-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, V9slIgHZsEQBeO0Y/wJh3u2LxQFWaRmDXqObV4ZnNvcrNmeAv+Ff7qWx9Qo19MLX I4s92D8PDd1kRtOeW/Vmhw== 0000950131-95-000663.txt : 19950616 0000950131-95-000663.hdr.sgml : 19950616 ACCESSION NUMBER: 0000950131-95-000663 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 27 FILED AS OF DATE: 19950321 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ROPAK CORP /CA/ CENTRAL INDEX KEY: 0000043514 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 953206821 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-37075 FILM NUMBER: 95522025 BUSINESS ADDRESS: STREET 1: 660 S STATE COLLEGE BLVD CITY: FULLERTON STATE: CA ZIP: 92631 BUSINESS PHONE: 7148709757 MAIL ADDRESS: STREET 1: 660 SOUTH STATE COLLEGE BLVD CITY: FULLERTON STATE: CA ZIP: 92631-5138 FORMER COMPANY: FORMER CONFORMED NAME: ROPAK WEST INC/NEW DATE OF NAME CHANGE: 19850813 FORMER COMPANY: FORMER CONFORMED NAME: GREAT WESTERN GENERAL INC DATE OF NAME CHANGE: 19820509 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LINPAC MOULDINGS LTD CENTRAL INDEX KEY: 0000931018 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 227 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60606 MAIL ADDRESS: STREET 2: DEYKJIN AVENUE CITY: WITTON BIRMINGHAM BC STATE: X0 ZIP: 00000 SC 14D1 1 SCHEDULE 14D1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SCHEDULE 13D-/A UNDER THE SECURITIES ACT OF 1934 (AMENDMENT NO. 10) ------------- ROPAK CORPORATION (NAME OF SUBJECT COMPANY) LINPAC MOULDINGS LTD. (BIDDER) COMMON STOCK, PAR VALUE $0.01 PER SHARE (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 BIDDER) WITH A COPY TO: STANLEY H. MEADOWS, P.C. MCDERMOTT, WILL & EMERY 227 WEST MONROE STREET CHICAGO, IL 60606 312-372-2000 - -------------------------------------------------------------------------------- MARCH 21, 1995 (DATE OF EVENT WHICH REQUIRES FILING STATEMENT ON SCHEDULE 13D) - -------------------------------------------------------------------------------- CALCULATION OF FILING FEE ================================================================================ TRANSACTION VALUATION: $25,757,446* AMOUNT OF FILING FEE: $5,152 ==========================================================--------------------- * FOR PURPOSES OF CALCULATING FEE ONLY. THE AMOUNT ASSUMES THE PURCHASE OF 2,122,636 SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE (THE "SHARES"), OF ROPAK CORPORATION, PLUS 218,950 SHARES ISSUABLE UPON THE EXERCISE OF ALL EXISTING VESTED OPTIONS TO PURCHASE SHARES, AT A PRICE PER SHARE OF $11.00 IN CASH. THE AMOUNT OF THE FILING FEE, CALCULATED IN ACCORDANCE WITH RULE 0-11 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED ("EXCHANGE ACT"), EQUALS 1/50TH OF ONE PERCENTUM OF THE AGGREGATE OF THE CASH OFFERED BY THE BIDDER. / / CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULE 0-11(A)(2) OF THE EXCHANGE ACT 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: NONE FORM OR REGISTRATION NO.: NOT APPLICABLE FILING PARTY: NOT APPLICABLE DATE FILED: NOT APPLICABLE ================================================================================ CUSIP No. 776670 10 1 1. NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LINPAC Mouldings Ltd. - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [_] - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCES OF FUNDS WC - ------------------------------------------------------------------------------- 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION UNITED KINGDOM - ------------------------------------------------------------------------------- 7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,841,303 - ------------------------------------------------------------------------------- 8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) APPROXIMATELY 57.2% OF THE SHARES OUTSTANDING AS OF DECEMBER 31, 1994 - ------------------------------------------------------------------------------- 10. TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------- CUSIP No. 776670 10 1 This Tender Offer Statement on Schedule 14D-1 relates to a tender offer by LINPAC Mouldings Ltd., an United Kingdom corporation (the "Purchaser"), to purchase any and all outstanding shares of common stock, $.01 par value per share (the "Shares"), of Ropak Corporation, a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 21, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together with any amendments or supplements thereto, collectively constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2) respectively. ITEM 1. SECURITY AND SUBJECT COMPANY (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 14D-1 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 without interest (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 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. ITEM 2. IDENTITY AND BACKGROUND (a)-(d) and (g) This Schedule 14D-1 is being filed by Purchaser, a corporation incorporated in the United Kingdom. Information concerning the principal business and the address of the principal offices of Purchaser is set forth in "THE OFFER--Certain Information Concerning 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 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 WITH THE SUBJECT COMPANY. (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. CUSIP No. 776670 10 1 ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION (a) The information set forth in "THE OFFER--Source and Amount of Funds" of the Offer to Purchase is incorporated herein by reference. (b) Not applicable. (c) Not applicable. ITEM 5. PURPOSE OF THE OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (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 "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. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) and (b) The information set forth in the "Introduction," "THE OFFER-- Certain Information Concerning Purchaser," "THE OFFER--Certain Information Concerning the Company" and "SPECIAL FACTORS--Background of the Offer" of the Offer to Purchase is incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'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," "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. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. Not Applicable. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. Not Applicable. ITEM 10. ADDITIONAL INFORMATION. (a) The information set forth in "THE OFFER--Background," "THE OFFER-- Arrangements with Officers of the Company and Other Agreements" and "THE OFFER-- Certain Information Concerning the Company" of the Offer to Purchase is incorporated herein by reference. (b) and (c) The information set forth in "THE OFFER--Certain Legal Matters" of the Offer to Purchase is incorporated herein by reference. (d) Not applicable. (e) None. CUSIP No. 776670 10 1 (f) The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated herein by reference. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Offer to Purchase dated March 21, 1995. (a)(2) Letter of Transmittal. (a)(3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(4) Letter to Clients. (a)(5) Notice of Guaranteed Delivery. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Notice of Cancellation. (a)(8) Text of Press Release issued by LINPAC Mouldings Ltd., dated March 15, 1995, issued by Purchaser. (a)(9) Form of press release to be issued by LINPAC Mouldings Ltd. on March 21, 1995. (b) None. (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. (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) None. (e) Not applicable. (f) None. CUSIP No. 776670 10 1 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: March 21, 1995 LINPAC Mouldings Ltd. By: /s/ David A. Williams Name: David A. Williams Title: Managing Director EX-99.A.1 2 OFFER TO PURCHASE 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 TABLE OF CONTENTS
PAGE ---- 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
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 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 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 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 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 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 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:
YEARS ENDED DECEMBER 31, ------------------------- 1991 1990 1989 ------- ------- ------- 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...... -- -- --
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 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:
YEARS ENDED DECEMBER 31, --------------- 1993 1992 ------- ------- 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
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 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 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 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).
TOTAL PURCHASES TOTAL SALES BY PURCHASER BY PURCHASER TO THE COMPANY FROM THE COMPANY ------------------------ ---------------- 1992............................ $562,000 $176,000 1993............................ 135,000 891,000 1994............................ 151,000 276,000 1995 (to March 1, 1995)......... 221,000 151,000
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 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." 12 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. 13 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. 14 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- 15 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. 16 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. 17 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 18 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 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 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.
HIGH LOW ------- ------ 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
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 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 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
YEARS ENDED DECEMBER 31, ------------------------------------------ 1994 1993 1992 1991 1990 -------- -------- ------- ------- ------- (EXPRESSED IN THOUSANDS, OTHER THAN PER SHARE DATA) 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
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 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.
DECEMBER 31, --------------------------------------- 1994 1993 1992 1991 1990 ------- ------- ------- ------- ------- BALANCE SHEET DATA: (EXPRESSED IN THOUSANDS) 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
- -------- 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.
SHARES BENEFICIALLY OWNED(1) ------------------------------- NAME OR GROUP AMOUNT PERCENT ------------- ---------------- -------------- 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%
- -------- (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 (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 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 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 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 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 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 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 31 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: 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 ========
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. 32 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 33 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.
PRINCIPAL OCCUPATION OR EMPLOYMENT; NAME AND BUSINESS ADDRESS FIVE YEAR EMPLOYMENT HISTORY ------------------------- ----------------------------------- 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
A-1
PRINCIPAL OCCUPATION OR EMPLOYMENT; NAME AND BUSINESS ADDRESS FIVE YEAR EMPLOYMENT HISTORY ------------------------- ----------------------------------- 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
A-2 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 (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 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 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 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 (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 (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 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 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 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 Ropak Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------- As of December 31, (in thousands, except number of shares) 1994 1993 - -------------------------------------------------------------------------------- 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.
