It is management's intention
to permanently invest such earnings in the related foreign operations, and it is
not practicable to estimate the amount of tax that might be payable on the
eventual remittance of such earnings.
At December 31, 1994 the Company has foreign net operating loss carryforwards
for tax purposes of approximately $838. These carryforwards of $135, $150 and
$553 expire in 1998, 1999 and 2000, respectively.
<PAGE>
NOTE 5 -- LONG-TERM DEBT (in thousands, except number of shares)
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
December 31, 1994 1993
<S> <C> <C>
Secured long-term revolving credit agreement with a bank. Interest payments
are due monthly at the bank's reference rate. $21,163 $16,271
Secured term loan with a bank due $2,500 per year in principal installments of
$1,000 in March and $500 in June, September and December until paid.
Interest payments are due monthly at the bank's reference rate. 7,000 9,500
Scott County Industrial Development Revenue Bonds, due May 1, 2014, payable in
annual installments of $550 beginning August 15, 1995. Interest is payable
monthly on an adjusted rate basis (5.75% at December 31, 1994) as defined in
the offering memorandum. 5,363 --
Note payable to an insurance company with interest at 9.125%, due in monthly
installments of $14 and collateralized by property and plant. 1,381 --
Commitment under licensing agreement due in September 1995. 300 600
Notes payable bearing interest ranging from 7.25% to 8.5% due in monthly
principal and interest installments. 1,295 1,093
Industrial Development Revenue Bonds -- 786
Obligations under capital leases, payable in monthly installments of $11,
including interest ranging from 7.25% to 7.71% (Note 6). 461 375
Other 1,027 863
- ----------------------------------------------------------------------------------------------------------------------------
37,990 29,488
Less current maturities 3,976 2,964
- ----------------------------------------------------------------------------------------------------------------------------
$34,014 $26,524
============================================================================================================================
</TABLE>
In January 1995 the Company amended its credit facility to provide for a
$19,500 revolving line of credit and a $9,500 term loan together with a special
revolving loan commitment of $5,500. The combined maximum credit allowed is not
to exceed $29,955. The special revolving loan is available to finance up to 70%
of new capital expenditures and is repayable in twenty equal quarterly
installments amortized on the principal loan balance outstanding on December 31,
1994. The revolving loan matures on July 1, 1996. The total line of credit bears
interest at the bank's reference rate and may be fixed at any time at LIBOR plus
1.75%. The credit facility requires the Company to observe certain restrictive
covenants, among which are a minimum tangible net worth plus subordinated debt,
restrictions on certain additional indebtedness and requirements to maintain
certain financial ratios.
In connection with the Scott County Industrial Development Revenue Bonds,
the Company is required to establish a bond repayment fund with cash deposits
totaling $138 due beginning on November 1, 1994 and then in each of February,
May, August and November thereafter until such time as all obligations under the
revenue bonds have been satisfied. The Bond agreement requires that the Company
maintain certain restrictive covenants similar to those required under the
credit facility.
The Company has established an irrevocable letter of credit in the amount
of $5,569 in support of the above mentioned revenue bonds.
At December 31, 1994 the bank's reference rate was 8.5%.
Aggregate maturities of long-term debt for each of the next five years
and thereafter are as follows:
<TABLE>
<CAPTION>
Year Ending December 31, Amount
<S> <C>
1995 $ 3,976
1996 24,871
1997 2,894
1998 727
1999 712
Thereafter 4,810
- ---------------------------------------------------------------------------------
$37,990
=================================================================================
</TABLE>
NOTE 6 -- COMMITMENTS AND CONTINGENCIES (in thousands)
Leases
The Company is committed under operating lease agreements for facilities
and equipment. During the year ended December 31, 1994, the Company entered
into leases for machinery and computer equipment which have been capitalized
(Notes 3 and 5).
<PAGE>
Ropak Corporation
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Years ended December 31, 1994, 1993, and 1992
Following is a schedule of the future minimum lease payments required
under operating leases that have initial or remaining non-cancelable lease terms
in excess of one year and the present value of future minimum lease payments for
the capital leases at December 31, 1994.
<TABLE>
<CAPTION>
Year Ending December 31, Operating Capitalized
Leases Leases
<S> <C> <C>
- --------------------------------------------------------------------------------
1995 $ 3,414 $213
1996 3,320 191
1997 3,356 74
1998 3,008 30
1999 Thereafter 2,566 21
10,649
- --------------------------------------------------------------------------------
Total future minimum lease payments $26,313 529
=======
Less amount representing interest 68
- --------------------------------------------------------------------------------
Obligations under capital leases $461
- --------------------------------------------------------------------------------
</TABLE>
Total rent expense was $2,697, $2,495, and $2,421 in 1994, 1993 and 1992,
respectively. Certain leases are collateralized by open letters of credit in
the amount of $252.
Consulting Agreement
The Company had five-year consulting agreements with former shareholders
of acquired companies. Expenses incurred under these contracts amounted to $155,
$267, and $345 in 1994, 1993 and 1992, respectively. The Company has no
remaining commitment under these agreements at December 31, 1994.
Litigation
The Company is subject to litigation in the normal course of business,
none of which management feels is material at December 31, 1994.
NOTE 7 -- STOCK OPTIONS AND WARRANTS
In May 1988, the Company approved "Plan B" to reserve 200,000 shares of
common stock for issuance. Options granted are exercisable at various dates and
expire five years after the date of grant. Exercisable at December 31, 1994,
1993 and 1992 were 90,820, 96,904, and 129,751 shares, respectively.
In May 1991, the Company approved "Plan C" to reserve 300,000 shares of
common stock for issuance. Options granted are exercisable at various dates and
expire five years after the date of grant. Shares exercisable at December 31,
1994, 1993 and 1992 were 217,750, 280,500 and 192,500 shares, respectively.
The Plans provide that the option price shall be fixed by a committee of
the Board of Directors, but shall not be less than 100% of the fair market value
at the date of grant.
During the year ended December 31, 1993, the Company's stock option
"Plan A" was terminated.
