<PAGE> 1
UNITED STATES
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): May 20, 1998
REPUBLIC GROUP INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 1-7210 75-1155922
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
811 East 30th Avenue
Hutchinson, Kansas 67502
(Address of principal executive offices)
(316) 727-2700
(Registrant's Telephone No.)
<PAGE> 2
ITEM 5. OTHER EVENTS
Certain matters discussed in this report may constitute
forward-looking statements within the meaning of the federal securities laws.
These forward-looking statements are based on current expectations and entail
various risks and uncertainties. The forward-looking statements may not be
realized owing to a number of factors -- including general economic and
competitive conditions, foreign currency exchange rates, weather, market
acceptance of products produced by the new project described below, raw
material availability and costs, facility fuel costs, labor shortages and
costs, financing risks associated with the new project, changing circumstances
affecting the viability of the new project and other risks detailed from time
to time in the Company's filings with the Securities and Exchange Commission,
including the Company's annual report on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K.
On May 20, 1998, the Company announced that its Board of Directors has
approved plans to build and operate a new, 100% recycled paperboard mill with
an annual capacity exceeding 220,000 tons. The new mill will be located in
Lawton, Oklahoma, a location chosen for its convenience with respect to the
Company's shipments to its customers throughout North America. The new mill
(the "Lawton Mill") will supply external customers with premium gypsum-grade
paperboard, a significant portion of which will be sold to James Hardie Gypsum,
Inc. under a long-term contract. James Hardie Gypsum, Inc. is a major
independent supplier of gypsum wallboard in the U.S. market. Additionally, the
Lawton Mill will supply the Company's own gypsum wallboard facility in Duke,
Oklahoma (the "Duke Plant"), which is currently undergoing an expansion,
expected to be completed during the summer, that will double the Duke Plant's
effective capacity to 1.2 billion square feet annually. While the Lawton Mill
has been designed to make premium gypsum-grade paperboard, it will also have
the capability to produce a variety of other paperboard products. Construction
of the Lawton Mill is currently scheduled to commence in June 1998 and is
expected to be completed by the end of 1999.
Total construction costs for the Lawton Mill are estimated to be
approximately $150-$170 million. The Company anticipates financing the Lawton
Mill through debt financing, all or a portion of which may be secured by
substantially all of the assets of the Company and its subsidiaries. On May
15, 1998, the Company increased to $50.0 million amounts available to it under
its existing revolving line of credit in order to finance the ongoing expansion
of the Duke Plant and provide funds for the construction of the Lawton Mill
until permanent financing can be obtained. With respect to the costs
associated with the Lawton Mill, the Company plans to expense start-up costs
and capitalize all project costs and interest payments, as required under GAAP,
until the Lawton Mill is operational. The Company expects that the start-up of
the Lawton Mill and the transition of the portion of the production of the
Company's paperboard mills that currently supply the Duke Plant to other
customers will be non-accretive to earnings until approximately one (1) to two
(2) years after commencement of operations at the Lawton Mill.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Fourth Amendment to Loan Documents, dated as of April
28, 1998, between Republic Group Incorporated,
Republic Paperboard Company, Republic Paperboard
Company of West Virginia, Republic Gypsum Company and
NationsBank, N.A.
99.2 Letter Agreement dated May 5, 1998 between Republic
Group Incorporated, Republic Paperboard Company,
Republic Paperboard Company of West Virginia,
Republic Gypsum Company and NationsBank, N.A.
99.3 Press Release, dated May 20, 1998.
Page 3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
REPUBLIC GROUP INCORPORATED
Dated: May 27, 1998 By: /s/ Doyle R. Ramsey
----------------------------------------
Printed Name: Doyle R. Ramsey
Title: Vice President - Finance and
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Item
Number Description Page
- ------ ----------- ----
<S> <C> <C>
99.1 Fourth Amendment to Loan Documents, dated as of April 28, 1998, between Republic Group 6
Incorporated, Republic Paperboard Company, Republic Paperboard Company of West Virginia,
Republic Gypsum Company and NationsBank, N.A.
