SC 13E3/A

RULE 13e-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934)
[Amendment No. 2]

SYLVAN INC.
SNYDER ASSOCIATED COMPANIES, INC.
SAC HOLDING CO.
DENNIS C. ZENSEN
(Name of Person(s) Filing Statement)

(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)

x a.

The filing of solicitation materials or information statement subject to Regulation 14A (17 CFR 240.14a-1 to 240.14b-2], Regulation 14C [17 CFR 240.14C-1 to 240.14c-101] or Rule 13e-3(c) [§240.13e-3(c)] under the Securities Exchange Act of 1934.

This calculation is based .00008090 multiplied by the transaction valuation above. For purposes of calculation of this fee only, this transaction valuation is based on the aggregate number of securities to which the transaction applies multiplied by the per unit price or other underlying value of the transaction. For purposes of calculating the aggregate number of securities only, this number is based on (i) 5,155,131 shares of Sylvan common stock outstanding and owned by stockholders; and (ii) outstanding stock options to purchase an aggregate of 467,469 shares of Sylvan common stock which will be cashed out in the transaction. For purposes of calculating the per unit price, this price is based on the assumption that (i) each outstanding share of common stock owned by stockholders will be converted into the right to receive $12.25 in cash, without interest, and (ii) each outstanding stock option to purchase shares of Sylvan common stock with a per share exercise price less than $12.25 will be converted into the right to receive a cash payment equal to (a) the difference between $12.25 and the per share exercise price for the shares of common stock subject to such stock option, multiplied by (b) the number of shares of common stock underlying each such stock option.

Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

This Amendment No. 2 to Rule 13e-3 Transaction Statement on Schedule 13E-3 is being filed by (i) Sylvan Inc. (“Sylvan”), a Nevada corporation and the issuer of the equity securities which are the subject of the Rule 13e-3 transaction, (ii) Snyder Associated Companies, Inc. (“Snyder”), a Pennsylvania, corporation, (iii) SAC Holding Co. (“Merger Sub”), a corporation owned by Snyder, and (iv) Dennis C. Zensen, Sylvan’s president, chief executive officer and chairman of its board of directors, and an anticipated director and officer of, and investor in, the surviving corporation of the merger described below.

This Schedule relates to the Agreement and Plan of Merger, dated November 16, 2003, as amended April 1, 2004 (the “merger agreement”) among Sylvan, Snyder and Merger Sub. Pursuant to the merger agreement, Merger Sub will be merged with and into Sylvan, with Sylvan continuing as the surviving corporation. Each share of common stock, of Merger Sub issued and outstanding immediately prior to the effectiveness of the merger will be converted into and become one share of common stock of the surviving corporation. All shares of Sylvan common stock issued and outstanding immediately prior to the effectiveness of the merger (other than any shares held by Snyder or any of its subsidiaries, including Merger Sub) will be converted into the right to receive in cash from Snyder an amount equal to $12.25 per share. Each Sylvan stock option granted under any employee stock option or compensation plan or other arrangement will be canceled, and the holders will be entitled to receive, for each option surrendered (whether or not previously vested), an amount in cash determined by multiplying (i) the excess (if any) of the applicable merger consideration over the applicable exercise price of such stock option by (ii) the number of shares of common stock the holder could have purchased (assuming full vesting of all options) had the holder of the stock option in full immediately prior to the effectiveness of the merger.

Concurrently with the filing of this Amendment No. 2 to the Schedule, Sylvan is filing with the Securities and Exchange Commission a revised preliminary version of the proxy statement under Regulation 14A of the Securities Exchange Act of 1934, as amended, relating to the special meeting of stockholders of Sylvan at which the stockholders of Sylvan will consider and vote to approve the merger agreement and merger.

A copy of the revised preliminary proxy statement is attached hereto as Exhibit (a)(3)(A) and a copy of the merger agreement is attached as Appendix A to the preliminary proxy statement. All references in this Schedule 13E-3 to Items numbered 1001 through 1016 are references to Items contained in Regulation M-A under the Exchange Act of 1934.

The information contained in the revised preliminary proxy statement, including all appendices thereto, is hereby expressly incorporated herein by reference. The information contained in this schedule and/or the proxy statement concerning (i) Sylvan was supplied by Sylvan and (ii) each other filing person was supplied by such filing person. As of the date hereof, the proxy statement is in preliminary form and is subject to completion.

The information set forth under the captions “Summary Term Sheet” and “Questions and Answers About the Merger” in the Proxy Statement is incorporated by reference.


(a)		Name and Address. The information set forth under the caption “Summary Term Sheet — Transaction Participants — Sylvan Inc.” of the Proxy Statement is incorporated by reference.

(b)		Securities. The information set forth under the caption “Information Concerning the Special Meeting — Record Date; Voting Rights” of the Proxy Statement is incorporated by reference.

(c)		Trading Market and Price. The information set forth under the caption “Information About Sylvan — Market for Registrant’s Common Equity and Related Stockholder Matters” of the Proxy Statement is incorporated by reference.

(d)		Dividends. The information set forth under the caption “Information About Sylvan — Market for Registrant’s Common Equity and Related Stockholder Matters” of the Proxy Statement is incorporated by reference.

(e)		Prior Public Offerings. The information set forth under the caption “Common Stock Purchase Information — Prior Public Offerings” of the Proxy Statement is incorporated by reference.


(a)		Name and Address. The information set forth under the captions “Summary Term Sheet — Transaction Participants” and “Information Concerning Snyder, Merger Sub and their Controlling Persons” of the Proxy Statement is incorporated by reference.

(b)		Business and Background of Entities. The information set forth under the captions “Summary Term Sheet — Transaction Participants”; and “Information Concerning Snyder, Merger Sub and Their Controlling Persons” of the Proxy Statement is incorporated by reference.

(c)(1)-(5)		Business and Background of Natural Persons. The information required by this item with respect to Sylvan is set forth under the caption “Summary Term Sheet — Executive Officers and Directors of the Parties — Sylvan” of the Proxy Statement and is incorporated by reference. The information required by this item with respect to Snyder is set forth under the captions “Summary Term Sheet — Executive Officers and Directors of the Parties — Snyder Associated Companies, Inc.” and “Information Concerning Snyder, Merger Sub and their Controlling Persons” of the Proxy Statement and is incorporated by reference. The information required by this item with respect to Merger Sub is set forth under the captions “Summary Term Sheet — Executive Officers and Directors of the Parties — SAC Holding Co.” and “Information Concerning Snyder, Merger Sub and their Controlling Persons” of the Proxy Statement and is incorporated by reference. The information required by this item with respect to Mr. Zensen is set forth under the captions “Summary Term Sheet — Transaction Participants — Dennis C. Zensen” and “Current Directors and Executive Officers of Sylvan” of the Proxy Statement and is incorporated by reference.


(a)(2)		Material Terms. The information set forth under the captions “Summary Term Sheet”; “Questions and Answers About the Merger”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger”; “Special Factors — Consequences of the Merger”; “Special Factors — Material Federal Income Tax Consequences”; “The Merger Agreement”; “Voting Agreement with Wynnefield Group”; “Stock Purchase Agreement Among Steel Partners, Merger Sub and Snyder”; “Information Concerning the Special Meeting — Voting Procedures; Vote Required”; “Special Factors — Sylvan’s Reason for the Merger”; “Special Factors — The Snyder Entities, Reasons for the Merger”; and “Special Factors — Dennis C. Zedsen’s Reason for the Merger” of the Proxy Statement is incorporated by reference.

(c)		Different Terms. The information set forth under the captions “Special Factors — Interests of Certain Persons in the Merger” and “Special Factors — Consequences of the Merger” of the Proxy Statement is incorporated by reference.

(d)		Appraisal Rights. The information set forth under the caption “No Dissenters’ or Appraisal Rights” of the Proxy Statement is incorporated by reference.

(e)		Provisions for Unaffiliated Security Holders. The information set forth under the caption “Special Factors — Provisions for Unaffiliated Securityholders” is incorporated by reference.

(f)		Eligibility for Listing or Trading. Not applicable.


(a)		Transactions. The information set forth under the captions “Voting Agreement with Wynnefield Group”; “Stock Purchase Agreement Among Steel Partners, Merger Sub and Snyder”; “Common Stock Purchase Information”; and “Certain Agreements and Understandings Related to Merger Sub and the Surviving Corporation” of the Proxy Statement is incorporated by reference.

(b)		Significant Corporate Events. The information set forth under the captions “Special Factors — Background of the Merger” and “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger” of the Proxy Statement is incorporated by reference.

(c)		Negotiations or Contacts. The information set forth under the captions “Special Factors — Background of the Merger” of the Proxy Statement is incorporated by reference.


(b)		Use of Securities Acquired. The information set forth under the captions “Special Factors — Consequences of the Merger” and “Questions and Answers About the Merger — What Will Happen to the Market for Sylvan Common Stock after the Merger” of the Proxy Statement is incorporated by reference.

(c)(1)-(8)		Plans. The information set forth under the captions “Summary Term Sheet”; “Questions and Answers About the Merger”; “Special Factors — Background of the Merger”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger”; “Special Factors — Interests of Certain Persons in the Merger — Directors and Executive Officers of the Surviving Corporation”; “Special Factors — Consequences of the Merger”; “Special Factors — Plans for Sylvan After the Merger”; and “Management of Snyder Following the Merger” of the Proxy Statement is incorporated by reference.


(a)		Purposes of the Merger. The information set forth under the captions “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Sylvan’s Reasons for the Merger”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — The Snyder Entities’ Position as to the Fairness of the Merger”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — The Snyder Entities’ Reasons for the Merger”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Dennis C. Zensen’s Position as to the Fairness of the Merger”; and “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Dennis C. Zensen’s Reasons for the Merger” of the Proxy Statement is incorporated by reference.

(b)		Alternatives. The information set forth under the captions “Special Factors — Background of the Merger” and “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger” of the Proxy Statement is incorporated by reference.

(c)		Reasons. The information set forth under the captions “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Sylvan’s Reasons for the Merger”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — The Snyder Entities’ Reasons for the Merger”; and “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Dennis C. Zensen’s Reasons for the Merger” of the Proxy Statement is incorporated by reference.

(d)		Effects. The information set forth under the captions “Special Factors — Consequences of the Merger”; “Special Factors — Interests of Certain Persons in the Merger”; and “Special Factors — Material Federal Income Tax Consequences” of the Proxy Statement is incorporated by reference.


(a)		Fairness. The information set forth under the captions “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Determinations and Recommendations of the Special Committee and Sylvan Board of Directors; Fairness of the Merger”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Determinations and Recommendation of the Board of Directors”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — The Snyder Entities’ Position as to the Fairness of the Merger”; and “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Dennis C. Zensen’s Position as to the Fairness of the Merger” of the Proxy Statement is incorporated by reference.

(b)		Factors Considered in Determining Fairness. The information set forth under the captions “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Determinations and Recommendations of the Special Committee and Sylvan Board of Directors; Fairness of the Merger”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Determinations and Recommendation of the Board of Directors”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — The Snyder Entities’ Position as to the Fairness of the Merger”; and “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Dennis C. Zensen’s Position as to the Fairness of the Merger” of the Proxy Statement is incorporated by reference.

(c)		Approval of Security Holders. The information set forth under the caption “Information Concerning the Special Meeting — Voting Procedures; Vote Required — Vote Required” of the Proxy Statement is incorporated by reference.


(d)		Unaffiliated Representative. The information set forth under the captions “Summary Term Sheet”; “Special Factors — Background of the Merger” and “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger” of the Proxy Statement is incorporated by reference.

(e)		Approval of Directors. The information set forth under the caption “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger — Recommendation of the Board of Directors” of the Proxy Statement is incorporated by reference.

(f)		Other Offers. The information set forth under the caption “Special Factors — Background of the Merger” of the Proxy Statement is incorporated by reference.


(a)		Report, Opinion, or Appraisal. The information set forth under the caption “Special Factors — Opinions of the Financial Advisors for the Special Committee” of the Proxy Statement is incorporated by reference.

(b)		Preparer and Summary of the Report, Opinion, or Appraisal. The information set forth under the captions “Special Factors — Opinions of Financial Advisors for the Special Committee — Lane, Berry & Co. International, LLC”; “Special Factors — Opinions of Financial Advisors for the Special Committee — Morgan Joseph & Co. Inc.”; and “Special Factors — Fees and Expenses” of the Proxy Statement is incorporated by reference.

(c)		Availability of Documents. The information set forth under the captions “Special Factors — Opinions of Financial Advisors for the Special Committee” and “Where You Can Find More Information” of the Proxy Statement is incorporated by reference.


(a)		Source of Funds. The information set forth under the captions “Special Factors — Source and Amount of Funds; Financing for the Merger” and “Certain Agreements and Understandings Related to Merger Sub and the Surviving Corporation” of the Proxy Statement is incorporated by reference.

(b)		Conditions. The information set forth under the caption “Special Factors — Source and Amount of Funds; Financing for the Merger” of the Proxy Statement is incorporated by reference.

(c)		Expenses. The information set forth under the caption “Special Factors — Fees and Expenses” of the Proxy Statement is incorporated by reference.

(d)		Borrowed Funds. The information set forth under the captions “Special Factors — Source and Amount of Funds; Financing for the Merger” and “Certain Agreements and Understandings Related to Merger Sub and the Surviving Corporation” of the Proxy Statement is incorporated by reference.


(a)(2)		Preliminary copy of Notice of Special Meeting of Stockholders, incorporated by reference to Schedule 14A filed by Sylvan Inc. on April 2, 2004.

(a)(3)(A)		Preliminary Proxy Statement, incorporated by reference to Schedule 14A filed by Sylvan Inc. on April 2, 2004.

(a)(3)(B)		Form of Proxy Card to be sent to stockholders filed on April 2, 2004 along with Exhibit (a)(3)(A), incorporated by reference to Schedule 14A filed by Sylvan, Inc. on April 2, 2004.

(b)(1)		Credit Agreement, dated as of November 15, 2002, by and between Snyder Associated Companies, Inc. and Citizens Bank of Pennsylvania.

(b)(2)		First Amendment to Credit Agreement, dated as of November 14, 2003, by and between Snyder Associated Companies, Inc. and Citizens Bank of Pennsylvania.

(b)(3)		Second Amendment to Credit Agreement, dated as of March 17, 2004, by and between Snyder Associated Companies, Inc. and Citizens Bank of Pennsylvania.

(c)(1)		Opinion of Lane, Berry & Co. International, LLC dated November 16, 2003 and Opinion of Morgan Joseph & Co. Inc. dated November 16, 2003 included as Appendices C and D, respectively, to the preliminary Proxy Statement, which is filed herewith as Exhibit (a)(3)(A).

(c)(2)		Materials prepared by Lane, Berry & Co. International, LLC and presented to the Special Committee of the Board on November 16, 2003.

(c)(3)		Materials prepared by Morgan Joseph & Co. Inc. and presented to the Special Committee of the Board on November 16, 2003.

(c)(4)		Materials prepared by Morgan Joseph & Co. Inc., and presented to the Special Committee of the Board on November 11, 2003.

(c)(5)		Materials prepared by Morgan Joseph & Co. Inc., and presented to the Special Committee of the Board on November 9, 2003.

(c)(6)		Materials prepared by Morgan Joseph & Co. Inc., and presented to the Special Committee of the Board on September 29, 2003.

(c)(7)		Materials prepared by Lane, Berry & Co. International, LLC and presented to the Special Committee of the Board on November 11, 2003.

(c)(8)		Materials prepared by Lane, Berry & Co. International, LLC and presented to the Special Committee of the Board on November 9, 2003.

(c)(9)		Materials prepared by Lane, Berry & Co. International, LLC and presented to the Special Committee of the Board on September 29, 2003.

(c)(10)		Materials prepared by Lane, Berry & Co. International, LLC and presented to the Special Committee of the Board on September 18, 2002.

(c)(11)		Materials prepared by Lane, Berry & Co. International, LLC and presented to the Special Committee of the Board on May 30, 2002.

(d)(1)		Agreement and Plan of Merger dated as of November 16, 2003, as amended April 1, 2004, among Sylvan Inc., Snyder Associated Companies, Inc. and SAC Holding Co. included as Appendix A to the preliminary Proxy Statement, which is filed herewith as Exhibit (a)(3)(A).

(d)(2)		Voting Agreement dated as of November 16, 2003, as amended April 1, 2004, by and among Snyder Associated Companies, Inc., Wynnefield Partners Small Cap Value, L.P., Wynnefield Partners Small Cap Value, L.P. II, Wynnefield Small Cap Value Offshore Fund, Ltd. and Nelson Obus included as Appendix B to the preliminary Proxy Statement, which is filed herewith as Exhibit (a)(3)(A).

(d)(3)		Form of Master Capitalization Agreement made as of , 2004 among SAC Holding Co. and Investors named therein included as Appendix E to the preliminary Proxy Statement, which is filed herewith as Exhibit (a)(3)(A).

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.