Ropak Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS - ---------------------------------------------------------------------------------------------- Years ended December 31, (in thousands, except per share data) 1994 1993 1992 - ---------------------------------------------------------------------------------------------- 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 ==============================================================================================
See accompanying notes to consolidated financial statements. Ropak Corporation and Subsidiaries
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 - -------------------------------------------------------------------------------------------------------------------------------- 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 ===================================================================================================================================
See accompanying notes to consolidated financial statements.
Ropak Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended December 31, (in thousands) 1994 1993 1992 - ------------------------------------------------------------------------------------------------------------------------------------ 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 ===================================================================================================================================
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. 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 Certain reclassifications have been made to the 1992 and 1993 financial statements to conform them to the 1994 presentation. 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):
December 31 1994 1993 - ------------------------------------------------------------------------------- Raw materials $ 7,309 $ 3,725 Finished goods 14,849 13,234 - ------------------------------------------------------------------------------- $22,158 $16,959 ===============================================================================
NOTE 3 -- PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following (in thousands):
Estimated December 31 Description Userful Life 1994 1993 - ------------------------------------------------------------------------------- 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 ===============================================================================
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):
Year Ended December 31, 1994 1993 1992
- ----------------------------------------------------------------------- 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 - -----------------------------------------------------------------------
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):
Year Ended December 31 1994 1993 1992 - ------------------------------------------------------------------------------------------------------------------------------------ % % % Pretax Pretax Pretax Amount Income Amount Income Amount Income - ------------------------------------------------------------------------------------------------------------------------------------ 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% ====================================================================================================================================
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):
Year Ended December 31 1994 1993 - -------------------------------------------------------------------------------- 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 ====== ======
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. NOTE 5 -- LONG-TERM DEBT (in thousands, except number of shares) Long-term debt consisted of the following:
December 31, 1994 1993 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 ============================================================================================================================
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:
Year Ending December 31, Amount 1995 $ 3,976 1996 24,871 1997 2,894 1998 727 1999 712 Thereafter 4,810 - --------------------------------------------------------------------------------- $37,990 =================================================================================
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). 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.
Year Ending December 31, Operating Capitalized Leases Leases - -------------------------------------------------------------------------------- 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 - --------------------------------------------------------------------------------
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:
Number of Average Option Plan A Shares Price Per Under Option Share - -------------------------------------------------------------------------------- Outstanding January 1, 1992 57,974 $3.61 Exercised (45,384) 3.54 - --------------------------------------------------------------------------------
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 ============================================================================================
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. 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)
Adjustments Year ended December 31, 1994 United Foreign and Consolidated States Eliminations - ---------------------------------------------------------------------------------------------- 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 ==============================================================================================
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. NOTE 12 -- INTERIM FINANCIAL INFORMATION (unaudited -- in thousands except per-share data)
Quarter Ended - ------------------------------------------------------------------------------ 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 ==============================================================================
(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:
1994 1993 Service cost $ 48 $ 66 Interest cost 37 29 Net amortization and deferrals 7 - ------------------------------------------------------------------------------ Total pension expense $ 92 $ 95 ==============================================================================
The funded status of the plan at December 31 is as follows:
1994 1993 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 ==============================================================================
The following assumptions were used to determine the annual pension expense and benefit obligations: Ropak Corporation and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Years ended December 31, 1994, 1993, and 1992
1994 1993 ---- ---- Discount rate 8% 7% Long term rate of return on assets n/a n/a Retirement age 60 65
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. 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. 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 EX-99.A.2 3 LETTER OF TRANSMITTAL 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 - -------------------------------------------------------------------------------------------------------
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) ------------ ----------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ TOTAL SHARES TENDERED - --- ------------------------- ------------
(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. 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. 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. 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) 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 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. 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 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 ____________________ 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 EX-99.A.3 4 LETTER TO BROKERS 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. 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 EX-99.A.4 5 LETTER TO CLIENTS 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. 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 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 EX-99.A.5 6 NOTICE OF GUARANTEED DELIVERY 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 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. EX-99.A.6 7 W-9 GUIDELINES 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. - ----------------------------------------------------------------
GIVE THE FOR THIS TYPE OF SOCIAL SECURITY ACCOUNT: NUMBER OF-- - ---------------------------------------------------------------- 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)
GIVE THE FOR THIS TYPE OF SOCIAL SECURITY ACCOUNT: NUMBER OF-- - ---------------------------------------------------------------- 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 - ----------------------------------------------------------------
