SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 27, 1997
_____________
American Filtrona Corporation
_____________________________
(Exact name of registrant as specified in its charter)
Virginia 0-7163 54-0574583
______________________ __________ ____________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3951 Westerre Parkway, Suite 300, Richmond, Virginia 23233
_______________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804-346-2400)
______________
<PAGE>
Item 5. Other Events.
On June 27, 1997, American Filtrona Corporation (the "Corporation")
issued the press release attached hereto as Exhibit 99.1, announcing that (i)
WBT Holdings LLC had terminated the merger agreement between the Corporation and
WBT Holdings and (ii) the Corporation's Board of Directors had authorized the
Special Committee of the Board to explore other alternatives to enhance
shareholder value, including the sale of the Corporation.
On July 2, 1997, the Corporation issued the press release attached
hereto as Exhibit 99.2, announcing that (i) it had entered into a letter of
intent with Bunzl plc regarding the proposed sale of the Corporation and (ii)
certain persons and entities having the right to vote approximately 46% of the
Corporation's outstanding shares had signed a letter of commitment to vote their
shares in favor of the transaction. Copies of the letter of intent and the
letter of commitment are attached hereto as Exhibits 99.3 and 99.4,
respectively.
Item 7. Exhibits.
EX-99.1 American Filtrona Corporation - Press Release (June 27, 1997)
EX-99.2 American Filtrona Corporation - Press Release (July 2, 1997)
EX-99.3 Letter of Intent between American Filtrona Corporation and
Bunzl plc dated as of July 1, 1997
EX-99.4 Letter of Commitment among American Filtrona Corporation,
Frances B. Bunzl, Bennett L. Kight, WBT Holdings LLC,
Rudolph H. Bunzl, Wallace Stettinius and William A. Forrest,
Jr. dated as of July 1, 1997
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN FILTRONA CORPORATION
(Registrant)
Date: July 8, 1997 By: /s/ John D. Barlow, Jr.
-------------------------------------
John D. Barlow, Jr.
Vice President - Finance
-3-
<PAGE>
EXHIBITS
Exhibit Number and Description
______________________________
99.1 American Filtrona Corporation - Press Release (June 27, 1997)
99.2 American Filtrona Corporation - Press Release (July 2, 1997)
99.3 Letter of Intent between American Filtrona Corporation and Bunzl
plc dated as of July 1, 1997
99.4 Letter of Commitment among American Filtrona Corporation, Frances
B. Bunzl, Bennett L. Kight, WBT Holdings LLC, Rudolph H. Bunzl,
Wallace Stettinius and William A. Forrest, Jr. dated as of July 1,
1997
-4-
American Filtrona Corporation
3951 Westerre Parkway, Suite 300
Richmond, VA 23233
Mailing Address:
P.O. Box 31640
Richmond, VA 23294
FOR IMMEDIATE RELEASE
Date: June 27, 1997
Contact: John L. Morgan or John D. Barlow, Jr.
Phone: 804/346-2400 - Fax: 804/346-0164
Richmond, VA - American Filtrona Corporation (NASDAQ-NM Symbol
AFIL) announced today that WBT Holdings, LLC, has terminated the Merger
Agreement between American Filtrona and WBT Holdings. The Board of
Directors of American Filtrona has authorized the Special Committee of the
Board to explore other alternatives to enhance shareholder value, including
a sale of American Filtrona.
American Filtrona Corporation
3951 Westerre Parkway, Suite 300
Richmond, VA 23233
Mailing Address:
P.O. Box 31640
Richmond, VA 23294
FOR IMMEDIATE RELEASE
Date: July 2, 1997
Contact: John L. Morgan or John D. Barlow, Jr.
Phone: 804/346-2400 -- Fax: 804/346-0164
Richmond, VA -- American Filtrona Corporation (NASDAQ-NM Symbol
AFIL) announced today that it has entered into a letter of intent for the
acquisition by Bunzl plc of all outstanding shares of American Filtrona for
a per share cash price of $46.52. The trustees of trusts for members of
the family of the late Walter Bunzl, trustees of trusts for members of the
family of Rudolph H. Bunzl, and Mr. Bunzl individually have signed letters
of commitment to vote their shares in favor of the transaction. Such
shareholders have the right to vote approximately 46% of American
Filtrona's outstanding shares.