8 EX-99.B.1 3 j0476003exv99wbw1.txt AMENDMENT NO. 2 EXHIBIT (b)(1) CONFIDENTIAL CREDIT AGREEMENT THIS CREDIT AGREEMENT (this "Agreement"), dated as of November 15, 2002, by and between SNYDER ASSOCIATED COMPANIES, INC., a Pennsylvania corporation with an address of P.O. Box 1022, One Glade Park East, Kittanning, PA 16201, (the "Borrower"), and CITIZENS BANK OF PENNSYLVANIA, a bank chartered under the laws of the Commonwealth of Pennsylvania, with an office address of 525 William Penn Place, Suite 2910, Pittsburgh, PA 15219 (the "Lender"); RECITALS: The Borrower has requested that the Lender provide the Borrower with certain loans and other financial accommodations as described in this Agreement. The Lender is willing to provide such financing on the terms, and subject to the conditions, set forth in this Agreement. NOW, THEREFORE, in consideration of the premises and of the mutual covenants contained in this Agreement, and intending to be legally bound, the parties agree as follows: ARTICLE I DEFINITIONS 1.01 Certain Definitions. In addition to other words and terms defined elsewhere in this Agreement, the following words and terms have the following meanings, respectively, unless the context otherwise clearly requires: "Affiliate" means any person or entity which directly or indirectly controls, or is controlled by, or is under common control with, the Borrower. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise. "Applicable Margin" means one percent (1%) per annum. "Authorized Officer" means the Chairman of the Board, the President, the Chief Executive Office, the Chief Operating Officer, the Chief Financial Officer, any Vice President or the Treasurer of the Borrower. The Lender shall be entitled to rely on the incumbency certificate delivered pursuant to Section 4.01(b) for the initial designation of each Authorized Officer. Additions or deletions to the list of Authorized Officers may be made by the Borrower at any time by delivering to the Lender a revised, fully-executed incumbency certificate. "Business Day" means any day which is neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in Pittsburgh, PA. "Change of Control" means cause, agree to, permit or suffer a change in the Snyder Family's ownership interest in the Borrower which would leave the Snyder Family with less than fifty point one percent (50.1%) voting interest, however effected, by one or more transactions, including without limitation the issuance, redemption, transfer, sale or encumbrance of stock (common or otherwise) of Borrower. "Consolidated Net Worth" means Total Assets less (i) amounts due to the Borrower from its officers and affiliates and (ii) Total Liabilities. "Closing Date" means November 15, 2002 or such other date upon which the parties may agree. "ERISA" shall mean the Employee Retirement Income Security Act of 1974 as in effect as of the date of this Agreement and as amended from time to time in the future. "Expiration Date" means ___________ ___, 2003, unless extended in writing by the Lender in its sole and absolute discretion. The Revolving Credit Commitment will automatically renew for 364 day terms, unless the Lender provides at least sixty (60) days written notice of non-renewal prior to the expiration of any term. "Federal Funds Effective Rate" shall mean for any day, the rate per annum (rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced. "GAAP" means generally accepted accounting principles (as such principles may change from time to time) applied on a consistent basis (except for changes in application in which the Borrower's independent certified public accountants concur). "Guarantor" means Allegheny Mineral Corporation, a Pennsylvania corporation, Armstrong Cement & Supply Corporation, a Pennsylvania corporation, and Glacial Sand & Gravel Company, a Pennsylvania corporation, jointly and severally, and "Guarantors" means collectively all of the foregoing. "Guaranty Agreement" means each Guaranty and Suretyship Agreement dated as of the date of this Agreement, as amended, modified or supplemented from time to time, executed and delivered by the Guarantors to the Lender. "Interest Rate Option" has the meaning assigned to such term in Section 2.02 of this Agreement. "Law" means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any Official Body. 2 "Loan Account" has the meaning assigned to such term in Section 2.06 of this Agreement. "Loan Document" or "Loan Documents" mean, singularly or collectively as the context may require (i) this Agreement, (ii) the Note, (iii) the Guaranty Agreements, and any and all other documents, instruments, certificates and agreements executed and delivered in connection with this Agreement, as any of them may be amended, modified, extended or supplemented from time to time. "Loan" or "Loans" means the Revolving Credit Loans and any other loan or loans made by the Lender to the Borrower under this Agreement. "Material Adverse Change" shall mean any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of this Agreement or any other Loan Document, (b) is or could reasonably be expected to be material and adverse to the business, properties, assets, financial condition, results of operations or prospects of the Borrower, (c) impairs materially or could reasonably be expected to impair materially the ability of the Borrower to duly and punctually pay or perform its obligations to the Lender, or (d) impairs materially or could reasonably be expected to impair materially the ability of the Lender, to the extent permitted, to enforce its legal remedies pursuant to this Agreement, the Note or any other Loan Document. The loss of the ability to conduct river dredging due to the inability to obtain appropriate permits shall not constitute a Material Adverse Change. "Note" means the Revolving Credit Note and any other note or Note of the Borrower executed and delivered pursuant to this Agreement, together with all extensions, renewals, refinancings or refundings in whole or in part. "Official Body" means any government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. "Person" shall mean any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, institution, public benefit corporation, joint venture, entity or government (whether Federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof). "Plan" means any deferred compensation program, including both single and multi-employer plans, subject to Title IV of ERISA and established and maintained for employees of the Borrower or any Subsidiary or any controlled group of trades or businesses under common control as defined respectively in Sections 1563 and 414(c) of the Internal Revenue Code of 1986, as amended, of which the Borrower or any Subsidiary is or becomes a part. "Portion"; "Prime Rate Portion" shall mean at any time the part, including the whole, of the unpaid principal amount of the Loans bearing interest at such time under the Prime Rate 3 Option or at a rate determined by reference to the Prime Rate Option pursuant to Section 2.02. "Federal Funds Effective Rate Portion" shall mean at any time the part borrowing interest bearing interest under the Federal Funds Rate Option or at a note determined by reference to the Federal Funds Rate Option pursuant to Section 2.02. "Potential Default" means any event or condition which with notice or the passage of time, or both, would constitute an Event of Default. "Prime Rate" means the rate of interest publicly announced from time to time by the Lender as its prime lending rate. The Prime Rate may be greater or less than other interest rates charged by the Lender to other borrowers and is not solely based or dependent upon the interest rate which the Lender may charge any particular borrower or class of borrowers.) "Revolving Credit Commitment" shall mean the obligation of the Lender to make available to the Borrower the maximum aggregate principal amount of $15,000,000, as such commitment shall be reduced pursuant to Section 2.01(b). "Revolving Credit Loans" has the meaning assigned to that term in section 2.01(a) of this Agreement. "Revolving Credit Note" means the revolving credit note of the Borrower executed and delivered pursuant to Section 2.01(h) of this Agreement, together with all extensions, renewals, refinancings or refundings in whole or in part. "Snyder Family" means Mr. Mark Snyder, Mr. David Snyder, Mr. Thomas Snyder, Mr. Charles Snyder, Jr., Mr. Dennis Snyder, Mr. Richard Snyder, and Ms. Sally Ann Snyder (so long as one or more family member is trustee for the Sally Ann Snyder Voting Trust). "Solvent" means as to any Person, the condition which exists when such Person (i) owns assets whose value (both at fair market value and present fair saleable value) is, on the date of determination, greater than the amount of such Person's liabilities (including without limitation contingent and unliquidated liabilities), (ii) is able to pay all of its Debt as such Debt matures and (iii) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage. "Subsidiary" of a Borrower at any time means any corporation of which a majority of the outstanding capital stock entitled to vote for the election of directors is at such time owned by the Borrower and/or one or more Subsidiaries. "Total Assets" means, as of the date of determination, all items which in accordance with GAAP would be included as assets on the asset side of a balance sheet of the Borrower. "Total Liabilities" means, as of the date of determination, all items (including taxes accrued as estimated but excluding taxes which are deferred in accordance with GAAP) which in accordance with GAAP would be included as liabilities on the liability side of a balance sheet of the Borrower. 4 1.02 Construction. Unless the context of this Agreement otherwise clearly requires, the following rules of construction shall apply to this Agreement and each of the other Loan Documents: (a) References to the plural include the singular, the plural, the part and the whole; "or" has the inclusive meaning represented by the phrase "and/or," and "including" has the meaning represented by the phrase "including without limitation"; (b) The words "hereof," "herein," "hereunder," "hereto" and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document as a whole and not to any particular provision of this Agreement or such other Loan Document; (c) The section and other headings contained in this Agreement or such other Loan Document and the Table of Contents (if any), preceding this Agreement or such other Loan Document are for reference purposes only and shall not control or affect the construction of this Agreement or such other Loan Document or the interpretation thereof in any respect; (d) Article, section, subsection, clause, schedule and exhibit references are to this Agreement or other Loan Document, as the case may be, unless otherwise specified; and (e) Reference to any agreement (including this Agreement and any other Loan Document together with the schedules and exhibits hereto or thereto), document or instrument means such agreement, document or instrument as amended, modified, replaced, substituted for, superseded or restated. 1.03 Accounting Principles. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP. ARTICLE II THE CREDITS 2.01 Revolving Credit Loans. (a) Revolving Credit Loans. Subject to the terms and conditions and relying upon the representations and warranties set forth in this Agreement and the other Loan Documents, the Lender agrees to make loans (the "Revolving Credit Loans") to the Borrower at any time or from time to time on or after the Closing Date and to and including the day immediately preceding the Expiration Date in an aggregate principal amount not exceeding at any one time outstanding the Revolving Credit Commitment. If at any time the sum of all Revolving Credit Loans outstanding exceeds the Revolving Credit Commitment, the Borrower shall immediately repay to the Lender, in funds immediately available, the amount of such 5 excess together with all accrued interest on the amount of such repayment. Within the limits of time and amount set forth in this Section 2.01, and subject to the provisions of this Agreement, including, without limitation, the Lender's right to demand repayment of the Revolving Credit Loans upon the occurrence of an Event of Default, the Borrower may borrow, repay and reborrow under this Section 2.01. The Borrower shall use the proceeds of the Revolving Credit Loans for general corporate and investment purposes. (b) Requests for Revolving Credit Loans. Each request for a Revolving Credit Loan under the Revolving Credit Commitment shall be made to the Lender orally or in writing in the form attached as Exhibit "A" to this Agreement, by an Authorized Officer, by 1:00 p.m. on the day of the proposed Revolving Credit Loan or portion thereof bearing interest at the Federal Funds Effective Rate Option or the Prime Rate Option in a minimum amount of $500,000 and integral multiples of $100,000, with an Interest Period of thirty (30) days. Any oral request for a Revolving Credit Loan shall be followed immediately by the Borrower's written confirmation of such request, executed by an Authorized Officer, which request or confirmation must set forth the amount and date of the Revolving Credit Loan and the Interest Rate Option being elected. (c) Revolving Credit Note. The obligations of the Borrower to repay the unpaid principal amount of the Revolving Credit Loans made to the Borrower by the Lender and to pay interest on the unpaid principal amount will be evidenced in part by the Revolving Credit Note of the Borrower dated the Closing Date, in substantially the form attached as Exhibit "B" to this Agreement, with the blanks appropriately filled. The executed Revolving Credit Note will be delivered by the Borrower to the Lender on the Closing Date. 2.02 Interest Rates. (a) Interest Rates. The unpaid principal amount of the Revolving Credit Loans shall bear interest for each day until due on one or more bases selected by the Borrower from among the interest rate options (the "Interest Rate Options") set forth below. The Borrower understands and agrees that subject to the provisions hereof the Borrower may select several Interest Rate Options to apply simultaneously to different parts of the unpaid principal amount of the Loans made to the Borrower. Federal Funds Effective Rate Option: a rate per annum (computed on the basis of a year of 360 days and actual days elapsed) for each day equal to the Federal Funds Rate for such day plus the Applicable Margin. Prime Rate Option: a rate per annum (computed on the basis of a year of 360 days and actual days elapsed) for each day equal to the Prime Rate. (b) Interest After Default. After the principal amount of any part of the Loans shall have become due (at maturity, by acceleration or otherwise), or upon the occurrence of one or more of the Events of Default (and for so long as any such Event of Default shall continue), as compensation to the Lender for the increased cost of administering the Loans, the Loans will bear interest for each day until paid (before and after judgment) at a rate per year (computed for 6 the actual number of days elapsed on the basis of a year of 360 days) which will be two percent (2.0%) above the then applicable interest rate determined in accordance with Section 2.02(a) above, such interest rate to change automatically from time to time effective as of the effective date of each change in the applicable interest rate. Upon the satisfaction or cure of any such Event of Default, the applicable interest rate will revert to the rate(s) originally selected and applied pursuant to Section 2.02(a) above. (c) Usury. In the event the rates of interest provided for in subsections (a) and (b) above or either of them are finally determined by any Official Body to exceed the maximum rate of interest permitted by applicable usury or similar Laws, their or its application will be suspended and there will be charged instead the maximum rate of interest permitted by such Laws. (d) Selection, Conversion or Renewal of Rate Options. Subject to the other provisions hereof, the Borrower may select any Interest Rate Option to apply to the Loans or any part thereof. Subject to the other provisions hereof, the Borrower may convert any part of the unpaid principal amount of the Loans from any Interest Rate Option. (e) Prime Rate Fallback. If at any time the Lender shall have determined in good faith (which determination shall be conclusive) that: (i) The Federal Reserve Bank of New York (or its successor) shall not have announced a Federal Funds Effective Rate on any day other than a Saturday, Sunday, public holiday or other day on which no Federal Funds Effective Rate would normally be announced under the practices of such Federal Reserve Bank as of the date hereof, substantially at the time when the Federal Funds Effective Rate on such day would normally be announced under the practices of such Federal Reserve Bank as of the date hereof; (ii) the effective cost to the Lender of funding any proposed or existing Federal Fund Rate Portion from a corresponding source of funds shall exceed the Federal Funds Effective Rate; or (iii) the making, maintenance, or funding of any Federal Funds Rate Potion has been made impractical or unlawful by compliance by the Lender in good faith with any law or guideline or interpretation or administration thereof by any official body charged with the interpretation or administration thereof or with any request or directive of any such official body (whether or not having the force of law); then, and in such event, the Lender shall notify Borrower forthwith of such determination. Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the Federal Funds Effective Rate shall automatically from and after such date be equal to the Prime Rate. 7 2.03 Interest Payment Dates. (a) Federal Funds Rate Loans and Prime Rate Rates. Interest on the Federal Funds Rate Loans and the Prime Rate Loans will be due and payable on the first day of each month in arrears. (b) General Interest Payment Provisions. Interest will be paid in the manner provided in Section 2.04 of this Agreement. After maturity of any part of the Loans (at maturity, by acceleration or otherwise), interest on such part of the Loans will be due and payable on demand. 2.04 Payments. All payments to be made in respect of principal, interest, fees or other amounts due from the Borrower under this Agreement or under the Note are payable at 12:00 noon, New York time, on the day when due, without presentment, demand, protest or notice of any kind, all of which are expressly waived, and an action for the payments will accrue immediately. All such payments must be made to the Lender at its office in U.S. dollars and in funds immediately available at such Office, without setoff, counterclaim or other deduction of any nature. All such payments shall be applied (i) at the option of the Lender to accrued and unpaid interest, outstanding principal and other sums due under this Agreement in such order as the Lender, in its sole discretion, shall elect, and (ii) on the date such payment is received, provided such payment is received at or before 12:00 noon New York time, or on the next Business Day if such payment is received after such time. On the day when any such payment shall be due, the Lender shall either (i) deduct the amount of such payment from any deposit account maintained by the Borrower with the Lender, or (ii) if borrowing availability exists under Section 2.01 of this Agreement, advance to the Borrower the amount of such payment, with such amount to be immediately repaid by the Borrower to the Lender and added to the outstanding principal of the Revolving Credit Loans; provided, however, that in the event that borrowing availability does not exist under Section 2.01 of this Agreement, the Lender shall not be obligated to make any such advance to the Borrower and any such payment shall nevertheless be then due and payable. 2.05 Indemnities; Taxes. (a) General Indemnities. The Borrower will indemnify the Lender against any loss or expense which the Lender sustains or incurs as a consequence of an Event of Default, including, without limitation, any failure of the Borrower to pay when due (at maturity, by acceleration or otherwise) any principal, interest, fee or any other amount due under this Agreement, or the Note or the other Loan Documents. If the Lender sustains or incurs any such loss or expense it will from time to time notify the Borrower in writing of the amount determined in good faith by the Lender (which determination will be conclusive) to be necessary to indemnify the Lender for the loss or expense. Such amount will be due and payable by the Borrower to the Lender within ten (10) days after presentation by the Lender of a statement setting forth a brief explanation of and the Lender's calculation of such amount, which statement shall be conclusively deemed correct absent manifest error. Any amount payable to the Lender under this Section 2.05 will bear interest at the Federal Funds Effective Rate plus two percent 8 (2.0%) per year (computed for the actual number of days elapsed on the basis of a year of 360 days) from the due date until paid (before and after judgment). (b) Increased Capital Costs. If any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority affects or would affect the amount of capital required or expected to be maintained by the Lender, or person controlling the Lender, and the Lender determines (in its sole and absolute discretion) that the rate of return on its or such controlling person's capital as a consequence of its commitments or the Loans made by the Lender is reduced to a level below that which the Lender or such controlling person could have achieved but for the occurrence of any such circumstance, then, in any such case upon notice from time to time by the Lender to the Borrower, the Borrower shall immediately pay directly to the Lender additional amounts sufficient to compensate the Lender or such controlling person for such reduction in rate of return. A statement of the Lender as to any such additional amount or amounts (including calculations thereof in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on the Borrower. In determining such amount, the Lender may use any method of averaging and attribution that it (in its sole and absolute discretion) shall deem applicable. (c) Taxes. All payments by the Borrower of principal of, and interest on, and all amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by the Lender's net income or receipts (such non-excluded items being called "Taxes"). In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Borrower will (i) pay directly to the relevant authority the full amount required to be so withheld or deducted; (ii) promptly forward to the Lender an official receipt or other documentation satisfactory to the Lender evidencing such payment to such authority; and (iii) pay to the Lender such additional amount or amounts as is necessary to ensure that the net amount actually received by the Lender will equal the full amount the Lender would have received had no such withholding or deduction been required. Moreover, if any Taxes are directly asserted against the Lender with respect to any payment received by the Lender hereunder, the Lender may pay such Taxes and the Borrower will promptly pay such additional amount (including any penalties, interest or expenses) as is necessary in order that the net amount received by the Lender after the payment of such Taxes 9 (including any Taxes on such additional amount) shall equal the amount the Lender would have received had not such Taxes been asserted. If the Borrower fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Lender the required receipts or other required documentary evidence, the Borrower shall indemnify the Lender for any incremental Taxes, interest or penalties that may become payable by the Lender as a result of any such failure. 2.06 Loan Account. The Lender will open and maintain on its books a loan account (the "Loan Account") with respect to Loans made, repayments, prepayments, the computation and payment of interest and fees and the computation and final payment of all other amounts due and sums paid to the Lender under this Agreement. Except in the case of manifest error in computation, the Loan Account will be conclusive and binding on the Borrower as to the amount at any time due to the Lender from the Borrower under this Agreement or the Note. 2.07 Termination. (a) The Revolving Credit Commitment is terminable by the Lender at its discretion upon the occurrence of an Event of Default under this Agreement. The Revolving Credit Commitment will automatically renew for 364 day terms, unless the Lender provides at least sixty (60) days written notice of nonrenewal prior to the expiration of any term. (b) The Borrower may prepay the Revolving Credit Loans in full and terminate the Revolving Credit Commitment made available to the Borrower under this Agreement at any time without premium or penalty, provided that any such payment in full shall be accompanied by payment of all accrued interest, costs, fees and expenses accrued to the date of prepayment. In the event the Revolving Credit Commitment is terminated for any reason, the outstanding balance of the Revolving Credit Loans, together with any accrued and unpaid interest thereon and any other sums due pursuant to the terms of this Agreement, the Note, the other Loan Documents and any other credit accommodation made by the Lender to the Borrower shall be due and payable immediately. ARTICLE III REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants to the Lender that: 3.01 Organization and Qualification. The Borrower is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation. The Borrower is duly qualified or licensed to do business as a foreign corporation and is in good standing in all jurisdictions in which the ownership of its properties or the nature of its activities or both makes such qualification or licensing necessary except where the failure to be so qualified or licensed would not have a material and adverse affect on the assets, business, operations or financial condition of the Borrower or the ability of the Borrower to perform its obligations under this Agreement, the Note or the other Loan Documents. 3.02 Power to Carry on Business. The Borrower has all requisite power and authority to own and operate its properties and to carry on its business as now conducted and as presently 10 planned to be conducted in all material respects. The Borrower has all governmental approvals or authorizations necessary to carry on its business as now conducted except where the failure to have any such approval would not have a material and adverse affect on the financial condition of the Borrower or the ability of the Borrower to perform its obligations under this Agreement, the Note or the other Loan Documents. 3.03 Authority and Authorization. The Borrower has corporate power and authority to execute and deliver this Agreement, the Note and the other Loan Documents executed by the Borrower, to make the borrowings provided for in this Agreement, to execute and deliver the Note in evidence of such borrowings and to perform its obligations under this Agreement, the Note and the other Loan Documents. All such action has been duly and validly authorized by all necessary corporate proceedings on the part of the Borrower. 3.04 Execution and Binding Effect. This Agreement, the Note and the other Loan Documents have been duly and validly executed and delivered by the Borrower and each such document or agreement constitutes a legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, or other similar laws affecting creditors' rights generally and by general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law). 3.05 Absence of Conflicts. Neither the execution and delivery of this Agreement, the Note or the other Loan Documents, nor the consummation of the transactions contemplated in any of them, nor the performance of or compliance with their terms and conditions will (a) violate any applicable Law, (b) conflict with or result in a breach of or a default under the articles of incorporation or by-laws of the Borrower or any agreement or instrument to which the Borrower is a party or by which it or any of its properties (now owned or acquired in the future) may be subject or bound or (c) result in the creation or imposition of any Lien upon any property (now owned or acquired in the future) of the Borrower. 3.06 Authorizations and Filings. No authorization, consent, approval, license, exemption or other action by, and no registration, qualification, designation, declaration or filing with, any Official Body is or will be necessary or advisable in connection with the execution and delivery of this Agreement, the Note or the other Loan Documents, the consummation of the transactions contemplated in any of them, or the performance of or compliance with the terms and conditions of this Agreement, the Note or the other Loan Documents. 3.07 Title to Property . The Borrower has good and marketable title to all real property and good and marketable title to all other property purported to be owned by it, including that reflected in the most recent reviewed balance sheet referred to in Section 3.08 of this Agreement or submitted pursuant to Section 5.01(a) of this Agreement (except as sold or otherwise disposed of in the ordinary course of business). 11 3.08 Financial Statements. (a) The Borrower has delivered to the Lender reviewed balance sheets and related statements of income and retained earnings of the Borrower for the fiscal year ending December 31, 2001, with only such qualifications as are described on Schedule 3.08 to this Agreement. Such financial statements (including the notes) present fairly the financial condition of the Borrower as of the end of such fiscal period and the results of its operations and the changes in financial position for the fiscal periods then ended. (b) The Borrower has delivered to the Lender an internally prepared balance sheet and related statement of income and retained earnings of the Borrower for the calendar month and year-to-date ending June 30, 2002. Such financial statements present fairly the financial condition of the Borrower as of the end of such period and the results of its operations for the period then ended, all in conformity with accounting principles applied on a basis consistent with that of the preceding fiscal period. 3.09 Taxes. All tax returns required to be filed by the Borrower have been properly prepared, executed and filed. All taxes, assessments, fees and other governmental charges upon the Borrower or upon any of its properties, incomes, sales or franchises which are due and payable have been paid. The reserves and provisions for taxes on the books of the Borrower are adequate for all open years and for its current fiscal period. The Borrower does not know of any proposed additional assessment or basis for any assessment for additional taxes (whether or not reserved against). 3.10 Litigation. Except for proceedings regarding permitted river dredging or disclosed in the opinion of counsel delivered in connection herewith, there is no pending or threatened action, suit or proceeding by or before any Official Body against or affecting the Borrower, at law or equity, which if adversely decided would cause a Material Adverse Change. 3.11 Compliance with Laws. The Borrower is not in violation of or subject to any material contingent liability on account of the failure to be in compliance with any Law. 3.12 Pension Plans. Except as described in Schedule 3.12 to this Agreement, (a) each Plan has been and will be maintained and funded in accordance with its terms and with all provisions of ERISA and other applicable laws; (b) no Reportable Event as defined in ERISA has occurred and is continuing with respect to any Plan; (c) no liability to the Pension Benefit Guaranty Corporation (the "PBGC") has been incurred with respect to any Plan, other than for premiums due and payable; (d) no Plan has been terminated, no proceedings have been instituted to terminate any Plan, and there exists no intent to terminate or institute proceedings to terminate any Plan; (e) no withdrawal, either complete or partial, has occurred or commenced with respect to any multi-employer Plan, and there exists no intent to withdraw either completely or partially from any multi-employer Plan; and (f) there has been no cessation of, and there is no intent to cease, operations at a facility or facilities where such cessation could reasonably be expected to result in a separation from employment of more than 20% of the total number of employees who are participants under a Plan. 12 3.13 Proceeds. The Borrower will use the proceeds of the Revolving Credit Loans for corporate purposes. 3.14 Margin Stock. The Borrower will make no borrowing under this Agreement for the purpose of buying or carrying any "margin stock", as such term is used in Regulation U and related regulations of the Board of Governors of the Federal Reserve System, as amended from time to time. The Borrower does not own any "margin stock". The Borrower is not engaged in the business of extending credit to others for such purpose, and no part of the proceeds of any borrowing under this Agreement will be used to purchase or carry any "margin stock" or to extend credit to others for the purpose of purchasing or carrying any "margin stock". 3.15 No Event of Default; Compliance with Agreements. No event has occurred and is continuing and no condition exists which constitutes an Event of Default or Potential Default. The Borrower has not, to the extent it would cause a Material Adverse Change, (i) violated any term of any charter instrument or bylaw or (ii) defaulted under any agreement, lease or instrument to which the Borrower is a party or by which it or any of its properties (now owned or acquired in the future) may be subject or bound. 3.16 No Material Adverse Change. Since June 30, 2002, there has been no Material Adverse Change. 3.17 Accurate and Complete Disclosure. No representation or warranty made by the Borrower under this Agreement, the Note or the other Loan Documents and no statement made by the Borrower in any financial statement (furnished pursuant to Sections 3.08 or 5.01 or otherwise), certificate, report, exhibit or document furnished by the Borrower to the Lender pursuant to or in connection with this Agreement is false or misleading in any material respect (including by omission of material information necessary to make such representation, warranty or statement not misleading). 3.18 Solvency. The Borrower is, and on a consolidated basis the Borrower and its Subsidiaries are, and after giving effect to the transitions contemplated pursuant to this Agreement and the other Loan Documents will be, Solvent. ARTICLE IV CONDITIONS OF LENDING 4.01 Initial Loans. The obligation of the Lender to make any Loan on the Closing Date is subject to the accuracy as of the Closing Date of the representations and warranties contained in this Agreement and the other Loan Documents, to the performance by the Borrower of its obligations to be performed under this Agreement and under the other Loan Documents on or before the Closing Date and to the satisfaction of the following further conditions: (a) Representations and Warranties, Events of Default and Potential Defaults. The representations and warranties contained in Article III shall be true and correct on and as of the Closing Date. On the Closing Date, the Borrower shall have delivered a Certificate to that effect signed by the President, Chairman or Chief Financial Officer of the Borrower. On the 13 Closing Date, no Event of Default and no Potential Default shall have occurred and be continuing or exist or shall occur or exist after giving effect to the Loan to be made on such date. On the Closing Date, the Borrower shall have delivered a Certificate to that effect signed by the President, Chairman or Chief Financial Officer of the Borrower. (b) Proceedings and Incumbency - Borrower. On the Closing Date, the Borrower shall have delivered to the Lender a certificate, in form and substance satisfactory to the Lender, dated the Closing Date and signed on behalf of the Borrower by the Secretary of the Borrower, certifying as to (a) true copies of the Articles of Incorporation and bylaws of the Borrower and any shareholders agreement concerning the Borrower, all as in effect on such date, (b) true copies of all corporate action taken by the Borrower relative to this Agreement, the Note and the other Loan Documents, including but not limited to that described in Section 3.03 of this Agreement, and (c) the names, true signatures and incumbency of the officers of the Borrower authorized to execute and deliver this Agreement, the Note and the other Loan Documents. The Lender may conclusively rely on such certificate unless and until a later certificate revising the prior certificate has been furnished to the Lender. (c) Proceedings and Incumbency - Guarantors. On the Closing Date, each Guarantor shall have delivered to the Lender a certificate, in form and substance satisfactory to the Lender, dated the Closing Date and signed on behalf of such Guarantor by the Secretary of each such Guarantor, certifying as to (a) true copies of the Articles of Incorporation and bylaws of such Guarantor and any shareholders agreement concerning such Guarantor, all as in effect on such date, (b) true copies of all corporate action taken by such Guarantor relative to its Guaranty Agreement, and (c) the names, true signatures and incumbency of the officers of such Guarantor authorized to execute and deliver its Guaranty Agreement. The Lender may conclusively rely on such certificate unless and until a later certificate revising the prior certificate has been furnished to the Lender. (d) Opinion of Counsel. On the Closing Date, there shall have been delivered to the Lender a written opinion, dated the Closing Date, of Greco & Lander, P.C., counsel for the Borrower and the Guarantors, in substantially the form attached as Exhibit "C" to this Agreement. (e) Agreement and Note. On the Closing Date, this Agreement and the Revolving Credit Note, satisfactory in terms, form and substance to the Lender, shall have been executed and delivered by the Borrower to the Lender. (f) Guaranty Agreements. On the Closing Date, the Guaranty Agreements, satisfactory in terms, forms and substance to the Lender, shall have been executed and delivered by the Guarantors to the Lender. (g) Operating Accounts. On or before the Closing Date, the Borrower shall have established its primary operating accounts with the Lender. 14 (h) Other Documents and Conditions. On or before the Closing Date, the following documents and conditions shall have been delivered or satisfied by or on behalf of the Borrower and the Guarantors, as the case may be, to the Lender: (i) Good Standing and Tax Lien Certificates - Borrower. Good Standing Certificate of the Department of State of the Commonwealth of Pennsylvania certifying to the good standing and corporate status of the Borrower, good standing/foreign qualification certificates from other jurisdictions in which the Borrower is qualified to do business and tax lien certificates of the Borrower from each jurisdiction in which the Borrower is qualified to do business. (ii) Good Standing and Tax Lien Certificates - Guarantors. Good Standing Certificates of the Department of State of the Commonwealth of Pennsylvania certifying to the good standing and corporate status of each Guarantor, good standing/foreign qualification certificates from other jurisdictions in which such Guarantor is qualified to do business and tax lien certificates of such Guarantor from each jurisdiction in which such Guarantor is qualified to do business. (iii) Other Documents and Conditions. Such other documents and conditions as may be required to be submitted to the Lender by the terms of this Agreement or of any Loan Document. (i) Details, Proceedings and Documents. All legal details and proceedings in connection with the transactions contemplated by this Agreement shall be satisfactory to the Lender and the Lender shall have received all such counterpart originals or certified or other copies of such documents and proceedings in connection with such transactions, in form and substance satisfactory to the Lender, as the Lender may from time to time request. 4.02 Each Additional Loan. At the time of making any Loans other than Loans made on the Closing Date and after giving effect to the proposed borrowings: (i) the representations and warranties of the Borrower contained in Article III of this Agreement shall be true on and as of the date of such additional Loan with the same effect as though such representations and warranties had been made on and as of such date (except representations and warranties which expressly relate solely to an earlier date or time, which representations and warranties shall be true and correct on and as of the specific dates or times referred to therein) and the Borrower shall have performed and complied with all covenants and conditions of this Agreement; (ii) no Event of Default or Potential Default shall have occurred and be continuing or shall exist; and (iii) the making of the Loans shall not contravene any Law applicable to the Borrower or Lender. ARTICLE V AFFIRMATIVE COVENANTS The Borrower covenants to the Lender as follows: 15 5.01 Reporting and Information Requirements. (a) Annual Reviewed Reports. As soon as practicable, and in any event within one hundred twenty (120) days after the close of each fiscal year of the Borrower, the Borrower will furnish to the Lender statements of income, retained earnings and cash flows of the Borrower for such fiscal year and a balance sheet of the Borrower as of the close of such fiscal year, all in reasonable detail, setting forth in comparative form the corresponding figures for the preceding fiscal year, prepared in accordance with GAAP applied on a basis consistent with that of the preceding fiscal year (except for changes in application in which such accountants concur) with such statements and balance sheet to be reviewed by independent certified public accountants of recognized standing selected by the Borrower and satisfactory to the Lender. (b) Annual Internally Prepared Reports. As soon as practicable, and in any event within one hundred twenty (120), days after the close of each fiscal year of the Borrower, the Borrower will furnish to the Lender internally proposed consolidated and consolidating statements of income and retained earnings for the Borrower and its Subsidiaries for such fiscal year all in reasonable detail, setting forth in comparative form the corresponding figures for the preceding fiscal year, prepared in accordance with GAAP applied on a basis consistent with that of the preceding fiscal year with such statements and balance sheet to be attested to by the Chief Financial Officer of the Borrower to the best of his or her knowledge and ability. (c) Quarterly Reports. As soon as practicable, and in any event within 45 days after the close of each fiscal quarter, during the term of this Agreement the Borrower will furnish to the Lender statements of income and cash flows for the Borrower for such quarter and for the portion of the fiscal year to the end of such quarter, and a balance sheet shall be prepared by the Borrower and certified by the Chief Financial Officer of the Borrower as presenting fairly the financial position of the Borrower as of the end of such quarter and the results of their operations for such periods, subject to year end adjustment, in conformity with GAAP applied in a manner consistent with that of the most recent reviewed financial statements furnished to the Lender. (d) Compliance Certificate. Within one hundred twenty (120) days after the end of each fiscal year of the Borrower and within forty-five (45) days after the end of each calendar quarter, the Borrower will deliver to the Lender a certificate, in the form attached to this Agreement as Exhibit "D", dated as of the end of such fiscal year or quarter, as the case may be, signed on behalf of the Borrower by its Chief Financial Officer, including a calculation of the financial maintenance covenant set forth in Section 6.05 of this Agreement and stating that, as of the date of the certificate, no Event of Default or Potential Default has occurred and is continuing or exists, or if an Event of Default or Potential Default has occurred and is continuing or exists, specifying in detail the nature and period of existence of the Event of Default or Potential Default and any action taken or contemplated to be taken by the Borrower. (e) Notice of Event of Default. Promptly upon becoming aware of an Event of Default or Potential Default, the Borrower will give the Lender notice of the Event of Default or Potential Default, together with a written statement of the President, Treasurer or Chief 16 Financial Officer of the Borrower setting forth the details of the Event of Default or Potential Default and any action taken or contemplated to be taken by the Borrower. (f) Notice of Material Adverse Change. Promptly upon becoming aware thereof, the Borrower will give the Lender telephonic or telegraphic notice (with written confirmation set on the same or next Business Day) about any material adverse change in the assets, business, operations or financial condition of the Borrower or any development or occurrence which would materially and adversely affect the ability of the Borrower to perform its obligations under this Agreement. (g) Reports to Governmental Agencies and other Creditors. With reasonable promptness following the Lender's request, the Borrower will deliver to the Lender copies of all such financial reports, statements and returns which the Borrower shall file with any federal or state department, commission, board, bureau, agency or instrumentality and any report, statement or return delivered by the Borrower to any supplier or other creditor. (h) Notice of Proceedings. Promptly upon becoming aware thereof, the Borrower will give the Lender notice of the commencement, existence or threat of all proceedings by or before any Official Body against or affecting the Borrower which, if adversely decided, would have a material adverse effect on the assets, business, operations or financial condition of the Borrower. (i) Updates to Schedules. In the event that any of the information or disclosures provided on any of the Schedules attached to this Agreement become incorrect in any material respect, the Borrower shall promptly provide the Lender in writing with such revisions or updates to such Schedule as may be necessary or appropriate to correct such Schedule (except to the extent that the Borrower has given the Lender written notice under subsections (e), (f) (g) or (h) of this Section 5.01); provided, however that no Schedule shall be deemed to have been amended, modified or superseded by any such correction or update, nor shall any breach of warranty or representation resulting from the inaccuracy or incompleteness of any such Schedule be deemed to have been cured thereby, unless and until the Lender, in its sole discretion, shall have accepted in writing such revisions or updates to such Schedule. (j) Further Information. The Borrower will promptly furnish to the Lender such other information, and in such form, as the Lender may reasonably request from time to time. 5.02 Preservation of Existence and Franchises. The Borrower will maintain its corporate existence, rights and franchises in full force and effect in its jurisdiction of incorporation. The Borrower will qualify and remain qualified as a foreign corporation in each jurisdiction in which failure to receive or retain qualification would have a material adverse effect on the assets, business, operations or financial condition of the Borrower. 5.03 Insurance. The Borrower will maintain with financially sound and reputable insurers, including, potentially, a captive insurance company, insurance with respect to its properties and business and against such liabilities, casualties and contingencies and of such 17 types and in such amounts as is satisfactory to the Lender and as is customary in the case of corporations or other entities engaged in the same or similar business or having similar properties similarly situated. 5.04 Payment of Liabilities. The Borrower will pay or discharge: (a) On or prior to the date on which penalties attach, all taxes, assessments and other governmental charges or levies imposed upon it or any of its properties or income except taxes, assessments or charges subject to good faith dispute for which the Borrower has created adequate reserves on its books; (b) On or prior to the date when due, all lawful claims of materialmen, mechanics, carriers, warehousemen, landlords and other like persons which, if unpaid, might result in the creation of a Lien upon any of its property, except such claims which are subject to good faith dispute and as to which the Borrower has created adequate reserves on its books; (c) On or prior to the date when due, all other lawful claims which, if unpaid, might result in the creation of a Lien upon any of its property, except such claims which are subject to good faith dispute and as to which the Borrower has created adequate reserves on its books; and (d) All other current liabilities so that none is due more than ninety (90) days after the due date for each liability, except current liabilities which are subject to good faith dispute and as to which the Borrower has created adequate reserves on its books. 5.05 Financial Accounting Practices. The Borrower will make and keep books, records and accounts which, in reasonable detail, accurately and fairly-reflect its transactions and dispositions of its assets and maintain a system of internal accounting controls sufficient to provide reasonable assurances that (a) transactions are executed in accordance with management's general or specific authorization, (b) transactions are recorded as necessary (i) to permit preparation of financial statements in conformity with GAAP and (ii) to maintain accountability for assets, (c) access to assets is permitted only in accordance with management's general or specific authorization and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 5.06 Compliance with Laws. The Borrower shall comply with all applicable Laws. 5.07 Pension Plans. The Borrower shall (a) keep in full force and effect any and all Plans which are presently in existence or may, from time to time, come into existence under ERISA, unless such Plans can be terminated without material liability to the Borrower in connection with such termination; (b) make contributions to all of the Borrower's Plans in a timely manner and in a sufficient amount to comply with the requirements of ERISA; (c) comply with all material requirements of ERISA which relate to such Plans so as to preclude the occurrence of any "reportable event", "prohibited transaction" (other than a Prohibited Transaction subject to an exemption under ERISA) or material "accumulated funding deficiency" 18 as such terms are defined in ERISA; and (d) notify the Lender immediately upon receipt by the Borrower of any notice of the institution of any proceeding or other action which may result in the termination of any Plan. The Borrower shall deliver to the Lender, promptly after the filing or receipt thereof, copies of all reports or notices which the Borrower files or receives under ERISA with or from the Internal Revenue Service, the Pension Benefit Guaranty Corporation, or the U.S. Department of Labor, which would materially or adversely (i) affect the Borrower, its business, assets or financial condition, or (ii) the Borrower's ability to perform its obligations under this Section 5.07. 5.08 Use of Proceeds. The Borrower will use the proceeds of the Revolving Credit Loans for the purposes described in Section 2.01(a) of this Agreement. 5.09 Operating Accounts. On or before the Closing Date, the Borrower shall establish, and for the remaining term of this Agreement shall maintain, its primary operating accounts with the Lender. 5.10 Change of Control. The Borrower shall not permit any Change of Control without the prior written consent of Lender. 5.11 Further Assurances. The Borrower, at its own cost and expense, will cause to be promptly and duly taken, executed, acknowledged and delivered all such further acts, documents and assurances as the Lender may from time to time request in order more effectively to carry out the intent and purposes of this Agreement and the transactions contemplated by this Agreement and to cause the security interest or interests, the liens, or conveyance granted under the Security Agreement or any other Loan Documents to be, at all times, valid, perfected and enforceable against the Borrower and all third parties. All expenses of such filings, and recordings, and refilings, and rerecordings, shall be borne by the Borrower. ARTICLE VI NEGATIVE COVENANTS The Borrower covenants to the Lender as follows: 6.01 Margin Stock. The Borrower will not use the proceeds of any Loans directly or indirectly to purchase or carry any "margin stock" (within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying, directly or indirectly, any margin stock. 6.02 Ownership and Control. The Borrower shall not directly or indirectly, issue, transfer, sell or otherwise dispose of any interest in the Borrower that would result in a Change of Control without the prior written consent of Lender. 6.03 Changes in Organizational Documents. The Borrower shall not amend in any respect its articles of incorporation (including any provisions or resolutions relating to capital stock), by-laws or other organizational documents without providing at least thirty (30) calendar days' prior written notice to the Lender. 19 6.04 Financial Maintenance Covenant. The Borrower shall not permit or suffer its Consolidated Net Worth to be less than $100,0000,000 for the fiscal year end 2002. 6.05 Financial Covenants of Guarantors. The financial covenants of each Guarantor hereto are set forth in their respective Guaranty and Suretyship Agreements of even date herewith, and are incorporated herein by reference. ARTICLE VII DEFAULTS 7.01 Events of Default. An "Event of Default" means the occurrence or existence of one or more of the following events or conditions (whatever the reason for such Event of Default and whether voluntary, involuntary or effected by operation of Law): (a) The Borrower shall fail to pay principal on the Note when due; or (b) The Borrower shall fail to pay interest on the Loans or any fees payable pursuant to Article II of this Agreement when due; or (c) The Borrower shall fail to pay any other fee, or other amount payable pursuant to this Agreement, the Note or any of the other Loan Documents when due; or (d) Any representation or warranty made by the Borrower under this Agreement, the Note or any of the other Loan Documents or by any Guarantor under its Guaranty Agreement or any statement made by the Borrower or any Guarantor in any financial statement, certificate, report, exhibit or document furnished by the Borrower or any Guarantor, as the case may be, to the Lender pursuant to this Agreement or the other Loan Documents shall prove to have been false or misleading in any material respect as of the time when made; or (e) The Borrower shall be in default in the performance or observance of Sections 5.05 or 5.07 of this Agreement and such default shall continue for a period of thirty (30) days after the Lender shall have given notice to the Borrower of such default; or (f) The Borrower shall be in default in the performance or observance of any other covenant, agreement or duty under this Agreement, the Note or the other Loan Documents beyond any applicable grace or cure period expressly provided in such Loan Document; or (g) A Change in Control for which Borrower has not received the prior written consent of Lender shall occur; or (h) The Borrower or any Guarantor shall (i) default (as principal or guarantor or other surety) in the due performance and observance of any term of any other agreement with the Lender, or (ii) default (as principal or guarantor or other surety) in any payment of principal of or interest on any obligation (or set of related obligations) for borrowed money, beyond any period of grace with respect to the payment or, if an obligation (or set of related obligations) is or 20 are payable or repayable on demand, fails to pay or repay such obligation or obligations when demanded, or (iii) default in the observance of any other covenant, term or condition contained in any agreement or instrument by which such obligation for borrowed money (or set of related obligations) is or are created, secured or evidenced, if the effect of such default is to cause, or to permit the holder or holders of such obligation or obligations (or a trustee or agent on behalf of such holder or holders) to cause, all or part of such obligation or obligations to become due before its or their otherwise stated maturity; or (i) One or more judgments for the payment of money in excess of $50,000 shall have been entered against the Borrower, which judgment or judgments shall have remained undischarged or unstayed for a period of thirty (30) days; or (j) A writ or warrant of attachment, garnishment, execution, distraint or similar process in excess of $50,000 shall have been issued against the Borrower or any of its properties which shall have remained undischarged or unstayed for a period of thirty (30) days; or (k) The indictment or threatened indictment of Borrower or any Guarantor under any criminal statute, or commencement or threatened commencement of criminal or civil proceedings against Borrower or any Guarantor pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture of any of the property of Borrower or such Guarantor; or (l) A Material Adverse Change has occurred with respect to the assets, business, operations or financial condition of the Borrower or that the prospect of payment or performance of any covenant, agreement or duty under this Agreement, the Note or the other Loan Documents is impaired in any material respect; or (m) A proceeding shall be instituted in respect of the Borrower or any Guarantor: (i) seeking to have an order for relief entered in respect of the Borrower or any Guarantor, or seeking a declaration or entailing a finding that the Borrower or any Guarantor is insolvent or a similar declaration or finding, or seeking dissolution, winding-up, charter revocation or forfeiture, liquidation, reorganization, arrangement, adjustment, composition or other similar relief with respect to the Borrower or any Guarantor, its assets or its debts under any law relating to bankruptcy, insolvency, relief of debtors or protection of creditors, termination of legal entities or any other similar law now or in the future in effect; or (ii) seeking appointment of a receiver, trustee, custodian, liquidator, assignee, sequestrator or other similar official for the Borrower or any Guarantor or for all or any substantial part of its property; or 21 (n) The Borrower or any Guarantor shall become insolvent, shall become generally unable to pay its debts as they become due, shall voluntarily suspend transaction of its business, shall make a general assignment for the benefit of creditors, shall institute a proceeding described in Section 7.01(m)(i) of this Agreement or shall consent to any order for relief, declaration, finding or relief described in Section 7.01(m)(i) of this Agreement, shall institute a proceeding described in Section 7.01(m)(ii) of this Agreement or shall consent to the appointment or to the taking of possession by any such official of all or any substantial part of its property whether or not any proceeding is instituted, dissolves, winds-up or liquidates itself or any substantial part of its property, or shall take any action in furtherance of any of the foregoing. 7.02 Consequences of an Event of Default. (a) If an Event of Default specified in subsections (a) through (l) of Section 7.01 of this Agreement occurs and continues or exists, the Lender will be under no further obligation to make Loans and may demand the unpaid principal amount of the Note, interest accrued on the unpaid principal amount and all other amounts owing by the Borrower under this Agreement, the Note and the other Loan Documents to be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are expressly waived, and an action for any amounts due shall accrue immediately. (b) If an Event of Default specified in subsections (in) or (n) of Section 7.01 of this Agreement occurs and continues or exists, the Revolving Credit Commitment will automatically terminate, the Lender will be under no further obligation to make Loans and the unpaid principal amount of the Note, interest accrued on the unpaid principal amount and all other amounts owing by the Borrower under this Agreement, the Note and the other Loan Documents shall become immediately due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived, and an action for any amounts due shall accrue immediately. (c) If an Event of Default occurs and continues or exists, the Lender may, without notice to the Borrower, increase the rate of interest applicable to the Loans to the rate of interest applicable to the Loans to the rate of interest specified in subsection (b) of Section 2.02 of this Agreement. (d) If an Event of Default occurs or exists, the Lender may, in its sole discretion terminate the Revolving Credit Commitment. (e) If an Event of Default occurs and continues or exists, and whether or not the Lender shall have accelerated the maturity of Loans pursuant to any of the foregoing provisions of this Section 7.02, the Lender, if owed any amount with respect to the Note, may proceed to protect and enforce its rights by suit in equity, action at law and/or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Agreement or the Note, and, if such amount shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of the Lender. 22 (f) If an Event of Default occurs and continues or exists, the Lender may exercise each and every right and remedy granted to the Lender under the Loan Documents and under any applicable Law. 7.03 Set-Off. If the unpaid principal amount of the Note, interest accrued on the unpaid principal amount or other amount owing by the Borrower under this Agreement, the Note or the other Loan Documents shall have become due and payable (at maturity, by acceleration or otherwise), the Lender and the holder of any participation in any Loan will each have the right, in addition to all other rights and remedies available to it, without notice to the Borrower, to set-off against and to appropriate and apply to such due and payable amounts any debt owing to, and any other funds held in any manner for the account of, the Borrower by the Lender or by such holder including, without limitation, all funds in all deposit accounts (whether time or demand, general or special, provisionally credited or finally credited, or otherwise) now or in the future maintained by the Borrower with the Lender or such holder. The Borrower consents to and confirms the foregoing arrangements and confirms the Lender's rights and such holder's rights of banker's lien and set-off. Nothing in this Agreement will be deemed a waiver or prohibition of or restriction on the Lender's rights or any such holder's rights of banker's lien or set-off. ARTICLE VIII MISCELLANEOUS 8.01 Holidays. Except as otherwise provided in this Agreement, whenever any payment or action to be made or taken under this Agreement, or under the Note or under any of the other Loan Documents is stated to be due on a day which is not a Business Day, such payment or action will be made or taken on the next following Business Day and such extension of time will be included in computing interest or fees, if any, in connection with such payment or action. 8.02 Records. The unpaid principal amount of the Note, the unpaid interest accrued thereon, the interest rate or rates applicable to such unpaid principal amount and the duration of such applicability shall at all times be ascertained from the records of the Lender, which shall be conclusive absent manifest error. 8.03 Amendments and Waivers. The Lender and the Borrower may from time to time enter into agreements amending, modifying or supplementing this Agreement, the Note or any other Loan Document or changing the rights of the Lender or of the Borrower under this Agreement, under the Note or under any other Loan Document and the Lender may from time to time grant waivers or consents to a departure from the due performance of the obligations of the Borrower under this Agreement, under the Note or under any other Loan Document. Any such agreement, waiver or consent must be in writing and will be effective only to the extent specifically set forth in such writing. In the case of any such waiver or consent relating to any provision of this Agreement, any Event of Default or Potential Default so waived or consented to will be deemed to be cured and not continuing, but no such waiver or consent will extend to any other or subsequent Event of Default or Potential Default or impair any right consequent to any other or subsequent Event of Default or Potential Default. 23 8.04 No Implied Waiver, Cumulative Remedies. No course of dealing and no delay or failure of the Lender in exercising any right, power or privilege under this Agreement, the Note or any other Loan Document will affect any other or future exercise of any such right, power or privilege or exercise of any other right, power or privilege except as and to the extent that the assertion of any such right, power or privilege shall be barred by an applicable statute of limitations; nor shall any single or partial exercise of any such right, power or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any further exercise of such right, power or privilege or of any other right, power or privilege. The rights and remedies of the Lender under this Agreement, the Note or any other Loan Document are cumulative and not exclusive of any rights or remedies which the Lender would otherwise have. 8.05 Notices. All notices, requests, demands, directions and other communications (collectively "notices") under the provisions of this Agreement or the Note must be in writing (including telexed or telecopied communication) unless otherwise expressly permitted under this Agreement and must be sent by first-class or first-class express mail, private overnight or next Business Day courier or by telex or telecopy with confirmation in writing mailed first class, in all cases with charges prepaid, and any such properly given notice will be effective when received. All notices will be sent to the applicable party at the addresses stated above or in accordance with the last unrevoked written direction from such party to the other parties. 8.06 Expenses, Taxes, Attorneys' Fees. The Borrower agrees to pay or cause to be paid and to save the Lender harmless against liability for the payment of all reasonable out-of-pocket expenses, including, but not limited to fees and expenses of counsel and paralegals for the Lender, incurred by the Lender from time to time (i) arising in connection with the Lender's enforcement or preservation of rights under this Agreement, the Note or any of the other Loan Documents, including but not limited to such expenses as may be incurred by the Lender in the collection of the outstanding principal amount of the Lender, and (ii) arising in connection with any case under 11 U.S.C. Section 101 et seq., as amended (the "Bankruptcy Code") filed by or against the Borrower. The Borrower agrees to pay all stamp, document, transfer, recording or filing taxes or fees and similar impositions in the future determined by the Lender to be payable in connection with this Agreement, the Note or any other Loan Document. The Borrower agrees to save the Lender harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such taxes, fees or impositions. In the event of termination adverse to the Borrower of any action at law or suit in equity in relation to this Agreement, the Note or the other Loan Documents, the Borrower will pay, in addition to all other sums which the Borrower may be required to pay, a reasonable sum for attorneys' and paralegals' fees incurred by the Lender or the holder of the Note in connection with such action or suit. All payments due from the Borrower under this Section will be added to and become part of the Loans until paid in full. 8.07 Severability. The provisions of this Agreement are intended to be severable. If any provision of this Agreement is held invalid or unenforceable in whole or in part in any jurisdiction, the provision will, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability of 24 the provision in any other jurisdiction or the remaining provisions of this Agreement in any jurisdiction. 