Information as of December 31, 1994 and for the three years then ended
with respect to options granted under the plans are as follows:
<TABLE>
<CAPTION>
Number of Average
Option Plan A Shares Price Per
Under Option Share
- --------------------------------------------------------------------------------
<S> <C> <C>
Outstanding January 1, 1992 57,974 $3.61
Exercised (45,384) 3.54
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Outstanding December 31, 1992 12,590 3.83
Exercised (9,662) 4.26
Cancelled (2,928)
- --------------------------------------------------------------------------------------------
Outstanding December 31, 1993 -- --
============================================================================================
Option Plan B
- --------------------------------------------------------------------------------------------
Outstanding January 1, 1992 148,598 $5.34
Granted 29,000 5.16
Exercised (7,320) 5.29
Cancelled (7,503) 6.04
- --------------------------------------------------------------------------------------------
Outstanding December 31, 1992 162,775 5.28
Granted 2,000 6.00
Exercised (4,842) 4.62
Cancelled (40,595) 6.51
- -------------------------------------------------------------------------------------------
Outstanding December 31, 1993 119,338 4.89
- -------------------------------------------------------------------------------------------
Granted 56,600 5.43
Exercised (29,428) 5.02
Cancelled (13,310) 6.40
- -------------------------------------------------------------------------------------------
Outstanding December 31, 1994 133,200 $4.97
============================================================================================
Option Plan C
- --------------------------------------------------------------------------------------------
Outstanding January 1, 1992 and December 31, 1992 and 1993 280,500 $5.45
Exercised (62,750) 5.45
- --------------------------------------------------------------------------------------------
Outstanding December 31, 1994 217,750 $5.45
============================================================================================
</TABLE>
NOTE 8 -- EARNINGS PER SHARE
Primary earnings per share are based on the weighted average number of
shares outstanding and common stock equivalents, if dilutive. The weighted
average number of shares outstanding and common stock equivalents, if
applicable, were 4,432,651, 4,397,707 and 4,168,565 for the years ended
December 31, 1994, 1993 and 1992, respectively. Fully diluted earnings per
share include the common stock equivalents of the Company's convertible
preferred stock (Note 15) for the years ended December 31, 1994, 1993 and 1992.
NOTE 9 -- RELATED PARTY TRANSACTIONS (in thousands)
The Company has a licensing agreement with five of its principal
shareholders that provides for a royalty on sales, of which $764, $729, and $724
was expensed during 1994, 1993 and 1992, respectively.
In November 1985, these same shareholders assigned to Ropak all present
and future rights to all U.S. and foreign patents, know-how and trademarks as
used by the Company and its licensees to produce and sell plastic shipping pails
in consideration for a ten-year, three-percent royalty not to exceed the 1985
royalty as adjusted for changes in the Consumer Price Index.
Three of the Company's executive officers formed Six Sixty Ltd., a
limited partnership, which leases space to the Company for its administrative
offices. The annual amount paid under this lease was $83 during each of 1994,
1993, and 1992.
The Company has advanced amounts to certain employees and officers to
cover relocation expenses. Non-interest-bearing notes are collateralized by
stock options granted to these same individuals aggregating 62,799 shares.
These amounts are included in "other assets" in the accompanying consolidated
balance sheets, and amounted to $400 in 1994 and $402 in 1993.
<PAGE>
Ropak Corporation
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Years ended December 31, 1994, 1993, and 1992
NOTE 10 -- PROFIT SHARING PLANS (in thousands)
In December 1986, the Company established a deferred profit sharing plan
(DPSP) to invest a portion of the Company's profits for the benefit of eligible
employees of Canadian subsidiary companies. Effective January 31, 1992, the
Company converted the DPSP to a Registered Retirement Savings Plan (RRSP).
Contributions to these plans, as determined annually by the Company's Board of
Directors, amounted to $80 and $58 in 1994 and 1993, respectively.
Effective on January 1, 1992, the Company entered into a 401(k) plan
agreement whereby employees are entitled to contribute up to 15% (10% in 1993)
of eligible earnings. The Company matches $0.25 for each $1.00 of eligible
contributions to the plan, up to 6% of eligible employee earnings. Company
contributions to the plan amounted to $169 and $101 in 1994 and 1993,
respectively. The Company's previously established employee stock ownership
plan (ESOP) was terminated on December 31, 1991. The ESOP assets were
transferred into the 401(k) plan with full vesting privileges for all
participants during 1992.
NOTE 11 -- INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT GEOGRAPHIC
AREAS
(in thousands)
<TABLE>
<CAPTION>
Adjustments
Year ended December 31, 1994 United Foreign and Consolidated
States Eliminations
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales to unaffiliated customers $88,171 $40,227 $ --- $128,398
Transfers between geographic areas --- 475 (475) ---
Total revenue 88,171 40,702 (475) 128,398
Operating profit 6,490 3,325 (36) 9,779
Identifiable assets 65,695 28,621 --- 94,316
==============================================================================================
Year ended December 31, 1993
- ----------------------------------------------------------------------------------------------
Sales to unaffiliated customers $69,718 $35,474 $ --- $105,192
Transfers between geographic areas 377 --- (377) ---
Total revenue 70,095 35,474 (377) 105,192
Operating profit 4,089 254 (47) 4,296
Identifiable assets 45,946 31,234 --- 77,180
==============================================================================================
Year ended December 31, 1992
- ----------------------------------------------------------------------------------------------
Sales to unaffiliated customers $64,195 $30,608 $ --- $ 94,803
Transfers between geographic areas 371 --- (371) ---
Total revenue 64,566 30,608 (371) 94,803
Operating profit 5,092 1,296 (29) 6,359
Identifiable assets 45,334 18,706 --- 64,040
==============================================================================================
</TABLE>
Transfers between geographic areas are accounted for by adding 6% - 10%
to the manufacturing costs of merchandise transferred. The duty and freight
charges are paid for by the plant receiving the merchandise.
Operating profit is total revenue less cost of sales and operating
expenses.
Identifiable assets are those assets of the Company that are physically
located in each geographic area.
<PAGE>
NOTE 12 -- INTERIM FINANCIAL INFORMATION (unaudited --
in thousands except per-share data)
<TABLE>
<CAPTION>
Quarter Ended
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
March 31 June 30 September 30 December 31
- ------------------------------------------------------------------------------
1994
- ------------------------------------------------------------------------------
Net sales $25,049 $35,910 $35,963 $31,476
Gross profit 4,460 9,521 7,770 7,711
Net income (loss) (273) 2,297 1,192 904
- ------------------------------------------------------------------------------
Net income (loss)
per share $ (0.09) $ 0.50 $ 0.24 $ 0.18
==============================================================================
1993
- ------------------------------------------------------------------------------
Net sales $19,922 $31,995 $29,677 $23,598
Gross profit 3,639 8,139 5,918 3,987
Net income (loss)(a) (480) 1,763 392 1,780
- ------------------------------------------------------------------------------
Net income (loss)
per share $ (0.11) $ 0.40 $ 0.07 $ 0.38
==============================================================================
</TABLE>
(a) During the quarter ended December 31, 1993, the Company recognized a pre-
tax $2,500 non-operating gain on the exchange of a subordinated note (Note 15).
NOTE 13 -- SUPPLEMENTAL BENEFITS PLAN (in thousands)
The Company maintains a defined benefit retirement plan for certain of
its key employees. The plan provides for pre-retirement death benefits through
life insurance and for retirement benefits. The Company will fund the plan in
1995 through contributions to a trust fund.