Execution of a definitive acquisition agreement is subject to
final negotiation of terms and conditions and completion of business and
financial reviews. Consummation of this transaction would be subject to
normal regulatory filings, American Filtrona shareholder approval and other
usual conditions.
July 1, 1997
Mr. Gilbert M. Rosenthal, Chairman
Special Committee of the Board of Directors
of American Filtrona Corporation
c/o MedOutcomes, Inc.
3301 Rosedale Avenue
Richmond, VA 23230
Dear Gilbert:
Bunzl plc is pleased to make the proposal to acquire American Filtrona
Corporation ("AFC") set forth in this letter of intent. Upon its acceptance by
AFC, this letter of intent will signify the intentions of the parties to
negotiate in good faith to attempt to agree upon and execute a definitive
Agreement and Plan of Merger (the "Merger Agreement") consistent with the terms
and conditions contained herein and to obtain approval of the shareholders of
AFC to the Merger Agreement. Except for the provisions of paragraphs 7, 12, 13
and 14 hereof (which are intended to be binding and enforceable), this letter is
not intended to constitute a contract or an offer to enter into a contract, nor
to be binding upon either of the parties, nor to create any legal obligations or
rights in any party with respect to any of the matters set forth herein.
1. Form of Transaction. AFC would enter into an agreement and plan of
merger (the "Merger Agreement") with an affiliate of Bunzl plc ("Newco") and
other affiliates of Bunzl plc, pursuant to which at the closing Newco would
merge with and into AFC (the "Merger"). In the Merger, the outstanding shares
of Newco capital stock would be canceled or converted into shares of AFC common
stock, and the outstanding shares of AFC capital stock would be converted into
the right to receive the consideration described in paragraph 2 below. Bunzl
USA, Inc. will guarantee the obligations of Newco (and other affiliates of Bunzl
plc) under the Merger Agreement.
<PAGE>
Mr. Gilbert M. Rosenthal
July 1, 1997
Page 2
2. Consideration. On the terms and conditions set forth in the Merger
Agreement, each outstanding share of AFC capital stock automatically would be
converted into a right to receive $46.52 in cash (the "Merger Consideration").
The Merger Agreement will specify that each stock option outstanding immediately
before the Merger shall be converted into the right to receive a cash amount
equal to the difference between the Merger Consideration and the exercise price
of such option.
3. Payment of Merger Consideration. On or after the effective date of
the Merger, the Merger Consideration and the option payments would be payable by
a bank acting as exchange agent upon surrender to the exchange agent by each
such shareholder of his or her certificates representing shares of AFC capital
stock and by each option holder of his or her option agreements.
4. Interim Operations. Until the closing of the Merger Agreement, AFC
shall be operated solely in the ordinary course with no dividends or
distributions in respect of AFC's capital stock (other than regular quarterly
dividends payable on or before the closing date), and, except as contemplated by
and scheduled in the Merger Agreement, no major capital expenditures, bonuses,
severance agreements or other adjustments to compensation, except normally
scheduled changes, and no changes in capital structure, shall be paid or made
without approval of Newco.
5. Due Diligence. From and after the date hereof, Bunzl plc, Bunzl
USA, Inc., Newco and their representatives will be provided with full access to
AFC's books, records and premises upon reasonable notice to AFC and during
regular business hours and also will be provided with copies of financial
statements, tax returns, agreements and other materials as requested, which
shall be kept confidential pursuant to the confidentiality agreement referred to
in paragraph 12 below. Newco's (and Bunzl plc's other affiliates') obligation
to execute the Merger Agreement is subject to the satisfactory completion of
such due diligence.
6. Certain Fees. Newco and AFC each shall pay its own fees and
expenses and those of its attorneys, agents and advisers. AFC shall not be
obligated to any investment adviser, investment broker, finder or broker in
<PAGE>
Mr. Gilbert M. Rosenthal
July 1, 1997
Page 3
connection with the proposed acquisition except for AFC's obligations to
Goldman, Sachs & Co. pursuant to a letter dated June 28, 1996. AFC shall not
pay or become obligated to pay any fee to or expenses of any competing bidder
for AFC or any significant part of its assets or business.
7. Exclusivity. From July 1, 1997 until the earlier of execution of
the Merger Agreement or termination of this letter of intent pursuant to
paragraph 8, AFC will not, and will not permit any of its officers, directors,
employees, financial advisors, agents or other representatives or those of its
subsidiaries to, solicit, initiate or have any, or any further, discussions or
negotiations with any party other than Bunzl plc with respect to any merger,
acquisition, takeover proposal or offer for AFC or its shares or any significant
portion of its business or assets, however structured or to be effected, or
furnish any information concerning AFC or its businesses or assets to any party
other than Bunzl plc with respect to any such acquisition or takeover proposal.