99.2 Letter Agreement dated May 5, 1998 between Republic Group Incorporated, Republic Paperboard 15
Company, Republic Paperboard Company of West Virginia, Republic Gypsum Company and NationsBank,
N.A.
99.3 Press Release, dated May 20, 1998. 18
</TABLE>
Page 5
<PAGE> 1
EXHIBIT 99.1
FOURTH AMENDMENT TO LOAN DOCUMENTS
THIS FOURTH AMENDMENT TO LOAN DOCUMENTS (this "Agreement") is made as
of the 28th day of April, 1998, by and between REPUBLIC GROUP INCORPORATED, a
Delaware corporation formerly known as Republic Gypsum Company ("Parent"),
REPUBLIC PAPERBOARD COMPANY, a Kansas corporation ("KS. Subsidiary"), REPUBLIC
PAPERBOARD COMPANY OF WEST VIRGINIA, a West Virginia Corporation ("W. VA.
Subsidiary"), REPUBLIC GYPSUM COMPANY, an Oklahoma corporation ("OK
Subsidiary"), (all of the foregoing parties are sometimes collectively referred
to as the "Borrowing Group") and NATIONSBANK, N.A., successor by merger to
BOATMEN'S FIRST NATIONAL BANK OF KANSAS CITY, a national banking association
(the "Bank");
RECITALS
A. Bank has extended credit to Parent ("Revolving Loans")
evidenced by a Revolving Credit Promissory Note in the principal amount of
Seven Million Dollars ($7,000,000.00) dated June 30, 1995 (the "Revolving
Note").
B. KS. Subsidiary and W. VA. Subsidiary executed and delivered to
the Bank the Revolving Loan Guaranty Agreement dated June 30, 1995 wherein KS.
Subsidiary and W. VA. Subsidiary agreed to unconditionally guarantee to the
Bank repayment of the Revolving Loans.
C. Bank has made a Loan to Parent and W. VA. Subsidiary ("Term
Loan") evidenced by a Term Loan Promissory Note in the principal amount of
Twenty-Eight Million Dollars ($28,000,000.00) dated June 30, 1995 (the "Term
Note").
D. KS. Subsidiary executed and delivered to the Bank the Term
Loan Guaranty dated June 30, 1995 wherein KS. Subsidiary agreed to
unconditionally guarantee to the Bank the payment of certain obligations of
Parent and W. VA. Subsidiary, including without limitation, repayment of the
Term Loan.
E. As security for the Term Loan, W. VA. Subsidiary granted to
the Bank liens and security interests in certain collateral as set forth in
that certain Security Agreement ("Security Agreement") dated June 30, 1995 and
that certain Deed of Trust dated June 30, 1995 and recorded June 30, 1995 with
the Clerk of the County Commission of Jefferson County, West Virginia in Book
808, at Page 493, as Document No. 4304 (the "Deed of Trust") which encumbers
certain property located in Jefferson County, West Virginia.
F. The credit relationship between the Bank and the Borrowing
Group is controlled and governed by the terms of the Revolving and Term Credit
Agreement dated June 30, 1995, the First Amendment To Loan Documents ("First
Amendment") dated December 1, 1995, the Second Amendment To Loan Documents
("Second Amendment") dated January 23, 1996 and the Third Amendment To Loan
Documents dated September 5, 1996 (collectively the "Credit Agreement").
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<PAGE> 2
G. Pursuant to the First Amendment, OK. Subsidiary agreed to
unconditionally guarantee the payment of the Term Loan and the Revolving Loans
and to become a party to the Term Loan Guaranty and the Revolving Loan
Guaranty.
H. The Borrowing Group and the Bank enter into this Agreement for
the purpose of (i) amending the maturity of the Revolving Note, (ii) increasing
the principal amount available for borrowing under the Revolving Note and (iii)
to amend the definition of "Applicable Margin" as contained in the Revolving
Note.