Components of the net defined benefit pension expense for the years ended
December 31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Service cost $ 48 $ 66
Interest cost 37 29
Net amortization and deferrals 7
- ------------------------------------------------------------------------------
Total pension expense $ 92 $ 95
==============================================================================
</TABLE>
The funded status of the plan at December 31 is as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligations $ 725 $ --
Accumulated benefit obligation 891 502
Projected benefit obligation $ 891 $502
Plan assets at fair value -- --
Unrecognized prior service cost 358 --
Unrecognized net loss 9 70
Additional liability recognized (367) (70)
- ------------------------------------------------------------------------------
Pension liability $ 891 $502
==============================================================================
</TABLE>
The following assumptions were used to determine the annual pension
expense and benefit obligations:
<PAGE>
Ropak Corporation
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Years ended December 31, 1994, 1993, and 1992
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Discount rate 8% 7%
Long term rate of return on assets n/a n/a
Retirement age 60 65
</TABLE>
NOTE 14 -- INVESTMENTS IN JOINT VENTURES (in thousands, except share data)
Effective September 30, 1991, the Company entered into an agreement to
sell to InVitro International its world-wide marketing and distribution rights
of present and future products of InVitro International and its in vitro
business segment.
Under the terms of the agreement, the Company received $40 cash, 281,233
shares of InVitro International's common stock valued at $3.86 per share and a
royalty agreement entitling Ropak to receive royalties ranging from 1% to 5% of
InVitro International's sales over the next ten years. Ropak subsequently
received 309,104 shares of InVitro International common stock valued at $1 per
share in settlement of present and future royalties and all other obligations
due Ropak. Gains recorded in 1992 as a result of these transactions totaled
$261.
In September 1992, in accordance with Securities and Exchange Commission
Staff Accounting Bulletin No. 59, Ropak recorded a $1,705 write-down of its
investment in InVitro International to market value of $1 per share due to
certain adverse financial conditions then existing at InVitro International.
In November 1993, Ropak sold 31,233 shares of InVitro International and
recorded a gain of $339.
In October 1988, Ropak concluded an agreement to acquire a 50% interest
in Flamegrace Ltd. of Great Britain, a company whose primary business is the
development and licensing of plastics cold-forming processes and product
technologies. Ropak has also been granted an exclusive license to employ these
patented technologies for commercial use in the United States and Canada. The
total investment in the joint venture includes cash of $300 and 83,994 common
shares of Ropak. The ownership of Ropak's shares by Flamegrace Ltd. results in
50% of these shares being treated as Treasury Stock.
NOTE 15 -- ACQUISITIONS AND DISPOSITIONS (in thousands, except share data)
In September 1992, the Company sold the assets of its Bishop Falls,
Newfoundland manufacturing facility to Clamar Plastics (Clamar) for
approximately $414 in cash and other net assets of $66. In connection with this
transaction, the Company acquired a 20% equity interest in Clamar for $20.
In April and June of 1993, Ropak entered into agreements to acquire the
assets of two Canadian companies, Vulcan Packaging, Inc. (Vulcan) and CRS
Plastics (CRS), a division of Vulcan.
The acquisition of Vulcan was accounted for as a purchase and was
recorded at a cost of $5,200. This acquisition was funded through the issuance
of 5,200 shares of 7.5% preferred stock of Ropak Canada, which are exchangeable
for Ropak common stock at $9.00 per share. The preferred shares are subject to a
mandatory sinking fund sufficient to redeem 1,200, 2,000 and 2,000 shares on
April 1, 1996, 1997 and 1998, respectively. Of the total purchase price, $1,582
represents cost in excess of net assets acquired, which is being amortized over
thirty years.
The acquisition of CRS was accounted for as a purchase and was recorded
at a cost of $3,500. Of the total purchase price, $1,942 represents cost in
excess of net assets acquired, which is being amortized over thirty years. This
acquisition was funded through the issuance of a $3,500, 7.0% exchangeable
subordinated promissory note due July 1, 1994.
In November 1993, Vulcan exercised an option to exchange the $3,500
subordinated promissory note for 1,000,000 shares of InVitro International held
by Ropak. This transaction resulted in a $2,500 gain recorded by Ropak in the
fourth quarter 1993.
The Company's results of operations include the operations of Vulcan and
CRS from April and June 1993, respectively.
NOTE 16 -- CERTAIN TRANSACTIONS
In September 1994, LINPAC Moulding Limited (LINPAC) entered into an
Option Agreement with the Roper Family and related trusts (Roper Family) which
granted LINPAC an option to purchase approximately 985,000 shares of Ropak
common stock and 132,000 shares of Ropak common stock covered by stock options
(Roper shares). The Option Agreement provided that at any time prior to the
close of business on February 28, 1995, subject to events indicating the LINPAC
proposed merger could not be consummated by February 24, 1995, the Roper Family
had the right to require that LINPAC purchase all of the Roper shares.
Pursuant to a provision of the Option Agreement, in October 1994, the
Company received an offer from LINPAC to acquire Ropak for $10.50 per share in
cash.
<PAGE>
Under the terms of the Option Agreement, assuming LINPAC successfully
completed its proposed merger, William H. Roper, Robert E. Roper and C. Richard
Roper would remain in Ropak executive management positions at specified
compensation rates for periods ranging from one to four years. In each case,
noncompetition covenants after employment provided for additional payments over
six years at $220,000 per year to each of the three Roper executives.
The option exercise price for both the LINPAC purchase option and the
Roper Family sales option was at $14.75 per share. The premium was intended to
compensate Roper Family members for prospective loss of employment and
noncompetition compensation, if the LINPAC proposed merger could not be
successfully completed. If the LINPAC proposed merger were to be successfully
completed, Roper Family members would receive the same $10.50 per share paid to
all stockholders in addition to their employment and noncompete compensation
programs.
Through November 29, 1994, LINPAC purchased 469,250 shares of the
Company's common stock not covered by the Option Agreement in the open market
and certain private transactions, including some with employees of the Company.
Also, in a private transaction with an unaffiliated third party, LINPAC acquired
the preferred stock of Ropak Canada, Inc. which is exchangeable at the holder's
option for 577,777 shares of the Company's common stock.
In December 1994, a special committee of the Board of Directors, formed
to evaluate the LINPAC offer to acquire the Company, reported to the Board that
it found the LINPAC offer to be inadequate. Shortly thereafter, LINPAC withdrew
its offer to purchase the Company. Accordingly, the Company expensed, in the
fourth quarter of 1994, approximately $592,000 in costs related to the proposed
merger.
Subsequent to the withdrawal of its offer LINPAC reported the purchase of
442,724 additional shares and in February 1995, LINPAC purchased 985,520 shares
of common stock of Ropak from the Roper Family for $10.50 per share. In the
transaction, options held by the Ropers to purchase 132,000 shares of Ropak
stock were canceled.
Ropak Corporation also entered into employment and noncompetition
agreements with Roper Family members with substantially the same terms as
provided for in the Option Agreement.