8.08 Governing Law; Consent to Jurisdiction. This Agreement will be deemed to be a contract under the laws of the Commonwealth of Pennsylvania and for all purposes will be governed by and construed and enforced in accordance with the laws of said Commonwealth. The Borrower consents to the exclusive jurisdiction and venue of the federal and state courts located in Allegheny County, Pennsylvania, in any action on, relating to or mentioning this Agreement, the Note, the other Loan Documents, or any one or more of them. 8.09 Prior Understandings. This Agreement, the Note and the other Loan Documents supersede all prior understandings and agreements, whether written or oral, among the parties relating to the transactions provided for in this Agreement, the Note and the other Loan Documents. 8.10 Duration, Survival. All representations and warranties of the Borrower contained in this Agreement or made in connection with this Agreement or any of the other Loan Documents shall survive the making of and will not be waived by the execution and delivery of this Agreement, the Note or the other Loan Documents, by any investigation by the Lender, or the making of any Loan. Notwithstanding termination of this Agreement or an Event of Default, all covenants and agreements of the Borrower will continue in full force and effect from and after the date of this Agreement so long as the Borrower may borrow under this Agreement and until payment in full of the Note, interest thereon, and all fees and other obligations of the Borrower under this Agreement or the Note. Without limitation, it is understood that all obligations of the Borrower to make payments to or indemnify the Lender will survive the payment in full of the Note and of all other obligations of the Borrower under this Agreement, the Note and the other Loan Documents. 8.11 Term of Agreement. This Agreement will terminate when all indebtedness of the Borrower to Lender including, without limitation, the Loans and interest on the Loans, is paid in full, and the Borrower has no right to borrow under this Agreement and the Lender has no obligation to make Loans under this Agreement. 8.12 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties to this Agreement on separate counterparts each of which, when so executed, will be deemed an original, but all such counterparts will constitute but one and the same instrument. 8.13 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Lender, the Borrower and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights under this Agreement without the prior written consent of the Lender. 8.14 No Third Party Beneficiaries. The rights and benefits of this Agreement and the other Loan Documents are not intended to, and shall not, inure to the benefit of any third party. 25 8.15 Participation. Upon thirty (30) days prior written notice to the Borrower, the Lender may from time to time sell, assign or grant one or more participations in all or any part of the Loans made by the Lender or which may be made by the Lender, or its right, title and interest in the Loans or in or to this Agreement, to another lending officer, lender or financial institution. Except to the extent otherwise required by the context of this Agreement, the word "Lender" where used in this Agreement means and includes any bolder of a Note originally issued to the Lender and each such holder of a Note will be bound by and have the benefits of this Agreement, the same as if such holder had been a signatory to this Agreement. In connection with any such sale, assignment or grant of participation, the Lender may make available to any prospective purchaser, assignee or participant any information relative to the Borrower in the Lender's possession. 8.16 Exhibits. All exhibits and schedules attached to this Agreement are incorporated and made a part of this Agreement. 8.17 Headings. The section headings contained in this Agreement are for convenience only and do not limit or define or affect the construction or interpretation of this Agreement in any respect. 8.18 WAIVER OF TRIAL BY JURY. THE BORROWER AND THE LENDER EXPRESSLY, KNOWINGLY AND VOLUNTARILY WAIVE ALL BENEFIT AND ADVANTAGE OF ANY RIGHT TO A TRIAL BY JURY, AND NEITHER WILL AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY ACTION ARISING IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR ANY OF THE LOAN DOCUMENTS. 26 IN WITNESS WHEREOF, and intending to be legally bound, the parties, by their duly authorized officers, have executed and delivered this Credit Agreement as of the date set forth at the beginning of this Credit Agreement. ATTEST: SNYDER ASSOCIATED COMPANIES, INC. /s/ Mark A. Snyder By: /s/ Elmer A. Snyder - ------------------------- ----------------------------- (Assistant) Secretary Name: Elmer A. Snyder [CORPORATE SEAL] Title: President CITIZENS BANK OF PENNSYLVANIA By: /s/ James P. Nickel ----------------------------- Name: James P. Nickel Title: Vice President 27 Exhibit "A" to Credit Agreement LOAN REQUEST Reference is hereby made to that certain Credit Agreement dated as of ________ ___, 2002, as from time to time amended (the "Agreement"), by and between SNYDER ASSOCIATED COMPANIES, INC., a Pennsylvania corporation (the "Borrower"), and CITIZENS BANK OF PENNSYLVANIA. All capitalized terms used herein as defined terms which are not defined herein but which are defined in the Agreement shall herein have the respective meanings specified in the Agreement. 1. Requested Borrowing. The Borrower hereby requests that the Lender make Revolving Credit Loans pursuant to the Agreement as specified below: Aggregate principal amount of Revolving Credit Loans requested: $ _______________________________ Proposed Borrowing Date on which such Revolving Credit Loans are to be made: _________________________, ______ 2. Borrowing Tranches. See attached Schedule A. 3. Disbursement Instructions. Such Revolving Credit Loans shall be disbursed by _______________ [deposit]/[wire transfer] to the following account at ____________________: Account #_______________________ $ _______________________ 4. Supplemental Representations. The Borrower hereby represents, warrants and confirms that: (i) on the date hereof and on the proposed borrowing date described above, the Borrower has performed and complied with, and will have performed and be in compliance with, in all material respects, all of the terms, covenants and conditions of the Agreement and the other Loan Documents which are binding upon it; (ii) all of the representations and warranties set forth in Article III of the Agreement and in the other Loan Documents are true and correct in all material respects on the date hereof and will be true and correct in all material respects on the proposed borrowing date described above (except the representations and warranties which relate solely to an earlier date or time, which representations and warranties are true and correct on and as of the specific date or times referred to therein); (iii) that no Potential Default or Event of Default has occurred and is continuing or will exist or occur as a result of the making of the Revolving Credit Loans requested hereby; and (iv) the making of the Revolving Credit Loans requested hereby will not contravene any Law applicable to the Borrower. 5. Authority. The undersigned hereby certifies that he/she is as Authorized Officer and is duly authorized to execute and deliver this loan request for, on behalf of, and with respect to, the Borrower. Dated: _______________, ___ SNYDER ASSOCIATED COMPANIES, INC. By: _____________________________ Name: ___________________________ Title: __________________________ 2 SCHEDULE A TO LOAN REQUEST OF SNYDER ASSOCIATED COMPANIES, INC. Date: _______________, 20___ A. Portion allocated to Prime Rate Option $ _____________________ B. Potion allocated to Federal Funds Rate Option $ _____________________ Aggregate amount of Revolving Credit Loans Requested (A & B) $ _____________________ 3 Exhibit "B" to Credit Agreement REVOLVING CREDIT NOTE $15,000,000.00 November ___, 2002 FOR VALUE RECEIVED, the undersigned, SNYDER ASSOCIATED COMPANIES, INC., a Pennsylvania corporation (the "Borrower"), promises to pay to the order of CITIZENS BANK OF PENNSYLVANIA (the "Lender"), on the Expiration Date, if not sooner paid, the lesser of: (i) the principal sum of FIFTEEN MILLION DOLLARS ($15,000,000.00) or (ii) the aggregate unpaid principal amount of all revolving credit loans and extensions of credit made by the Lender to the Borrower pursuant to the Credit Agreement dated as of the date hereof, entered into by and between the Borrower and the Lender, as such agreement may be further amended, modified or supplemented from time to time (the "Credit Agreement"). The Borrower further promises to pay to the order of the Lender interest from time to time outstanding on the unpaid principal amount of this Revolving Credit Note at the rate or rates per annum determined pursuant to, or otherwise provided in, the Credit Agreement, and with such amounts being payable on the dates set forth, or as otherwise provided in, the Credit Agreement. All payments and prepayments to be made in respect of principal, interest or other amounts due from the Borrower under this Revolving Credit Note shall be payable at 12:00 noon, New York time, on the day when due. Such payments shall be made to the Citizens Bank of Pennsylvania at its office located at 525 William Penn Place, Pittsburgh, Pennsylvania, 15219, or at such other place as Lender may designate in writing, in lawful money of the United States of America in immediately available funds without setoff, counterclaim or other deduction of any nature. The Borrower expressly waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Revolving Credit Note, and an action for any amounts due and unpaid shall therefore accrue immediately. If any payment of principal or interest under this Revolving Credit Note becomes due on a day which is a Saturday, Sunday or other day on which lending institutions are authorized or obligated to close in Pittsburgh, Pennsylvania, such payment will be made on the next following business day on which the Lender is open for business and such extension of time will be included in computing interest in connection with such payment. This Revolving Credit Note is the "Revolving Credit Note" referred to in, and is entitled to the benefits of, the Credit Agreement as defined herein, between the Borrower and the Lender. This Revolving Credit Note is secured by, and is entitled to the benefits of, certain other Loan Documents, as each of them may be amended, modified or supplemented from time to time. Capitalized terms used in this Revolving Credit Note which are defined in the Credit Agreement have the meanings assigned to them in the Credit Agreement unless otherwise expressly defined in this Revolving Credit Note. This Revolving Credit Note is governed by, and will be construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania without regard to principles of conflicts of law in the Commonwealth of Pennsylvania. The Borrower consents to the exclusive jurisdiction and venue of the Federal and State courts located in Allegheny County, Pennsylvania with respect to any suit arising out of, relating to, or mentioning this Revolving Credit Note. THE BORROWER AUTHORIZES AND EMPOWERS THE PROTHONOTARY OR ANY ATTORNEY OF ANY COURT OF RECORD WITHIN THE UNITED STATES OR ELSEWHERE, UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT UNDER THE LOAN AGREEMENT OR UNDER THIS REVOLVING CREDIT, TO APPEAR FOR AND CONFESS JUDGMENT AGAINST THE BORROWER IN FAVOR OF THE LENDER OR ANY HOLDER OF THIS REVOLVING CREDIT NOTE, FOR ALL SUMS DUE AND UNPAID UNDER THIS REVOLVING CREDIT NOTE, WHETHER BY ACCELERATION OR NOT, WITH OR WITHOUT DECLARATION, WITH COST OF SUIT, RELEASE OF ALL ERRORS, WITHOUT STAY OF EXECUTION AND WITH FIVE PERCENT (5%) ADDED FOR COLLECTION FEE (PROVIDED, HOWEVER, THAT, DESPITE THE ENTRY OF JUDGMENT IN SUCH AMOUNT, THE LENDER SHALL NOT BE ENTITLED TO COLLECT AS PART OF SUCH COLLECTION FEE AN AMOUNT IN EXCESS OF REASONABLE ATTORNEYS' AND PARALEGALS' FEES). THE BORROWER ALSO WAIVES THE RIGHT OF INQUISITION OF ANY REAL ESTATE LEVIED ON, VOLUNTARILY CONDEMNS THE SAME, AUTHORIZES THE PROTHONOTARY OR CLERK TO ENTER THE WRIT OF EXECUTION ON SAID VOLUNTARY CONDEMNATION, AGREES THAT SAID REAL ESTATE MAY BE SOLD ON A WRIT OF EXECUTION, AND ALSO WAIVES AND RELEASES ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAW OF ANY STATE NOW IN FORCE OR ENACTED IN THE FUTURE. IF A COPY OF THIS REVOLVING CREDIT NOTE, VERIFIED BY AFFIDAVIT OF THE LENDER OR ANY HOLDER OF THIS REVOLVING CREDIT NOTE OR SOMEONE AUTHORIZED TO ACT ON BEHALF OF THE LENDER OR ANY SUCH HOLDER, HAS BEEN FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL OF THE REVOLVING CREDIT NOTE AS A WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST THE BORROWER WILL NOT BE EXHAUSTED BY ANY SINGLE EXERCISE OF THE AUTHORIZED POWER, AND THE SAME MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE HOLDER DEEMS NECESSARY OR DESIRABLE; AND THIS INSTRUMENT WILL BE A SUFFICIENT WARRANT. 2 IN WITNESS WHEREOF, and intending to be legally bound, the Borrower has executed, issued and delivered this Revolving Credit Note as of the day and year first above written. ATTEST: SNYDER ASSOCIATED COMPANIES, INC. ___________________________ By: _____________________________ Name: ___________________________ Title: __________________________ 3 EX-99.B.2 4 j0476003exv99wbw2.txt EXHIBIT (B)(2) EXHIBIT (b)(2) CONFIDENTIAL FIRST AMENDMENT TO CREDIT AGREEMENT THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment"), made effective as of the _____ day of November, 2003 (the "First Amendment Effective Date"), by and between CITIZENS BANK OF PENNSYLVANIA, a Pennsylvania state chartered bank (the "Lender") and SNYDER ASSOCIATED COMPANIES, INC., a Pennsylvania corporation (the "Borrower"). BACKGROUND A. The Borrower and the Lender are parties to that certain Credit Agreement dated as of November 15, 2002 (the "Credit Agreement") pursuant to which the Lender has made a revolving credit loan facility available to the Borrower. B. The Borrower and the Lender desire to amend the Credit Agreement upon the terms and conditions set forth herein. NOW, THEREFORE, the parties hereto, intending to be legally bound, covenant and agree as follows: SECTION 1. USE OF TERMS Capitalized terms used herein (including the Background above) shall have the same meaning ascribed thereto in the Credit Agreement as amended hereby unless otherwise specified herein. SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT The Credit Agreement is amended as follows: (a) The definition of "Expiration Date" as set forth in Section 1.01 of the Credit Agreement is amended and restated in its entirety to read as follows: "Expiration Date" means November 13, 2004, provided, by written request to the Lender given at least ninety (90) days prior to the then current Expiration Date, the Borrower may request the Expiration Date be extended to the date that is 364 days from the Expiration Date then in effect, in which case, the Lender shall, in its sole discretion, approve or reject the Borrower's extension request within thirty (30) days after receipt of the Borrower's written request for such extension. Upon the approval by the Lender of an extension request, but effective on the day immediately following the Expiration Date then in effect, the Expiration Date shall be the date 364 days from the Expiration Date then in effect, subject to the execution and delivery by the Borrower of any documentation required by the Lender in connection with such extension. The failure of the Lender to respond to the extension request within such thirty (30) day period shall be deemed to be a rejection of the extension request. (b) Section 2.07(a) of the Credit Agreement is amended and restated in its entirety to read as follows: (a) The Revolving Credit Commitment is terminable by the Lender at its discretion upon the occurrence of an Event of Default under this Agreement. The Revolving Credit Commitment will terminate on the Expiration Date. SECTION 3. REPRESENTATIONS AND COVENANTS 3.1 The Borrower hereby ratifies, confirms and reaffirms, without condition, all the terms and conditions of the Credit Agreement and the other Loan Documents to which it is a party and agrees that it continues to be bound by the terms and conditions thereof as amended by this First Amendment. Except as specifically amended by this First Amendment, the Credit Agreement shall remain in full force and effect in accordance with its terms. This First Amendment is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction, and the Credit Agreement as herein modified shall continue in full force and effect. 3.2 The Borrower represents and warrants to the Lender that: (i) this First Amendment has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with their terms; (ii) the representations and warranties set forth within Article III of the Credit Agreement continue to be true and correct in all material respects as of the First Amendment Effective Date except to the extent that (A) such representations and warranties expressly relate to an earlier date, or (B) such representations and warranties have changed, and such changes have been consented to in writing by the Lender and are reflected on revised schedules to the Credit Agreement attached to this First Amendment; (iii) no Event of Default or Potential Default shall have occurred and be continuing on the First Amendment Effective Date; and (iv) no Material Adverse Change has occurred since the Closing Date, and no event or events shall have occurred and be continuing on the First Amendment Effective Date which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change. SECTION 4. CONDITIONS PRECEDENT The amendments set forth in this First Amendment shall become effective as of the First Amendment Effective Date provided each of the following conditions has been satisfied or effectively waived by the Lender: (a) No Event of Default or Potential Default shall have occurred and be continuing on the First Amendment Effective Date. (b) The representations and warranties set forth within Article III of the Credit Agreement shall continue to be true and correct in all material respects as of the First Amendment Effective Date except to the extent that (i) such representations and warranties expressly relate to an earlier date, or (ii) such representations and warranties have changed, and such changes have been consented to in writing by the Lender and are reflected on revised schedules to the Credit Agreement attached to this First Amendment. (c) No Material Adverse Change has occurred since the Closing Date, and no event or events shall have occurred and be continuing on the First Amendment Effective Date which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change. 2 (d) Contemporaneously with or prior to the execution hereof, the Borrower shall deliver, or cause to be delivered, to the Lender: (1) A certificate of the secretary or assistant secretary of the Borrower dated the First Amendment Effective Date and certifying as to (i) true copies of its Articles of Incorporation and Bylaws, and all amendments thereto, as in effect on the First Amendment Effective Date, (ii) true copies of all action taken by its Board of Directors in authorizing the execution, delivery and performance of this First Amendment and the transactions contemplated hereby, and (iii) the names and true signatures of its officers authorized to execute and deliver this First Amendment; (2) A certificate of the President of the Borrower to the effect that: (i) the representations and warranties set forth within Article V of the Credit Agreement continue to be true and correct in all material respects as of the date of this First Amendment except to the extent that (A) such representations and warranties expressly relate to an earlier date, or (B) such representations and warranties have changed, and such changes have been consented to by the Lender and are reflected on revised schedules to the Credit Agreement attached to this First Amendment, and (ii) no Event of Default or Potential Default has occurred and is continuing as of the First Amendment Effective Date; and (3) Such other documents required by the Lender and its counsel in connection with the transactions contemplated by this First Amendment. (e) All legal details and proceedings in connection with the transactions contemplated by this First Amendment shall be satisfactory to counsel for the Lender, and the Lender shall have received all such originals or copies of such documents as the Lender may request. SECTION 5. JOINDER 5.1 Each Guarantor joins herein to (i) consent to the execution of this First Amendment by the Borrower, and (ii) ratify, confirm and reaffirm, without condition, all of the terms and conditions of the Guaranty Agreement to which it is a party. Each Guarantor specifically confirms that it continues to be bound by the terms and conditions of the Guaranty Agreement to which it is a party and its liability thereunder continues in full force and effect and encompasses the obligations and indebtedness of the Borrower to the Lender arising or incurred under the Credit Agreement, as the term thereof is extended by the amendments to the Credit Agreement effected pursuant to this First Amendment. EACH GUARANTOR REAFFIRMS AND HEREBY RESTATES THE PROVISIONS OF PARAGRAPH 24 OF THE GUARANTY AGREEMENT WHEREBY THE GUARANTOR WAIVES THE RIGHT TO A TRIAL BY JURY AND PARAGRAPH 25 OF THE GUARANTY AGREEMENT WHEREBY THE GUARANTOR GRANTS THE LENDER THE POWER TO CONFESS JUDGMENT AGAINST THE GUARANTOR. 5.2 Each Guarantor acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this First Amendment, the Guarantors are not required by the terms of the Credit Agreement, the Guaranty Agreement to which it is a party or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this First Amendment, and (ii) nothing in the Credit Agreement, the Guaranty Agreement to which it is a party or any other Loan Document shall be deemed to require the consent of the Guarantors to any future amendments to the Credit Agreement. 3 SECTION 6. MISCELLANEOUS 6.1 This First Amendment shall be construed in accordance with, and governed by the internal laws of the Commonwealth of Pennsylvania without giving effect to its conflict of laws principles. 6.2 All notices, communications, agreements, certificates, documents or other instruments executed and delivered after the execution and delivery of this First Amendment may refer to the Credit Agreement and the other Loan Documents without making specific reference to this First Amendment, but nevertheless all such references shall be deemed a reference to the Credit Agreement and the other Loan Documents as respectively amended by this First Amendment unless the context requires otherwise. All references to the Credit Agreement and the other Loan Documents in any document, instrument or agreement executed in connection with the Credit Agreement and the other Loan Documents shall be deemed to refer to the Credit Agreement and the other Loan Documents as respectively amended by this First Amendment unless the context requires otherwise. 6.3 This First Amendment shall inure to the benefit of, and shall be binding upon, the respective successors and assigns of the Borrower and the Lender. The Borrower may not assign any of its rights or obligations hereunder without the prior written consent of the Lender. 6.4 This First Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. Delivery by telecopier of an executed counterpart of a signature page to this First Amendment or any notice, communication, agreement, certificate, document or other instrument in connection with the Credit Agreement and the other Loan Documents shall be effective as delivery of an executed original counterpart thereof. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused their duly authorized officers to execute and deliver this First Amendment to Credit Agreement the day and year first above written. BORROWER: ATTEST: SNYDER ASSOCIATED COMPANIES, INC. ______________________________ By: _____________________________ Secretary Title: __________________________ (CORP. SEAL) ******SIGNATURES CONTINUE ON THE FOLLOWING PAGE****** 4 GUARANTORS: ATTEST: ALLEGHENY MINERAL CORPORATION ______________________________ By: _____________________________ Secretary Title: __________________________ (CORP. SEAL) ATTEST: ARMSTRONG CEMENT & SUPPLY CORPORATION ______________________________ By: _____________________________ Secretary Title: __________________________ (CORP. SEAL) ATTEST: GLACIAL SAND & GRAVEL COMPANY ______________________________ By: _____________________________ Secretary Title: __________________________ (CORP. SEAL) LENDER: CITIZENS BANK OF PENNSYLVANIA By: _____________________________ Title: __________________________ 5 EX-99.B.3 5 j0476003exv99wbw3.txt EXHIBIT (B)(3) EXHIBIT (b)(3) CONFIDENTIAL SECOND AMENDMENT TO CREDIT AGREEMENT THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment"), made effective as of the 17th day of March, 2004 (the "Second Amendment Effective Date"), by and between SNYDER ASSOCIATED COMPANIES, INC., a Pennsylvania corporation (the "Borrower") and CITIZENS BANK OF PENNSYLVANIA, a Pennsylvania state chartered bank (the "Lender"). BACKGROUND A. The Borrower and the Lender are parties to that certain Credit Agreement dated as of November 15, 2002, as amended by that certain First Amendment to Credit Agreement dated as of November 14, 2003 (as amended, the "Credit Agreement") pursuant to which the Lender has made Revolving Credit Loans available to the Borrower in an aggregate amount outstanding at any time not to exceed $15,000,000. B. The Borrower has requested the Lender to further amend the Credit Agreement to increase the maximum amount of Revolving Credit Loans permitted to be outstanding at any time to $25,000,000 and to make certain other changes to the Credit Agreement, and the Lender is willing to do so upon the terms and conditions set forth in this Second Amendment. NOW, THEREFORE, the parties hereto, intending to be legally bound, covenant and agree as follows: SECTION 1. USE OF TERMS; RECITALS 1.1 Capitalized terms used herein (including the Background above) shall have the same meaning ascribed thereto in the Credit Agreement as amended hereby unless otherwise specified herein. 1.2 The Borrower acknowledges that the recitals set forth above in the Background ABOVE are true and correct and are incorporated herein by reference. SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT 2.1 The following definitions set forth in Section 1.01 of the Credit Agreement are amended and restated in their entirety to read as follows: "Revolving Credit Commitment" means the obligation of the Lender to make Revolving Credit Loans available to the Borrower in the maximum aggregate principal amount of Twenty Five Million Dollars ($25,000,000.00) MINUS all L/C Obligations. "Revolving Credit Note" shall mean the Amended and Restated Revolving Credit Note dated March 17, 2004 in the original principal amount of Twenty Five Million Dollars ($25,000,000.00) issued by the Borrower to the Lender, in form and substance satisfactory to the Lender, together with any and all amendments, restatements, extensions, renewals, refinancings, or refundings in whole or in part thereof, such note being an amendment and restatement, AND NOT A NOVATION OR SATISFACTION, of that certain Revolving Credit Note dated November 15, 2002 issued by the Borrower to the Lender in the original principal amount of Fifteen Million Dollars ($15,000,000.00). 2.2 The following definitions are added to Section 1.01 of the Credit Agreement in their appropriate alphabetical order: "Issue" means, with respect to any Letter of Credit, to issue or to extend the expiry of, or to renew or increase the amount of, or otherwise amend such Letter of Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding meanings. "Issuance Date" shall have the meaning set forth in Section 2.08 of the Agreement. "L/C Amendment Application" means an application form for amendment of outstanding standby or commercial documentary letters of credit as shall at any time be in use at the Lender. "L/C Application" means an application form for issuances of standby or commercial documentary letters of credit as shall at any time be in use at the Lender. "L/C Borrowing" means an extension of credit resulting from a drawing under any Letter of Credit which shall not have been reimbursed on the date when made nor converted into a borrowing of Revolving Credit Loans. "L/C Commitment" means the commitment of the Lender to Issue Letters of Credit from time to time under the Agreement in an aggregate outstanding amount at any time not to exceed on any date the lesser of (i) Ten Million Dollars ($10,000,000.00), and (ii) the Revolving Credit Commitment minus the aggregate principal amount of Revolving Credit Loans then outstanding; it being understood that that the L/C Commitment is a part of the Revolving Credit Commitment, rather than a separate, independent commitment. "L/C Obligations" means at any time the sum of, without duplication, (i) the aggregate undrawn Stated Amount of all Letters of Credit then outstanding, PLUS (ii) the amount of all unreimbursed drawings under all Letters of Credit, including all outstanding L/C Borrowings, PLUS (iii) the aggregate amount of the Borrower's unpaid obligations in respect to all Letters of Credit (whether or not outstanding) under this Agreement and the L/C-Related Documents, including any indebtedness, liability or obligation of any kind whatsoever, however arising, whether present or future, related or unrelated, fixed or contingent, or paid, incurred, or arising in connection with any Letters of Credit (including any drafts or acceptances thereunder), all amounts charged or chargeable to the Borrower or by the Lender (or by any correspondent bank which opens, issues or is involved with such Letter of Credit), including any and all charges, expenses, fees and commissions, and all duties and taxes and costs of insurance which may pertain either directly or indirectly to such Letter of Credit. "L/C-Related Documents" means the Letters of Credit, the L/C Applications, the L/C Amendment Applications and any other document relating to any Letter of Credit, including any standard form documents used by the Lender for letter of credit issuances. "Letter of Credit" means any letter of credit (whether a standby letter of credit or a merchandise letter of credit) Issued by the Lender. "Letter of Credit Fees" shall have the meaning set forth in Section 2.13 of the Agreement. 2 "Stated Amount" means the stated or face amount of a Letter of Credit to the extent available at the time for drawing (subject to presentment of all required items), as the same may be increased or decreased from time to time in accordance with the terms of such Letter of Credit. 2.3 New Sections 2.08, 2.09, 2.10, 2.11, 2.12 and 2.13 are added reading as follows: 2.08 LETTER OF CREDIT SUBFACILITY. (a) Subject to the conditions and on the terms hereinafter set forth in this Agreement, and in reliance upon the representations and warranties of the Borrower contained in Article III, the Lender agrees (i) from time to time on any Business Day, during the period from the Closing Date to the day which is five (5) Business Days prior to the Termination Date, to issue Letters of Credit for the account of the Borrower in an aggregate Stated Amount at any one time that, together with the aggregate Stated Amount of all other outstanding Letters of Credit issued pursuant hereto, does not exceed the L/C Commitment, and to amend or renew Letters of Credit previously issued by it, and (ii) to honor drafts under Letters of Credit; provided, that the Lender shall not be obligated to Issue any Letter of Credit if as of the date of Issuance of such Letter of Credit (the "Issuance Date") and after giving effect to such Issuance (A) the aggregate outstanding Revolving Credit Loans exceed the Revolving Credit Commitment, or (B) the outstanding L/C Obligations exceeds the L/C Commitment. If on any date the outstanding L/C Obligations of L/C Obligations exceeds the L/C Commitment, the Borrower shall immediately, without further notice or demand by the Lender, prepay the outstanding principal amount of the Revolving Credit Loans by an amount equal to the applicable excess. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be fully revolving, and, accordingly, the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit which have expired or which have been drawn upon and reimbursed. (b) The Lender is under no obligation to, and shall not, Issue any Letter of Credit if: (i) any order, judgment or decree of any Official Body or arbitrator shall by its terms purport to enjoin or restrain the Lender from Issuing such Letter of Credit, or any requirement of Law applicable to the Lender or any request or directive (whether or not having the force of Law) from any Official Body with jurisdiction over the Lender shall prohibit, or request that the Lender refrain from, the Issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Lender in good faith deems material to it; (ii) on or prior to the Business Day prior to the requested date of Issuance of such Letter of Credit, one or more of the applicable conditions contained in Section 4.02 of the Agreement is not then satisfied as though a Revolving Credit Loan was then to be made; 3 (iii) the expiration date of any requested Letter of Credit is (A) more than one year after the date of Issuance, unless the Lender has approved such expiration date in writing, or (B) after the date that is six (6) months after the Expiration Date, unless the Lender has approved such expiration date in writing; (iv) any requested Letter of Credit does not provide for drafts, or is not otherwise in form and substance acceptable to the Lender, or the Issuance of a Letter of Credit shall violate any applicable policies of the Lender; or (v) such Letter of Credit is to be denominated in a currency other than U.S. dollars. 2.09 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT. (a) Each Letter of Credit shall be issued upon the written request of the Borrower received by the Lender at least three (3) Business Days (or such shorter time as the Lender may agree in a particular instance in its sole discretion) prior to the proposed date of issuance. Each such request for issuance of a Letter of Credit shall be by facsimile, confirmed immediately in an original writing, in the form of an L/C Application (or such other form as shall be acceptable to the Lender), and shall specify in form and detail satisfactory to the Lender: (i) the proposed date of issuance of the Letter of Credit (which shall be a Business Day); (ii) the face amount of the Letter of Credit; (iii) the expiration date of the Letter of Credit; (iv) the name and address of the beneficiary thereof; (v) the documents to be presented by the beneficiary of the Letter of Credit in case of any drawing thereunder; (vi) the full text of any certificate to be presented by the beneficiary in case of any drawing thereunder; and (vii) such other matters as the Lender may require. (b) Unless such issuance is not then permitted under Section 2.08(b) of the Agreement, the Lender shall, subject to the terms and conditions hereof, issue a Letter of Credit for the account of the Borrower on the requested Issuance Date in accordance with the Lender's usual and customary business practices. (c) From time to time while a Letter of Credit is outstanding and prior to the Expiration Date, the Lender may, upon the written request of the Borrower received by the Lender at least three (3) Business Days (or such shorter time as the Lender may agree in a particular instance in its sole discretion) prior to the proposed date of amendment, amend any Letter of Credit issued by it. Each such request for amendment of a Letter of Credit shall be made by facsimile, confirmed immediately in an original writing, made in the form of an L/C Amendment Application and shall specify in form and detail satisfactory to the Lender: (i) the Letter of Credit to be amended; (ii) the proposed date of amendment of the Letter of Credit (which shall be a Business Day); (iii) the nature of the proposed amendment; and (iv) such other matters as the Lender may require. The Lender shall be not amend any Letter of Credit if (x) the Lender would have no obligation at such time to issue such Letter of Credit in its amended form under the terms of the Agreement; or (y) the beneficiary of any such Letter of Credit does not accept the proposed amendment to the Letter of Credit. (d) The Lender agrees that, while a Letter of Credit is outstanding and prior to the Expiration Date, at the option of the Borrower and upon the written request of the Borrower received by the Lender at least three (3) Business Days (or such shorter time as the Lender may agree in a particular instance in its sole discretion) prior to 4 the proposed date of notification of renewal, the Lender shall be entitled to authorize the automatic renewal of any Letter of Credit issued by it. Each such request for renewal of a Letter of Credit shall be made by facsimile, confirmed immediately in an original writing, in the form of an L/C Amendment Application, and shall specify in form and detail satisfactory to the Lender: (i) the Letter of Credit to be renewed; (ii) the proposed date of notification of renewal of the Letter of Credit (which shall be a Business Day); (iii) the revised expiration date of the Letter of Credit; and (iv) such other matters as the Lender may require. The Lender shall be under no obligation so to renew any Letter of Credit if (x) the Lender would have no obligation at such time to issue or amend such Letter of Credit in its renewed form under the terms of the Agreement; or (y) the beneficiary of any such Letter of Credit does not accept the proposed renewal of the Letter of Credit. If any outstanding Letter of Credit shall provide that it shall be automatically renewed unless the beneficiary thereof receives notice from the Lender that such Letter of Credit shall not be renewed, and if at the time of renewal the Lender would be entitled to authorize the automatic renewal of such Letter of Credit in accordance with this Section upon the request of the Borrower but the Lender shall not have received any L/C Amendment Application from the Borrower with respect to such renewal or other written direction by the Borrower with respect thereto, the Lender shall nonetheless be permitted to allow such Letter of Credit to renew, and the Borrower and the Lender hereby authorize such renewal, and, accordingly, the Lender shall be deemed to have received an L/C Amendment Application from the Borrower requesting such renewal. (e) This Agreement shall control in the event of any irreconcilable conflict with any L/C-Related Document (other than a Letter of Credit). 2.10 DRAWINGS AND REIMBURSEMENTS. (a) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the Lender will promptly notify the Borrower. The Borrower shall reimburse the Lender prior to 11:00 a.m. (prevailing time in Pittsburgh, Pennsylvania), on each date that any amount is paid by the Lender under any Letter of Credit (each such date being an "Honor Date"), in the amount so paid by the Lender. In the event the Borrower fails to reimburse the Lender in the full amount of any drawing under any Letter of Credit by 11:00 a.m. (prevailing time in Pittsburgh, Pennsylvania) on the Honor Date, the Borrower shall be deemed to have requested that a Revolving Credit Loan in an amount equal to such unreimbursed amount be made by the Lender to be disbursed on the Honor Date under such Letter of Credit to be applied by the Lender for such reimbursement, subject to the limitations on Revolving Credit Loans set forth in Section 2.01(a) and Section 4.02 of the Agreement. (b) With respect to any unreimbursed drawing that is not converted into a Revolving Credit Loan to the Borrower because of the Borrower's failure to satisfy the conditions set forth in Section 4.02 of the Agreement or for any other reason, the Borrower shall be deemed to have incurred from the Lender an L/C Borrowing in the amount of such drawing, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. 2.11 ROLE OF THE LENDER. (a) The Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the Lender shall not have any responsibility to obtain any document (other than any sight draft, other documents and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document (other than to determine that the sight draft, other documents and 5 certificates required to be delivered substantially comply on their face with the requirements of the applicable Letter of Credit). (b) The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. No Lender-Related Person, nor any of the respective correspondents, participants or assignees of the Lender, shall be liable or responsible for any of the matters described in clauses (i) through (vii) of Section 2.12 of the Agreement; provided, however, anything in such clauses to the contrary notwithstanding, that the Borrower may have a claim against the Lender, and the Lender may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the Lender's willful misconduct or gross negligence or the Lender's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft, other documents and certificates strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing: (i) the Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; and (ii) the Lender shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. 2.12 OBLIGATIONS ABSOLUTE. The obligations of the Borrower under this Agreement and any L/C-Related Document to reimburse the Lender for a drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing under a Letter of Credit converted into Revolving Credit Loans, shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of the Agreement and each such other L/C-Related Document under all circumstances, including the following: (i) any lack of validity or enforceability of the Agreement or any L/C-Related Document; (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any Letter of Credit or any other amendment or waiver of or any consent to departure from all or any of such obligation; (iii) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by the L/C-Related Documents or any unrelated transaction; (iv) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the 6 transmission or otherwise of any document required in order to make a drawing under any Letter of Credit; (v) any payment by the Lender under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the Lender under any Letter of Credit to any Person who is a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any arising in connection with any proceeding with respect to the Borrower described in Section 7.01(m) of the Agreement; (vi) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the obligations of the Borrower in respect of any Letter of Credit; or (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor; provided, however, the foregoing shall not be construed to restrict or otherwise limit any claim the Borrower may have against the Lender permitted under Section 2.11(b) of the Agreement. 2.13 LETTER OF CREDIT FEES. (a) The Borrower shall pay to the Lender a fee (the "Letter of Credit Fee") on the average outstanding daily Stated Amount of each Letter of Credit Issued by the Lender equal to (i) for each standby Letter of Credit, the Applicable Margin, and (ii) for each merchandise Letter of Credit, the Lender's then standard fee for merchandise letters of credit. Letter of Credit Fees shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed in the period during which it accrues, and shall be due and payable on the same dates as interest payments under Section 2.03(a) of the Agreement and on the date upon which the outstanding Letter of Credit shall expire, with final payment to be made on the Expiration Date. (b) The Borrower shall pay to the Lender from time to time on demand the normal issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the Lender relating to Letters of Credit as from time to time are in effect. 2.4 Section 5.01(c) of the Credit Agreement is amended and restated in its entirety to read as follows: (c) Quarterly Reports. As soon as practicable, and in any event within 60 days after the close of each fiscal quarter during the term of the Agreement, the Borrower will furnish to the Lender (i) statements of income and cash flows for the Borrower for such fiscal quarter and for the portion of the fiscal year to the end of such fiscal quarter together with a balance sheet of the Borrower for such fiscal quarter, all prepared by the Borrower and certified by a Responsible Officer (or other Person acceptable to the 7 Lender) of the Borrower as presenting fairly the financial position of the Borrower as of the end of such fiscal quarter and the results of the Borrower's operations for such periods, subject to year end adjustment, in conformity with GAAP applied in a manner consistent with that of the most recent reviewed financial statements furnished to the Lender, and (ii) internally prepared consolidated and consolidating statements of income and retained earnings for the Borrower and its Subsidiaries for such fiscal quarter, all in reasonable detail setting forth in comparative form the corresponding figures for the preceding fiscal quarter and for the portion of the fiscal year to the end of such fiscal quarter, all prepared in accordance with GAAP applied in a basis consistent with that of the preceding fiscal quarter with such statements and balance sheet to be attested to by a Responsible Officer (or other Person acceptable to the Lender) of the Borrower to the best of his or her knowledge and ability. 2.5 Section 5.09 of the Credit Agreement is amended and restated in its entirety to read as follows: 5.09 Operating Accounts. The Borrower will establish and maintain, and will cause the Guarantors to establish and maintain, their primary operating accounts with the Lender. 2.6 A new Section 6.06 is added to the Credit Agreement reading as follows: 6.06 Intercompany Transactions. The Borrower shall not directly or indirectly, enter into or assume or become bound by, or permit any Guarantor to enter into or assume or become bound by, any agreement (other than this Agreement and the other Loan Documents) or any provision of any certificate of incorporation, bylaws, partnership agreement, operating agreement or other organizational or governing document prohibiting or restricting loans, advances, distributions or other transfers by and among the Borrower and the Guarantors, PROVIDED that the foregoing shall not apply to (i) restrictions and conditions imposed by any Law or by any Loan Document, or (ii) customary provisions in leases or other agreements restricting assignment thereof. 2.7 The meaning ascribed to "Loan Documents" in the Credit Agreement is hereby amended to the extent necessary to expressly incorporate in such meaning this Second Amendment. SECTION 3. AMENDED AND RESTATED REVOLVING CREDIT NOTE 3.1 From and after the Second Amendment Effective Date, the Revolving Credit Loans shall be evidenced by an Amended and Restated Revolving Credit Note in the principal amount of Twenty Five Million Dollars ($25,000,000.00) (the "Amended Revolving Credit Note"), in form and substance satisfactory to the Lender, appropriately completed and duly executed by the Borrower. Upon the Lender's receipt of the appropriately completed and duly executed Amended Revolving Credit Note, the previously outstanding Revolving Credit Note dated November 15, 2002 issued by the Borrower to the Lender in the original principal amount of Fifteen Million Dollars ($15,000,000.00) (the "Prior Note") shall be marked amended and restated and replaced by the Amended Revolving Credit Note. The Amended Revolving Credit Note is intended as an amendment and restatement, AND NOT A NOVATION OR SATISFACTION, of the Prior Note, and all outstanding principal and unpaid interest and other charges, if any, accrued and owing on the Prior Note shall be outstanding under the Amended Revolving Credit Note. SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS 8 4.1 The Borrower hereby ratifies, confirms and reaffirms, without condition, all the terms and conditions of the Credit Agreement and the other Loan Documents to which it is a party and agrees that it continues to be bound by the terms and conditions thereof as amended by this Second Amendment. Except as specifically amended by this Second Amendment, the Credit Agreement shall remain in full force and effect in accordance with its terms. This Second Amendment is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction of the Borrower's indebtedness and obligations under the Credit Agreement, and the Credit Agreement as herein modified shall continue in full force and effect. 4.2 The Borrower represents and warrants to the Lender that: (i) this Second Amendment and the Amended Revolving Credit Note have been duly executed and delivered by the Borrower and constitute the legal, valid and binding obligations of the Borrower enforceable in accordance with their terms; (ii) the representations and warranties set forth within Article III of the Credit Agreement continue to be true and correct in all material respects as of the Second Amendment Effective Date except to the extent that (A) such representations and warranties expressly relate to an earlier date, or (B) such representations and warranties have changed, and such changes have been consented to in writing by the Lender and are reflected on revised schedules to the Credit Agreement attached to this Second Amendment; (iii) no Event of Default or Potential Default shall have occurred and be continuing on the Second Amendment Effective Date; and (iv) no Material Adverse Change has occurred since the Closing Date, and no event or events shall have occurred and be continuing on the Second Amendment Effective Date which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change. SECTION 5. CONDITIONS PRECEDENT 5.1 The amendments set forth in this Second Amendment shall become effective as of the Second Amendment Effective Date provided each of the following conditions has been satisfied or effectively waived by the Lender: (a) The representations and warranties set forth in Section 4 of this Second Amendment shall be true and correct as of the Second Amendment Effective Date. (b) Contemporaneously with or prior to the execution hereof, the Borrower shall deliver, or cause to be delivered, to the Lender: (1) The Amended Revolving Credit Note duly executed by the Borrower; (2) A First Amendment to Guaranty and Suretyship Agreement, in form and substance satisfactory to the Lender, duly executed by each Guarantor pursuant to which the Guaranty Agreements will be amended to, inter alia, extend to and encompass the indebtedness and obligations of the Borrower under the Amended Revolving Credit Note; 9 (3) A certificate of the secretary or assistant secretary of the Borrower dated the Second Amendment Effective Date and certifying as to (i) true copies of its Articles of Incorporation and Bylaws, and all amendments thereto, as in effect on the Second Amendment Effective Date, (ii) true copies of all action taken by its Board of Directors in authorizing the execution, delivery and performance of this Second Amendment, the Amended Revolving Credit Note and the transactions contemplated thereby, and (iii) the names and true signatures of its officers authorized to execute and deliver this Second Amendment and the Amended Revolving Credit Note; and (4) Such other documents required by the Lender and its counsel in connection with the transactions contemplated by this Second Amendment. (c) All legal details and proceedings in connection with the transactions contemplated by this Second Amendment shall be satisfactory to counsel for the Lender, and the Lender shall have received all such originals or copies of such documents as the Lender may request. SECTION 6. MISCELLANEOUS 6.1 This Second Amendment shall be construed in accordance with, and governed by the internal laws of the Commonwealth of Pennsylvania without giving effect to its conflict of laws principles. 6.2 All notices, communications, agreements, certificates, documents or other instruments executed and delivered after the execution and delivery of this Second Amendment may refer to the Credit Agreement and the other Loan Documents without making specific reference to this Second Amendment, but nevertheless all such references shall be deemed a reference to the Credit Agreement and the other Loan Documents as respectively amended by this Second Amendment unless the context requires otherwise. All references to the Credit Agreement and the other Loan Documents in any document, instrument or agreement executed in connection with the Credit Agreement and the other Loan Documents shall be deemed to refer to the Credit Agreement and the other Loan Documents as respectively amended by this Second Amendment unless the context requires otherwise. 6.3 This Second Amendment shall inure to the benefit of, and shall be binding upon, the respective successors and assigns of the Borrower and the Lender. The Borrower may not assign any of its rights or obligations hereunder without the prior written consent of the Lender. 6.4 This Second Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. Delivery by telecopier of an executed counterpart of a signature page to this Second Amendment or any notice, communication, agreement, certificate, document or other instrument in connection with the Credit Agreement and the other Loan Documents shall be effective as delivery of an executed original counterpart thereof. 6.5 The provisions contained in Section 8.18 of the Credit Agreement are incorporated herein by reference to the same extent as if reproduced herein in their entirety, except with reference to this Second Amendment rather than the Credit Agreement. 10 ******SIGNATURES APPEAR ON THE FOLLOWING PAGE****** 11 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused their duly authorized officers to execute and deliver this Second Amendment to Credit Agreement the day and year first above written. ATTEST: SNYDER ASSOCIATED COMPANIES, INC. ______________________________ By: _____________________________ Secretary Title: __________________________ (CORP. SEAL) CITIZENS BANK OF PENNSYLVANIA James P. Nickel Vice President EX-99.C.2 6 j0476003exv99wcw2.txt SYLVAN DISCUSSION MATERIALS 11/16/03 EXHIBIT c(2) CONFIDENTIAL Discussion Materials For The Special Committee of [SYLVAN LOGO] November 16, 2003 [LANE, BERRY & CO. LOGO] [SYLVAN LOGO] DISCLAIMER - - The following materials have been prepared by Lane, Berry & Co. International ("LBCI") as part of a presentation being made to and at the request of the Special Committee of the Board of Directors of Sylvan Inc. ("Sylvan" or the "Company"). - - In preparing this presentation, we have assumed and relied, upon the accuracy and completeness of the financial and other information supplied or otherwise made available to us from public sources or by the Company and have not independently verified such information. We have neither obtained nor performed any independent valuation or appraisal of the assets or liabilities of the Company. In addition, the Company has not requested and we have not performed a liquidation analysis. - - Please note that this presentation is based on economic, market and other conditions as in effect on, and the information and agreements (or drafts thereof) made available to us as of, the date hereof and does not purport to take into consideration subsequent developments which may affect the information presented herein. LBCI does not have any obligation to update, revise, or reaffirm the information presented herein. - - This presentation has been prepared for the benefit and use of the Special Committee in connection with and for the purposes of its evaluation of the proposed transaction and is not on behalf of, and shall not confer rights or remedies upon, any person other than the Special Committee. - - In addition, this presentation does not constitute an opinion or recommendation to a stockholder of the Company on how to vote with respect to the proposed transaction. Further, we do not address the relative merits of the proposed transaction compared with other business strategies or alternative transactions that might be available to the Company, the Company's underlying business decision to proceed or effect the proposed transaction, or any other aspect of the proposed transaction. [LANE, BERRY & CO. LOGO] 2 [SYLVAN LOGO] AGENDA 1. Executive Summary 2. Summary of Proposed Transaction 3. Summary Background of Proposed Transaction 4. Overview of Sylvan 5. Analysis of Proposed Transaction 6. Valuation Overview 7. Conclusion [LANE, BERRY & CO. LOGO] 3 [SYLVAN LOGO] EXECUTIVE SUMMARY [LANE, BERRY & CO. LOGO] 4 [SYLVAN LOGO] INTRODUCTION - - Lane, Berry & Co. International ("LBCI") has been asked by the Special Committee of the Board of Directors (the "Special Committee") of Sylvan Inc. ("Sylvan" or the "Company") to opine as to the fairness, from a financial point of view, of the cash consideration to be received by the holders (other than Dennis Zensen, Virgil Jurgensmeyer, Monir Elzalaki, Roger Claypoole, Nelson Obus, Wynnefield Capital, Inc., Steel Partners II, L.P., Snyder Associated Companies, Inc., SAC Holding Company and their respective affiliates) of Sylvan's common stock (the "Common Stockholders") pursuant to the merger (as described in the draft Agreement and Plan of Merger dated November 10, 2003 (the "Merger Agreement"), among the Company, Snyder Associated Companies, Inc. ("Parent" or the "Snyder Group") and SAC Holding Company ("Sub")) (the "Proposed Transaction") - - In conducting our analysis, we have analyzed, among other things, the following: - The Merger Agreement - The results of the first sales process conducted by LBCI between April 2002 and December 2002 - The results of the second sales process conducted between April 2003 and November 2003 - The Company's Annual Reports on Form 10-K and the Company's Quarterly Reports on Form 10-Q - Certain internal information and other data relating to the Company, including standalone forecasts and projections prepared and provided to us by management of the Company - Certain other publicly available information concerning the Company and the trading markets for the Company's common stock - Certain publicly available information concerning other companies engaged in businesses which we believe to be generally comparable to the Company and the trading markets for certain of such other companies - Certain publicly available information concerning the terms of recent business combinations which we believe to be relevant - - We have also interviewed certain senior management of the Company concerning the business and operations, present condition and future prospects of the Company and undertook other studies, analyses and investigations as we deemed appropriate under the circumstances [LANE, BERRY & CO. LOGO] 5 [SYLVAN LOGO] EXECUTIVE SUMMARY - - SUMMARY OF PROPOSED TRANSACTION - The Snyder Group has proposed to purchase all the outstanding shares of common stock (not owned by Parent or any subsidiary of Parent), par value $0.001 per share (the "Common Stock"), in a one-step cash merger - After the Proposed Transaction, Sylvan will become a privately held corporation - - CONSIDERATION FOR THE PROPOSED TRANSACTION - At the effective time, i.e. the date of consummation of the Proposed Transaction, the Common Stockholders will receive $12.25 in cash for each share of Common Stock (the "Merger Consideration") which aggregates to $64.2 million - The Snyder Group is expected to contribute up to $56.5 million as equity (1) - Roger Claypoole is expected to contribute up to $1.0 million as equity (1) - Sylvan management is expected to contribute up to $9.2 million through a rollover of a portion or all of its equity (1) - The remaining source of funds will come from Citizens Bank or an alternative senior lender (1) - - PROCESS & TIMING OF THE PROPOSED TRANSACTION - Sign the definitive Merger Agreement the week beginning November 16, 2003 - File proxy statement with the SEC by early December 2003 - Receive approval from the SEC and mail proxies to the stockholders by late January 2004 or early February 2004 - Hold special meeting and stockholder vote in February or March 2004 - Proposed Transaction closes during Q1'2004 (1) Per the Snyder Group's proposed sources and uses of funds. [LANE, BERRY & CO. LOGO] 6 [SYLVAN LOGO] SUMMARY OF PROPOSED TRANSACTION [LANE, BERRY & CO. LOGO] 7 [SYLVAN LOGO] SUMMARY OF KEY TERMS OF THE PROPOSED TRANSACTION THE PROPOSED TRANSACTION INCLUDES THE FOLLOWING KEY ELEMENTS WHICH ARE TAKEN FROM THE DRAFT MERGER AGREEMENT DATED AS OF NOVEMBER 10, 2003 BY AND AMONG THE COMPANY, PARENT AND SUB: MERGER CONSIDERATION - The Common Stockholders receive $12.25 in cash for each share of Common Stock - Sylvan management is expected to contribute up to $9.2 million through a rollover of a portion or all of its equity - All outstanding and unexercised options to purchase shares of Common Stock that have exercise prices less than the Merger Consideration (as defined in the Merger Agreement) shall be cancelled and exchanged for the right to receive a cash amount equal to the difference between the Merger Consideration and the per share exercise price of such option TRANSACTION STRUCTURE - Reverse triangular merger (i.e. merger of Sub, a wholly owned subsidiary of Parent, with and into the Company, with the Company being the surviving entity) PRINCIPAL CONDITIONS TO CLOSING - Stockholder vote approval - Wynnefield Capital must sign a voting agreement and Steel Partners must sign a stock purchase agreement simultaneously with the signing of the definitive Merger Agreement - Customary representations and warranties of the Company, Parent and Sub remain true and correct with only such exceptions as do not in the aggregate have a material adverse effect (as defined in the Merger Agreement) - Since June 30, 2003, there shall not have been any change, circumstance or event which constitutes, has resulted in, or that would reasonably be likely to result in, a material adverse effect (as defined in the Merger Agreement) - Other customary approvals, consents, waivers and clearances (e.g. HSR) [LANE, BERRY & CO. LOGO] 8 [SYLVAN LOGO] SUMMARY OF KEY TERMS OF THE PROPOSED TRANSACTION (CONT'D) THE PROPOSED TRANSACTION INCLUDES THE FOLLOWING KEY ELEMENTS WHICH ARE TAKEN FROM THE DRAFT MERGER AGREEMENT DATED AS OF NOVEMBER 10, 2003 BY AND AMONG THE COMPANY, PARENT AND SUB: TERMINATION/BREAK-UP FEE - The Merger Agreement may be terminated and the Proposed Transaction may be abandoned, at any time prior to the Effective Time, in the following circumstances: - By mutual written agreement of the Company, Parent and Sub - By either the Company or Parent if the Merger Agreement is not approved and adopted by the Common Stockholders - By judgment or injunction - By material breach of either Parent or Company - By either the Company or Parent if the Proposed Transaction has not been consummated on or before May 1, 2004 - Upon the occurrence of certain events listed below, the Merger Agreement will be terminated and the Company will pay $2.0 million as a break-up fee to Parent and will pay up to $500,000 to Parent for expense reimbursements: - Lack or withdrawal of Board of Directors or Special Committee recommendation - No stockholder meeting is held within 30 business days of proxy's clearance with the SEC - The Company enters into a Superior Proposal (as defined within the Merger Agreement) - Consummation of certain transactions within 12 months of termination pursuant to lack of stockholder approval - Parent shall be entitled to expense reimbursement in the event the Merger Agreement is not approved and adopted by the Common Stockholders [LANE, BERRY & CO. LOGO] 9 [SYLVAN LOGO] SUMMARY BACKGROUND OF PROPOSED TRANSACTION [LANE, BERRY & CO. LOGO] 10 [SYLVAN LOGO] BACKGROUND OF PROPOSED TRANSACTION APRIL 2002 - Special Committee retains LBCI to explore strategic alternatives - LBCI performs business and financial due diligence MAY 2002 - LBCI continues to perform business and financial due diligence - Sylvan issues a press release announcing the exploration of strategic alternatives process - Sylvan holds its stockholder meeting and LBCI provides an update to the Board of Directors JUNE 2002 - Special Committee decides to run a targeted sales process - LBCI together with the Company prepares sales process materials JULY 2002 - LBCI together with the Company receives final approval from the Board of Directors regarding the sales process materials - LBCI begins making calls to prospective buyers AUGUST 2002 - LBCI continues to make calls to prospective buyers; 35 parties were contacted - LBCI communicates bidding process and deadline to prospective buyers SEPTEMBER 2002 - Deadline for submitting non-binding indications of interest - Sylvan receives one non-binding indication of interest from American Securities Capital Partners at $10.00 - $11.00 per share - LBCI presents to the Board of Directors regarding the sales process and future strategic alternatives OCTOBER 2002 - Sylvan receives a second non-binding indication of interest from Cadigan Investment Partners at $12.50 - $13.50 per share (Cadigan Investment Partners subsequently verbally rescinded this non-binding indication of interest) - Dissatisfied with offers received, Sylvan issues a press release announcing a major share repurchase program and the completion of its review of strategic alternatives NOVEMBER 2002 - Sylvan announces Q3'02 financial results and lower 2002 earnings expectations due partially to increased competitive pressures in spawn operations DECEMBER 2002 - Sylvan terminates engagement with LBCI APRIL 2003 - Wynnefield Capital and Steel Partners announce in a 13D filing that they have formed a group and intend to nominate a new slate of directors through a proxy solicitation process - Sylvan issues a press release announcing that it received a non-binding indication of interest from the Snyder Group to acquire the Company at $11.00 per share and announces the formation of the Special Committee - Special Committee retains LBCI and Morgan Joseph as financial advisors - Wynnefield Capital and Steel Partners announce in a 13D filing that they will not agree to vote their shares in favor of the proposed Snyder Group buyout - LBCI and Morgan Joseph perform business and financial due diligence - Special Committee decides to run a second sales process - LBCI and Morgan Joseph together with the Company prepare sales process materials [LANE, BERRY & CO. LOGO] 11 [SYLVAN LOGO] BACKGROUND OF PROPOSED TRANSACTION (CONT'D) MAY 2003 - LBCI and Morgan Joseph receive final approval from the Special Committee regarding the sales process materials - LBCI and Morgan Joseph begin making calls to prospective buyers JUNE 2003 - LBCI and Morgan Joseph continue making calls to prospective buyers; 73 prospective buyers are contacted - The Snyder Group issues a press release announcing the official withdrawal of its non-binding indication of interest - LBCI and Morgan Joseph communicate bidding process and deadline to prospective buyers JULY 2003 - Deadline for submitting non-binding indication of interest - Sylvan receives four non-binding indications of interest from the following parties: American Securities Capital Partners, Key Kosmont, Lake Pacific Partners and The Tokarz Group (affiliated with Cadigan Investment Partners) - Special Committee decides to continue discussions with Lake Pacific Partners on an exclusive basis due to the superiority of their offer - Lake Pacific Partners performs financial, business and legal due diligence - Lake Pacific Partners receives a draft merger agreement AUGUST 2003 - Lake Pacific Partners continues to perform financial, business and legal due diligence - Lake Pacific Partners submits a revised non-binding indication of interest calling for a two-tiered offer, increasing from $11.50 per share for all stockholders to $12.00 per share for the outside stockholders and $11.50 per share for the inside stockholders (as defined in their offer) SEPTEMBER 2003 - Lake Pacific Partners continues to perform financial, business and legal due diligence - Lake Pacific Partners, the Special Committee and their respective counsels continue to negotiate the merger agreement OCTOBER 2003 - State of Wisconsin Investment Board, a Lake Pacific Partners financing source, decides not to participate in the Proposed Transaction - Lake Pacific Partners' period of exclusivity expires - Lake Pacific Partners actively looks for an alternative source of financing - The Snyder Group verbally indicates that it has interest in acquiring the Company; however, refuses to formally engage with the Special Committee NOVEMBER 2003 - Lake Pacific Partners receives commitments from John Hancock Life Insurance Company and Wingate Partners to serve as financing sources in their bid to acquire the Company - The Snyder Group expresses interest to the Special Committee at $12.25 cash per share for all Common Stockholders - Lake Pacific Partners orally expresses offer to acquire all of the Common Stock at $12.50 cash per share subject to mutually acceptable management agreement with Dennis Zensen - Negotiations continue with both interested parties [LANE, BERRY & CO. LOGO] 12 [SYLVAN LOGO] OVERVIEW OF SYLVAN [LANE, BERRY & CO. LOGO] 13 [SYLVAN LOGO] KEY PERFORMANCE METRICS