I. The Bank requires that the Loan Documents be expressly
ratified and confirmed by Borrowing Group.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and the mutual agreements contained herein, the Bank
and Borrowing Group agree as follows:
1. No Events of Default. The Borrowing Group represents and
warrants that all of the representations, warranties and covenants in the
Credit Agreement remain true and correct and that no Event of Default under the
Credit Agreement or any Loan Document currently exists.
2. Amendments to Credit Agreement. The Credit Agreement is
amended as follows:
(a) Subparagraph 2.1 is deleted and the following provision is
inserted in lieu thereof:
2.1 Agreement To Lend. The Bank agrees, on the terms and
subject to the conditions set forth in this Agreement, to make loans
(each a "Revolving Loan") to RGC ("Revolving Loan Borrower"), from
time to time during the period beginning on the Closing Date and
ending on June 30, 1999 (the "Revolving Credit Maturity Date") or the
date of termination of the commitments hereunder pursuant to Article 9
upon the occurrence of an Event of Default, in such amounts as
Borrower shall request as provided in Section 4.1 hereof; provided,
however, that the Bank shall have no obligation to make a requested
Revolving Loan if, after the making of such Revolving Loan, the
aggregate unpaid principal balance of all Revolving Loans made by the
Bank to Revolving Loan Borrower hereunder would exceed the Revolving
Credit Commitment or if a Default has occurred and is continuing.
Notwithstanding the foregoing, Revolving Loan Borrower and the Bank
agree that on the first anniversary of the Closing Date, and on each
anniversary of the Closing Date thereafter, the Revolving Credit
Maturity Date may be extended for an additional one-year period as
Revolving Loan Borrower and the Bank may mutually agree, so that at
each such anniversary on which the
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maturity of the Revolving Loan is extended, the Revolving Credit
Maturity Date shall be the date that is two years after such
anniversary.
(b) The reference to "Seven Million Dollars ($7,000,000.00)" in
the first recital on the first page of the Credit Agreement is deleted and
"Fifty Million Dollars ($50,000,000.00)" is inserted in lieu thereof.
(c) The references to "Barry Sullivan" and "(Telecopy No. (816)
691-7426)" in subparagraph 10.1(c) are deleted and references to "Kurt Knutson"
and "(Telecopy No. (816) 979-7561)", respectively, are inserted in lieu
thereof.
(d) The definition of "Revolving Credit Commitment" contained in
Exhibit 1 is deleted and the following definition is inserted in lieu thereof:
"Revolving Credit Commitment" shall mean Fifty Million Dollars
($50,000,000.00).
3. Amendments To Revolving Note. The Revolving Note is amended
as follows:
(a) References on the first page to "$7,000,000.00" or "Seven
Million Dollars ($7,000,000.00)" are deleted and references to "$50,000,000.00"
and "Fifty Million Dollars ($50,000,000.00)", respectively, are inserted in
lieu thereof.
(b) The portion of the definition of "Applicable Margin" contained
within (a) (v) is deleted and the following provision is inserted in lieu
thereof:
(v) equal to or greater than 5.00 to 1.00, 50 basis
points.
(c) The definition of "Maturity" as contained in paragraph 1 on
page 3, is deleted and the following provision is inserted in lieu thereof:
(1) "Maturity" means June 30, 1999.
4. Cross-Referenced Terms. Each reference in the Loan Documents
to the Credit Agreement or the Revolving Note shall henceforth refer to the
Credit Agreement or the Revolving Note as amended hereby.
5. Conditions Precedent. On or prior to the date hereof, the
Bank shall have received the following, each of which shall be in form and
substance satisfactory to the Bank:
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<PAGE> 4
(a) evidence of the authority of the Borrowing Group to enter into
the transactions contemplated hereby; and
(b) all other documents, opinions and items as the Bank may
request.
6. Ratification; Estoppel. The terms, conditions, covenants and
provisions of the Credit Agreement, the Revolving Note, the Term Loan Guaranty,
the Revolving Loan Guaranty and the Loan Documents, as amended hereby, are
ratified and confirmed by the Borrowing Group in all respects as of the date
hereof.