- --------------------------------------- --------------------------------------- (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. 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). EX-99.A.7 8 NOTICE OF CANCELLATION 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 - -----------------------------------------------------------------------------------------
DATE NUMBER NAME NAME AND ADDRESS OF OF OF EXERCISE OF HOLDER GRANT SHARES(1) PLAN(2) PRICE - ----------------------------------------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------
(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). 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 EX-99.A.8 9 PRESS RELEASE EXHIBIT (a)(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- EX-99.A.9 10 PRESS RELEASE [FORM OF PRESS RELEASE] EXHIBIT (a)(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. EX-99.C.1 11 OPTION AGREEMENT 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". 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- 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- 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 -4- 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; -5- (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, -6- 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 -7- 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 -8- 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 -9- 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 -10- 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 -11- 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 -12- 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 -13- 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 -14- 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 -15- 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 -16- 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 -17- 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. -18- 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 -19- 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; -20- (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 -21- 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- 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- 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 -24- 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. -25- 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). * * * -26- 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 ------------------------------------ ---------------------------------------- C. Richard Roper, as custodian under the Uniform Transfers to Minors Act ROPER FAMILY TRUST By:------------------------------------- William H. Roper, trustee ROPER FAMILY TRUST F/B/O WILLIAM H. ROPER DATED 4/12/94 By:------------------------------------- William H. Roper, trustee ROPER FAMILY TRUST F/B/O ROBERT E. ROPER AND/OR CHILDREN UTA 9/6/77 By:------------------------------------- Robert E. Roper, trustee ROPER FAMILY TRUST F/B/O C. RICHARD ROPER AND/OR CHILDREN UTA 9/6/77 By:------------------------------------- C. Richard Roper, trustee -27- 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". * 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. -2- EX-99.C.2 12 SIDE LETTER AGREEMENT 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 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 -2- 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] -3- 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 -4- 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- EX-99.C.3 13 STOCK PURCHASE AGREEMENT 2/17 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 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: 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. 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. * * * 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 EX-99.C.4 14 STOCK PURCHASE AGREEMENT 2/10 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. 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 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 EX-99.C.5 15 STOCK PURCHASE AGREEMENT 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. 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 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 EX-99.C.6 16 EMPLOYMENT AGREEMENTS 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). 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- 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- (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- (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- 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- 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- 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- 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- 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- 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 -11- 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- 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- (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- (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- 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- 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- 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. -18- 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. -19- 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 -20- 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). -21- 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. -22- (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- 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- (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- 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- (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- 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 -28- 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. -29- 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 -30- EX-99.C.7 17 GUARANTY AGREEMENT 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 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- 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- 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- 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- 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 -6- EX-99.C.8 18 SHARE PURCHASE AGREEMENT EXHIBIT (c)(8) SHARE PURCHASE AGREEMENT between National Bank of Canada and Linpac Mouldings Limited Date: October 14, 1994 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: 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- 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- 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- 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- 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- 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- SCHEDULE "A" ------------ 1. EXCHANGE AGREEMENT 2. SHARE PURCHASE AGREEMENT 3. ROPAK GUARANTY AND UNDERTAKING 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; 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- 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- (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- 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- 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- 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- 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- 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: 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- 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- 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- 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- 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- 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- 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- 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- 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 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- (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- 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- 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- EX-99.C.9 19 STOCK PURCHASE AGREEMENT 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. 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 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. 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 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 EX-99.C.10 20 LETTER AGREEMENT 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 EX-99.C.11 21 LETTER AGREEMENT 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 EX-99.C.12 22 LETTER AGREEMENT 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 EX-99.C.13 23 INDEM AGREEMENT 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 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 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 EX-99.C.14 24 LETTER 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 EX-99.C.15 25 LETTER 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 EX-99.C.16 26 LETTER 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 EX-99.C.17 27 LETTER 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 -----END PRIVACY-ENHANCED MESSAGE-----