(1) The Old Wrapper Projections are from September 2002; the New Wrapper Projections are from May 2003; the Revised 2003 Projections are from June 2003; the Current Projections are from November 2003. (2) The New Wrapper and the Revised Projections added back non-cash pension related expense to devise EBITDA. We deducted it to allow Adjusted EBITDA for the various projections to be comparable. Additionally, YTD September 2003 Amortization expense is an estimate. (3) Under private ownership, Management Annuity expenses of $400K forecasted in each model are assumed to be eliminated, which is reflected in the Adjusted EBITDA figures. [LANE, BERRY & CO. LOGO] 14 [SYLVAN LOGO] KEY PERFORMANCE METRICS (CONT'D)

(1) The New Wrapper Projections are from May 2003; the Current Projections are from November 2003. (2) The New Wrapper and the Revised Projections added back non-cash pension related expense to devise EBITDA. We deducted it to allow Adjusted EBITDA for the various projections to be comparable. (3) In the Current Projections, Public Company Expenses of $900K were eliminated from Corporate Expenses beginning in 2004. (4) Under private ownership, Management Annuity expenses of $400K forecasted in each model are assumed to be eliminated, which is reflected in the Adjusted EBITDA figures. [LANE, BERRY & CO. LOGO] 15 [SYLVAN LOGO] STOCK PRICE / VOLUME NOVEMBER 14, 2001 - NOVEMBER 14, 2003 [GRAPHIC OF CHART] [LANE, BERRY & CO. LOGO] 16 [SYLVAN LOGO] STOCK TRADING ACTIVITY NOVEMBER 14, 2001 - NOVEMBER 14, 2003 Volume in Thousands [BAR CHART]