8. Merger Agreement. AFC, Bunzl plc and Newco will negotiate in good
faith to agree upon the provisions of the Merger Agreement on the basis set
forth in this proposal. The Merger Agreement shall contain usual and customary
representations and warranties (and supporting disclosures), agreements and
conditions pending closing and other matters typically found in agreements
relating to transactions of this type, size and complexity and otherwise
satisfactory to the parties in form and substance. The Merger Agreement shall
be executed and delivered as soon as possible, and in no event later than
September 30, 1997. AFC, Newco and other affiliates of Bunzl plc will use their
best efforts to execute and deliver the Merger Agreement in accordance with the
terms hereof on or prior to July 30, 1997. If the parties have not executed a
Merger Agreement by September 30, 1997, all obligations of the parties under
this letter of intent (except those obligations provided in paragraphs 12, 13
and 14) shall terminate automatically as of a termination time specified by
either party in a notice to the other party given not less than 48 hours prior
to such termination time. Without limiting the foregoing, the Merger Agreement
shall provide for the following:
(a) Receipt by AFC of an opinion from Goldman, Sachs & Co. at the
time of execution of the Merger Agreement, and not withdrawn before the
closing thereunder, that the Merger Consideration is fair to AFC
shareholders.
<PAGE>
Mr. Gilbert M. Rosenthal
July 1, 1997
Page 4
(b) Approval by the Board of Directors of AFC of the Merger and,
subject to subparagraph (e) below, recommendation by the Board that the AFC
shareholders approve the Merger.
(c) Approval of the Merger by holders of more than two-thirds of the
outstanding stock of AFC at a shareholders meeting to be duly called and
held.
(d) After execution and prior to termination of the Merger
Agreement, neither AFC nor its officers, directors, financial advisors or
agents shall at any time solicit or encourage (including by way of
furnishing information) any merger, acquisition, asset acquisition or
takeover proposal or offer or engage in any discussions or negotiations
relating thereto, unless the Board of Directors of AFC concludes in good
faith, after receiving the advice of its counsel, that the failure to take
such action would violate the fiduciary obligations of the directors of AFC
under applicable law.
(e) The Board of Directors of AFC shall have a "fiduciary out,"
permitting it to terminate the Merger Agreement because of its receipt of a
higher competing proposal at any time that the Board concludes, in good
faith, after receiving the advice of its counsel, that such action is in
the best interests of AFC and its shareholders.
(f) If the Board of Directors exercises its fiduciary out, AFC shall
be obligated as follows:
(i) AFC shall pay to Bunzl plc or Newco the expenses incurred
by Bunzl plc after June 26, 1997 in connection with the Merger
Agreement, up to a maximum of 1% of the product of the Merger
Consideration multiplied by the total number of shares of
outstanding AFC stock, within three business days after receipt by
AFC of a statement specifying such expenses; and
(ii) if any proposal for a merger, acquisition, takeover
proposal or offer for AFC or its shares or any significant portion
of
<PAGE>
Mr. Gilbert M. Rosenthal
July 1, 1997
Page 5
its assets or businesses, however structured or to be effected, is
consummated on or before July 30, 1998, AFC shall pay to Bunzl plc
or Newco a fee equal to 2% of the product of the Merger
Consideration multiplied by the total number of shares of
outstanding AFC stock, within three business days after such
consummation.
(g) The Merger Agreement shall contain customary conditions to the
obligations of Newco to proceed, including without limitation the
following, and the other special conditions set forth below:
(i) Stay bonuses and severance agreements for employees will be
limited to those approved by the Compensation Committee and Special
Committee, as reported to Bunzl plc as of the date hereof.
(ii) The employment termination agreement with John Morgan will
provided for a severance payment (in lieu of all salary and bonuses
payable after the closing and all additional accruals or
contributions that would be payable after the closing with respect
to his interests under the Pension Plan, SERP and 401(k) Plan and,
except as provided herein, in lieu of continued participation in
welfare plans) of $800,000, and (y) AFC's continuing until December
31, 1999 to provide Mr. Morgan participation, as a retiree, in AFC's
medical insurance plan (if available thereunder) on the same
contributory basis as now in effect; provided, however, that Mr.
