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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): October 4, 2000
U.S. CAN CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-13678 06-1094196
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
900 Commerce Drive
Oak Brook, Illinois 60523
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (630) 571-2500
Not Applicable
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(Former name or former address, if changed since last report)
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Item 1. CHANGES IN CONTROL OF REGISTRANT.
On October 4, 2000, U.S. Can Corporation, a Delaware corporation (the
"Company"), and Pac Packaging Acquisition Corporation, a Delaware corporation
("Pac") organized by Paul W. Jones, Chairman and Chief Executive Officer of the
Company, John L. Workman, Chief Financial Officer of the Company, and Berkshire
Partners LLC, the Boston-based private equity firm, completed a recapitalization
of the Company in which Pac was merged with and into the Company (the "Merger")
pursuant to an Agreement and Plan of Merger dated as of June 1, 2000, as amended
by the First Amendment to Agreement and Plan of Merger dated as of June 28,
2000, and the Second Amendment to Agreement and Plan of Merger dated as of
August 22, 2000 (the "Merger Agreement"). The Company is the surviving
corporation in the Merger.
Pursuant to the terms of the Merger Agreement, each share of common
stock, par value $0.01 per share, of the Company ("Common Stock") outstanding at
the effective time of the Merger was converted into the right to receive $20.00
in cash, except for certain shares of Common Stock held by senior management of
the Company, Salomon Smith Barney Inc., affiliates of Company directors Ricardo
Poma and Francisco A. Soler, and other designated stockholders (the "Rollover
Stockholders") which were converted into the right to receive capital stock of
the surviving corporation and except for shares of Common Stock held in treasury
and held by dissenting stockholders who perfect their appraisal rights under
Delaware law. In connection with the Merger and related recapitalization, Squam
Lake Investors IV L.P. ("Squam Lake") and affiliates of Berkshire Partners
purchased shares of Common Stock and shares of preferred stock, par value $.01
per share, of the Company ("Preferred Stock"). In addition, certain members of
the Company's senior management purchased additional shares of Common Stock. As
a result of the recapitalization, the Company's capital stock was delisted from
the New York Stock Exchange and became privately-owned by affiliates of
Berkshire Partners LLC, the Rollover Stockholders, other members of senior
management, and Squam Lake. The following is a table that describes (1) the
persons who were stockholders of the Company immediately after the
recapitalization; (2) the percentage of shares of common stock of the Company
owned by each such stockholder immediately after the recapitalization; and (3)
the percentage of shares of preferred stock of the Company owned by each such
stockholder immediately after the recapitalization:
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
COMMON STOCK PREFERRED STOCK
IMMEDIATELY AFTER IMMEDIATELY AFTER
POST-RECAPITALIZATION STOCKHOLDERS RECAPITALIZATION (1) RECAPITALIZATION (1)
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<S> <C> <C>
Management Investors:
Gillian V.N. Derbyshire * 0.625%(2) 0%
David R. Ford * 0.85%(2) 0%
Paul W. Jones * 3.625%(2) 0%
J. Michael Kirk * 0.625%(2) 0%
John L. Workman * 1.875%(2) 0%
Roger B. Farley * 1.00%(2) 0%
Thomas A. Scrimo 0.40%(2) 0%
AFFILIATES OF MR. POMA:
Salcorp Ltd. * 1.73% 1.91%
Barcel Corporation * 2.34% 2.58%
Scarsdale Company N.V., Inc. * (3) 0.05% 0.05%
AFFILIATES OF MR. SOLER:
Windsor International Corporation * 0.80% 0.87%
Atlas World Carriers S.A. * 0.47% 0.52%
The World Financial Corporation S.A. * 0.47% 0.52%
OTHER INVESTORS:
Berkshire Fund V Investment Corp./
Berkshire Fund V Coinvestment Corp./ Berkshire
Investors LLC (4) 76.72% 84.31%
Carl Ferenbach *(5) 0.58% 0.64%
Salomon Smith Barney Inc. * 4.90% 5.38%
Lennoxville Investments, Inc. * 1.06% 1.16%
Empire Investments S.A. * 1.29% 1.42%
Squam Lake Investments IV L.P. 0.59% 0.64%
</TABLE>
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* Rollover Stockholder.
(1) Total equity is $160 million immediately after the recapitalization.
(2) Includes rollover shares and additional shares purchased in connection
with the recapitalization.
(3) Scarsdale is affiliated with both Mr. Poma and Mr. Soler. Each of Mr.
Poma and Mr. Soler is the beneficial owner of one-half of the Scarsdale
shares.
(4) Berkshire Fund V Investment Corp., Berkshire Fund V Coinvestment Corp.
and Berkshire Investors LLC are affiliates of Berkshire Partners LLC.
(5) Mr. Ferenbach is a Managing Director of Berkshire Partners and a former
director of U.S. Can. Mr. Ferenbach transferred his shares of common
stock and preferred stock of the Company to Berkshire Investors LLC
shortly after the effective time of the Merger.
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The Merger and related recapitalization required total funding
(including rollover stock) of approximately $657.9 million, including the funds
necessary to (i) make all payments required to effect the Merger and related
recapitalization; (ii) complete a tender offer by United States Can Company, a
wholly owned operating subsidiary of the Company (the "Company Subsidiary"), for
its outstanding 10 1/8% notes due 2006 (plus accrued interest and a bond tender
premium) and refinance a majority of the Company Subsidiary's pre-existing
senior debt; and (iii) pay related fees and expenses. The recapitalization was
funded with a combination of debt and equity comprised principally of the
following:
(a) Equity Financing. Affiliates of Berkshire Partners, Squam
Lake, the rollover stockholders, and members of senior
management of the Company contributed approximately $160
million in cash and rollover stock in exchange for securities
consisting of approximately $53.3 million in Common Stock and
$106.7 million in Preferred Stock.