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or such stockholder's broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Hand/Overnight Courier:
Tenders & Exchanges Tenders & Exchanges
Suite 4660-RO Suite 4680-RO
P.O. Box 2563 14 Wall Street
Jersey City, New Jersey 8th Floor
07303-2563 New York, New York 10005
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Information Agent at its telephone numbers and location
listed below. You may also contact your broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[LOGO OF KISSEL-BLAKE INC.]
25 BROADWAY, 6TH FLOOR
NEW YORK, NEW YORK 10004
CALL TOLL-FREE: (800) 554-7733
BROKERS AND BANKS, PLEASE CALL: (212) 344-6733
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
ROPAK CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 21, 1995
BY
LINPAC MOULDINGS LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, MAY 2, 1995, UNLESS EXTENDED.
THE DEPOSITARY: FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Hand/Overnight Courier:
By Mail:
Tenders & Exchanges Suite 4680-RO
Tenders & Exchanges Suite 4660-RO 14 Wall Street 8th Floor New York, New
P.O. Box 2563 Jersey City, New Jersey York 10005
07303-2563
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to an account maintained by the Depositary at any of The
Depository Trust Company ("DTC"), Midwest Securities Trust Company ("MSTC") or
Pacific Depository Trust Company ("PDTC") (each a "Book-Entry Transfer
Facility") pursuant to the procedures set forth in "THE OFFER--Procedure For
Tendering Shares" of the Offer to Purchase. Stockholders who deliver Shares by
book-entry transfer are referred to herein as "Book-Entry Stockholders" and
other stockholders are referred to herein as "Certificate Stockholders."
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation
(as defined in "THE OFFER--Procedure For Tendering Shares" of the Offer to
Purchase) with respect to, their Shares and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in "THE OFFER--Terms
of the Offer" of the Offer to Purchase) must tender their Shares in accordance
with the guaranteed delivery procedures set forth in "THE OFFER--Procedure For
Tendering Shares" of the Offer to Purchase. See Instruction 2.
DESCRIPTION OF SHARES TENDERED
<TABLE>
- -------------------------------------------------------------------------------------------------------
<CAPTION>
SHARES TENDERED
PRINT NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (ATTACHED ADDITIONAL SIGNED LIST IF
EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S) NECESSARY)
- ----------------------------------------------------- -------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
------------ ----------------- ------------
<S> <C> <C> <C>
------------ ------------ ------------
------------ ------------ ------------
------------ ------------ ------------
------------ ------------ ------------
------------ ------------ ------------
TOTAL SHARES TENDERED
- --- ------------------------- ------------
</TABLE>
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares described
above are being tendered. See Instruction 4.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution:
Check Box of Book-Entry Transfer Facility:
[_] DTC [_] MSTC [_] PDTC
Account Number: Transaction Code Number:
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE INCLUDE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Owner(s): ____________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
If delivered by Book-Entry Transfer check box of applicable Book-Entry
Transfer Facility:
[_] DTC [_] MSTC [_] PDTC
Account Number: Transaction Code Number:
Ladies and Gentlemen:
The undersigned hereby tenders to LINPAC Mouldings Ltd., an United Kingdom
corporation ("Purchaser"), the above-described shares of common stock, par
value $.01 per share (the "Shares"), of Ropak Corporation, a Delaware
corporation (the "Company"), pursuant to the Purchaser's offer to purchase any
and all outstanding Shares at a price of $11.00 per share, net to the seller in
cash, in accordance with the terms and conditions of the Purchaser's Offer to
Purchase dated March 21, 1995 (the "Offer to Purchase"), and this Letter of
Transmittal (which, together constitute the "Offer"), receipt of which is
hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with
the terms of the Offer (including, if the Offer is extended or amended, the
terms or conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Purchaser all right,
title and interest in and to all the Shares that are being tendered hereby (and
any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after March 1, 1995) and irrevocably constitutes
and appoints the Depositary the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Shares (and any such other Shares or
securities or rights), with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (a)
deliver certificates for such Shares (and any such other Shares or securities
or rights) or transfer ownership of such Shares (and any such other Shares or
securities or rights) on the account books maintained by a Book-Entry Transfer
Facility together, in any such case, with all accompanying evidences of
transfer and authenticity to, or upon the order of, the Purchaser, (b) present
such Shares (and any such other Shares or securities or rights) for transfer on
the Company's books and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares (and any such other Shares or
securities or rights), all in accordance with the terms of the Offer.
<PAGE>
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
(and any and all Shares or other securities or rights issued or issuable in
respect of such Shares on or after March 1, 1995), and, when the same are
accepted for payment by the Purchaser, the Purchaser will acquire good title
thereto, free and clear of all liens, restrictions, claims and encumbrances.
The undersigned will, upon request, execute any additional documents deemed by
the Depositary or the Purchaser to be necessary or desirable to complete the
sale, assignment and transfer of the tendered Shares (and any such other Shares
or other securities or rights).
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned hereby irrevocably appoints David A. Williams, John L.
Doughty, Nigel Victor David Roe and Robert A. Lang, in their respective
capacities as officers of Purchaser or its affiliates, and any individual who
shall hereafter succeed to any such office of Purchaser or its affiliates, and
each of them, and any other designees of the Purchaser, the attorneys-in-fact
and proxies of the undersigned, each with full power of substitution, to vote
at any annual, special or adjourned meeting of the Company's stockholders or
otherwise in such manner as each such attorney-in-fact and proxy or his
substitute shall in his sole discretion deem proper with respect to, and to
otherwise act (by written consent or otherwise) as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper with
respect to all the Shares tendered hereby that have been accepted for payment
by the Purchaser prior to the time any such action is taken and with respect to
which the undersigned is entitled to vote (and with respect to any and all
other Shares or other securities or rights issued or issuable in respect of
such Shares on or after March 1, 1995). This appointment is effective when, and
only to the extent that, the Purchaser accepts for payment such Shares as
provided in the Offer to Purchase. This power of attorney and proxy are
irrevocable and are granted in consideration of the acceptance for payment of
such Shares in accordance with the terms of the Offer. Such acceptance for
payment shall, without further action, revoke all prior powers of attorney and
proxies appointed by the undersigned at any time with respect to such Shares
(and any such other Shares or securities or rights) and no subsequent powers of
attorney or proxies will be appointed by the undersigned, or be effective, with
respect thereto.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in "THE OFFER--Procedure for Tendering Shares"
of the Offer to Purchase and in the Instructions hereto will constitute a
binding agreement between the undersigned and the Purchaser upon the terms and
subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price and/or return any certificates for Shares not
tendered or accepted for payment (and any accompanying documents, as
appropriate) in the name of, and deliver such check and/or return such
certificates (and any accompanying documents, as appropriate) to, the persons
so indicated. The undersigned recognizes that the Purchaser has no obligation
pursuant to the Special Payment Instructions to transfer any Shares from the
name of the registered holder thereof if the Purchaser does not accept for
payment any of the Shares so tendered.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares accepted
for payment are to be issued in the name of someone other than the undersigned.