[LANE, BERRY & CO. LOGO] 17 [SYLVAN LOGO] ANALYSIS OF PROPOSED TRANSACTION [LANE, BERRY & CO. LOGO] 18 [SYLVAN LOGO] SUMMARY TRANSACTION MULTIPLES

(1) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K and it does include all public company expenses which are $1.25mm in 2003. (2) Financial figures assume Sylvan becomes a private company. EBITDA adjusted for add-backs of $1.25mm and $400K for elimination of public company expenses and executive annuity expenses respectively in 2003. [LANE, BERRY & CO. LOGO] 19 [SYLVAN LOGO] SOURCES AND USES OF FUNDS FOR PROPOSED TRANSACTION

(1) Per the Snyder Group's proposed Sources and Uses of Funds. (2) Net Debt and Transaction Fees and Expenses are estimates made by the Snyder Group. [LANE, BERRY & CO. LOGO] 20 [SYLVAN LOGO] SUMMARY OF FIRST SYLVAN SALES PROCESS - - LBCI CONTACTED A TOTAL OF 35 PROSPECTIVE BUYERS - - 8 OF THE 14 STRATEGIC BUYERS RECEIVED A "TEASER" AND 1 OF THESE 8 RECEIVED A CONFIDENTIALITY AGREEMENT - None of the strategic buyers executed a Confidentiality Agreement; therefore, no strategic buyer received a "Wrapper" - The other 6 strategic buyers immediately declined further interest - - 15 OF THE 21 FINANCIAL BUYERS RECEIVED A "TEASER" AND 10 OF THESE 15 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - Some financial buyers that did not receive a "Teaser" or execute a Confidentiality Agreement evaluated the merits of a deal by using public filings - - TWO FINANCIAL BUYERS, AMERICAN SECURITIES CAPITAL PARTNERS AND CADIGAN INVESTMENT PARTNERS, SUBMITTED A NON- BINDING INDICATION OF INTEREST - American Securities Capital Partners valued Sylvan at $10.00 -$11.00 per share - Cadigan Investment Partners valued Sylvan at $12.50 - $13.50 per share - - THESE BUYERS WERE PROVIDED 2002E REVENUE AND EBITDA ESTIMATES OF $88.0 MILLION AND $16.1 MILLION RESPECTIVELY - American Securities Capital Partners' bid range: 1.0x 2002E Revenue & 5.3x 2002E EBITDA - 1.0x 2002E Revenue & 5.7x 2002E EBITDA - Cadigan Investment Partners' bid range: 1.1x 2002E Revenue & 6.3x 2002E EBITDA - 1.2x 2002E Revenue & 6.6x 2002E EBITDA

[LANE, BERRY & CO. LOGO] 21 [SYLVAN LOGO] THE SNYDER GROUP ORIGINAL PRELIMINARY BID DETAILS THE ORIGINAL SNYDER GROUP OFFER INCLUDED THE FOLLOWING KEY ELEMENTS: DEAL CONSIDERATION - $11.00 cash for each share of Common Stock IMPLIED MULTIPLES (1) - 0.9x 2003E revenue - 6.0x 2003E EBITDA TRANSACTION STRUCTURE - Cash merger PRINCIPAL CONDITIONS TO CLOSING - Stock voting agreement for all stockholders who own 5% or more of the Common Stock of Sylvan (the "Significant Stockholders") - Agree to vote shares in favor of merger - Grant an irrevocable proxy to Newco to vote the shares in favor of the merger - Agree not to sell or otherwise dispose of their shares - Debt financing of at least $65mm of which approximately $15mm would be subordinated debt - Representations and warranties will be true in all material respects - No material adverse change in the financial condition, business or prospects of Sylvan will have occurred - Other customary approvals, consents, waivers and clearances (e.g. HSR) BREAK-UP FEE - Break-up fee in an amount to be determined payable if the merger is abandoned or fails to close as a result of: - A material breach by Sylvan or any Significant Stockholder - Acceptance by Sylvan's Board of Directors of a superior bid proposal (1) Implied multiples are calculated off of the New Wrapper Projections for Revenue and EBITDA ($97.0mm and $15.1mm respectively). [LANE, BERRY & CO. LOGO] 22 [SYLVAN LOGO] SUMMARY OF SECOND SYLVAN SALES PROCESS - LBCI AND MORGAN JOSEPH CONTACTED A TOTAL OF 73 PROSPECTIVE BUYERS - 13 OF THE 32 STRATEGIC BUYERS RECEIVED A "TEASER" AND 1 OF THESE 13 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - The other 19 strategic buyers immediately declined further interest - 27 OF THE 41 FINANCIAL BUYERS RECEIVED A "TEASER" AND 12 OF THESE 27 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - Some financial buyers that did not receive a "Teaser" or execute a Confidentiality Agreement evaluated the merits of a deal by using public filings - THE FOLLOWING FOUR FINANCIAL BUYERS SUBMITTED A NON-BINDING INDICATION OF INTEREST: AMERICAN SECURITIES CAPITAL PARTNERS, KEY KOSMONT, LAKE PACIFIC PARTNERS AND THE TOKARZ GROUP (1) - THESE BUYERS WERE PROVIDED 2003E REVENUE AND EBITDA ESTIMATES OF $97.0 MILLION AND $15.1 MILLION RESPECTIVELY

(1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. [LANE, BERRY & CO. LOGO] 23 [SYLVAN LOGO] PRELIMINARY BID DETAILS THE COMPREHENSIVE SALES PROCESS CONDUCTED BY LBCI AND MORGAN JOSEPH PRODUCED FOUR PRELIMINARY BIDS WHICH ARE SUMMARIZED BELOW:

(1) Implied Revenue and EBITDA multiples calculated from projected 2003 financials on prior page except for Lake Pacific's revised offer multiples which are calculated off of the September 2003E Revenue and EBITDA projections ($95.9 million and $13.0 million respectively) as their revised bid was based on these projections. (2) Implied Revenue and EBITDA multiples assume $12.00 per share is paid in cash to all Sylvan stockholders. [LANE, BERRY & CO. LOGO] 24 [SYLVAN LOGO] VALUATION OVERVIEW [LANE, BERRY & CO. LOGO] 25 [SYLVAN LOGO] SUMMARY - SYLVAN IMPLIED PRICE PER SHARE [GRAPHIC OF CHART] IMPLIED MULTIPLES 2003E EBITDA 4.75x to 6.55x 5.05x to 7.90x 6.45x to 6.95x 6.90x to 7.60x 2003E Adj. EBITDA 4.30x to 5.90x 4.60x to 7.10x 5.80x to 6.20x 6.20x to 6.80x

[LANE, BERRY & CO. LOGO] 26 [SYLVAN LOGO] PUBLIC EQUITY COMPARABLES OVERVIEW METHODOLOGY - To determine the current public market value and trading multiples of companies similar to Sylvan, thereby imputing a "public market" valuation range COMPANY SELECTION - LBCI analyzed a range of public food and agricultural producers and selected three sectors comprising six trading comparables for analysis: Food Processors: Fresh Produce Companies: Agricultural Companies: Archer-Daniels-Midland Chiquita Brands Delta and Pine Bunge Fresh Del Monte Hines Horticulture

ISSUES - No control premium is reflected in the results of the public market valuation - There are no direct public company comparables to the Company - Many of the listed companies are substantially larger than the Company which affects their direct applicability vis-a-vis valuation [LANE, BERRY & CO. LOGO] 27 [SYLVAN LOGO] PUBLIC EQUITY COMPARABLES ANALYSIS
STOCK % OF FD EV / REVENUE EV / EBITDA P / E (USD in Millions) PRICE 52-WEEK EQUITY ENTERPRISE ------------------- ------------------- ------------------- COMPANY 11/14/03 HIGH VALUE VALUE LTM CY'03E CY'04E LTM CY'03E CY'04E LTM CY'03E CY'04E ------- -------- ---- ----- ----- --- ------ ------ --- ------ ------ --- ------ ------ SYLVAN $ 10.10 85% $ 52.1 $ 83.5 0.9X 0.9X 0.9X 6.2X 6.4X 6.0X 15.1X 16.5X 13.7X FOOD PROCESSING COMPANIES Archer-Daniels-Midland (1) $ 14.24 95% $9,221.1 $11,053.7 0.3x 0.3x 0.3x 7.6x 7.1x 5.7x 18.6x 17.3x 12.9x Bunge (2) 27.50 88% 2,774.2 4,782.2 0.2x 0.2x 0.2x 6.9x 6.5x 5.1x 10.1x 11.3x 9.5x FRESH PRODUCE COMPANIES Chiquita Brands (3) 19.60 98% 786.0 1,012.1 0.3x 0.4x 0.4x 5.6x 6.4x 5.2x 9.0x 11.3x 7.3x Fresh DelMonte 25.65 88% 1,467.9 1,418.2 0.6x 0.6x 0.5x 5.1x 4.7x 4.3x 6.5x 6.8x 6.5x AGRICULTURAL COMPANIES Delta and Pine 24.34 95% 989.7 851.3 3.0x 2.9x 2.6x 13.0x 11.6x 9.3x 28.9x 24.6x 18.2x Hines Horticulture (4) 4.15 93% 91.6 334.1 1.0x NA NA 5.8x NA NA 7.9x 2.4x NA HIGH 98% 3.0X 2.9X 2.6X 13.0X 11.6X 9.3X 28.9X 24.6X 18.2X MEDIAN 94% 0.5X 0.4X 0.4X 6.4X 6.5X 5.2X 9.6X 11.3X 9.5X LOW 88% 0.2X 0.2X 0.2X 5.1X 4.7X 4.3X 6.5X 2.4X 6.5X

REVENUE EBITDA EARNINGS PER SHARE -------------------------- ----------------------------- ----------------------------- LTM CY'03E CY'04E LTM CY'03E (5) CY'04E (5) LTM CY'03E (5) CY'04E (5) ------ ------ ------ ------ ------- -------- ------ --------- ------- SYLVAN FINANCIALS $ 93.4 $ 95.9 $ 96.9 $ 13.5 $ 13.1 $ 14.0 $ 0.67 $ 0.61 $ 0.74 IMPLIED SYLVAN PRICE PER SHARE HIGH $48.74 $47.41 $41.99 $28.05 $23.46 $19.07 $19.30 $15.11 $13.46 MEDIAN $ 2.39 $ 0.48 $ 1.37 $10.58 $10.47 $ 8.04 $ 6.41 $ 6.92 $ 7.01 LOW NM NM NM $ 7.18 $ 5.76 $ 5.67 $ 4.37 $ 1.46 $ 4.80
(1) Pro forma for the acquisition of Minnesota Corn Processsors LLC. (2) Pro forma for the acquisition of Cereol S.A. and for the sale of its Lesieur bottled oil business. (3) Pro forma for the acquisition of Scipio and the sale of Chiquita Processed Foods. (4) Pro forma for the 9/11/03 issuance of $175mm in senior notes. (5) Financial figures assume Sylvan remains a public company. CY'03E and CY'04E EBITDA, and CY'03E and CY'04E EPS do not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K, and do include all public company expenses, which are $1.25mm in 2003 and $900K in 2004. [LANE, BERRY & CO. LOGO] 28 [SYLVAN LOGO] M&A COMPARABLES OVERVIEW METHODOLOGY - To determine the historical private market value and transaction multiples of companies similar to the Company, thereby imputing a "transaction" valuation range ISSUES - Multiples paid in the transaction analysis may reflect potential synergies an acquiror could realize as a result of the target's operating scale - There are no direct M&A comparable transactions [LANE, BERRY & CO. LOGO] 29 [SYLVAN LOGO] M&A COMPARABLES ANALYSIS
(USD in Millions) ANN. DATE ACQUIROR TARGET --------- -------- ------ 6/2/03 Fox Paine and Co. Seminis 2/4/03 Riviana Foods ACH Food Companies, Rice Business 12/18/02 Investor Group (1) Dole Food Company 7/22/02 Bunge Cereol S.A. 1/7/02 Kerry Group Stearns & Lehman 8/17/01 Nippon Suisan Gorton's Seafood & Bluewater Seafoods 2/20/01 Lesaffre et Compagnie Sensient Technologies' Red Star Yeast & Products (2) 12/21/00 Investor Group Michael Foods 10/17/00 Kerry Group Armour Food Ingredients 12/17/99 Moneys Mushrooms Vlasic Foods, Vlasic Farms Fresh Mushrooms Business 9/16/98 Pictsweet LLC United Foods Inc. TRANSACTION VALUE / LTM (USD in Millions) TRANS. --------------- ANN. DATE DESCRIPTION VALUE REVENUE EBITDA --------- ----------- ----- ------- ------ 6/2/03 Worldwide producer and marketer of vegetable and fruit seeds. $ 625.0 1.3x 7.8x 2/4/03 Producer of rice products. 24.0 0.7x NA 12/18/02 Producer and marketer of fruits and vegetables. 2,500.0 0.6x 6.4x 7/22/02 Manufacturer of seed oils and olive oils. 1,496.3 0.3x 5.5x 1/7/02 Stearns & Lehman is a manufacturer of coffeehouse chain, 26.0 1.3x NA foodservice and branded Italian-style flavoured syrups. 8/17/01 Gorton's is a retail frozen seafood brand in 175.0 0.7x 8.8x the U.S. & Bluewater is a brand in Canada. 2/20/01 Supplier of yeast to the commercial bakery market. 122.0 1.0x 7.1x 12/21/00 Producer and distributor of food products in four areas: egg products, 747.2 0.7x 5.5x refrigerated distribution, dairy products and potato products. 10/17/00 Provide a wide range of specialty food ingredients. 35.0 0.9x NA 12/17/99 Producer of fresh mushrooms. 50.0 0.4x NM 9/16/98 Grower, processor, marketer and distributor of food products. 63.1 0.3x 4.9x HIGH $2,500.0 1.3X 8.8x MEDIAN $ 122.0 0.7X 6.4x LOW $ 24.0 0.3X 4.9x

LTM -------------------------- REVENUE EBITDA ------- ------ SYLVAN FINANCIALS $ 93.4 $ 13.5 IMPLIED SYLVAN PRICE PER SHARE HIGH $18.18 $16.84 MEDIAN $ 6.43 $10.66 LOW NM $ 6.77
(1) David H. Murdock, Chairman and CEO of Dole, acquired the 76% of Dole's outstanding common stock that he and his family did not own. (2) Revenue is an actual figure, EBITDA is an estimate. [LANE, BERRY & CO. LOGO] 30 [SYLVAN LOGO] LBO ANALYSIS OVERVIEW METHODOLOGY - To determine the potential price a financial buyer could pay assuming certain benchmarks of financial leverage and required returns - This analysis uses "private company" figures to reflect the operations as if the Company were no longer a public company BENCHMARK SELECTION - LBCI identified the following key benchmarks in performing its analysis: - Maximum pro forma Senior Debt / 2003E Adjusted EBITDA of 3.25x - Maximum pro forma Total Debt / 2003E Adjusted EBITDA of 4.25x - Minimum equity returns of approximately 17% to the mezzanine debt holders - Minimum equity returns to the sponsor of approximately 25% [LANE, BERRY & CO. LOGO] 31 [SYLVAN LOGO] LBO ANALYSIS SOURCES & USES OF FUNDS (USD IN MILLIONS)
CUM. MULT. FY03E SOURCES AMT. % TOTAL ADJUSTED EBITDA USES AMT. - ------- ---- ------- --------------- ---- ---- Revolver (1) $27.2 29.9% 1.9x Equity Purchase Price $55.8 Term Loan A 20.0 22.0% 3.3x Refinance Debt 31.3 Mezzanine 14.5 16.0% 4.3x Transaction Fees & Expenses 3.9 ----- ----- Subtotal 61.8 67.8% 4.3x Sponsor Equity 29.3 32.2% 6.3x ----- ----- ----- TOTAL SOURCES $91.1 100.0% 6.3x TOTAL USES $91.1 ===== ===== =====
TRANSACTION SUMMARY Current Stock Price $ 10.10 PURCHASE PRICE PER SHARE 10.75 Shares Outstanding 5.2 -------- Equity Value 55.8 Plus: Existing Debt 31.3 Plus: Existing Minority Interest 2.2 Less: Existing Cash 4.0 -------- Total Enterprise Value 85.3 TEV AS A MULTIPLE OF: FY'03E EBITDA (2) 6.5x FY'03E Adjusted EBITDA (3) 5.9x ========

OWNERSHIP TABLE
PF DILUTED VALUE IN OWNER. WARRANTS OWNER. 2008 IRR ------ -------- ------ ---- --- Sponsor Group 94.5% 0.0% 94.5% $ 90.6 25.3% Mezzanine (12.0%) 0.0% 5.5% 5.5% 21.5 17.1% ---- --- ----- -------- TOTAL 94.5% 5.5% 100.0% 112.2 ==== === ===== ========
SUMMARY CREDIT AND LEVERAGE STATISTICS
PROJECTED FISCAL YEARS ENDING DECEMBER 31, PRO FORMA ---------------------------------- 12/31/03E 2004 2005 2006 2007 --------- ---- ---- ---- ---- Bank Debt / Adj. EBITDA (3) 3.3x 2.8x 2.4x 1.7x 1.1x Total Debt / Adj. EBITDA (3) 4.3 3.8 3.3 2.5 1.8 Adj. EBITDA / Interest Expense (3) 3.2 3.3 3.6 4.5 5.6 Adj. EBITDA-CapEx / Int Expense (3) 2.4 2.5 2.7 3.5 4.5
RETURNS TO SPONSOR'S EQUITY
PURCHASE PRICE PER SHARE ----------------------------------------------------------------- $9.75 $10.25 $10.75 $11.25 $11.75 $12.25 ----------------------------------------------------------------- 5.50X 28.4% 25.7% 23.3% 21.1% 19.1% 17.3% 2008 5.75X 29.9% 27.1% 24.7% 22.5% 20.4% 18.6% DJ. EBITDA 6.00X 31.2% 28.5% 26.0% 23.8% 21.7% 19.8% EXIT MULTIPLE (3) 6.25X 32.6% 29.8% 27.3% 25.0% 22.9% 21.1% 6.50X 33.9% 31.0% 28.5% 26.2% 24.1% 22.2%
(1) Assumes a $30mm revolver that is drawn $27.2mm at close. Also, assumes that $1.3mm of other debt is refinanced as well. (2) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K and it does include all public company expenses which are $1.25mm in 2003 and $900K in 2004-2008. (3) Financial figures assume Sylvan becomes a private company. EBITDA adjusted for add-backs of $1.25mm and $400K for elimination of public company expenses and executive annuity expenses respectively in 2003 and for aforementioned amounts in all future periods. [LANE, BERRY & CO. LOGO] 32 [SYLVAN LOGO] DCF ANALYSIS OVERVIEW METHODOLOGY - To determine the present value of the projected after-tax free cash flows of the Company utilizing an EBITDA exit multiple terminal value and a range of discount rates VARIABLES VARIABLE SELECTED RANGE -- EBITDA Exit Multiple (2008): -- 5.50x-6.50x -- Discount Rate Range: -- 12.0%-14.0% [LANE, BERRY & CO. LOGO] 33 [SYLVAN LOGO] DCF ANALYSIS
YEAR ENDING DECEMBER 31, ---------------------------------------- (USD in Millions) 2004 2005 2006 2007 2008 TV - ----------------------------------------------------------------------------------------- SUMMARY FINANCIALS: REVENUE $96.9 $97.7 $100.6 $103.6 $106.7 Growth % -- 0.8% 3.0% 3.0% 3.0% ADJUSTED EBITDA (1) 14.0 14.3 16.6 18.7 19.3 Margin % 14.4% 14.7% 16.5% 18.0% 18.0% EBIT 7.4 8.1 10.7 13.0 13.7 Margin % 7.7% 8.3% 10.6% 12.5% 12.9% FREE CASH FLOW ANALYSIS: EBIT * (1 - Tax Rate) 4.9 5.3 7.0 8.5 9.0 Plus: Depreciation 6.3 6.0 5.7 5.5 5.3 Plus: Amortization 0.2 0.2 0.2 0.2 0.2 Plus: Change in Working Capital (0.1) (0.1) (0.4) (0.4) (0.6) Less: Capital Expenditures 3.9 3.9 3.9 3.9 3.9 - ----------------------------------------------------------------------------------------- FREE CASH FLOW 7.4 7.5 8.7 10.0 10.0 EBITDA (2008) 19.3 EBITDA Multiple 6.00X - ----------------------------------------------------------------------------------------- TERMINAL VALUE 115.6 Total Free Cash Flow 7.4 7.5 8.7 10.0 10.0 115.6 Weighted Average Cost of Capital 13.0% PRESENT VALUE OF FCF 6.6 5.9 6.0 6.1 5.5 62.7 =========================================================================================
IMPLIED ENTERPRISE VALUE: TOTAL ENTERPRISE VALUE $ 92.8 Less: Net Debt 29.4 - ------------------------------------- EQUITY VALUE 63.3 FD Shares Outstanding 5.2 IMPLIED PRICE PER SHARE $12.29 =====================================

SENSITIVITY ANALYSIS:
5.50X 5.75X 6.00X 6.25X 6.50X ------------------------------------------ 12.0% $11.94 $12.47 $13.00 $13.53 $14.06 12.5% 11.60 12.12 12.64 13.16 13.67 13.0% 11.27 11.78 12.29 12.80 13.30 13.5% 10.96 11.45 11.95 12.44 12.94 14.0% 10.65 11.13 11.62 12.10 12.59
(1) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K and it does include all public company expenses which are $900K in 2004-2008. [LANE, BEERY & CO. LOGO] 34 [SYLVAN LOGO] WACC ANALYSIS
TOTAL DEBT & COMPARABLE COMPANIES COST OF EQUITY TOTAL PREFERRED EFFECTIVE UNLEVERED PREF'D STOCK / (USD in Millions) BETA (1) EQUITY (2)(8) VALUE DEBT STOCK TAX RATE BETA (3) CAPITAL - -------------------------------------------------------------------------------------------------------------------- Archer-Daniels-Midland 0.64 10.0% $9,221.1 $3,543.5 $ 0.0 28.5% 0.50 27.8% Bunge 0.60 10.2% 2,774.2 2,072.0 0.0 26.3% 0.39 42.8% Chiquita Brands 0.79 12.0% 786.0 276.5 0.0 12.0% 0.60 26.0% Delta and Pine 0.51 10.2% 989.7 (141.7) 0.0 35.5% 0.56 (16.7%) Fresh DelMonte 0.71 11.2% 1,467.9 (33.6) 0.0 8.5% 0.73 (2.3%) Hines Horticulture NA NA 91.6 242.5 0.0 41.0% NA 72.6% MEAN 0.65 10.7% $2,555.1 $ 993.2 $ 0.0 25.3% 0.56 25.0% MEDIAN 0.64 10.2% $1,228.8 $ 259.5 $ 0.0 27.4% 0.56 26.9% SYLVAN 0.44 17.3% 52.1 29.3 0.0 34.5% 0.31 38.0%

ASSUMPTIONS - --------------------------------------------- Pretax Cost of Debt (Kd)(6) 5.0% Risk-Free Rate (Rf)(7) 5.1% Equity Risk Premium (Rm-Rf)(8) 7.0% Size Premia (Sp)(9) 9.2% Tax Rate For Target (Tr) 34.5% Equity Political Risk Premium (Rp) 0.0% Other Risk Premium (Ro) 0.0%

WEIGHTED AVERAGE COST OF CAPITAL (4) --------------------------------------- TARGET DEBT & PREF'D / ENTERPRISE VALUE --------------------------------------- BETA 35.0% 40.0% 45.0% --------------------------------------- 0.45 13.2% 12.6% 12.0% 0.50 13.5% 12.9% 12.3% 0.55 13.8% 13.2% 12.6% 0.60 14.1% 13.5% 12.9% 0.65 14.4% 13.8% 13.2%