7. No Impairment. Nothing in this Agreement shall be deemed to
or shall in any manner prejudice or impair the Loan Documents held by the Bank
for the indebtedness evidenced by the Notes arising under the Credit Agreement.
This Agreement shall not be deemed to be nor shall it constitute any
alteration, waiver, annulment or variation of any of the terms, covenants and
provisions of or any rights, powers or remedies under any Loan Document, except
as expressly set forth herein.
8. Law. This Agreement shall be a contract made under, governed
by and construed in accordance with, the internal laws of the State of
Missouri.
9. Survival of Representations. All covenants, representations
and warranties made by Borrowing Group herein and in the Credit Agreement and
any Loan Document shall survive the delivery of this Agreement and the
effective date hereof and shall continue in effect until the Notes are fully
repaid and all obligations thereunder completely performed.
10. Successors. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that the Borrowing Group shall not assign this Agreement or
the Credit Agreement or any of their rights or duties hereunder or thereunder,
without the prior written consent of the Bank.
11. Captions. The section headings and captions in this Agreement
are for convenience only and shall not affect the construction thereof.
12. Terms and Definitions. Terms capitalized herein which are not
defined are to be accorded the meaning such terms possess in the Credit
Agreement.
13. Waiver of Claims and Defenses. The Borrowing Group
acknowledges, as of the date hereof, their obligation for full payment of
amounts outstanding under the Notes and hereby waive any and all claims or
defenses, known or unknown, existing as of the date hereof, which would
diminish their obligation of repayment
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Page 9
<PAGE> 5
under the Notes, the Term Loan Guaranty, or the Revolving Loan Guaranty or
which in any manner arise out of or relate to any Loan Document.
14. NO ORAL CREDIT AGREEMENT. ORAL AGREEMENTS OR COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO
PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN
THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT
BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
IN WITNESS WHEREOF, the Borrowing Group and the Bank have executed
this Agreement as of the date and year first above written.
BORROWING GROUP:
ATTEST: REPUBLIC GROUP INCORPORATED
/s/ JANEY L. RIFE By: /s/ DOYLE R. RAMSEY
- ----------------------------- ----------------------------------
Secretary Name: Doyle R. Ramsey
(Corporate Seal) Title: Vice President Finance
ATTEST: REPUBLIC PAPERBOARD COMPANY
/s/ JANEY L. RIFE By: /s/ DOYLE R. RAMSEY
- ----------------------------- ----------------------------------
Secretary Name: Doyle R. Ramsey
(Corporate Seal) Title: Vice President Finance
ATTEST: REPUBLIC PAPERBOARD COMPANY
OF WEST VIRGINIA
/s/ JANEY L. RIFE By: /s/ DOYLE R. RAMSEY
- ----------------------------- ----------------------------------
Secretary Name: Doyle R. Ramsey
(Corporate Seal) Title: Vice President Finance
ATTEST: REPUBLIC GYPSUM COMPANY
/s/ JANEY L. RIFE By: /s/ DOYLE R. RAMSEY
- ----------------------------- ----------------------------------
Secretary Name: Doyle R. Ramsey
(Corporate Seal) Title: Vice President Finance
-5-
<PAGE> 6
BANK:
NATIONSBANK, N.A.
Successor by merger to
BOATMEN'S FIRST NATIONAL BANK
OF KANSAS CITY
By: /s/ KURT KNUTSON
----------------------------------
Kurt Knutson
Vice President
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<PAGE> 7
STATE OF KANSAS )
) SS.
COUNTY OF RENO )
On this 28th day of April, 1998, before me, personally appeared Doyle
R. Ramsey, who, being first duly sworn and known by me to be the person who
executed this Fourth Amendment To Loan Documents, did say that he has full
power and authority to execute this instrument in the name of Republic Group
Incorporated and is doing so with the full knowledge and consent of the Board
of Directors of said Corporation and that the execution of said instrument is
his own free act and deed on behalf of said Corporation.
/s/ CHERRI L. HARRIS
---------------------------------
Notary Public
My Commission Expires:
February 27, 1999
- -------------------------
STATE OF KANSAS )
) SS.