Issue check and/or certificate(s) to:
Name: __________________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- --------------------------------------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NO.
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares accepted
for payment are to be sent to someone other than the undersigned or to the
undersigned at an address other than that indicated above.
Mail check and/or certificate(s) to:
Name: __________________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- --------------------------------------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NO.
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
<PAGE>
IMPORTANT
STOCKHOLDERS SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
^ ___________________________________________________________________________ ^^
^ ___________________________________________________________________________ ^^
(Signature(s) of Stockholder(s))
Dated: , 1995
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians, attorneys-
in-fact, agents, officers of corporations or others acting in a fiduciary or
representative capacity, please provide the following information and see
Instruction 5.)
Name(s): _______________________________________________________________________
(Please Print)
Capacity (Full Title): _________________________________________________________
Address: _______________________________________________________________________
(Include zip code)
Area Code and Telephone No.: ___________________________________________________
Taxpayer Identification or Social Security No.: ________________________________
(Complete Substitute Form W-9 on reverse side)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTION 1 AND 5)
Authorized Signature(s): _______________________________________________________
Name(s): _______________________________________________________________________
(Please Print)
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
(Include Zip Code)
Area Code and Telephone No.: ___________________________________________________
Dated: ^^^^^^^^^^ , 1995
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most commercial banks, savings and loans associations
and brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program or identified as an "eligible
guarantor institution" as such term is defined in Rule 17Ad-15 under the
Exchange Act (an "Eligible Institution"). No signature guarantee is required on
this Letter of Transmittal if (a) this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the reverse
hereof, or (b) such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
stockholders either if certificates are to be forwarded herewith or if delivery
of Shares is to be made pursuant to the procedures for book-entry transfer set
forth in "THE OFFER--Procedure for Tendering Shares" of the Offer to Purchase.
For a stockholder validly to tender Shares pursuant to the Offer, either (a) a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees and any other
required documents, must be received by the Depositary at one of its addresses
set forth herein prior to the Expiration Date and either (i) certificates for
tendered Shares must be received by the Depositary at one of such addresses
prior to the Expiration Date or (ii) Shares must be delivered pursuant to the
procedures for book-entry transfer set forth herein and a Book-Entry
Confirmation must be received by the Depositary prior to the Expiration Date or
(b) the tendering stockholder must comply with the guaranteed delivery
procedure set forth below and in "THE OFFER--Procedure for Tending Shares" of
the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in "THE OFFER--Procedure for Tendering Shares" of the
Offer to Purchase.
Pursuant to such procedures, (a) such tender must be made by or through an
Eligible Institution, (b) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Purchaser must be
received by the Depositary prior to the Expiration Date and (c) the
certificates for all physically delivered Shares or a Book-Entry Confirmation
with respect to all tendered Shares, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Depositary within five trading days after
the date of execution of the Notice of Guaranteed Delivery. A "trading day" is
any day on which the Nasdaq National Market is open for business.
THE METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution
of this Letter of Transmittal (or facsimile thereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares that are to be tendered in the box entitled
"Number of Shares Tendered." In any such case, new certificate(s) for the
remainder of the Shares that were evidenced by the old certificate(s) will be
sent to the registered holder, unless otherwise provided in the appropriate box
on this Letter of Transmittal, as soon as practicable after the expiration of
the Offer. All Shares represented by certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTERS OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificate(s) without any change whatsoever.
<PAGE>
If any of the Shares tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence satisfactory
to the Purchaser of their authority to so act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or accepted for payment are to be issued
to a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered
holder(s) of certificates listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. Purchaser will pay any stock transfer taxes with
respect to the transfer and sale of Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any persons other than the registered holder(s), or
if tendered certificates are registered in the name of any person other than
the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder(s) or such person)
payable on account of the transfer to such person will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT
WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES
LISTED IN THIS LETTER OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of and/or certificates for Shares not tendered or not accepted for
payment are to be returned to, a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such certificates are to be
returned to a person other than the signer of this Letter of Transmittal or to
an address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Any stockholder(s) delivering Shares by book-
entry transfer may request that Shares not accepted for payment be credited to
such account maintained at a Book-Entry Transfer Facility as such
stockholder(s) may designate.
8. WAIVER OF CONDITIONS. Subject to the terms of the Offer, the Purchaser
reserves the absolute right in its sole discretion to waive any of the
specified conditions of the Offer, in whole or in part, in the case of any
Shares tendered.
9. BACKUP WITHHOLDING. Under U.S. federal income tax law, a stockholder whose
tendered Shares are accepted for payment is required to provide the Depositary
with such stockholder's correct taxpayer identification number, e.g., social
security number or employer identification number ("TIN"), on Substitute Form
W-9 below. If the Depositary is not provided with the correct TIN, the Internal
Revenue Service may subject the stockholder or other payee to a $50 penalty. In
addition, payments that are made to such stockholder or other payee with
respect to Shares purchased pursuant to the Offer may be subject to a 31%
backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the stockholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld, provided that the
required information is given to the Internal Revenue Service. If withholding
results in an overpayment of taxes, then a refund may be obtained from the
Internal Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
<PAGE>
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for additional
copies of the Offer to Purchase, this Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 should be directed to the
Information Agent at its address set forth below. Questions or requests for
assistance may be directed to the Information Agent.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A SIGNED FACSIMILE COPY THEREOF
(TOGETHER WITH CERTIFICATES FOR, OR A BOOK-ENTRY CONFIRMATION WITH RESPECT TO,
TENDERED SHARES WITH ANY REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED
DOCUMENTS) MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION
DATE.
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK, AS DEPOSITARY
PART 1-PLEASE PROVIDE Social Security Number OR
YOUR TIN IN THE BOX Employer Identification
AT RIGHT AND CERTIFY Number
BY SIGNING AND DATING ----------------------------
BELOW.
SUBSTITUTE
FORM W-9
---------------------------------------------------------
DEPARTMENT OF THE PART 2-CERTIFICATES--Under penalties of perjury, I
TREASURY certify that:
INTERNAL REVENUE (1) The number shown on this form is my correct
SERVICE Taxpayer Identification Number (or I am waiting for
a number to be issued for me) and
PAYER'S REQUEST (2) I am not subject to backup withholding either
FOR TAXPAYER because: (a) I am exempt from backup withholding, or
IDENTIFICATION (b) I have not been notified by the Internal Revenue
("TIN") Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified
me that I am no longer subject to backup
withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you are subject to backup withholding,
you received another notification from the IRS that
you are no longer subject to backup withholding, do
not cross out such item (2).
SIGNATURE ______________________________ PART-3
---------------------------------------------------------
DATE ___________________________________ Awaiting
TIN[_]
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a Taxpayer Identification Number by the
time of payment, 31% of all reportable payments made to me will be withheld,
but that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
Signature _________________________________________ Date ____________________
<PAGE>
QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THE OFFER TO
PURCHASE, THIS LETTER OF TRANSMITTAL AND OTHER TENDER OFFER MATERIALS MAY BE
DIRECTED TO THE INFORMATION AGENT AS SET FORTH BELOW.