Morgan will pay any premiums in excess of $9,000 for such coverage
during 1997 through 1999. Mr. Morgan will enter into a
non-competition and consulting agreement on terms previously agreed
to between Mr. Morgan and Bunzl plc. AFC will hold Mr. Morgan
harmless from the application of the golden parachute and excise tax
provisions of Sections 280G and 4999 of the Internal Revenue Code of
1986, as amended, respectively. This will include indemnification of
Mr. Morgan for any excise tax obligations and any federal, state or
local income, employment-related and excise tax obligations related
to indemnification payments.
<PAGE>
Mr. Gilbert M. Rosenthal
July 1, 1997
Page 6
(iii) The accuracy of warranties and representations of AFC
regarding AFC, its financial condition, operations, business,
assets, liabilities and prospects.
(iv) The absence of any material adverse change in the
financial condition, results of operations, business or prospects
of AFC from that reflected in its December 31, 1996 financial
statements.
(v) The receipt of any necessary governmental or contractual
consents to the consummation of the Merger Agreement so that the
surviving corporation in the Merger can continue to use all of AFC's
significant assets, including software and other contract rights,
following the Merger.
(vi) Relevant filings being made and waiting periods expiring
under the Hart-Scott-Rodino Act (as defined below).
(h) Concurrently with the execution of the Merger Agreement, Newco
shall have received an irrevocable proxy coupled with an interest executed
by each of Mrs. Frances B. Bunzl, Bennett L. Kight, Esquire, Mr. Rudolph H.
Bunzl, Mr. Wallace Stettinius and Mr. William A. Forrest, Jr., granting to
such persons named in such respective proxy full authority and power to
vote all shares in which such person has a beneficial interest for the
approval of the Merger Agreement; provided that such proxy shall terminate
automatically upon the termination of the Merger Agreement; provided,
however, that such proxy shall not terminate if the person granting such
proxy shall have breached its obligations in connection with the Merger
Agreement in any manner that proximately contributed to the termination of
such agreement.
9. Shareholder Approval. Following execution of the Merger Agreement,
subject to sub-paragraph 8(e), the Board of Directors of AFC shall:
<PAGE>
Mr. Gilbert M. Rosenthal
July 1, 1997
Page 7
(a) proceed promptly to call a special meeting of its shareholders,
to be held as soon as practicable, for the purpose of voting on the
transactions contemplated herein;
(b) recommend approval by AFC's shareholders of the transactions
contemplated herein; and
(c) use its best commercial efforts to solicit sufficient proxies to
obtain such approval.
In connection therewith, AFC shall, upon the execution of this letter of intent,
promptly prepare and, upon the execution of the Merger Agreement, promptly file
a proxy statement and other related proxy materials containing all information
required under the Securities Exchange Act of 1934, as amended, all of which
will be distributed to AFC's shareholders.
10. Hart-Scott Filings. Promptly after the execution of this letter of
intent, AFC, Newco and Bunzl plc will cooperate with each other in the
preparation of all filings with respect to the transactions contemplated herein
required to be made with the Federal Trade Commission (the "FTC") and the
Department of Justice under the Antitrust Improvements Act of 1976 (the
"Hart-Scott-Rodino Act"). In the event that the FTC or the Department of Justice
requires any additional information with respect to the transactions, AFC, Newco
and Bunzl plc will cooperate with each other in promptly obtaining and preparing
such information and delivering it to the FTC and the Department of Justice.
11. Closing Date. The closing of the transactions contemplated hereby
will take place at the offices of Hunton & Williams, Riverfront Plaza, Richmond,
VA at 10:00 a.m. (local time) on the next business day following approval of the
Merger Agreement by AFC's shareholders and satisfaction of all other conditions
to the Merger, or at such other place, on such other date and at such other time
as the parties may mutually agree.
12. Confidentiality. Bunzl plc, its affiliates, agents and advisors have
entered into a Confidentiality Agreement agreeing that all of the information
that AFC or its agents and advisors shall provide to Bunzl plc, its affiliates,
agents and advisors concerning AFC or that is obtained by Newco or its agents or
advisors
<PAGE>
Mr. Gilbert M. Rosenthal
July 1, 1997
Page 8
from its examination of the facilities, records and personnel of AFC will be
used solely for the purpose of the evaluation of the proposed acquisition of
AFC. Bunzl plc and Newco will be bound by that Confidentiality Agreement. AFC
and Bunzl plc agree that there will be no public statement about this proposal
or disclosure of it to customers of AFC or Bunzl plc save as mutually agreed or
as required by applicable law or by any governmental or regulatory authority or
securities exchange.