LEVERED COST OF EQUITY (5) - --------------------------------------- TARGET DEBT & PREF'D / ENTERPRISE VALUE - --------------------------------------- 35.0% 40.0% 45.0% - --------------------------------------- ~~18.5% 18.8% 19.1% 19.0% 19.3% 19.6% 19.5% 19.8% 20.2% 20.0% 20.3% 20.7% 20.4% 20.8% 21.3%~~
(1) Source: two years of weekly data vs. the S&P 500 from Bloomberg. (2) Cost of Equity = Risk-Free Rate (Rf) + (Equity Beta (Be) * Equity Risk Premium (Rm-Rf)) + Size Premia(Sp). (3) Unlevered Beta = Be / (1+(D*(1-Tr) + P) / E). (4) WACC= [(Rf+Be * (Rm-Rf) + Sp + Rp) *%E] +[Kd* (1-Tr) * % D] + Ro. Assumes pretax cost of debt remains constant. (5) Levered Cost of Equity = [Rf + Be * (Rm-Rf) + Sp +Rp)] +Ro. (6) Any political risk premium (Rp) associated with debt is included in the pretax cost of debt (Kp). (7) Risk-Free Rate based on 30-year U.S. Treasury Yield as of 11/14/03. (8) Source: 2003 Ibbotson Risk Premia Report. Based on the differences of large company total arithmetic mean returns minus long-term bond income returns from 1926-2002. (9) Cost of equity premia based on equity market capitalization. Micro-cap (within $0.5mm - $64.8mm) =9.2%. Amounts per 2003 Ibbotson Risk Premia Report. [LANE, BEERY & CO. LOGO] 35 [SYLVAN LOGO] CONCLUSION [LANE, BEERY & CO. LOGO] 36 [SYLVAN LOGO] CONCLUSION AS OF THE DATE HEREOF, LBCI IS PREPARED TO DELIVER ITS FAIRNESS OPINION WITH RESPECT TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE MERGER CONSIDERATION TO BE RECEIVED BY THE COMMON STOCKHOLDERS. [LANE, BEERY & CO. LOGO] 37 EX-99.C.3 7 j0476003exv99wcw3.txt PROJECT SPAWN DISCUSSION MATERIALS 11/16/03 EXHIBIT c(3) Discussion Materials for the Board of Directors [MORGAN JOSEPH LOGO] November 16, 2003 PROJECT SPAWN Confidential Disclaimer - - The following materials (the "Presentation") were prepared for the Special Committee of the Board of Directors of Sylvan Inc. ("Sylvan" or the "Company") which has requested that Morgan Joseph & Co. Inc. ("Morgan Joseph") provide its opinion as to the fairness, from a financial point of view, to the shareholders of the Company, excluding Dennis Zensen, Virgil Jurgensmeyer, Monir Elzalaki, Roger Claypoole, Wynnefield Capital, Inc., Steel Partners II, L.P., Snyder Associated Companies, Inc., SAC Holding Company and their respective affiliates, of the consideration to be paid by a group formed by Snyder Associated Companies, Inc. and selected others (the "Acquiror') in connection with the proposed acquisition of the Company (the "Proposed Transaction"). - - In arriving at our opinion, we have assumed and relied upon the accuracy and completeness of the financial and other information used by us and have not attempted independently to verify such information, nor do we assume any responsibility to do so. We have assumed that the Company's forecasts and projections provided to or reviewed by us have been reasonably prepared based on the best current estimates and judgment of the Company's management as to the future financial condition and results of operations of the Company. While we have visited certain of the Company's locations, we have not conducted a physical inspection of the properties and facilities of the Company, nor have we made or obtained any independent evaluation or appraisal of the assets or liabilities of the Company. We have also taken into account our assessment of general economic, market and financial conditions and our experience in similar transactions, as well as our experience in securities valuation in general. Our opinion necessarily is based upon economic, market, financial and other conditions as they exist and can be evaluated on the date hereof and we assume no responsibility to update or revise our opinion based upon events or circumstances occurring after the date hereof. We reserve, however, the right to withdraw, revise or modify our opinion based upon additional information which may be provided to or obtained by us, which suggests, in our judgment, a material change in the assumptions (or the bases therefor) upon which our opinion is based. - - These materials are not intended to represent an opinion, but rather to serve as discussion materials for the Board to review and as a basis upon which Morgan Joseph may render an opinion. These materials do not address the Company's underlying business decision to approve the Proposed Transaction or constitute a recommendation to the Company or its shareholders as to any action it should take regarding the Proposed Transaction. These materials may not be reproduced, summarized, excerpted from or otherwise publicly referred to or disclosed in any manner without our prior written consent. - - The following materials are based upon Morgan Joseph's analysis of the Proposed Transaction as of November 16, 2003. In the event of material changes to the terms and conditions of the Proposed Transaction upon which these materials are based, the enclosed analysis and our conclusions may be affected. - - Certain portions of the enclosed analysis are based upon projected financial results. Any projected financial results are based upon analyst forecasts, internal projections and discussions with management of the Company. A number of factors, including industry conditions, changes in costs, labor issues and other factors which are beyond the scope of these projections and out of the control of the Company, the Acquiror and Morgan Joseph may cause actual results to differ materially from these projections. Material changes in the projections may affect the conclusions derived from our analysis. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 2 Table of Contents 1. INTRODUCTION 2. SUMMARY OF PROPOSED TRANSACTION 3. SUMMARY BACKGROUND OF PROPOSED TRANSACTION 4. OVERVIEW OF THE COMPANY 5. OVERVIEW OF THE ACQUIROR 6. ANALYSIS OF PROPOSED TRANSACTION APPENDIX A. DESCRIPTIONS OF COMPARABLE COMPANIES [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 3 1 / INTRODUCTION [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 4 Introduction - - Morgan Joseph & Co. Inc. ("Morgan Joseph") has been retained by the Special Committee of the Board of Directors of Sylvan Inc. (the "Company") and requested to render its opinion to the Board of Directors of the Company as to the fairness, from a financial point of view, of the consideration to be received by the shareholders of the Company, excluding Dennis Zensen, Virgil Jurgensmeyer, Monir Elzalaki, Roger Claypoole, Wynnefield Capital, Inc., Steel Partners II, L.P., Snyder Associated Companies, Inc., SAC Holding Company and their respective affiliates, pursuant to the proposed sale to a group formed by Snyder Associated Companies, Inc. (the "Acquiror") of all of the Common Stock of the Company (the "Proposed Transaction"). - - In conducting our analysis and arriving at our opinion, we have reviewed and analyzed, among other things, the following: - The draft Agreement and Plan of Merger dated November 10, 2003 (the "Agreement"); - The Company's Annual Reports on Form 10-K for each of the fiscal years in the three-year period ended December 31, 2002, and the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003, and September 28, 2003; - The indications of interest received by the Company; - Certain other publicly available information concerning the Company and the trading markets for the Company's common stock; - Certain internal information and other data relating to the Company, its business and prospects, including forecasts and projections prepared and provided to us by management of the Company; - Certain publicly available information concerning certain other companies engaged in businesses which we believe to be generally comparable to the Company and the trading markets for certain of such other companies' securities; and - The financial terms of certain recent business combinations which we believe to be relevant to the Proposed Transaction. - - We have also interviewed certain senior officers of the Company concerning the business and operations, assets, present condition and prospects of the Company, visited certain of the Company's locations and undertook such other studies, analyses and investigations as we deemed appropriate. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 5 Introduction - - The Acquiror has proposed to purchase all the outstanding shares of Common Stock, par value $0.001 per share. After the proposed transaction, Sylvan will become a privately held company. - - All shareholders will receive $12.25 in cash for each share of Common Stock held, or $64.2 million in aggregate. Merger consideration of $12.25 per share, plus assumed net debt as of September 28, 2003 of $31.4 million (including minority interest of $2.2 million), implies an enterprise value for the Proposed Transaction of $95.6 million. - - Process: - Sign the definitive merger agreement on November 16, 2003; - File proxy statement with SEC by November 28, 2003; - Receive approval from the SEC and mail proxies to the stockholders by December 26, 2003; - Hold special meeting and stockholder vote by the middle of February; and - Proposed Transaction closes; a subsidiary created by the Acquiror merges with and into Sylvan pursuant to a reverse triangular merger by the end of February 2004. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 6 2 / SUMMARY OF PROPOSED TRANSACTION [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 7 Summary of Proposed Transaction Summary of Key Terms of the Proposed Transaction CONSIDERATION: - $12.25 cash consideration for Sylvan's Common Stock TRANSACTION STRUCTURE: - Reverse triangular merger PRINCIPAL CONDITIONS TO - Approval by the Company's shareholders CLOSING: - Material adverse change out - Fiduciary out in the event of a Superior Proposal (as determined by the Special Committee or the Board) TERMINATION FEE: - $2.0 million plus expense reimbursement of up to $0.5 million NON-COMPETITION: - None ESTIMATED CLOSING: - End of February 2004 OTHER: - In connection with the execution of the Agreement, Wynnefield Capital, Inc. will execute put and voting agreements with the Acquiror. - Also in connection with the execution of the Agreement, Steel Partners II, L.P. will sell its shares to the Acquiror at $12.25, plus $60,000 of legal expenses. - Dennis Zensen, CEO of the Company, will contribute (all or part) of his shares in connection with the Proposed Transaction.

[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 8 3 / SUMMARY BACKGROUND OF PROPOSED TRANSACTION [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 9 Summary Background of Proposed Transaction MAY 14, 2002: - Sylvan retains Lane Berry as advisor to the Company and announces plans to explore strategic alternatives MAY - SEPTEMBER 2002: - Lane Berry conducts first marketing process - 14 prospective strategic buyers: 0 bids - 21 prospective financial buyers: 2 bids - American Securities Capital Partners: $10.00 - $11.00/share - Cadigan Investment Partners(1): $12.50 - $13.50/share - Based on 2003E Revenue and EBITDA of $88.9 million and $16.5 million OCTOBER 15, 2002: - Company announces major share repurchase program up to 1.3 million shares and completion of its review of strategic alternatives - 333,321 shares repurchased in 2002 at an average price of $10.60 (310,000 purchased following announcement of program) - No shares purchased in 2003; program suspended APRIL 16, 2003: - Company announces it has received a non-binding proposal from a management-led buyer group at $11.00/share with equity financing provided by the Snyder Associated Companies, Inc. APRIL 23, 2003: - Company forms a Special Committee and retains Morgan Joseph as financial advisor to the Special Committee

- ---------------- (1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 10 Summary Background of Proposed Transaction MAY - JUNE 2003: - Lane Berry and Morgan Joseph conduct second marketing process - 32 prospective strategic buyers: 0 bids - 41 prospective financial buyers: 4 bids - American Securities Capital Partners: $8.00/share - Key Kosmont: $7.00-$9.00/share - Lake Pacific Partners: $11.50/share - The Tokarz Group(1): $10.00/share JUNE 16, 2003: - Management-led group withdraws proposal JULY 21, 2003: - Company signs exclusivity agreement with Lake Pacific Partners AUGUST 28, 2003: - Lake Pacific Partners receives extension of "exclusivity" and revises bid with two-tier offer - $11.50/share for Insiders - $12.00/share for Outsiders OCTOBER 2, 2003: - Lake Pacific Partners notifies Special Committee and financial advisors that the source of $15.0 million of their financing has withdrawn their commitment. OCTOBER 7, 2003: - Lake Pacific Partners exclusivity expires

- ---------------- (1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 11 Summary Background of Proposed Transaction OCTOBER 29, 2003: - The Snyder Associated Companies, Inc. expressed interested in submitting an offer to acquire the Company at a price "higher" than $12.00/share. NOVEMBER 5, 2003: - The Snyder Associated Companies, Inc. orally communicated an offer of $12.25/share to acquire the Company, with certain members of management, the Board of Directors, and other identified shareholders, including Dennis Zensen, Virgil Jurgensmeyer, Monir Elzalaki and Roger Claypoole, to be equity participants in the purchaser. NOVEMBER 6, 2003: - The counsel to the Special Committee, Davis Polk, submitted a definitive agreement to the Snyder buyout group for comments and to begin formal negotiations. - Lake Pacific Partners re-submits their prior acquisition proposal with evidence of equity and debt financing. Lake Pacific expresses a desire to proceed expeditiously to closing with deadline to consummate a transaction by November 7, 2003. NOVEMBER 7, 2003: - Counsel to the Special Committee and counsel to the Snyder buyout group reach substantial agreement on merger agreement. NOVEMBER 9, 2003: - Lake Pacific Partners orally communicated an offer of $12.50/share to acquire the Company subject to reaching an agreement for Dennis Zensen to rollover all or a portion of his shares and also reaching agreement with respect to employment and other business matters in connection with the transaction. NOVEMBER 16, 2003: - Meeting of Special Committee to consider Snyder acquisition proposal and Lake Pacific acquisition proposal. Board meeting to follow to consider and act on the recommendation of the Special Committee. Expected signing of definitive agreement.

[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 12 4 / OVERVIEW OF THE COMPANY [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 13 Company Summary COMPANY DESCRIPTION The Company is a worldwide producer and distributor of products for the mushroom industry, specializing in spawn (the equivalent of seed for mushrooms) and spawn-related products and services. The Company, which operates through its subsidiaries, is also a grower of fresh mushrooms in the United States. The Company has two business segments: spawn products and fresh mushrooms. Spawn-related products include casing inoculum, nutritional supplements and disease-control agents. The fresh mushrooms segment is comprised of Quincy Farms, a large, regional producer of fresh mushrooms. GENERAL COMPANY INFORMATION MANAGEMENT Dennis Zensen - Chairman, President and CEO Donald Smith - CFO Monir Elzalaki - Director; President of Sylvan America Gregory Verhagen - President of Quincy Farms Gary Walker - President of Sylvan Bioproducts, Inc. BOARD OF DIRECTORS Dennis Zensen (Chairman) William L. Bennett (Monitor Company Group, L.P.) Monir Elzalaki (President of Sylvan America) Jeanine C. Heller (Independent Investor Relations Consultant) Virgil H. Jurgensmeyer (Mid-West Custom Mixing Co.) Nelson Obus (Wynnefield Capital, Inc.) HEADQUARTERS: SAXONBURG, PENNSYLVANIA SUMMARY FINANCIAL INFORMATION (a) MARKET DATA AS OF 11/14/03 - ------------------------------------------------ Stock Price $ 10.10 52-Week High $ 11.50 87.8% 52-Week Low $ 8.85 114.1% FD Shares Outstanding 5.2 Equity Value 52.1 Enterprise Value ("EV") 83.5 BALANCE SHEET DATA AS OF 9/28/03 (a) - ------------------------------------------------ Cash and Equivalents $ 6.1 Debt 35.4 Minority Interest 2.2 ESTIMATES (a),(b) - ------------------------------------------------ $ IN MILLIONS EV MULTIPLE ------------- ----------- FY 2003 Revenue $ 95.9 0.9x FY 2003 EBITDA 13.1 6.4x FY 2004 Revenue $ 96.9 0.9x FY 2004 EBITDA 14.0 6.0x

(a) Millions, except per share data. (b) Financial projections from the Company. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 14 Overview of the Company Business Overview - - Successor to the business of a Pennsylvania corporation that was chartered in 1937 - - Worldwide producer and distributor of products for the mushroom industry, specializing in spawn and spawn-related products and services, and is a major grower of fresh mushrooms in the U.S. - - The Company has two reportable business segments: - Spawn Operations - Accounts for 71% of the Company's total sales in 2002 and 79% of its operating income. - Conducts operations through subsidiaries in North America, Europe, Australia and South Africa - Plant operations are conducted in: the United States, England, Ireland, the Netherlands, France, Hungary, Australia, South Africa and Canada - Fresh Mushrooms Operations - Accounts for 29% of the Company's total sales in 2002 and 21% of its operating income - Operates a farm located in Quincy, Florida, one of the most modern and efficient mushroom production operations in North America - Within Quincy operations are four satellite mushroom growing facilities; two commenced operations in mid-2001 and two commenced operations in early 2003 - January 2000, Sylvan began selling all of its mushrooms to a leading U.S. mushroom marketing organization that packages and distributes them throughout the eastern United States [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 15 Overview of the Company Business Outlook - - Global "fresh" mushroom market is a mature industry growing at GDP growth rates - - Fresh producers in U.S. continue to struggle with high potential for further consolidation - - Certain international markets unstable and in state of transition/consolidation - French growers benefiting from government subsidies - Growers in Poland taking some market share away from Sylvan - Overall European market mature - - Modest upside potential in bioproducts; however, no "break-out" products near-term - Agaricus Blazei sales up due to Japanese demand for tea product - Red Yeast Rice revenue well above forecast due to strong GNC demand in Q2 - Company pursuing new sales channels for bioproducts (Whole Foods, Wild Oats, Vitamin Shoppes, etc.) - - Company maintaining strong market position with strategic initiatives to increase volume: - JV operations in Mexico - "Satellite" growing opportunities for farmers - - Few catalysts likely to significantly increase overall demand for fresh mushrooms and therefore spawn - - Recent initiatives to lower prices in an effort to increase volume yielded limited success due to competitors following Sylvan - - Limited capital requirements going forward to maintain world-class infrastructure and support projected global demand [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 16 Overview of the Company Summary Ownership Profile
TOTAL PERCENTAGE DILUTED PERCENTAGE REPORT DATE HOLDER NAME SHARES HELD (1) OF TOTAL SHARES (6) OF TOTAL - ------------------- ------------------------------------------------------ --------------- ---------- ---------- ---------- Insider Holdings 8/21/2003 Nelson Obus - Director 1,069,886(2) 20.75% 1,080,886 18.18% 8/21/2003 Dennis C Zensen - Chairman, President and CEO 694,128(3) 13.46% 724,128 12.18% 8/21/2003 Virgil H. Jurgensmeyer - Director 20,000 0.39% 55,000 0.92% 8/21/2003 Monir K. Elzalaki - Director & Pres. of Sylvan America 11,061 0.21% 56,061 0.94% 8/21/2003 William L. Bennett - Director 8,880(4) 0.17% 24,880 0.42% 8/21/2003 Jeanie Heller - Director 1,000 0.02% 17,000 0.29% 8/21/2003 Donald A. Smith - CFO 0 0.00% 33,668 0.57% 8/21/2003 All Others 48,645 0.94% 241,440 4.06% --------- ------ --------- ------ 1,853,600 35.96% 2,233,063 37.55% 5% Owners 3/31/2003 Steel Partners 537,772 10.43% 537,772 9.04% --------- ------ --------- ------ 537,772 10.43% 537,772 9.04% Other Institutions 6/30/2003 Dimensional Fund Advisors 397,676 7.71% 397,676 6.69% 6/30/2003 Manning & Napier Advisors 199,925 3.88% 199,925 3.36% 6/30/2003 Paradigm Capital Mgmt (cl King & Associates) 170,100 3.30% 170,100 2.86% 6/30/2003 Gabelli Funds Llc 143,000 2.77% 143,000 2.40% 6/30/2003 Fidelity Mgmt & Research Co 142,100 2.76% 142,100 2.39% 6/30/2003 Loeb Arbitrage Management Inc. 115,110 2.23% 115,110 1.94% --------- ------ --------- ------ 1,167,911 22.66% 1,167,911 19.64% Total Holders Identified 3,559,283 69.04% 3,938,746 66.23% ========= ====== ========= ====== Retail Holdings & Other Institutions 1,595,848 30.96% 2,007,925 33.77% Total Shares Outstanding (5) 5,155,131 100.00% 5,946,671 100.00% ========= ====== ========= ======
- ----------------------- (1) Based on Computershare Analytics and Company filings. (2) Mr. Obus is President of Wynnefield Capital, Inc. and a member of Wynnefield Capital Management. (3) Owned by Mr. and Mrs. Zensen as joint tenants. (4) Includes 2,000 shares held in Mr. Bennett's 401(k) account and 880 shares held by trusts for the benefit of his children. (5) Share count from draft 10-Q for the quarter ended Sept. 28, 2003. (6) Includes 791,540 options from 12/31/02 10-K. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 17 Price and Volume Graph [GRAPHIC OF CHART] [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 18 Volume Traded SYLVAN INC. VOLUME WEIGHTED AVERAGE PRICE OF SHARES TRADED FROM 11/14/01 TO PRESENT
CUMULATIVE --------------------------------------------- DAYS % OF TOTAL % OF TOTAL DAYS % OF TOTAL % OF TOTAL TRADING DAILY AVG. DAYS TRADING TRADING DAILY AVG. DAYS TRADING TRADING RANGE IN RANGE TRADED VOLUME VOLUME IN RANGE TRADED VOLUME VOLUME - ------------------------------------------------------------------------------------------------------------- $9.00 - $9.25 7 1.3% 14,400 0.3% 7 1.3% 14,400 0.3% $9.25 - $9.50 1 0.2% 7,000 0.1% 8 1.5% 21,400 0.4% $9.50 - $9.75 10 1.9% 27,400 0.6% 18 3.4% 48,800 1.0% $9.75 - $10.00 33 6.3% 187,414 3.9% 51 9.8% 236,214 4.9% $10.00 - $10.25 66 12.6% 420,570 8.8% 117 22.4% 656,784 13.7% $10.25 - $10.50 65 12.4% 214,994 4.5% 182 34.8% 871,778 18.2% $10.50 - $10.75 32 6.1% 286,568 6.0% 214 40.9% 1,158,346 24.2% $10.75 - $11.00 29 5.5% 344,400 7.2% 243 46.5% 1,502,746 31.4% - ---------------------------------------------------------------------------------------------------------- $11.00 - $11.25 54 10.3% 1,378,000 28.8% 297 56.8% 2,880,746 60.2% - ---------------------------------------------------------------------------------------------------------- $11.25 - $11.50 66 12.6% 170,600 3.6% 363 69.4% 3,051,346 63.8% $11.50 - $11.75 40 7.6% 503,100 10.5% 403 77.1% 3,554,446 74.3% $11.75 - $12.00 30 5.7% 347,400 7.3% 433 82.8% 3,901,846 81.6% $12.00 - $12.25 7 1.3% 124,100 2.6% 440 84.1% 4,025,946 84.2% ========================================================================================================== $12.25 - $12.50 13 2.5% 219,900 4.6% 453 86.6% 4,245,846 88.7% $12.50 - $12.75 49 9.4% 282,700 5.9% 502 96.0% 4,528,546 94.7% $12.75 - $13.00 14 2.7% 190,800 4.0% 516 98.7% 4,719,346 98.6% $13.00 - $13.25 6 1.1% 51,600 1.1% 522 99.8% 4,770,946 99.7% $13.25 - $13.50 1 0.2% 13,200 0.3% 523 100.0% 4,784,146 100.0% ======================================= TOTAL: 523 100% 4,784,146 100%
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 19 Recent Quarter Earnings Announcement
NINE MONTHS ENDED ($ IN MILLIONS) --------------------------------- 3Q03 3Q02 VARIANCE ------ ------ --------- Revenue $ 69.8 $ 64.6 $ 5.2 Cost of Sales 44.0 38.2 5.7 ------ ------ ------ Gross Profit 25.8 26.3 (0.5) SG&A 16.5 15.6 0.9 EBITDA 9.4 10.8 (1.4) Depreciation and Amortization 4.8 4.4 0.4 ------ ------ ------ EBIT 4.5 6.3 (1.8) Other Income 0.1 0.1 0.1 Interest Expense, Net 1.2 1.4 (0.1) ------ ------ ------ EBT 3.4 5.0 (1.7) Income Tax Expense 1.1 1.7 (0.5) Minority Interest 0.1 0.1 0.1 ------ ------ ------ Net Income from Continuing Operations $ 2.1 $ 3.3 $ (1.2) ====== ====== ====== Earnings Per Share from Continuing Operations $ 0.41 $ 0.60 $(0.19) Fully-Diluted Shares Outstanding 5.2 5.5
- ------------------------- Source: Company Press Release. 3Q03 VS. 3Q02 - Consolidated operating income for the nine-months ended September 28, 2003 decreased 29%, when compared to the corresponding 2002 period, reflecting a 14% decrease in operating income from the Spawn Products Segment, a 1% increase in operating income from the Fresh Mushrooms Segment and a 23% increase in unallocated corporate expenses. - The increase in corporate expenses during the 2003 nine-month period was related to the recording of a net periodic pension expense of $502,000. - Net sales of spawn and spawn-related products increased 4% due to a weaker U.S. dollar on overseas sales that was partially offset by a 6% decrease in spawn product sales volume. - Net sales of fresh mushrooms increased during the first nine months of 2003 to $21.9 million, as compared with $18.8 million for the corresponding period of 2002, reflecting a 7% increase in the number of pounds sold and a 1% increase in the average selling price per pound. - Operating income of the fresh mushrooms segment for the first nine-months of 2003 was $2.0 million, which is 1% higher than the amount reported for the first nine months of 2002. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 20 Overview of the Company Summary Income Statement
FISCAL YEAR ENDED DECEMBER, (1), (2) ------------------------------------ LTM ENDED 2001 2002 2003E (2) 9/28/2003 (2) ---------- ---------- ---------- ------------- Net sales $ 85,911 $ 88,192 $ 95,857 $ 93,401 Operating costs and expenses Cost of sales 49,818 52,109 61,344 57,835 Selling and administration 17,806 19,216 20,472 20,115 Research and development 1,721 1,965 1,244 1,965 Depreciation and amortization 5,575 5,842 6,268 6,234 --------- --------- --------- ---------- 74,920 79,132 89,328 86,149 --------- --------- --------- ---------- Operating income 10,991 9,060 6,529 7,252 Interest expense, net 2,532 1,865 1,524 1,723 Other income (expense) (19) (3) - 57 --------- --------- --------- ---------- Income before income taxes 8,440 7,192 5,005 5,586 Income taxes 2,490 2,406 1,656 1,884 --------- --------- --------- ---------- Income before minority interest 5,950 4,786 3,349 3,703 Minority interest 121 117 184 203 --------- --------- --------- ---------- Net income $ 5,829 $ 4,669 $ 3,165 $ 3,500 ========= ========= ========= ========== Earnings per share $ 1.05 $ 0.86 $ 0.59 $ 0.65 Diluted WASO 5,552 5,455 5,370 5,370 EBITDA (4) $ 17,200 $ 14,876 $ 13,080 $ 13,486 Maintenance Cap Ex $ 4,100 $ 3,400 $ 3,850 $ 3,100 Expansionary Cap Ex 4,644 2,744 - 2,876 --------- --------- --------- ---------- Total Cap Ex $ 8,744 $ 6,144 $ 3,850 $ 5,976 Revenue growth 0.0% 2.7% 8.7% n/a EBITDA margin 20.0% 16.9% 13.6% 14.4% Operating income margin 12.8% 10.3% 6.8% 7.8% Income before income taxes margin 9.8% 8.2% 5.2% 6.0% Net income margin 6.8% 5.3% 3.3% 3.7% Effective tax rate 29.5% 33.5% 33.1% 33.7% PROJECTED FISCAL YEAR ENDING DECEMBER, (1), (2), (3) ---------------------------------------------------------- 2004 2005 2006 2007 2008 ---------- ---------- ---------- ---------- ---------- Net sales $ 96,852 $ 97,670 $ 100,600 $ 103,618 $ 106,727 Operating costs and expenses Cost of sales 61,461 61,795 61,869 62,171 64,036 Selling and administration 20,388 20,495 21,020 21,624 22,245 Research and development 1,250 1,250 1,308 1,347 1,387 Depreciation and amortization 6,323 5,996 5,726 5,510 5,340 --------- --------- --------- --------- --------- 89,422 89,536 89,923 90,652 93,008 --------- --------- --------- --------- --------- Operating income 7,430 8,134 10,677 12,966 13,719 Interest expense, net 1,385 1,015 620 170 (335) Other income (expense) - - - - - --------- --------- --------- --------- --------- Income before income taxes 6,045 7,119 10,057 12,796 14,054 Income taxes 2,116 2,492 3,520 4,479 4,919 --------- --------- --------- --------- --------- Income before minority interest 3,929 4,627 6,537 8,317 9,135 Minority interest 117 117 117 117 117 --------- --------- --------- --------- --------- Net income $ 3,812 $ 4,510 $ 6,420 $ 8,200 $ 9,018 ========= ========= ========= ========= ========= Earnings per share $ 0.71 $ 0.84 $ 1.20 $ 1.53 $ 1.68 Diluted WASO 5,370 5,370 5,370 5,370 5,370 EBITDA (4) $ 13,953 $ 14,130 $ 16,603 $ 18,676 $ 19,259 Maintenance Cap Ex $ 3,850 $ 3,850 $ 3,850 $ 3,850 $ 3,850 Expansionary Cap Ex - - - - - --------- --------- --------- --------- --------- Total Cap Ex $ 3,850 $ 3,850 $ 3,850 $ 3,850 $ 3,850 Revenue growth 1.0% 0.8% 3.0% 3.0% 3.0% EBITDA margin 14.4% 14.5% 16.5% 18.0% 18.0% Operating income margin 7.7% 8.3% 10.6% 12.5% 12.9% Income before income taxes margin 6.2% 7.3% 10.0% 12.3% 13.2% Net income margin 3.9% 4.6% 6.4% 7.9% 8.4% Effective tax rate 35.0% 35.0% 35.0% 35.0% 35.0%
- ----------------------- (1) The Company maintains its accounting records on a 52-53 week fiscal year ending the Sunday nearest December 31. All of the above fiscal years are 52 weeks. (2) Excludes non-recurring expenses. (3) Based upon management estimates dated September 23, 2003. Includes public company expenses. Assumes an Euro to U.S. Dollar exchange rate of 1.09 and a normalized tax rate of 35%. (4) EBITDA = operating income plus depreciation and amortization. 2001-2002 EBITDA includes amortization embedded in other line items. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 21 Overview of the Company Balance Sheet
DEC. 31, 2000 DEC. 30, 2001 DEC. 29, 2002 JUN. 29, 2003 SEPT. 28, 2003 ------------- ------------- ------------- ------------- -------------- ASSETS: Current assets: Cash and cash equivalents $ 5,371 $ 5,072 $ 5,624 $ 4,504 $ 6,118 Trade accounts receivable 12,740 13,133 14,399 14,709 15,095 Inventories 10,398 10,119 11,425 12,831 12,010 Prepaid income taxes and other expenses 1,420 1,437 1,495 2,066 2,181 Other current assets 1,634 4,206 1,494 1,472 1,731 --------- --------- --------- --------- --------- Total current assets 31,563 33,967 34,437 35,582 37,135 Property, plant and equipment: Land and improvements 3,693 3,711 3,987 n/a n/a Buildings 35,540 38,021 43,699 n/a n/a Equipment 48,072 51,014 56,895 n/a n/a --------- --------- --------- --------- --------- Total property, plant and equipment 87,305 92,746 104,581 n/a n/a Less: accumulated depreciation (34,769) (38,470) (45,794) n/a n/a --------- --------- --------- --------- --------- Total property, plant and equipment, net 52,536 54,276 58,787 60,132 59,640 Intangible assets 11,899 11,036 12,321 13,104 13,197 Other assets 9,776 7,811 1,261 1,066 1,187 --------- --------- --------- --------- --------- TOTAL ASSETS $ 105,774 $ 107,090 $ 106,806 $ 109,884 $ 111,159 ========= ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Current portion of long-term debt $ 192 $ 2,430 $ 223 $ 163 $ 122 Accounts payable - trade 4,108 3,833 3,895 4,138 3,835 Accrued salaries, wages and employee benefits 2,653 2,635 2,771 2,580 2,956 Other accrued liabilities 896 905 1,413 1,794 2,099 Income taxes payable 690 942 1,545 1,202 1,344 --------- --------- --------- --------- --------- Total current liabilities 8,539 10,745 9,847 9,877 10,356 Long-term and revolving-term debt 39,871 37,255 38,162 36,140 35,260 Other long-term liabilities: Other employee benefits 1,056 1,362 9,538 9,770 9,811 Other 5,215 5,162 256 289 324 --------- --------- --------- --------- --------- Total other long-term liabilities 6,271 6,524 9,794 10,059 10,135 Minority interest 1,559 1,680 1,741 2,122 2,176 Total shareholders' equity 49,534 50,886 47,262 51,686 53,232 --------- --------- --------- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 105,774 $ 107,090 $ 106,806 $ 109,884 $ 111,159 ========= ========= ========= ========= =========
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 22 5 / OVERVIEW OF THE ACQUIROR [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 23 Overview of the Acquiror - - The Acquiror has been actively acquiring companies in a variety of industries since 1941 and currently maintains eleven separate operating segments that employ more than 450 people. - - The Acquiror was formally founded in 1975 in Kittening, Pennsylvania to provide management services for all Snyder subsidiaries. - - The Acquirer's subsidiaries operate in a broad range of businesses, including construction, mining, industrial equipment, energy, and agriculture. - - The Acquiror is partnered with Creekside Mushrooms, Ltd., which is the world's largest underground mushroom farm and owner of Moonlight (R) Brand mushrooms. - - Founders include: - Charles H. Snyder Sr. - Chairman of Snyder Associated Companies, Inc. - 1941 - PRESENT C.H. Snyder Co. Inc. - 1974 - PRESENT Bauer Company Inc. - Elmer A. Snyder [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 24 6 / ANALYSIS OF PROPOSED TRANSACTION [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 25 Analysis of Proposed Transaction Summary Transaction Multiples CALCULATION OF TRANSACTION VALUE
Offer Price $12.25 Sylvan Diluted Shares Outstanding (1) 5.2 Equity Value $ 64.2 Net Debt (2) 31.4 ------ Enterprise Value $ 95.6 ======
(1) Fully diluted shares outstanding based on the treasury stock method. (2) Includes minority interest of $2.2 million. IMPLIED TRANSACTION MULTIPLES
SYLVAN EV ESTIMATES MULTIPLE --------- -------- LTM 9/28/03 Revenue $93.4 1.0x EBITDA 13.5 7.1x FY 2003 ESTIMATE Revenue $95.9 1.0x EBITDA 13.1 7.3x FY 2004 ESTIMATE Revenue $96.9 1.0x EBITDA 14.0 6.9x
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 26 Analysis of Proposed Transaction Historical Stock Trading Analysis OFFER PRICE PREMIUM ANALYSIS RELATIVE TO HISTORY AS OF NOVEMBER 14, 2003 Offer Price: $ 12.25 125% of April 15, 2003 (1) $ 9.82 107% of May 13, 2002 (2) 11.44 142% of 52 Week Low Trading - March 19, 2003 8.60 103% of 52 Week High Trading - September 24, 2002 11.95 119% of Twelve-Month Average Closing Price 10.27 120% of Six-Month Average Closing Price 10.21 121% of One-Month Average Closing Price 10.10 65% of All Time Trading High - June 17, 1998 18.75 75% of Five-Year High - December 28, 1998 16.37