THE INFORMATION AGENT FOR THE OFFER IS:
LOGO
25 BROADWAY, 6TH FLOOR
NEW YORK, NEW YORK 10004
CALL TOLL FREE: (800) 554-7733
BROKERS AND BANKS, PLEASE CALL: (212) 344-6733
<PAGE>
Kissel-Blake Inc.
25 Broadway, 6th Floor
New York, New York 10004
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ROPAK CORPORATION
AT
$11.00 NET PER SHARE
BY
LINPAC MOULDINGS LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, MAY 2, 1995, UNLESS EXTENDED.
March 21, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by LINPAC Mouldings Ltd., an United Kingdom
corporation (the "Purchaser"), to act as Information Agent in connection with
the Purchaser's offer to purchase any and all outstanding shares of common
stock, par value $.01 per share (the "Shares"), of Ropak Corporation, a
Delaware corporation (the "Company"), at $11.00 per share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Purchaser's
Offer to Purchase dated March 21, 1995 (the "Offer to Purchase"), and the
related Letter of Transmittal (which collectively constitute the "Offer").
Please furnish copies of the enclosed materials to those of your clients for
whom you hold Shares registered in your name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase dated March 21, 1995;
2. Letter of Transmittal to be used by stockholders of the Company
accepting the Offer;
3. A printed form letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such client's instructions with regard to the
Offer;
4. Notice of Guaranteed Delivery;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to First Chicago Trust Company of New York,
the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
TUESDAY, MAY 2, 1995, UNLESS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates for
such Shares (or timely Book-Entry Confirmation of a transfer of such Shares as
described in "THE OFFER--Procedure for Tendering Shares" of the Offer to
Purchase), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other documents required by the Letter of
Transmittal.
<PAGE>
The Purchaser will not pay any fees or commissions to any broker or dealer or
other person to solicit tenders of Shares pursuant to the Offer. You will be
reimbursed upon request for customary mailing and handling expenses incurred by
you in forwarding the enclosed offering materials to your customers.
Questions and requests for additional copies of the enclosed material may be
directed to the Information Agent at the address and telephone numbers set
forth on the back cover of the enclosed Offer to Purchase.
Very truly yours,
Kissel-Blake Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF PURCHASER, THE DEPOSITARY, THE INFORMATION
AGENT OR ANY AFFILIATE OF ANY OF THEM OR AUTHORIZE YOU OR ANY OTHER PERSON
TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF
OF ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS
AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ROPAK CORPORATION
AT
$11.00 NET PER SHARE
BY
LINPAC MOULDINGS LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, MAY 2, 1995, UNLESS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated March 21, 1995
(the "Offer to Purchase"), and a related Letter of Transmittal (which, together
constitute the "Offer") relating to an offer by LINPAC Mouldings Ltd., an
United Kingdom corporation ("Purchaser"), to purchase shares of common stock,
par value $.01 per share (the "Shares"), of Ropak Corporation, a Delaware
corporation (the "Company"), at $11.00 per share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The tender price is $11.00 per share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer.
2. The Offer is being made for any and all outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City Time, on Tuesday, May 2, 1995, unless the Offer is extended by
the Purchaser. In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates for such Shares (or timely Book-Entry
Confirmation of a transfer of such Shares as described in "THE OFFER--
Procedure for Tendering Shares" of the Offer to Purchase), a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
and any other documents required by the Letter of Transmittal.
4. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
<PAGE>
The Offer is being made to all holders of Shares. Purchaser is not aware of
any jurisdictions where the making of the Offer is not in compliance with
applicable law. If Purchaser becomes aware of any jurisdiction in which the
making of the Offer would not be in compliance with applicable law, Purchaser
will make a good faith effort to comply with any such laws. If, after such good
faith effort, Purchaser cannot comply with any such law, the Offer will not be
made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction.
IF YOU WISH TO HAVE US TENDER ANY OR ALL OF YOUR SHARES, PLEASE SO INSTRUCT
US BY COMPLETING, EXECUTING, DETACHING AND RETURNING TO US THE INSTRUCTION FORM
SET FORTH BELOW. AN ENVELOPE TO RETURN YOUR INSTRUCTIONS TO US IS ENCLOSED. IF
YOU AUTHORIZE TENDER OF YOUR SHARES, ALL SUCH SHARES WILL BE TENDERED UNLESS
OTHERWISE SPECIFIED BELOW. YOUR INSTRUCTIONS TO US SHOULD BE FORWARDED PROMPTLY
TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE
OFFER.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK OF
ROPAK CORPORATION
The undersigned acknowledge(s) receipt of your letter enclosing the Offer to
Purchase dated March 21, 1995, of LINPAC Mouldings Ltd., an United Kingdom
corporation, and the related Letter of Transmittal, relating to shares of
common stock, par value $.01 per share, of Ropak Corporation, a Delaware
corporation (the "Shares").
This will instruct you to tender all of the Shares held by you for the
account of the undersigned, unless another number is indicated below, on the
terms and conditions set forth in such Offer to Purchase and the related Letter
of Transmittal.
Number of Shares to be Tendered*
_________________Shares
*Unless otherwise indicated, it will be assumed that all your Shares are to
be tendered.
SIGN HERE
Signature(s)_________________________________________________________________
Name(s)______________________________________________________________________
Please print name(s)
Address:_____________________________________________________________________
-----------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.:_________________________________________________
-----------------------------------------------------------------------------
Taxpayer Identification or Social Security No.:______________________________
Dated: , 1995
3
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
ROPAK CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, MAY 2, 1995, UNLESS EXTENDED.
As set forth in "THE OFFER--Procedure for Tendering Shares" of the Offer to
Purchase (as defined below), this form or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates
representing shares of common stock, par value $.01 per share (the "Shares"),
of Ropak Corporation, a Delaware corporation (the "Company"), are not
immediately available or if the procedures for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Depositary prior to the Expiration Date (as defined in "THE OFFER--
Terms of the Offer" of the Offer to Purchase). Such form may be delivered by
hand or transmitted by telegram or facsimile transmission or mailed to the
Depositary and must include a guarantee by an Eligible Institution (as defined
in "THE OFFER--Procedure for Tendering Shares" of the Offer to Purchase). See
"THE OFFER--Procedure for Tendering Shares" of the Offer to Purchase.
The Depositary:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By Mail: By Facsimile Transmission By Hand/Overnight
Courier:
(for Eligible Institutions only):
Tenders & Exchanges
Suite 4660-RO Fax: (201) 222-4720 or 4721 Tenders & Exchanges
P.O. Box 2563 Suite 4680-RO
Jersey City, New Jersey Confirm Facsimile Transmission: 8th Floor
07303-2563 (for Notice of Guarantees only) New York, New York
10005
(201) 222-4707
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to LINPAC Mouldings Ltd., an United Kingdom
corporation (the "Purchaser"), upon the terms and subject to the conditions set
forth in the Purchaser's Offer to Purchase, dated March 21, 1995 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together constitute
the "Offer"), receipt of which is hereby acknowledged, Shares pursuant to the
guaranteed delivery procedures set forth in "THE OFFER--Procedure For Tendering
Shares" of the Offer to Purchase.