13. Fees and Expenses. If a definitive Merger Agreement consistent with
the terms of this letter of intent is not executed on or before termination of
this letter of intent pursuant to paragraph 8 hereof:
(i) if AFC has received on or before that date a higher
competing proposal for a merger, acquisition, or takeover proposal
or offer for AFC or its shares or any significant portion of its
businesses or assets, however structured or to be effected, AFC
shall pay to Bunzl plc or Newco an amount equal to the expenses
incurred by Bunzl plc after June 26, 1997 in connection with the
proposed transactions contemplated by this letter of intent up to a
maximum of 1% of the product of the Merger Consideration multiplied
by the total number of outstanding shares of AFC stock, which amount
shall be paid promptly after receipt by AFC of a statement
specifying such expenses; and
(ii) if any proposal for a merger, acquisition or takeover
proposal or offer for AFC or its shares or any significant portion
of its assets or businesses, however structured or to be effected,
is consummated on or before July 30, 1998, AFC shall pay to Bunzl
plc or Newco, within three business days after such consummation, a
fee equal to 2% of the product of the Merger Consideration
multiplied by the total number of outstanding shares of AFC stock;
provided, however, that no fee or expense shall be payable pursuant to this
paragraph 13 if Goldman, Sachs & Co. is unable to provide a fairness opinion to
the Special Committee regarding the Merger Consideration or if Bunzl plc
terminates this letter of intent for any reason other than refusal of AFC to
execute a definitive Merger Agreement consistent with the terms of this letter
of intent.
<PAGE>
Mr. Gilbert M. Rosenthal
July 1, 1997
Page 9
14. Amendment of Letter Agreement. Without the prior written consent of
Newco, AFC shall not terminate, amend or waive any provisions of that certain
letter agreement dated the date hereof with certain of its shareholders with
respect to the voting of their respective shares.
15. Approval of Merger Agreement. The Merger Agreement effectuating this
letter of intent is subject to approval by the Board of Directors of AFC.
Yours truly,
BUNZL PLC
by: /s/ A. J. Habgood
------------------------------
Accepted, this July 1, 1997,
Special Committee
by: /s/ Gilbert M. Rosenthal by JLM
------------------------------
Gilbert M. Rosenthal, Chairman
cc: C. Porter Vaughan, III, Esquire
John J. McCarthy, Jr., Esquire
Mr. David Coyle
American Filtrona Corporation
3951 Westerre Parkway, Suite 300
Richmond, Virginia 23233
804-346-2400
July 1, 1997
Mrs. Frances B. Bunzl Mr. Wallace Stettinius
3649 Peachtree Road, Apt. 105 Post Office Box 27367
Atlanta, Georgia 30319 Richmond, Virginia 23261
Bennett L. Kight, Esquire Mr. William A. Forrest, Jr.
c/o Sutherland, Asbill & Brennan, L.L.P. Post Office Box 27367
999 Peachtree Street, N.W. Richmond, Virginia 23261
Atlanta, Georgia 30309
WBT Holdings LLC
Mr. Rudolph H. Bunzl 999 Peachtree Street, N.E.
5540 Falmouth Street, Suite 305 Suite 2300
Richmond, Virginia 23230 Atlanta, Georgia 30309-3996
Attention: Bennett L. Kight, Esquire
Dear Mrs. Bunzl and Gentlemen:
This letter constitutes the agreement between American Filtrona
Corporation, a Virginia corporation (the "Company"), and each of the undersigned
(the "Shareholders") regarding shares of common stock, par value $1.00, of the
Company (the "Shares") beneficially owned by the Shareholders. The Company is
contemplating entering into a letter of intent (the "Letter of Intent") in the
form attached hereto as Exhibit A, pursuant to which the Company would be merged
or otherwise combined with an affiliate ("Newco") of Bunzl plc, an English
public limited company ("Bunzl"), on the terms described in the Letter of
Intent.