COUNTY OF RENO )
On this 28th day of April, 1998, before me, personally appeared Doyle
R. Ramsey, who, being first duly sworn and known by me to be the person who
executed this Fourth Amendment To Loan Documents, did say that he has full
power and authority to execute this instrument in the name of Republic
Paperboard Company and is doing so with the full knowledge and consent of the
Board of Directors of said Corporation and that the execution of said
instrument is his own free act and deed on behalf of said Corporation.
/s/ CHERRI L. HARRIS
---------------------------------
Notary Public
My Commission Expires:
February 27, 1999
- -------------------------
-7-
Page 12
<PAGE> 8
STATE OF KANSAS )
) SS.
COUNTY OF RENO )
On this 28th day of April, 1998, before me, personally appeared Doyle
R. Ramsey, who, being first duly sworn and known by me to be the person who
executed this Fourth Amendment To Loan Documents, did say that he has full
power and authority to execute this instrument in the name of Republic
Paperboard Company of West Virginia and is doing so with the full knowledge and
consent of the Board of Directors of said Corporation and that the execution of
said instrument is his own free act and deed on behalf of said Corporation.
/s/ CHERRI L. HARRIS
---------------------------------
Notary Public
My Commission Expires:
February 27, 1999
- -------------------------
STATE OF KANSAS )
) SS.
COUNTY OF RENO )
On this 28th day of April, 1998, before me, personally appeared Doyle
R. Ramsey, who, being first duly sworn and known by me to be the person who
executed this Fourth Amendment To Loan Documents, did say that he has full
power and authority to execute this instrument in the name of Republic Gypsum
Company and is doing so with the full knowledge and consent of the Board of
Directors of said Corporation and that the execution of said instrument is his
own free act and deed on behalf of said Corporation.
/s/ CHERRI L. HARRIS
---------------------------------
Notary Public
My Commission Expires:
February 27, 1999
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STATE OF MISSOURI )
) SS.
COUNTY OF JACKSON )
On this 28th day of April, 1998, before me, personally appeared Kurt
Knutson, who being first duly sworn and known by me to be the person who
executed this Fourth Amendment To Loan Documents, did say that he has full
power and authority to execute this instrument in the name of NationsBank, N.A.
and is doing so as his own free act and deed on behalf of said Bank.
In Witness Whereof, I have hereunto set my hand and affixed my
notarial seal on the day and year last above written.
/s/ NANCY LAUBER
---------------------------------
Notary Public
My Commission Expires:
September 4, 2001
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EXHIBIT 99.2
NationsBank
Financial Strategies Team
14 West 10th Street
Kansas City, MO 64189-0001
NATIONSBANK
May 5, 1998
Republic Group Incorporated
Republic Paperboard Company
Republic Paperboard Company of West Virginia
Republic Gypsum Company
c/o Doyle R. Ramsey
Vice President - Finance & CFO
Republic Group Incorporated
811 East 30th Avenue
Hutchinson, KS 67502
Re: Revolving Credit Promissory Note (the "Note") dated June 30, 1995, in
the principal amount of $50,000,000.00) issued by Republic Gypsum
Company, a Delaware corporation, n.k.a. Republic Group Incorporated, a
Delaware corporation ("Borrower") and Boatmen's First National Bank of
Kansas City, n.k.a. NationsBank, N.A. ("NationsBank").
Dear Doyle:
This letter agreement is to document the agreement between the Borrower and
Republic Paperboard Company, a Kansas corporation, Republic Paperboard Company
of West Virginia, a West Virginia corporation, Republic Gypsum Company, an
Oklahoma corporation (collectively the "Guarantors") and NationsBank concerning
modifying the maturity of the Note. The Borrower is seeking financing in the
form of an $85,000,000.00 syndicated loan facility and the issuance and the
issuance of $100,000,000.00 in high yield bonds. This alternate financing,
when obtained, will be used in part to pay off the outstanding balance of the
Note.