(1) Day prior to announcement of Sylvan management group buyout proposal. (2) Day prior to press release indicating Sylvan's exploration of strategic [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 27 Analysis of Proposed Transaction Valuation Summary
IMPLIED ENTERPRISE VALUE --------------------------------------------- ($ IN MILLIONS) 25TH 75TH VALUATION METHODOLOGY LOW PERCENTILE MEDIAN PERCENTILE HIGH - ----------------------- ----- ---------- ------ ---------- ------ COMPARABLE COMPANIES $63.2 $68.8 $74.3 $102.2 $130.0 COMPARABLE TRANSACTIONS 84.9 85.2 85.6 95.7 105.9 DISCOUNTED CASH FLOW 79.0 84.4 89.8 95.7 101.6 LEVERAGED BUY-OUT 76.2 n/m n/m n/m 88.6 PROPOSED TRANSACTION $95.6

IMPLIED EQUITY VALUE PER SHARE ---------------------------------------------- 25TH 75TH VALUATION METHODOLOGY LOW PERCENTILE MEDIAN PERCENTILE HIGH - ----------------------- ------ ---------- ------ ---------- ------ COMPARABLE COMPANIES $ 6.16 $ 7.24 $ 8.32 $13.72 $19.12 COMPARABLE TRANSACTIONS 10.79 10.86 10.93 12.89 14.86 DISCOUNTED CASH FLOW 9.23 10.28 11.33 12.47 13.60 LEVERAGED BUY-OUT 8.69 n/m n/m n/m 11.03 PROPOSED TRANSACTION $12.25
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 28 Analysis of Proposed Transaction Valuation Summary - - The valuation ranges implied by the techniques employed are summarized below, based on the following: - LBO ANALYSIS - High and low values represent 20% and 30% IRRs - DCF ANALYSIS - Based on discount rates and EBITDA exit multiples of 12% - 14% and 5.0x - 6.5x - COMPARABLE TRANSACTION ANALYSIS (1) - Based on 2003E EBITDA and multiples of 6.5x - 8.1x - PUBLICLY-TRADED COMPARABLE COMPANY ANALYSIS (2) - Based on 2003E EBITDA and multiples of 4.8x - 9.9x IMPLIED ENTERPRISE VALUE ($ in million) [GRAPHIC OF CHART] IMPLIED EQUITY PER SHARE [GRAPHIC OF CHART] - ----------------------- (1) Based on best comparable transactions including: Savia acquiring Seminis, Inc., Investor Group acquiring Dole, Cal-Maine Foods acquiring Smith Farms, and Investor Group acquiring Maui Land & Pineapple. (2) Based on best comparable companies including: BG, CQB, FDP and HORT. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 29 ANALYSIS of PROPOSED TRANSACTION Comparable Companies Analysis
RANGE OF VALUATION MULTIPLES IMPLIED BY COMPARABLE PUBLIC COMPANIES ANALYSIS 2003E ------------------------------------------------------------------- OPERATING 25TH 75TH DATA LOW PRTL MEDIAN PRTL HIGH --------- --------- -------- -------- --------- --------- ENTERPRISE VALUE TO LTM: ALL COMPARABLES: EBITDA 4.8 x 5.4 x 5.9 x 9.0 x 12.2 x BEST COMPARABLES: EBITDA 4.8 x 5.3 x 5.7 x 7.8 x 9.9 x ($ IN MILLIONS) ----------------------------------------------------------------- IMPLIED ENTERPRISE VALUE BASED ON BEST COMPARABLES: EBITDA $ 13.1 $ 63.2 $ 68.8 $ 74.3 $ 102.2 $ 130.0 ----------------------------------------------------------------- PROPOSED TRANSACTION ENTERPRISE VALUE $ 95.6 ----------------------------------------------------------------- IMPLIED EQUITY VALUE BASED ON BEST COMPARABLES: EBITDA $ 13.1 $ 6.16 $ 7.24 $ 8.32 $ 13.72 $ 19.12 ----------------------------------------------------------------- PROPOSED TRANSACTION EQUITY VALUE/SHARE $12.25 -----------------------------------------------------------------
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS NOVEMBER 16, 2003 / 30 Analysis of Proposed Transaction COMPARABLE COMPANIES ANALYSIS CAPITALIZATION & OPERATING DATA:(1)
MARKET CAPITALIZATION(2) % OF ------------------------- LTM OPERATING RESULTS ($ millions, except per share data) TICKER PRICE 52-WK EQUITY MKT ENTERPRISE ----------------------------------- COMPANY SYMBOL 11/14/03 HIGH CAP VALUE SALES EBITDA(3) EBIT SYLVAN INC.(5) SYLN $10.10 87.8% $ 52.1 $ 83.5 $ 93.4 $ 13.5 $ 7.3 GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. ADM 14.24 95.3% 9,247.5 12,927.6 31,732.0 1,459.9 797.6 Bunge Limited BG 27.50 88.3% 2,760.2 5,391.2 20,620.0 915.0 729.0 FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. CQB 19.60 97.7% 803.3 1,079.8 2,714.7 108.6 66.9 Fresh Del Monte Produce Inc. FDP 25.65 88.4% 1,469.2 1,439.3 2,395.5 298.0 234.9 Northland Cranberries, Inc. NRCNA 0.48 44.9% 47.1 84.8 92.2 11.1 7.4 AG INPUTS Delta and Pine Land Co. DLP 24.34 95.5% 978.3 867.4 284.4 71.3 63.8 Hines Horticulture, Inc. HORT 4.15 92.8% 91.9 334.4 338.3 61.1 52.0 PROTEIN Cal-Maine Foods, Inc. CALM 17.68 89.3% 216.2 312.1 419.6 56.8 40.2 Sanderson Farms, Inc. SAFM 36.24 99.6% 485.9 505.1 818.6 87.2 62.6 - ------------------------------------------------------------------------------------------------------------------------------------ High 99.6% 9,247.5 12,927.6 31,732.0 1,459.9 797.6 Median 92.8% 803.3 867.4 818.6 87.2 63.8 Mean 88.0% 1,788.9 2,549.1 6,601.7 341.0 228.3 Low 44.9% 47.1 84.8 92.2 11.1 7.4 - ------------------------------------------------------------------------------------------------------------------------------------ LTM OPERATING RESULTS LTM MARGINS 3 FISCAL YR. CAGR(4) ($ millions, except per share data) --------- ----------------------------------- --------------------------------- COMPANY NET INC EBITDA EBIT NET INC SALES EBITDA NET INC SYLVAN INC.(5) $ 3.5 14.4% 7.8% 3.7% 5.6% (12.8%) (26.3%) GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 502.1 4.6% 2.5% 1.6% 25.5% 7.1% 9.6% Bunge Limited 367.0 4.4% 3.5% 1.8% 20.7% 36.0% 128.3% FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 65.0 4.0% 2.5% 2.4% 2.5% (5.9%) N/A Fresh Del Monte Produce Inc. 246.3 12.4% 9.8% 10.3% 6.0% 45.2% 153.7% Northland Cranberries, Inc. 8.9 12.1% 8.0% 9.7% (30.0%) N/A N/A AG INPUTS Delta and Pine Land Co. 32.7 25.1% 22.4% 11.5% (7.5%) 0.9% (3.4%) Hines Horticulture, Inc. 6.1 18.0% 15.4% 1.8% 5.2% (4.7%) (8.6%) PROTEIN Cal-Maine Foods, Inc. 21.6 13.5% 9.6% 5.2% 4.0% 12.0% 43.5% Sanderson Farms, Inc. 33.0 10.6% 7.7% 4.0% 10.8% 60.5% N/A - ----------------------------------------------------------------------------------------------------------------------------- High 502.1 25.1% 22.4% 11.5% 25.5% 60.5% 153.7% Median 33.0 12.1% 8.0% 4.0% 5.2% 9.5% 26.5% Mean 142.5 11.7% 9.0% 5.4% 4.1% 18.9% 53.8% Low 6.1 4.0% 2.5% 1.6% (30.0%) (5.9%) (8.6%) - -----------------------------------------------------------------------------------------------------------------------------
- ------------------------------ (1) Excludes non-recurring and extraordinary items. (2) Fully-diluted using the treasury-stock method. (3) EBITDA = income from operations plus the sum of depreciation, amortization and non-cash stock option compensation. (4) Historical results have not been adjusted to reflect the discontinuation of goodwill amortization. (5) Sylvan is shown for illustrative purposes only and is not included in high, median, mean and low calculations. (6) Earnings estimates are from First Call, where available, and calendarized, where appropriate. (7) Growth rates are from Bloomberg, where available. (8) ROIC = EBITDA divided by the sum of total equity and total debt. (9) Best comparables include BG, CQB, FDP and HORT. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS NOVEMBER 16, 2003 / 31 Analysis of Proposed Transaction Comparable Companies Analysis VALUATION & LEVERAGE STATISTICS:
EQUITY MKT CAP / ENTERPRISE VALUE / LTM --------------------- EPS ESTIMATES(6) -------------------------------- NET BOOK ---------------- COMPANY SALES EBITDA EBIT INCOME VALUE 2003 2004 SYLVAN INC.(5) 0.9 X 6.2 X 11.5 X 14.9 X 1.0 X N/A N/A GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 0.4 x 8.9 x 16.2 x 18.4 x 1.3 x 0.81 0.99 Bunge Limited 0.3 x 5.9 x 7.4 x 7.5 x 1.3 x 2.50 2.80 FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 0.4 x 9.9 x 16.1 x 12.4 x 1.1 x 1.91 2.68 Fresh Del Monte Produce Inc. 0.6 x 4.8 x 6.1 x 6.0 x 1.6 x 3.78 3.86 Northland Cranberries, Inc. 0.9 x 7.6 x 11.5 x 5.3 x 1.1 x N/A N/A AG INPUTS Delta and Pine Land Co. 3.1 x 12.2 x 13.6 x 29.9 x 4.2 x 1.05 1.29 Hines Horticulture, Inc. 1.0 x 5.5 x 6.4 x 15.0 x 1.6 x N/A N/A PROTEIN Cal-Maine Foods, Inc. 0.7 x 5.5 x 7.8 x 10.0 x 2.9 x N/A N/A Sanderson Farms, Inc. 0.6 x 5.8 x 8.1 x 14.7 x 2.9 x N/A N/A ALL COMPARABLES - ------------------------------------------------------------------------------------------------------------------------------- High 3.1 x 12.2 x 16.2 x 29.9 x 4.2 x 3.78 3.86 Median 0.6 x 5.9 x 8.1 x 12.4 x 1.6 x 1.91 2.68 Mean 0.9 x 7.3 x 10.4 x 13.2 x 2.0 x 2.01 2.32 Low 0.3 x 4.8 x 6.1 x 5.3 x 1.1 x 0.81 0.99 - ------------------------------------------------------------------------------------------------------------------------------- BEST COMPARABLES (9) - ------------------------------------------------------------------------------------------------------------------------------- High 1.0 x 9.9 x 16.1 x 15.0 x 1.6 x 3.78 3.86 Median 0.5 x 5.7 x 6.9 x 9.9 x 1.4 x 2.50 2.80 Mean 0.6 x 6.5 x 9.0 x 10.2 x 1.4 x 2.73 3.11 Low 0.3 x 4.8 x 6.1 x 6.0 x 1.1 x 1.91 2.68 - ------------------------------------------------------------------------------------------------------------------------------- LEVERAGE STATISTICS --------------------------------- PROJECTED P/E 2004 P/E / DEBT / ------------------- 5 YR. EPS EBITDA / DEBT / EQUITY MKT COMPANY 2003 2004 GROWTH(7) ROIC(8) INTEREST EBITDA CAP SYLVAN INC.(5) N/A N/A N/A 15.2% 7.8 X 2.6 X 68.0% GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 17.6 x 14.4 x 165.3% 11.9% 6.2 x 3.5 x 54.6% Bunge Limited 11.0 x 9.8 x 107.9% 19.1% 21.8 x 2.8 x 93.7% FRUITS & Vegetables Chiquita Brands Int'l, Inc. 10.3 x 7.3 x 60.9% 9.2% 2.2 x 4.0 x 54.3% Fresh Del Monte Produce Inc. 6.8 x 6.6 x 88.6% 30.1% 32.4 x 0.2 x 3.3% Northland Cranberries, Inc. N/A N/A N/A 12.8% 5.7 x 4.0 x 95.5% AG INPUTS Delta and Pine Land Co. 23.3 x 18.8 x 198.2% 30.6% N/A 0.0 x 0.2% Hines Horticulture, Inc. N/A N/A N/A 20.4% 2.3 x 4.0 x 263.9% PROTEIN Cal-Maine Foods, Inc. N/A N/A N/A 31.6% 7.3 x 1.9 x 49.2% Sanderson Farms, Inc. N/A N/A N/A 41.5% 32.8 x 0.5 x 8.5% ALL COMPARABLES - ----------------------------------------------------------------------------------------------------------------------------- High 23.3 x 18.8 x 198.2% 41.5% 32.8 x 4.0 x 263.9% Median 11.0 x 9.8 x 107.9% 20.4% 6.7 x 2.8 x 54.3% Mean 13.8 x 11.4 x 124.2% 23.0% 13.8 x 2.3 x 69.2% Low 6.8 x 6.6 x 60.9% 9.2% 2.2 x 0.0 x 0.2% - ----------------------------------------------------------------------------------------------------------------------------- BEST COMPARABLES(9) - ----------------------------------------------------------------------------------------------------------------------------- High 11.0 x 9.8 x 107.9% 30.1% 32.4 x 4.0 x 263.9% Median 10.3 x 7.3 x 88.6% 19.8% 12.0 x 3.4 x 74.0% Mean 9.3 x 7.9 x 85.8% 19.7% 14.6 x 2.7 x 103.8% Low 6.8 x 6.6 x 60.9% 9.2% 2.2 x 0.2 x 3.3% - -----------------------------------------------------------------------------------------------------------------------------
- ----------------------- (1) Excludes non-recurring and extraordinary items. (2) Fully-diluted using the treasury-stock method. (3) EBITDA = income from operations plus the sum of depreciation, amortization and non-cash stock option compensation. (4) Historical results have not been adjusted to reflect the discontinuation of goodwill amortization. (5) Sylvan is shown for illustrative purposes only and is not included in high, median, mean and low calculations. (6) Earnings estimates are from First Call, where available, and calendarized, where appropriate. (7) Growth rates are from Bloomberg, where available. (8) ROIC = EBITDA divided by the sum of total equity and total debt. (9) Best comparables include BG, CQB, FDP and HORT. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 32 Analysis of Proposed Transaction Comparable Transactions Analysis
RANGE OF VALUATION MULTIPLES IMPLIED BY COMPARABLE TRANSACTIONS ANALYSIS 2003E ------------------------------------------------------------------- OPERATING 25TH 75TH DATA LOW PRTL MEDIAN PRTL HIGH --------- --------- --------- --------- --------- --------- ENTERPRISE VALUE TO LTM: ENTIRE GROUP: EBITDA 5.9 x 7.0 x 8.1 x 15.6 x 23.1 x BEST COMPARABLES: EBITDA 6.5 x 6.5 x 6.5 x 7.3 x 8.1 x IMPLIED ENTERPRISE VALUE: ($ IN MILLIONS) ----------------------------------------------------------------- EBITDA $ 13.1 $ 84.9 $ 85.2 $ 85.6 $ 95.7 $ 105.9 ----------------------------------------------------------------- PROPOSED TRANSACTION ENTERPRISE VALUE $ 95.6 ----------------------------------------------------------------- IMPLIED EQUITY VALUE PER SHARE: EBITDA $ 13.1 $ 10.79 $ 10.86 $ 10.93 $ 12.89 $ 14.86 ----------------------------------------------------------------- PROPOSED TRANSACTION EQUITY VALUE PER SHARE $ 12.25 -----------------------------------------------------------------
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 33 Analysis of Proposed Transaction Comparable Transactions Analysis
($ in millions) ENTERPRISE VALUE MULTIPLES: ANNOUNCEMENT DATE ACQUIROR EQUITY --------------------------- CLOSING DATE TARGET EQUITY ENTERPRISE PREMIUM VALUE TO: LTM LTM LTM CONSIDERATION TARGET BUSINESS VALUE VALUE PAID LTM NI REVENUE EBITDA EBIT 8/29/2003 Venture Group n/a n/a n/a n/a n/a n/a n/a 8/29/2003 Packers of Indian River Ltd. (Chiquita Brands International Inc.) Cash Producer and wholesaler of fresh and processed citrus products 8/18/2003 Tyson Foods Inc. 74.0 74.0 n/a 0.3 x n/a n/a n/a Pending Choctaw Maid Farms Inc. n/a Producer and manufacturer of wholesale poultry products 8/18/2003 BC Natural Foods LLC n/a n/a n/a n/a n/a n/a n/a 8/18/2003 Penn Valley Farms n/a Owner and operator of poultry farms 6/9/2003 Pilgrims Pride Corp 302.7 597.3 n/a n/a 0.3 x 23.1 x n/a Pending ConAgra Foods Inc-Chicken Business Cash/Stock/Sub. Notes Producer of meat, eggs, and cooking oil 2/4/2003 Riviana Foods Inc. 25.3 25.3 n/a n/a 0.7 x n/a n/a 2/10/2003 ACH Rice Specialties Business (Associated British Foods Plc) Cash Producer and marketer of rice products 12/13/2002 Savia, S.A. de C.V. 384.4 650.0 50.6% 126.0 x 1.4 x 8.1 x 13.3 x 9/30/2003 Seminis, Inc. Cash Producer and marketer of fruit and vegetable seeds 9/22/2002 Investor Group 2,017.8 2,500.0 36.8% 13.1 x 0.6 x 6.6 x 9.1 x 3/31/2003 Dole Food Co., Inc. Cash Producer and marketer of fresh fruit and vegetables 8/17/2001 Nippon Suisan 175.0 175.0 n/a n/a 0.7 x 8.8 x n/a 10/2/2001 Gorton's & Bluewater Seafoods Cash Producers of frozen seafood 1/23/2001 Hormel Foods Corp 334.4 334.4 n/a 16.0 x 1.0 x n/a 10.0 x 2/26/2001 The Turkey Store Co. (d/b/a Jerome Foods, Inc.) Cash Producer of poultry, food products 9/27/2000 Pilgrim's Pride Corp. 234.5 280.0 105.4% 65.2 x 0.3 x 10.2 x 31.2 x 1/28/2001 WLR Foods, Inc. Cash Producer of poultry products
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 34 Analysis of Proposed Transaction Comparable Transactions Analysis
ENTERPRISE VALUE MULTIPLES: ANNOUNCEMENT DATE ACQUIROR EQUITY --------------------------- CLOSING DATE TARGET EQUITY ENTERPRISE PREMIUM VALUE TO: LTM LTM LTM CONSIDERATION TARGET BUSINESS VALUE VALUE PAID LTM NI REVENUE EBITDA EBIT 8/9/2000 Lesaffre et Compagnie $ 113.0 $ 113.0 n/a n/a 0.9 x n/a n/a 2/26/2001 Red Star Yeast and Products (Sensient Technologies Corp.) Cash Supplier of yeast to commercial bakery 12/20/1999 Money's Mushrooms Ltd. 50.0 50.0 n/a n/a 0.4 x n/a n/a 2/1/2000 Fresh Mushrooms Business (Vlasic Foods Int'l Inc.) Cash Producer of fresh mushrooms 12/6/1999 ConAgra, Inc. 360.0 376.0 n/a n/a 0.8 x n/a 11.1 x 1/3/2000 Seaboard Farms (Seaboard Corp.) Cash Producer of poultry products 9/15/1999 Cal-Maine Foods, Inc. 36.2 36.2 n/a 13.4 x 0.7 x 6.5 x 9.1 x 9/30/1999 Smith Farms, Inc. Cash Owns and operates egg farms 7/15/1999 Reservoir Capital Group LLC 72.2 153.8 8.7% 36.8 x 1.2 x 10.0 x 21.7 x 11/2/1999 Orange-co., Inc. Cash Producer of citrus fruit, juices 7/2/1999 Investor Group 95.2 119.6 (12.8%) 18.0 x 0.8 x 6.5 x 11.7 x 9/7/1999 Maui Land & Pineapple Co., Inc. n/a Producer of pineapples 5/14/1999 Pictsweet LLC 23.8 72.6 36.6% 39.3 x 0.4 x 5.9 x 13.9 x 9/23/1999 United Foods, Inc. Cash Producer and marketer of frozen fruits, vegetables
Summary Multiples: Median 36.7% 18.0 x 0.7 x 8.1 x 11.7 x Mean 37.6% 36.4 x 0.7 x 9.5 x 14.6 x Low (12.8%) 0.3 x 0.3 x 5.9 x 9.1 x High 105.4% 126.0 x 1.4 x 23.1 x 31.2 x

Summary Best Comparable Multiples(1): Median 36.8% 15.7 x 0.7 x 6.5 x 10.4 x Mean 24.9% 42.6 x 0.9 x 6.9 x 10.8 x Low -12.8% 13.1 x 0.6 x 6.5 x 9.1 x High 50.6% 126.0 x 1.4 x 8.1 x 13.3 x

- ---------------------- Source: Thomson Financial, SEC filings and company press releases. Data includes transactions announced between January 1, 1999 and November 6, 2003. (1) Best transactions include Savia acquiring Seminis, Inc, Investor Group acquiring Dole, Cal-Maine Foods acquiring Smith Farms, and Investor Group acquiring Maui Land & Pineapple. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 35 Analysis of Proposed Transaction Discounted Cash Flow Analysis
PRESENT VALUE PRESENT VALUE OF TERMINAL OF FREE + VALUE = PRESENT VALUE OF ENTERPRISE CASH FLOWS MULTIPLE OF 2008 EBITDA VALUE DISCOUNT ------------- ------------------------- --------------------------- RATE 2004 - 2008 5.00X 5.75X 6.50X 5.00X 5.75X 6.50X - -------- ------------- ----- ----- ----- ----- ----- ------- 12.0% $30.5 $54.6 $62.8 $71.0 $85.2 $93.4 $ 101.6 13.0% 29.7 52.3 60.1 67.9 82.0 89.8 97.7 14.0% 29.0 50.0 57.5 65.0 79.0 86.5 94.0 TOTAL RANGE $79.0 - $ 101.6 ASSUMED OFFER PRICE $95.6

IMPLIED EQUITY VALUE IMPLIED EQUITY VALUE PER SHARE DISCOUNT NET DEBT ------------------------- ------------------------------ RATE - SEPT. 28, 2003 = 5.00X 5.75X 6.50X 5.00X 5.75X 6.50X - -------- ------------- ----- ----- ----- ----- ----- ------- 12.0% $31.4 $53.7 $61.9 $70.1 $10.42 $12.01 $ 13.60 13.0% 31.4 50.6 58.4 66.2 9.81 11.33 12.85 14.0% 31.4 47.6 55.1 62.6 9.23 10.68 12.14 TOTAL RANGE $47.6 - $70.1 $ 9.23 - $ 13.60 ASSUMED OFFER PRICE $64.2 $12.25
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 36 Analysis of Proposed Transaction Discounted Cash Flow Analysis HISTORICAL AND PROJECTED CASH FLOWS ($ in millions except per share data)
Fiscal Year End December, HISTORICAL CAGR PROJECTED (a) CAGR ------------------------------------------------------------------------------------ 2001 2002 2003 01-03 2004 2005 2006 2007 2008 04-08 - ------------------------------------------------------------------------------------------------------------------------ Net Sales $85.9 $88.2 $95.9 5.6% $ 96.9 $ 97.7 $100.6 $103.6 $106.7 2.5% % Growth - 2.7% 8.7% 1.0% 0.8% 3.0% 3.0% 3.0% EBITDA 17.2 14.9 13.1 -12.8% 14.0 14.1 16.6 18.7 19.3 8.4% % of Sales 20.0% 16.9% 13.6% 14.4% 14.5% 16.5% 18.0% 18.0% EBIT 11.6 9.0 6.8 -23.5% 7.6 8.1 10.9 13.2 13.9 16.2% % of Sales 13.5% 10.2% 7.1% 7.9% 8.3% 10.8% 12.7% 13.0% Less: Taxes @ 35% (4.1) (3.2) (2.4) (2.7) (2.8) (3.8) (4.6) (4.9) ---------------------- ------------------------------------------ UNLEVERED NET INCOME 7.6 5.9 4.4 -23.5% 5.0 5.3 7.1 8.6 9.0 16.2% Plus: Depreciation and Amortization 5.6 5.8 6.3 6.3 6.0 5.7 5.5 5.3 Less: Capital Expenditures (4.1) (3.4) (3.9) (3.9) (3.9) (3.9) (3.9) (3.9) Less: Increase in Working Capital (2.9) (1.6) 3.0 0.5 (0.2) (0.6) (0.6) (0.7) ---------------------- ------------------------------------------ UNLEVERED FREE CASH FLOW $ 6.2 $ 6.7 $ 9.9 26.3% $ 8.0 $ 7.3 $ 8.3 $ 9.6 $ 9.8 5.5% ====================== ==========================================
DISCOUNTED CASH FLOW VALUATION ANALYSIS
Discount Rate 12.0% 13.0% 14.0% ------------------------- ------------------------ -------------------------- Terminal EBITDA Multiple 5.00x 5.75x 6.50x 5.00x 5.75x 6.50x 5.00x 5.75x 6.50x EBITDA $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 Terminal Value 96.3 110.7 125.2 96.3 110.7 125.2 96.3 110.7 125.2 PV Terminal Value 54.6 62.8 71.0 52.3 60.1 67.9 50.0 57.5 65.0 PV Free Cash Flows 30.5 30.5 30.5 29.7 29.7 29.7 29.0 29.0 29.0 ------------------------- ------------------------ ------------------------- IMPLIED ENTERPRISE VALUE $ 85.2 $ 93.4 $ 101.6 $ 82.0 $ 89.8 $ 97.7 $ 79.0 $ 86.5 $ 94.0 ========================= ======================== ========================= Less: Net Debt (b) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) Less: Minority Interest (b) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) ------------------------- ------------------------ ------------------------- EQUITY VALUE $ 53.7 $ 61.9 $ 70.1 $ 50.6 $ 58.4 $ 66.2 $ 47.6 $ 55.1 $ 62.6 Shares Outstanding (mm) 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 ------------------------- ------------------------ ------------------------- EQUITY VALUE PER SHARE $10.42 $12.01 $ 13.60 $ 9.81 $11.33 $12.85 $ 9.23 $10.68 $12.14 ========================= ======================== ========================= ENTERPRISE VALUE AS A MULTIPLE OF 2003E: Net Sales 0.89x 0.97x 1.06x 0.86x 0.94x 1.02x 0.82x 0.90x 0.98x EBITDA 6.51x 7.14x 7.76x 6.27x 6.87x 7.47x 6.04x 6.61x 7.19x EBIT 12.50x 13.70x 14.91x 12.04x 13.19x 14.34x 11.60x 12.70x 13.80x
- ---------- (a) Based upon Management estimates dated September 23, 2003. Includes $1.1 million of public company expenses. Assumes an Euro to U.S. dollar exhange rate of 1.09. (b) Based on August 2003 Balance Sheet. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 37 Analysis of Proposed Transaction Leveraged Buy-Out Analysis - - The leveraged buy-out analysis is summarized on the following page and is based on the following assumptions: - Senior debt of approximately 3.0x at LIBOR +375 basis points - 5 year amortization - Subordinated debt of approximately 1.25x - Coupon of 12% - Required return of 17-20% - Sponsor equity returns of 20-30% - Management incentive options of 10% - Enter and exit at the same multiple - Based on management projections as of September 26, 2003 and September 28, 2003 balance sheet [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 38 Analysis of Proposed Transaction Leveraged Buy-Out Analysis LBO TRANSACTION SUMMARY IMPLIED IRR = 20.0%
PURCHASE PRICE: - ----------------------------------------- Equity value $ 57.2 Plus: debt (1) 37.6 Less: cash (6.1) ------ Net debt 31.4 Enterprise value $ 88.6 ======