In consideration of the Company's expenditure of efforts and incurrence
of expenses, the parties agree as follows:
1. Each of the Shareholders hereby agrees that if:
(a) an acquisition transaction incorporating the terms of paragraphs
1, 2, 3 and 8(e)(f) and (h) of the Letter of Intent and providing for
the actions described on Exhibit B attached hereto (subject to the
limitations and exceptions set forth therein) (the "Transaction") is
approved by the Board of Directors of the Company upon recommendation
of the Special Committee of the Board of Directors; and
<PAGE>
Mrs. Frances B. Bunzl
Bennett L. Kight, Esquire
Mr. Rudolph H. Bunzl
Mr. Wallace Stettinius
Mr. William A. Forrest
WBT Holdings LLC
July 1, 1997
Page Two
(b) the Company has received an opinion of Goldman Sachs & Co. that
the consideration to be received by the Company's shareholders in the
Transaction other than a Shareholder who participates in the actions
described in Exhibit B is fair to such shareholders, then
(i) each of the Shareholders shall have granted a proxy as provided
in paragraph 8(h) of the Letter of Intent, or, if he or she has
not done so with the approval of Bunzl, then such Shareholder
shall vote all Shares as to which he or she has voting power in
favor of the Transaction if the Transaction involves the vote of
the Company's shareholders; and
(ii) each of the Shareholders shall tender or submit for exchange all
Shares as to which he or she has dispositive power if the
Transaction involves a tender or exchange offer.
2. Until the consummation of the Transaction, each of the Shareholders
hereby agrees that:
(a) if the voting or dispositive power with respect to any Shares is
subsequently acquired by a Shareholder, such Shares will become
subject to the terms of this Agreement; and
(b) without the prior approval of Bunzl, he or she will not sell,
assign, pledge or otherwise transfer any of his or her Shares or any
interest therein to any person except to the extent necessary to
effect the transaction described in Exhibit B attached hereto;
provided that Shares that are transferred either with such approval
by Bunzl or as described on such Exhibit B shall remain subject to
the terms of this Agreement.
3. If (i) the Company and Newco have not entered into a definitive
agreement with respect to the Transaction by September 30, 1997, (ii) such
definitive agreement is terminated in accordance with its terms, or (iii) the
Company releases any of the Shareholders from his or her obligations under this
Agreement (with any transfer made in compliance with paragraph 2(b) above not
being deemed such a release), then this Agreement shall expire and all further
obligations of the parties hereto shall terminate.
<PAGE>
Mrs. Frances B. Bunzl
Bennett L. Kight, Esquire
Mr. Rudolph H. Bunzl
Mr. Wallace Stettinius
Mr. William A. Forrest
WBT Holdings LLC
July 1, 1997
Page Three
4. Each of the Shareholders represents that he or she, as to shares held
individually or as a trustee, has all requisite power or authority to enter into
this Agreement in the respective capacities in which he or she owns or controls
Shares, and the covenants of the Shareholders set forth herein are valid and
enforceable against him or her, respectively, in the respective capacities in
which he or she owns or controls Shares. The representations, agreements and
covenants of the Shareholders set forth herein are also intended for the benefit
of Newco and Bunzl, and Newco and Bunzl shall have the right to enforce such
agreements and covenants to the maximum extent permitted by law.
5. Each of the parties hereto acknowledges and agrees that in the event
of any breach of this Agreement, each non-breaching party would be irreparably
and immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that the parties hereto (a) will waive, in any action for
specific performance, the defense of adequacy of a remedy at law and (b) shall
be entitled, in addition to any other remedy to which they may be entitled at
law or in equity, to compel specific performance of this Agreement in any action
instituted in a court of competent jurisdiction.
Please acknowledge your agreement with the foregoing by executing all
copies of this Agreement as marked. Please retain a copy for your records and
return all other copies to the Company in the enclosed envelope.
Sincerely,
AMERICAN FILTRONA CORPORATION
By: /s/ John L. Morgan
------------------
John L. Morgan
Chairman
<PAGE>
ACKNOWLEDGED AND AGREED:
/s/ Frances B. Bunzl
- -----------------------------
Frances B. Bunzl
/s/ Bennett L. Kight
- ----------------------------
Bennett L. Kight
/s/ Rudolph H. Bunzl
- ----------------------------
Rudolph H. Bunzl
/s/ Wallace Stettinius
- ----------------------------
Wallace Stettinius
/s/ William A. Forrest, Jr.
- ----------------------------
William A. Forrest, Jr.
WBT HOLDINGS LLC
/s/ Bennett L. Kight
- ----------------------------
By: Bennett L. Kight
Title: President