Based upon the foregoing, the Borrower, NationsBank and the Guarantors agree to
amend the Note and the Revolving And Term Credit Agreement dated June 30, 1995
(the "Credit Agreement") as follows:
(a) The Credit Agreement is amended such that the "Revolving
Credit Maturity Date" as defined in Section 2.1 shall be the earlier of (i) the
closing of the $85,000,000.00 syndicated loan
Page 15
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Mr. Doyle R. Ramsey
Republic Group Incorporated
May 5, 1998
Page 2
facility in favor of the Borrower, (ii) the issuance of the $100,000,000.00 in
high yield bonds benefiting the Borrower, or (iii) June 30, 1999;
(b) The definition of "Maturity", as contained in paragraph 1 of
page 3 of the Note, is deleted and the following provision is inserted in lieu
thereof:
(1) "Maturity" means the earlier of the (i) closing of
the $85,000,000.00 syndicated loan facility in favor of the Borrower,
(ii) issuance of the $100,000,000.00 in high yield bonds benefiting
the Borrower, (iii) June 30, 1999, or (iv) such earlier date to which
the maturity of the Note shall be accelerated as hereinafter provided.
Nothing in this letter agreement shall be deemed to or shall in any manner
prejudice or impair the Loan Documents held by NationsBank and nothing in this
letter agreement shall be deemed to constitute any alteration, waiver or
variation of any of the terms of such Loan Documents except as expressly set
forth herein. Further, the terms and provisions of the Credit Agreement, the
Note, the Revolving Loan Guaranty and the Loan Documents as amended hereby, are
ratified and confirmed by the Borrower and Guarantors in all respects.
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWERS) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
On behalf of the Borrower and Guarantors, please indicate your agreement to the
foregoing by executing this letter agreement in the space provided below.
Please sign and return the original of this agreement to my attention. The
Fourth Amendment to the Loan Documents will be effective upon receipt of this
agreement. Thank you for your assistance.
Sincerely,
NATIONSBANK, N.A., successor by merger to
Boatmen's First National Bank of Kansas City
By: /s/ KURT A. KNUTSON
---------------------------------------------
Kurt A. Knutson
Vice President
Page 16
<PAGE> 3
Mr. Doyle R. Ramsey
Republic Group Incorporated
May 5, 1998
Page 3
THE UNDERSIGNED BORROWER AND GUARANTORS HEREBY AGREE TO THE TERMS OF THIS
LETTER AGREEMENT AND HEREBY REPRESENT THAT THE OFFICER EXECUTING THIS LETTER
AGREEMENT ON THEIR BEHALF IS DULY AUTHORIZED TO EXECUTE AND DELIVER THIS
AGREEMENT.
ATTEST: REPUBLIC GROUP INCORPORATED
/s/ JANEY L. RIFE By: /s/ DOYLE R. RAMSEY
- ----------------------------- --------------------------------
Janey L. Rife, Secretary Doyle R. Ramsey
Vice President Finance
(Corporate Seal) Date: May 15, 1998
------------------------------
ATTEST: REPUBLIC PAPERBOARD COMPANY
/s/ JANEY L. RIFE By: /s/ DOYLE R. RAMSEY
- ----------------------------- --------------------------------
Janey L. Rife, Secretary Doyle R. Ramsey
Vice President Finance
(Corporate Seal) Date: May 15, 1998
------------------------------
ATTEST: REPUBLIC PAPERBOARD COMPANY OF
WEST VIRGINIA
/s/ JANEY L. RIFE By: /s/ DOYLE R. RAMSEY
- ----------------------------- --------------------------------
Janey L. Rife, Secretary Doyle R. Ramsey
Vice President Finance
(Corporate Seal) Date: May 15, 1998
------------------------------
ATTEST: REPUBLIC GYPSUM COMPANY
/s/ JANEY L. RIFE By: /s/ DOYLE R. RAMSEY
- ----------------------------- --------------------------------
Janey L. Rife, Secretary Doyle R. Ramsey
Vice President Finance
(Corporate Seal) Date: May 15, 1998
------------------------------
Page 17
<PAGE> 1
EXHIBIT 99.3
PRESS RELEASE, DATED MAY 20, 1998
Page 18
<PAGE> 2
P.O. Box 1307
Hutchinson, Kansas 67504
Telephone: (316) 727-2700
REPUBLIC GROUP INCORPORATED Fax: (316) 727-2727
NEWS RELEASE
Contact: Janey Rife (316) 727-2711
Doyle Ramsey (316) 727-2709
FOR IMMEDIATE RELEASE www.republic-group.com
- --------------------------------------------------------------------------------
REPUBLIC TO BUILD NEW 100% RECYCLED PAPERBOARD MILL