(b) New Senior Secured Credit Facility. The Company Subsidiary
obtained credit facilities in an aggregate amount of $400
million pursuant to the terms of a Credit Agreement, dated as
of October 4, 2000, among the Company Subsidiary, the
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Company, U.S.C. May Verpackungen Holding Inc., the lenders
from time to time party thereto, Bank of America, N.A., as
Administrative Agent, Citicorp North America, Inc., as
Syndication Agent, and Bank One, NA (Main Office Chicago), as
Documentation Agent (the "Credit Agreement"). The Credit
Agreement provides for term loan facilities in an aggregate
principal amount of $260 million and a $140 million revolving
credit facility available for loans and letters of credit. All
of the term debt and $20.5 million under the revolving credit
facility was used to finance a portion of the
recapitalization.
(c) Senior Subordinated Notes. The Company Subsidiary issued $175
million aggregate principal amount of 12 3/8% senior
subordinated notes due 2010 under an indenture dated as of
October 4, 2000 among the Company Subsidiary, the Company,
domestic restricted subsidiaries of the Company Subsidiary,
and Bank One Trust Company, N.A., as trustee (the
"Indenture").
The remaining approximately $42.4 million in required funding consisted of
approximately $39.2 million of assumed debt, approximately $0.9 million of
remaining untendered 10 1/8 notes due 2006 and approximately $2.3 million of
working capital.
In connection with the recapitalization, the Board of Directors of the
Company approved an amendment dated October 4, 2000 (the "Rights Agreement
Amendment") to its Amended and Restated Rights Agreement dated as of October 19,
1995, as amended by an amendment dated as of June 1, 2000 and amendment dated
June 19, 2000, by and between the Company and Harris Trust and Savings Bank, as
rights agent (as amended by the Rights Agreement Amendment, the "Rights
Agreement") which caused the Rights (as defined in the Rights Agreement) to
expire as of the effective time of the Merger.
In addition, the holders of equity securities of the Company entered
into a Stockholders Agreement with the Company, dated as of October 4, 2000 (the
"Stockholders Agreement"), in which the equity holders agreed that the Board of
Directors of the Company will consist of two designees of the affiliates of
Berkshire Partners LLC who are stockholders of the Company so long as the
Berkshire stockholders maintain ownership of at least 25% of the common stock of
the Company (who shall initially be Richard K. Lubin and Carl Ferenbach), two
designees of the management stockholders (who shall initially be Paul W. Jones
and John L. Workman),
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Louis Susman, Richard Poma, Francisco Soler (or other designees of the
Scarsdale Group (defined as Salcorp Ltd., Barcel Corporation, Scarsdale
Company N.V., Inc., Empire Investments S.A., Lennoxville Investments, Inc.,
and their permitted transferees) if Francisco Soler and Ricardo Poma both
no longer serve on the board of directors so long as the Scarsdale Group
owns at least 5% of the common stock of the Company) and up to two other
independent directors acceptable to the other directors. Upon a majority
vote of the holders of common stock of the Company, the composition of the
board of directors may be changed to reflect the proportional ownership of
common stock of the Berkshire stockholders, the management stockholders and
certain other stockholders. In addition to the foregoing, the Stockholders
Agreement provides for, among other things, (i) certain restrictions on
transfers of shares of capital stock of the Company; (ii) put and call
rights for management stockholders' equity interests upon the occurrence of
specified events; (iii) drag along and tag along rights with respect to
certain transactions and sales of capital stock of the Company; (iv)
registration rights for certain stockholders following an initial public
offering of the Company's common stock and "piggy-back" registration rights
on all registrations of common stock by the Company or any other
stockholder; (v) supermajority voting requirements with respect to various
corporate matters; and (vi) pre-emptive rights for stockholders to
subscribe for newly issued shares of capital stock on a pro rata basis,
subject to certain exclusions. Most of the restrictions contained in the
Stockholders Agreement will terminate upon consummation of a qualified
initial public offering of common stock by the Company or certain changes
in control of the Company.
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The preceding discussion is qualified in its entirety by reference to
the Merger Agreement, the Credit Agreement, the Indenture and the Rights
Agreement Amendment, which are exhibits hereto and incorporated herein by
reference.
Item 5. OTHER EVENTS.
On October 4, 2000, the Company issued the press release attached as
Exhibit 99.1 hereto and incorporated herein by reference.
Item 7. EXHIBITS.
2.1 Agreement and Plan of Merger, dated as of June 1, 2000 (filed
as Exhibit 2 to the Company's Current Report on Form 8-K dated
June 15, 2000 and incorporated by reference herein).
2.2 First Amendment to Agreement and Plan of Merger, dated as of
June 28, 2000 (filed as Exhibit 2.2 to the Company's Current
Report on Form 8-K dated June 30, 2000 and incorporated by
reference herein).
2.3 Second Amendment to Agreement and Plan of Merger, dated as of
August 22, 2000 (filed as Exhibit 2.3 to the Company's Current
Report on Form 8-K dated August 31, 2000 and incorporated by
reference herein).
4.1 Indenture, dated as of October 4, 2000.
10.1 Credit Agreement, dated as of October 4, 2000.
10.2 Amendment No. 3 to Amended and Restated Rights Agreement,
dated as of October 4, 2000.
99.1 Press Release, dated October 4, 2000.
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SIGNATURES
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 hereunto duly authorized.
Dated: October 18, 2000 U.S. CAN CORPORATION
By: /s/ John L. Workman
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John L. Workman
Executive Vice President
and Chief Financial Officer