Number of Shares: _________________ Name(s) of Record Holder(s):
Certificate Nos. (if available): -----------------------------------
----------------------------------- -----------------------------------
(Please Print)
-----------------------------------
Address(es): ______________________
Check ONE box if Shares will be
tendered by Book-Entry Transfer:
-----------------------------------
[_]The Depository Trust Company -----------------------------------
[_]Midwest Securities Trust Zip Code
Company
[_]Philadelphia Depository Trust Area Code and Tel. No.: ___________
Company
Signature(s):
Account Number: ___________________
-----------------------------------
Dated: _____________________ , 1995
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, an Eligible Institution, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation (as defined in "THE
OFFER--Procedure For Tendering Shares" of the Offer to Purchase) of a transfer
of such Shares, in any such case together with a properly completed and duly
executed Letter of Transmittal, or a manually signed facsimile thereof, with
any required signature guarantees, and any other documents required by the
Letter of Transmittal within five trading days after the date hereof. A
"trading day" is any day on which the Nasdaq National Market is open for
business.
Name of Firm: _______________________ -------------------------------------
Authorized Signature
Address: ____________________________
Name: _______________________________
- ------------------------------------- (Please print)
Zip Code
Title: ______________________________
Area Code and Tel. No.: _____________
Date: _______________________________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE CERTIFICATES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF SOCIAL SECURITY
ACCOUNT: NUMBER OF--
- ----------------------------------------------------------------
<S> <C>
1. An individual's The individual
account
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, any one of the
individuals(1)
3. Custodian account of The minor(2)
a minor (Uniform Gift
to Minors Act)
4.a. The usual The grantor-trustee(1)
revocable savings
trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is not
a legal or valid
trust under State
law
5. Sole proprietorship The owner(3)
account
6. A valid trust, The legal entity (Do not
estate, or pension furnish the identifying
trust number of the personal
representative or
trustee unless the legal
entity itself is not
designated in the
account title.)(4)
</TABLE>
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF SOCIAL SECURITY
ACCOUNT: NUMBER OF--
- ----------------------------------------------------------------
<S> <C>
7. Corporate account The corporation
8. Religious, The organization
charitable, or
educational
organization account
9. Partnership The partnership
10. Association, club, The organization
or other tax-exempt
organization
11. A broker or The broker or nominee
registered nominee
12. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
- ----------------------------------------------------------------
</TABLE>
- --------------------------------------- ---------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER . Payments described in section
If you do not have a taxpayer 6049(b)(5) to non-resident
identification number or you do not aliens.
know your number, obtain Form SS-5, . Payments on tax-free covenant
Application for a Social Security bonds under section 1451.
Number Card, or Form SS-4, . Payments made by certain
Application for Employer foreign organizations.
Identification Number, at the local Exempt payees described above should
office of the Social Security file Form W-9 to avoid possible er-
Administration or the Internal roneous backup withholding. FILE
Revenue Service and apply for a THIS FORM WITH THE PAYER, FURNISH
number. YOUR TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF THE
PAYEES EXEMPT FROM BACKUP FORM, AND RETURN IT TO THE PAYER. IF
WITHHOLDING THE PAYMENTS ARE INTEREST, DIVI-
Payees specifically exempted from DENDS, OR PATRONAGE DIVIDENDS, ALSO
backup withholding on ALL payments SIGN AND DATE THE FORM.
include the following: Certain payments other than inter-
. A corporation. est, dividends, and patronage divi-
. A financial institution. dends, that are not subject to in-
. An organization exempt from tax formation reporting are also not
under section 501(a), or an in- subject to backup withholding. For
dividual retirement plan. details, see the regulations under
. The United States or any agency sections 6041, 6041A(a), 6045 and
or instrumentality thereof. 6050A.
. A State, the District of Colum- PRIVACY ACT NOTICE--Section 6109 re-
bia, a possession of the United quires most recipients of dividend,
States, or any subdivision or interest, or other payments to give
instrumentality thereof. taxpayer identification numbers to
. A foreign government, a politi- payers who must report the payments
cal subdivision of a foreign to IRS. The IRS uses the numbers for
government, or any agency or identification purposes. Payers must
instrumentality thereof. be given the numbers whether or not
. An international organization recipients are required to file tax
or any agency, or instrumental- returns. Payers must generally with-
ity thereof. hold 31% of taxable interest, divi-
. A registered dealer in securi- dend, and certain other payments to
ties or commodities registered a payee who does not furnish a tax-
in the U.S. or a possession of payer identification number to a
the U.S. payer. Certain penalties may also
. A real estate investment trust. apply.
. A common trust fund operated by
a bank under section 584(a). PENALTIES
. An exempt charitable remainder (1) Penalty For Failure to Furnish
trust, or a non-exempt trust Taxpayer Identification Number.--If
described in section you fail to furnish your taxpayer
4947(a)(1). identification number to a payer,
. An entity registered at all you are subject to a penalty of $50
times under the Investment Com- for each such failure unless your
pany Act of 1940. failure is due to reasonable cause
. A foreign central bank of is- and not to willful neglect.
sue. (2) Civil Penalty for False Informa-
Payments of dividends and patronage tion with Respect to Withholding.--
dividends not generally subject to If you make a false statement with
backup withholding include the no reasonable basis which results in
following: no imposition of backup withholding,
. Payments to nonresident aliens you are subject to a penalty of
subject to withholding under $500.
section 1441. (3) Criminal Penalty for Falsifying
. Payments to partnerships not Information.--Falsifying certifica-
engaged in a trade or business tions or affirmations may subject
in the U.S. and which have at you to criminal penalties including
least one nonresident partner. fines and/or imprisonment.
. Payments of patronage dividends FOR ADDITIONAL INFORMATION CONTACT
where the amount received is YOUR TAX CONSULTANT OR THE INTERNAL
not paid in money. REVENUE SERVICE.
. Payments made by certain for-
eign organizations.
Payments of interest not generally
subject to backup withholding
include the following:
. Payments of interest on obliga-
tions issued by individuals.
Note: You may be subject to
backup withholding if this in-
terest is $600 or more and is
paid in the course of the pay-
er's trade or business and you
have not provided your correct
taxpayer identification number
to the payer.
. Payments of tax-exempt interest
(including exempt-interest div-
idends under section 852).
<PAGE>
NOTICE OF CANCELLATION
WITH RESPECT TO OPTIONS
TO PURCHASE
SHARES OF COMMON STOCK
OF
ROPAK CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 21, 1995
BY
LINPAC MOULDINGS LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, MAY 2, 1995, UNLESS EXTENDED.