Hutchinson, Kan., May 20--Republic Group Incorporated (NYSE:RGC) and
its wholly-owned subsidiary Republic Paperboard Company announced today that
its Board of Directors has approved plans to build and operate a new, 100%
recycled paperboard mill with an annual capacity exceeding 220,000 tons. The
mill will supply premium quality, gypsum- grade paperboard to external
customers, a significant portion of which will be sold under contract to James
Hardie Gypsum, Inc., a major independent supplier of gypsum wallboard in the
U.S. market. Additionally, the mill will supply the Company's own gypsum
wallboard facility in Duke, Oklahoma, which is currently undergoing an
expansion expected to be completed during the summer to double its effective
capacity to 1.2 billion square feet annually. While the mill design has been
optimized to make premium quality, gypsum-grade paperboard, the mill will also
have the capability to produce a variety of other paperboard products. The
mill will be located in Lawton, Oklahoma--an advantageous location for shipping
to customers throughout North America. Construction will commence almost
immediately with start-up expected for the end of 1999. Total construction
costs are estimated to be approximately $150-$170 million. Republic intends to
finance the project through debt financing.
Phil Simpson, Chairman and President of Republic, stated, "We are
pleased to announce this project to our shareholders and investors. This is an
important milestone in the history of the Company. We already have a solid
reputation as a premier producer of recycled paperboard including gypsum-grade
paperboard. This venture will make Republic one of the largest producers of
gypsum-grade paperboard in North America."
Steve Gagnon, Executive Vice President of Republic, explained "The
Company has been planning this project for over a year. The new mill will
utilize state-of-the-art, proven technology not yet being fully utilized in the
U.S. The paperboard to be produced at the new mill is expected to be 20%-30%
lighter than now generally available. This should afford gypsum wallboard
customers and end-users significant benefits in the years ahead."
Fluor Daniel Inc. will provide the overall project management,
engineering, procurement and construction services from their Greenville, South
Carolina operations center. Fluor Daniel is a major international engineering
and construction firm. Marathon Engineers/Architects/Planners, LLC will
provide detailed engineering and design services from its Appleton, Wisconsin
office. Marathon is a member of the Jaakko Poyry Group, an internationally
recognized engineering and consulting company specializing in the forest
products industries. Voith Sulzer Paper Technology North America Inc. will
supply the recycled fiber plant and paperboard machine equipment. Voith Sulzer
has manufacturing facilities in the United States and Europe.
Certain matters discussed in this press release may constitute
forward-looking statements within the meaning of the federal securities laws.
These forward-looking statements are based on current expectations and entail
various risks and uncertainties. The forward-looking statements may not be
realized due to a number of factors--including general economic and competitive
conditions, foreign currency exchange rates, weather, market acceptance of
products produced by the new mill, raw material availability and costs,
facility fuel costs, labor shortages and costs, financing risks associated with
this project, changing circumstances affecting the viability of this project
and other risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission, including its annual report on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K.
Republic Group Incorporated and its wholly-owned operating
subsidiaries--Republic Paperboard Company, Halltown Paperboard Company,
Republic Recycling Company, and Republic Gypsum Company--are manufacturers of
100% recycled paperboard, recovered paper fiber and gypsum wallboard, servicing
markets nationwide. Republic's common stock is traded on the New York Stock
Exchange under the symbol "RGC".
Page 19 May 27, 1998