Deliver to:
ROPAK CORPORATION
ATTN.: CHIEF FINANCIAL OFFICER
660 SOUTH STATE COLLEGE BOULEVARD
FULLERTON, CALIFORNIA 92631
DELIVERY OF THIS NOTICE OF CANCELLATION TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
ANY INQUIRIES WITH RESPECT TO THE CANCELLATION OF OPTIONS SHOULD BE DIRECTED
TO THE CHIEF FINANCIAL OFFICER OF THE COMPANY.
THIS NOTICE OF CANCELLATION IS ONLY FOR USE BY EMPLOYEES HOLDING OPTIONS TO
PURCHASE SHARES.
DESCRIPTION OF OPTIONS TO BE CANCELLED
<TABLE>
- -----------------------------------------------------------------------------------------
<CAPTION>
DATE NUMBER NAME
NAME AND ADDRESS OF OF OF EXERCISE
OF HOLDER GRANT SHARES(1) PLAN(2) PRICE
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-------------------------------------------------------
-------------------------------------------------------
</TABLE>
(1) Insert number of shares for which the Options that are hereby surrendered
may be exercised. Unless otherwise indicated, it will be assumed that all
options to purchase shares have been surrendered for cancellation.
(2) Insert the name of the Stock Option Plan pursuant to which the Options were
granted (either the 1988 Stock Option Plan or 1991 Stock Option Plan).
<PAGE>
Ladies and Gentlemen:
The undersigned hereby surrenders on behalf of LINPAC Mouldings Ltd., an
United Kingdom corporation ("Purchaser"), the above-described options
("Options") to purchase shares of common stock, par value $.01 per share (the
"Shares"), of Ropak Corporation, a Delaware corporation (the "Company"), for
cancellation by the Company pursuant to Purchaser's offer to purchase all
outstanding Shares at a price of $11.00 per share, net to the holder in cash
less the exercise price for the Options, multiplied by the number of Shares for
which the Options are exercisable (the "Option Price"), in accordance with the
terms and conditions of Purchaser's Offer to Purchase dated March 21, 1995 (the
"Offer to Purchase"), and this Notice of Cancellation (which collectively
constitute the "Offer"), receipt of which is hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Options surrendered herewith in accordance
with the terms of the Offer (including, if the Offer is extended or amended,
the terms or conditions of any such extension or amendment), the undersigned
hereby surrenders for cancellation all right, title and interest in and to all
the Options that are being surrendered hereby (and any and all other Shares or
other securities or rights issued or issuable in respect of such Options on or
after March 1, 1995) and irrevocably authorizes the Company to cancel the
Options upon notification from Purchaser of acceptance for payment of the
Options.
The undersigned hereby represents, warrants and acknowledges to Purchaser
that the undersigned has full power and authority to surrender the Options for
cancellation (and any and all Shares or other securities or rights issued or
issuable in respect of such Shares on or after March 1, 1995), and, when the
same are accepted for payment by Purchaser, the Options will be cancelled. The
undersigned will, upon request, execute any additional documents deemed by the
Company or Purchaser to be necessary or desirable to complete the surrender and
cancellation of the Options (and any such other Shares or other securities or
rights).
All authority conferred or agreed to be conferred pursuant to this Notice of
Cancellation shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. Except as stated in the Offer to Purchase, this
Notice of Cancellation is irrevocable.
The undersigned hereby requests Purchaser to issue the check for the Option
Price in the name of the holder appearing under "Description of Options to be
Cancelled." No Options will be accepted for payment unless Purchaser receives
satisfactory evidence from the Company of the due execution and timely delivery
of this Notice of Cancellation.
IMPORTANT
SIGN HERE
______________________________________________________________________
(Signature of Option Holder)
Dated: , 1995
(Must be signed by Option Holder as name appears on the grant of the Option.)
2
<PAGE>
EXHIBIT (d)(8)
FOR IMMEDIATE RELEASE
Wednesday, March 15, 1995
CONTACT: John L. Doughty
Financial Director
011-44-21-328-2400
LINPAC MOULDINGS LTD. TO COMMENCE TENDER OFFER TO ACQUIRE
ROPAK CORPORATION COMMON STOCK AT $11.00 PER SHARE
LINPAC MOULDINGS LTD. today announced that it will begin a cash tender
offer for all outstanding shares of ROPAK CORPORATION (NASDAQ/NMS Symbol: ROPK)
common stock for $11.00 per share.
The offer will remain open for a minimum of 30 business days after
commencement, subject to LINPAC's right to extend the offer. The offer is
subject to customary conditions.
LINPAC currently beneficially owns 2,841,303 shares of ROPAK's outstanding
common stock, or approximately 57.2% of the outstanding common stock (assuming
exchange of certain exchangeable securities held by LINPAC). If sufficient
shares are tendered pursuant to the offer, then LINPAC intends to seek delisting
of ROPAK common stock from NASDAQ and deregistration from requirements under the
Securities Exchange Act of 1934.
Privately-held LINPAC manufactures a wide variety of plastic, paper and
metal packaging products and operates approximately 50 manufacturing facilities
(of which 8 are located in the United States) with over 7,000 employees
worldwide.
-1-
<PAGE>
[FORM OF PRESS RELEASE]
EXHIBIT (d)(9)
FOR IMMEDIATE RELEASE
Tuesday, March 21, 1995
CONTACT: Information Agent
Kissel-Blake Inc.
(212) 344-6733
LINPAC MOULDINGS LTD. COMMENCES TENDER OFFER TO ACQUIRE
ROPAK CORPORATION COMMON STOCK AT $11.00 PER SHARE
LINPAC MOULDINGS LTD. today announced that it was commencing a cash tender
offer for any and all outstanding shares of ROPAK CORPORATION (NASDAQ/NMS
Symbol: ROPK) common stock for $11.00 per share.
The offer expires at 12:00 Midnight, New York City time on Tuesday, May 2,
1995, subject to LINPAC's right to extend the offer. The offer is subject to
customary conditions.
The offer is being made only through definitive offering materials filed
with the Securities and Exchange Commission. Copies of the Offer to Purchase and
related Letter of Transmittal may be obtained from the Information Agent,
Kissel-Blake Inc.
LINPAC currently beneficially owns 2,841,303 shares of ROPAK's outstanding
common stock, or approximately 57.2% of the outstanding common stock (assuming
exchange of certain exchangeable securities held by LINPAC). If the requirements
for delisting are satisfied after completion of the offer, then LINPAC intends
to seek delisting of the ROPAK common stock from the Nasdaq Stock Market and
deregistration from the reporting requirements of the Securities Exchange Act of
1934, as amended.
Privately-held LINPAC manufactures a wide variety of plastic, paper and
metal packaging products and operates approximately 50 manufacturing facilities
(of which 8 are located in the United States) with over 7,000 employees
worldwide.