USES: - ----------------------------------------- Equity purchase price $ 57.2 Refinance existing debt 35.4 Transaction expenses 3.2 ------ $ 95.8 ======

SOURCES: - ----------------------------------------- Excess cash $ 4.1 Bank debt 42.3 Sub-debt 18.2 Financial sponsor equity 31.2 ----- $95.8 =====

PURCHASE MULTIPLES: - ------------------------------------------- Enterprise value / 2003 revenue 0.9 x Enterprise value / 2003 EBITDA 6.4 x ------ IMPLIED PRICE PER SHARE: $11.03 ======

OWNERSHIP: - ------------------------------------------ ~~Financial sponsor 82.0% Management 10.0% Sub-debt 8.0%~~

LEVERAGE STATISTICS: - ------------------------------------------ Bank debt / 2003 EBITDA 2.9 x Total debt / 2003 EBITDA 4.1 x 2003 EBITDA / Interest 3.3 x (2003 EBITDA - CapEx) / Interest 2.0 x 2004 EBITDA / Interest 1.9 x (2004 EBITDA - CapEx) / Interest 2.6 x
LBO TRANSACTION SUMMARY IMPLIED IRR = 30.0%
PURCHASE PRICE: - ------------------------------------------ Equity value $ 44.8 Plus: debt (1) 37.6 Less: cash (6.1) ------ Net debt 31.4 Enterprise value $ 76.2 ======

USES: - ----------------------------------------- Equity purchase price $ 44.8 Refinance existing debt 35.4 Transaction expenses 3.2 ------ $ 83.4 ======

SOURCES: - ------------------------------------------ Excess cash $ 4.1 Sub-debt 42.3 Assumed debt 18.2 Financial sponsor equity 18.8 ------- $ 83.4 =======

PURCHASE MULTIPLES: - -------------------------------------------- Enterprise value / 2003 revenue 0.8 x Enterprise value / 2003 EBITDA 5.5 x ------ IMPLIED PRICE PER SHARE: $ 8.69 ------

OWNERSHIP: - -------------------------------------------- ~~Financial sponsor 82.5% Management 10.0% Sub-debt 7.5%~~

LEVERAGE STATISTICS: - ------------------------------------------ Bank debt / 2003 EBITDA 2.9 x Total debt / 2003 EBITDA 4.1 x 2003 EBITDA / Interest 3.3 x (2003 EBITDA - CapEx) / Interest 2.0 x 2004 EBITDA / Interest 1.9 x (2004 EBITDA - CapEx) / Interest 2.6 x
- ---------- NOTE: Analysis based on management estimates, anticipated financing parameters and required returns. (1) Debt includes minority interest of $2.2 million. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 39 Analysis of Proposed Transaction Premiums Paid Analysis - - The outside offer price of $12.25 represents a premium of 25% to the Company's closing price of $9.82 one day prior to the announcement of the management-led proposal. - A meaningful comparison of the premium implied by the Proposed Transaction to the average and median premiums analyzed is difficult due to the lengthy and public background of the Proposed Transaction. ANNOUNCED TRANSACTIONS $50MM - $150MM (APRIL 1, 2003 - NOVEMBER 3, 2003)
PREMIUM PAID RELATIVE TO: ------------------------ VALUE OF PRICE DATE TRANSACTION PER 1 DAY 1 WEEK 4 WEEKS ANNOUNCED TARGET NAME ACQUIROR NAME ($MIL) SHARE PRIOR PRIOR PRIOR - ---------------------------------------------------------------------------------------------------------------------------- 04/01/03 National Service Industries California Investment Fund LLC 111.9 10.00 93.8% 90.8% 67.5% 04/03/03 Elite Information Group Inc Thomson Corp 121.5 14.00 40.4% 44.3% 40.7% 04/04/03 Sports Club Co Investor Group 70.2 3.00 25.0% 24.5% 31.6% 04/07/03 Bruker AXS Inc Bruker Daltonics Inc 104.6 1.86 44.2% 38.8% 28.3% 04/09/03 Ramsay Youth Services Inc Psychiatric Solutions Inc 77.9 5.00 42.9% 31.6% 24.7% 04/16/03 Lillian Vernon Corp Investor Group 60.7 7.25 72.6% 74.7% 72.2% 04/16/03 Signal Technology Corp Crane Co 142.5 13.25 17.6% 15.6% 21.6% 04/22/03 Varsity Brands Inc Investor Group 136.8 6.57 39.8% 39.5% 42.2% 04/29/03 Thousand Trails Inc Kohlberg & Co LP 114.6 14.50 55.1% 55.9% 49.8% 05/14/03 MountainBank Financial Corp South Financial Corp. 123.1 32.75 11.0% 25.9% 28.9% 05/16/03 National Energy Group Inc American Re Partners LP 148.1 0.80 150.0% 14.3% 29.0% 05/27/03 TMBR/Sharp Drilling Inc Patterson-UTI Energy Inc 92.1 20.19 4.1% 5.3% 9.1% 05/28/03 CommerceSouth Inc,Eufaula,AL BancTrust Financial Group Inc 73.1 25.50 64.5% 59.2% 66.4% 05/30/03 Cysive Inc Snowbird Holdings Inc 74.5 3.23 0.9% 0.9% 11.4% 06/09/03 Grange National Banc Corp,PA Community Bank Sys Inc,NY 82.2 45.85 19.9% 17.6% 24.6% 06/25/03 United Park City Mines Co Capital Growth Partners LLC 68.7 21.00 3.4% 4.7% 5.5% 06/26/03 Elder-Beerman Stores Corp Wright Holdings Inc 68.5 6.00 13.0% 9.9% 14.9% 06/27/03 Acres Gaming Inc International Game Technology 136.5 11.50 1.0% 13.9% 31.4%
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 40 Analysis of Proposed Transaction Premiums Paid Analysis
PREMIUM PAID RELATIVE TO: VALUE OF PRICE --------------------------- DATE TRANSACTION PER 1 DAY 1 WEEK 4 WEEKS ANNOUNCED TARGET NAME ACQUIROR NAME ($MIL) SHARE PRIOR PRIOR PRIOR - -------------------------------------------------------------------------------------------------------------------------------- 06/29/03 Information Resources Inc Investor Group 99.4 3.30 10.7% -2.4% -2.7% 07/03/03 Methode Electronics Inc Dura Automotive Systems Inc 54.4 50.00 153.2% 156.4% 155.0% 07/15/03 Klamath First Bancorp,Oregon Sterling Financial Corp,WA 148.0 20.44 17.1% 17.8% 16.8% 07/16/03 Alliance Bancorp of NE Inc New Haven Savings Bank,CT 72.1 25.00 -5.3% 2.2% 7.3% 07/16/03 Timberline Software Corp Best Software Inc 103.5 8.25 36.4% 38.0% 38.0% 07/23/03 Brio Software Inc Hyperion Solutions Corp 141.9 3.44 27.4% 24.2% 50.2% 07/23/03 Pinnacor Inc MarketWatch.com Inc 104.8 2.42 9.0% 8.5% 24.1% 07/29/03 Elder-Beerman Stores Corp Bon-Ton Stores Inc 97.8 8.00 32.9% 33.3% 36.3% 07/30/03 Community Bk,Pilot Mtn,NC Southern Community Finan Corp 77.3 48.65 56.9% 56.9% 62.2% 08/04/03 Mercator Software Inc Ascential Software Corp 115.0 3.00 22.4% 34.5% 86.3% 08/05/03 ResortQuest International Gaylord Entertainment Co 107.6 5.53 8.4% 10.8% 13.8% 08/12/03 California Independent Bancorp Humboldt Bancorp,Eureka,CA 81.7 35.50 22.8% 22.4% 18.3% 08/12/03 Jacksonville Bancorp,TX Franklin Bank Corp,Houston,TX 73.4 37.50 25.0% 29.3% 27.1% 09/04/03 Ross Systems Inc Chinadotcom Corp 66.2 19.00 9.9% 22.7% 22.6% 09/09/03 Lightspan Inc Plato Learning Inc 103.5 10.89 36.1% 29.6% 67.5% 09/11/03 CoVest Bancshares Inc,IL First Midwest Bancorp,IL 129.4 27.45 2.7% 1.7% 5.8% 09/11/03 Skibo Financial Corp,PA Northwest Bancorp MHC,PA 55.2 17.00 26.3% 28.1% 29.5% 09/22/03 Thistle Group Holdings Co Citizens Bank of Pennsylvania 147.8 26.00 35.4% 39.0% 58.7% 09/22/03 United States Exploration Inc DGL Acquisition Corp 53.3 2.82 0.7% -1.1% -1.1% 09/25/03 Caledonia Finl Corp,MI Chemical Financial Corp,MI 55.3 39.00 N/A N/A N/A 09/26/03 Business Bancorp,California UnionBanCal Corp,CA 114.9 28.57 N/A N/A N/A 09/29/03 Good Guys Inc CompUSA Inc 55.4 2.05 36.7% 31.4% 45.4% 09/30/03 Garden Fresh Restaurant Corp Fairmont Capital Inc 103.0 16.35 48.9% 54.8% 64.3% 10/03/03 OneSource Information Services ValueAct Capital Partners LP 80.9 9.50 9.3% 21.6% 17.7% 10/08/03 Crown Resources Corp Kinross Gold Corp 78.4 78.42 46.7% 46.7% 41.9% 10/20/03 Docent Inc click2learn.com inc 61.9 4.14 1.0% 0.7% 6.2% 10/22/03 Brass Eagle Inc K2 Inc 82.5 10.51 26.6% 25.1% 27.7% 10/24/03 Information Resources Inc Open Ratings Inc 114.9 3.30 -29.2% -27.3% -28.6% 10/27/03 SCB Computer Technology Inc CIBER Inc 52.5 2.15 13.2% 7.5% 22.9% 10/27/03 On Technology Corp Symantec Corp 101.1 4.00 15.9% 16.3% 57.5% AVERAGE $ 94.6 $ 16.6 30.4% 28.2% 34.1% MEDIAN $ 95.0 $ 10.7 23.9% 24.3% 28.6%
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 41 A / DESCRIPTIONS OF COMPARABLE COMPANIES [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 42 Descriptions of Comparable Companies ARCHER-DANIELS-MIDLAND COMPANY (NYSE:ADM) Archer-Daniels-Midland Company is principally engaged in procuring, transporting, storing, processing and merchandising agricultural commodities and products. The Company's operations are classified into four business segments: Oilseeds Processing, which includes the processing of oilseeds; Corn Processing, which includes its dry milling and wet milling corn operations; Wheat Processing, which includes the milling of wheat, corn and milo into flour, and Agricultural Services, which buys, stores, cleans and transports agricultural commodities. Archer-Daniels-Midland's remaining operations are classified as the Other segment, which primarily includes the production of value-added soy protein products. BUNGE LIMITED (NYSE:BG) Bunge Limited is an integrated, global agribusiness and food company operating in the farm-to-consumer food chain, which ranges from raw materials, such as grains and fertilizers, to retail food products, such as flour and margarine. The Company has primary operations in North America, Brazil, Argentina and Europe and worldwide distribution capabilities. Bunge conducts its operations in three divisions: agribusiness, fertilizer and food products. The agribusiness division consists of three business lines: grain origination, oilseed processing and international marketing. The Company's fertilizer division is comprised of nutrients and retail operations. The food products division consists of four business lines: edible oil products, wheat milling and bakery products, soy ingredients and corn products. CHIQUITA BRANDS INTERNATIONAL, INC. (NYSE:CQB) Chiquita Brands International, Inc. and its subsidiaries operate in two business segments: Fresh Produce and Processed Foods. The Company Fresh Produce segment sources, distributes and markets a line of fresh fruits and vegetables sold under the Chiquita and other brand names. Chiquita's fresh fruits and vegetables include bananas, berries, citrus, grapes, melons, mushrooms, stone fruit, tomatoes and a variety of other fresh produce. In Europe, the Company's Processed Foods segment sells Chiquita branded fruit juices, beverages, snacks and desserts, which are manufactured by third parties to Chiquita's specifications. In the United States, several national fruit juice and beverage producers manufacture and sell shelf-stable, refrigerated and frozen juice and beverage products using the Chiquita brand name, for which they pay Chiquita a license fee. Chiquita's processed banana products include banana puree, frozen banana pieces, sliced bananas and other specialty products. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 43 Descriptions of Comparable Companies FRESH DEL MONTE PRODUCE INC. (NYSE:FDP) Fresh Del Monte Produce Inc. is primarily engaged in the worldwide sourcing, transportation and marketing of fresh and fresh-cut produce. The Company's products include bananas, pineapples, cantaloupe, honeydew, watermelons, grapes, non-tropical fruits (including citrus, apples, pears, peaches, plums, nectarines, apricots and kiwi), plantains, Vidalia sweet onions and various greens. In January 2003, the Company has added tomatoes, potatoes and onions to its product offering. The Company sources its products primarily from Central and South America and the Philippines. Fresh Del Monte also sources products from North America, Africa and Europe and distributes its products in Europe, the Asia-Pacific region and South America. The Company also has non-produce businesses. These include its third-party ocean freight container business, a third-party plastics and box manufacturing business, its Jordanian poultry business and its Argentine grain business. HINES HORTICULTURE, INC. (NASD:HORT) Hines Horticulture, Inc. produces and distributes horticultural products through its wholly owned subsidiaries, Hines Nurseries, Inc. (Hines Nurseries) and Enviro-Safe Laboratories Inc. The Company is a national supplier of ornamental shrubs, color plants and container-grown plants, with 14 commercial nursery facilities located in Arizona, California, Florida, Georgia, New York, Oregon, Pennsylvania, South Carolina and Texas. Hines markets its products to retail and commercial customers throughout the United States. It produces approximately 5,500 varieties of ornamental shrubs and color plants and sells to more than 2,200 retail and commercial customers, representing more than 8,400 outlets throughout the United States and Canada. NORTHLAND CRANBERRIES (OTC:NRCNA) Northland Cranberries, Inc. is a vertically integrated grower, handler, processor and marketer of cranberries, branded cranberry products and fruit beverages. The Company markets and sells its Northland, Seneca, TreeSweet and Awake brand cranberry and other fruit juice products, as well as fresh, frozen and dried cranberries and cranberry concentrate domestically through retail supermarkets and through other distribution channels, both domestically and internationally. In addition, the Company produces and packages juice beverages for other companies on a contract-manufacturing basis. As of November 26, 2002, Northland owned or operated 21 cranberry-producing marshes with 2,009 planted acres in Wisconsin. It also maintains multi-year crop purchase contracts with 44 independent cranberry growers to purchase all of the cranberries harvested from an aggregate of up to 1,743 contracted acres. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 44 Descriptions of Comparable Companies DELTA AND PINE LAND COMPANY (NYSE:DLP) Delta and Pine Land Company (D&PL) and its subsidiaries breed, produce, condition and market cotton and soybean planting seed. In connection with its seed operations, the Company farms approximately 2,000 acres largely for the production of cotton and soybean foundation seed. D&PL is in a single line of business and operates in two business segments, domestic and international. The Company's reportable segments offer similar products, however, the business units are managed separately due to the geographic dispersion of their operations. The Company develops its proprietary seed products through research and development efforts in the United States and certain foreign countries. CAL-MAINE FOODS, INC. (NASD:CALM) Cal-Maine Foods, Inc. is primarily engaged in the production, cleaning, grading and packaging of fresh shell eggs for sale to shell egg retailers. The Company had sales of approximately 571 million dozen shell eggs during the fiscal year ended May 31, 2003 (fiscal 2003). It primarily markets shell eggs in the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States. Shell eggs are sold directly by the Company primarily to national and regional supermarket chains. Cal-Maine also produces specialty eggs such as Eggo land's Best and Farmhouse eggs and operates a dairy facility. SANDERSON FARMS, INC. (NASD:SAFM) Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and the preparation, processing, marketing and distribution of processed and prepared food items. The Company sells chill pack, ice pack and frozen chicken, both whole and cut-up, primarily under the Sanderson Farms brand name, to retailers, distributors and fast-food operators principally in the southeastern, southwestern and western United States. During the fiscal year ended October 31, 2002, the Company processed approximately 264.7 million chickens, or approximately 1.3 billion dressed pounds. In addition, it purchased and further processed 14.5 million pounds of poultry products. It sells over 200 processed and prepared food items nationally and regionally, primarily to distributors, national foodservice accounts, retailers and club stores. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 16, 2003 / 45 EX-99.C.4 8 j0476003exv99wcw4.txt PROJECT SPAWN DISCUSSION MATERIALS 11/11/03 EXHIBIT (c)(4) Discussion Materials for the Board of Directors [MORGAN JOSEPH LOGO] November 11, 2003 PROJECT SPAWN Confidential Disclaimer - - The following materials (the "Presentation") were prepared for the Special Committee of the Board of Directors of Sylvan Inc. ("Sylvan" or the "Company") which has requested that Morgan Joseph & Co. Inc. ("Morgan Joseph") provide its opinion as to the fairness, from a financial point of view, to the shareholders of the Company, excluding Dennis Zensen, Virgil Jurgensmeyer, Roger Claypoole, Snyder Associated Companies, Inc., and SAC Holding Company, of the consideration to be paid by a group formed by Snyder Associated Companies, Inc. and selected others (the "Acquiror") in connection with the proposed acquisition of the Company (the "Proposed Transaction"). - - In arriving at our opinion, we have assumed and relied upon the accuracy and completeness of the financial and other information used by us and have not attempted independently to verify such information, nor do we assume any responsibility to do so. We have assumed that the Company's forecasts and projections provided to or reviewed by us have been reasonably prepared based on the best current estimates and judgment of the Company's management as to the future financial condition and results of operations of the Company. While we have visited certain of the Company's locations, we have not conducted a physical inspection of the properties and facilities of the Company, nor have we made or obtained any independent evaluation or appraisal of the assets or liabilities of the Company. We have also taken into account our assessment of general economic, market and financial conditions and our experience in similar transactions, as well as our experience in securities valuation in general. Our opinion necessarily is based upon economic, market, financial and other conditions as they exist and can be evaluated on the date hereof and we assume no responsibility to update or revise our opinion based upon events or circumstances occurring after the date hereof. We reserve, however, the right to withdraw, revise or modify our opinion based upon additional information which may be provided to or obtained by us, which suggests, in our judgment, a material change in the assumptions (or the bases therefor) upon which our opinion is based. - - These materials are not intended to represent an opinion, but rather to serve as discussion materials for the Board to review and as a basis upon which Morgan Joseph may render an opinion. These materials do not address the Company's underlying business decision to approve the Proposed Transaction or constitute a recommendation to the Company or its shareholders as to any action it should take regarding the Proposed Transaction. These materials may not be reproduced, summarized, excerpted from or otherwise publicly referred to or disclosed in any manner without our prior written consent. - - The following materials are based upon Morgan Joseph's analysis of the Proposed Transaction as of November 11, 2003. In the event of material changes to the terms and conditions of the Proposed Transaction upon which these materials are based, the enclosed analysis and our conclusions may be affected. - - Certain portions of the enclosed analysis are based upon projected financial results. Any projected financial results are based upon analyst forecasts, internal projections and discussions with management of the Company. A number of factors, including industry conditions, changes in costs, labor issues and other factors which are beyond the scope of these projections and out of the control of the Company, the Acquiror and Morgan Joseph may cause actual results to differ materially from these projections. Material changes in the projections may affect the conclusions derived from our analysis. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/2 Table of Contents 1. INTRODUCTION 2. SUMMARY OF PROPOSED TRANSACTION 3. SUMMARY BACKGROUND OF PROPOSED TRANSACTION 4. OVERVIEW OF THE COMPANY 5. OVERVIEW OF THE ACQUIROR 6. ANALYSIS OF PROPOSED TRANSACTION APPENDIX A. DESCRIPTIONS OF COMPARABLE COMPANIES [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/3 1/Introduction [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/4 Introduction - - Morgan Joseph & Co. Inc. ("Morgan Joseph") has been retained by the Special Committee of the Board of Directors of Sylvan Inc. (the "Company") and requested to render its opinion to the Board of Directors of the Company as to the fairness, from a financial point of view, of the consideration to be received by the shareholders of the Company, excluding Dennis Zensen, Virgil Jurgensmeyer and Roger Claypoole, pursuant to the proposed sale to a group formed by Snyder Associated Companies, Inc. (the "Acquiror") of all of the Common Stock of the Company (the "Proposed Transaction"). - - In conducting our analysis and arriving at our opinion, we have reviewed and analyzed, among other things, the following: - The draft Agreement and Plan of Merger dated November 10, 2003 (the "Agreement"); - The Company's Annual Reports on Form 10-K for each of the fiscal years in the three-year period ended December 31, 2002, and the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003, and September 28, 2003 (draft as of November 6, 2003); - The indications of interest received by the Company; - Certain other publicly available information concerning the Company and the trading markets for the Company's common stock; - Certain internal information and other data relating to the Company, its business and prospects, including forecasts and projections prepared and provided to us by management of the Company; - Certain publicly available information concerning certain other companies engaged in businesses which we believe to be generally comparable to the Company and the trading markets for certain of such other companies' securities; and - The financial terms of certain recent business combinations which we believe to be relevant to the Proposed Transaction. - - We have also interviewed certain senior officers of the Company concerning the business and operations, assets, present condition and prospects of the Company, visited certain of the Company's locations and undertook such other studies, analyses and investigations as we deemed appropriate. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/5 Introduction - The Acquiror has proposed to purchase all the outstanding shares of Common Stock, par value $0.001 per share. After the proposed transaction, Sylvan will become a privately held company. - All shareholders will receive $12.25 in cash for each share of Common Stock held, or $64.2 million in aggregate. Merger consideration of $12.25 per share, plus assumed net debt as of September 28, 2003 of $31.4 million (including minority interest of $2.2 million), implies an enterprise value for the Proposed Transaction of $95.6 million. - Process: - Sign the definitive merger agreement on November 11, 2003; - File proxy statement with SEC by November 28, 2003; - Receive approval from the SEC and mail proxies to the stockholders by December 26, 2003; - Hold special meeting and stockholder vote by the middle of February; and - Proposed Transaction closes; a subsidiary created by the Acquiror merges with and into Sylvan pursuant to a reverse triangular merger by the end of February 2004. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/6 2/SUMMARY OF PROPOSED TRANSACTION [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/7 Summary of Proposed Transaction Summary of Key Terms of the Proposed Transaction CONSIDERATION: - $12.25 cash consideration for Sylvan's Common Stock TRANSACTION STRUCTURE: - Reverse triangular merger PRINCIPAL CONDITIONS TO CLOSING: - Approval by the Company's shareholders - Material adverse change out - Fiduciary out in the event of a Superior Proposal (as determined by the Special Committee or the Board) TERMINATION FEE: - $2.0 million plus expense reimbursement of up to $0.5 million NON-COMPETITION: - None ESTIMATED CLOSING: - End of February 2004 OTHER: - In connection with the execution of the definitive agreement, certain shareholders will also execute an option agreement and voting agreements. The shareholders are Nelson Obus and affiliated entities (option agreement) and Steel Partners II, L.P. - Dennis Zensen, CEO of the Company, will contribute (all or part) of his shares in connection with the Proposed Transaction. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/8 3 SUMMARY BACKGROUND OF PROPOSED TRANSACTION [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 9 Summary Background of Proposed Transaction MAY 14, 2002: - Sylvan retains Lane Berry as advisor to the Company and announces plans to explore strategic alternatives MAY - SEPTEMBER 2002: - Lane Berry conducts first marketing process - 14 prospective strategic buyers: 0 bids - 21 prospective financial buyers: 2 bids - American Securities Capital Partners: $10.00 - $11.00/share - Cadigan Investment Partners(1): $12.50 - $13.50/share - Based on 2003E Revenue and EBITDA of $88.9 million and $16.5 million OCTOBER 15, 2002: - Company announces major share repurchase program up to 1.3 million shares and completion of its review of strategic alternatives - 333,321 shares repurchased in 2002 at an average price of $10.60 (310,000 purchased following announcement of program) - No shares purchased in 2003; program suspended APRIL 16, 2003: - Company announces it has received a non-binding proposal from a management-led buyer group at $11.00/share with equity financing provided by the Snyder Associated Companies, Inc. APRIL 23, 2003: - Company forms a Special Committee and retains Morgan Joseph as financial advisor to the Special Committee (1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 10 Summary Background of Proposed Transaction MAY - JUNE 2003: - Lane Berry and Morgan Joseph conduct second marketing process - 32 prospective strategic buyers: 0 bids - 41 prospective financial buyers: 4 bids - American Securities Capital Partners: $8.00/share - Key Kosmont: $7.00-$9.00/share - Lake Pacific Partners: $11.50/share - The Tokarz Group(1): $10.00/share JUNE 16, 2003: - Management-led group withdraws proposal JULY 21, 2003: - Company signs exclusivity agreement with Lake Pacific Partners AUGUST 28, 2003: - Lake Pacific Partners receives extension of "exclusivity" and revises bid with two-tier offer - $11.50/share for Insiders - $12.00/share for Outsiders OCTOBER 2, 2003: - Lake Pacific Partners notifies Special Committee and financial advisors that the source of $15.0 million of their financing has withdrawn their commitment. OCTOBER 7, 2003: - Lake Pacific Partners exclusivity expires (1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 11 Summary Background of Proposed Transaction OCTOBER 29, 2003: - The Snyder Associated Companies, Inc. expressed interested in submitting an offer to acquire the Company at a price "higher" than $12.00/share. NOVEMBER 5, 2003: - The Snyder Associated Companies, Inc. orally communicated an offer of $12.25/share to acquire the Company, with certain members of management, the Board of Directors, and other identified shareholders, including Dennis Zensen, Virgil Jurgensmeyer and Roger Claypoole, to be equity participants in the purchaser. NOVEMBER 6, 2003: - The counsel to the Special Committee, Davis Polk, submitted a definitive agreement to the Snyder buyout group for comments and to begin formal negotiations. - Lake Pacific Partners re-submits their prior acquisition proposal with evidence of equity and debt financing. Lake Pacific expresses a desire to proceed expeditiously to closing with deadline to consummate a transaction by November 7, 2003. NOVEMBER 7, 2003: - Counsel to the Special Committee and counsel to the Snyder buyout group reach substantial agreement on merger agreement. NOVEMBER 9, 2003: - Lake Pacific Partners orally communicated an offer of $12.50/share to acquire the Company subject to reaching an agreement for Dennis Zensen to rollover 100% of his shares and also reaching agreement with respect to employment and other business matters in connection with the transaction. NOVEMBER 11, 2003: - Meeting of Special Committee to consider Snyder acquisition proposal and Lake Pacific acquisition proposal. Board meeting to follow to consider and act on the recommendation of the Special Committee. Expected signing of definitive agreement. [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 12 4 OVERVIEW OF THE COMPANY [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 13 COMPANY SUMMARY COMPANY DESCRIPTION The Company is a worldwide producer and distributor of products for the mushroom industry, specializing in spawn (the equivalent of seed for mushrooms) and spawn-related products and services. The Company, which operates through its subsidiaries, is also a grower of fresh mushrooms in the United States. The Company has two business segments: spawn products and fresh mushrooms. Spawn-related products include casing inoculum, nutritional supplements and disease-control agents. The fresh mushrooms segment is comprised of Quincy Farms, a large, regional producer of fresh mushrooms. GENERAL COMPANY INFORMATION MANAGEMENT Dennis Zensen - Chairman, President and CEO Donald Smith - CFO Monir Elzalaki - Director; President of Sylvan America Gregory Verhagen - President of Quincy Farms Gary Walker - President of Sylvan Bioproducts, Inc. BOARD OF DIRECTORS Dennis Zensen (Chairman) William L. Bennett (Monitor Company Group, L.P.) Monir Elzalaki (President of Sylvan America) Jeanine C. Heller (Independent Investor Relations Consultant) Virgil H. Jurgensmeyer (Mid-West Custom Mixing Co.) Nelson Obus (Wynnefield Capital, Inc.) HEADQUARTERS: SAXONBURG, PENNSYLVANIA SUMMARY FINANCIAL INFORMATION (a) MARKET DATA AS OF 11/06/03 Stock Price $ 10.07 52-Week High $ 11.95 84.3% 52-Week Low $ 8.60 117.1% FD Shares Outstanding 5.2 Equity Value 51.9 Enterprise Value ("EV") 83.4 BALANCE SHEET DATA AS OF 9/28/03 (a) Cash and Equivalents $ 6.1 Debt 35.4 Minority Interest 2.2

ESTIMATES (a), (b) $ IN MILLIONS EV MULTIPLE ------------- ----------- FY 2003 Revenue $ 95.9 0.9x FY 2003 EBITDA 13.1 6.4x FY 2004 Revenue $ 96.9 0.9x FY 2004 EBITDA 14.0 6.0x
(a) Millions, except per share data. (b) Financial projections from the Company. [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 14 OVERVIEW OF THE COMPANY Business Overview - - Successor to the business of a Pennsylvania corporation that was chartered in 1937 - - Worldwide producer and distributor of products for the mushroom industry, specializing in spawn and spawn-related products and services, and is a major grower of fresh mushrooms in the U.S. - - The Company has two reportable business segments: - Spawn Operations - Accounts for 71% of the Company's total sales in 2002 and 79% of its operating income. - Conducts operations through subsidiaries in North America, Europe, Australia and South Africa - Plant operations are conducted in: the United States, England, Ireland, the Netherlands, France, Hungary, Australia, South Africa and Canada - Fresh Mushrooms Operations - Accounts for 29% of the Company's total sales in 2002 and 21% of its operating income - Operates a farm located in Quincy, Florida, one of the most modern and efficient mushroom production operations in North America - Within Quincy operations are four satellite mushroom growing facilities; two commenced operations in mid-2001 and two commenced operations in early 2003 - January 2000, Sylvan began selling all of its mushrooms to a leading U.S. mushroom marketing organization that packages and distributes them throughout the eastern United States [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 15 OVERVIEW OF THE COMPANY Business Outlook - - Global "fresh" mushroom market is a mature industry growing at GDP growth rates - - Fresh producers in U.S. continue to struggle with high potential for further consolidation - - Certain international markets unstable and in state of transition/consolidation - French growers benefiting from government subsidies - Growers in Poland taking some market share away from Sylvan - Overall European market mature - - Modest upside potential in bioproducts; however, no "break-out" products near-term - Agaricus Blazei sales up due to Japanese demand for tea product - Red Yeast Rice revenue well above forecast due to strong GNC demand in Q2 - Company pursuing new sales channels for bioproducts (Whole Foods, Wild Oats, Vitamin Shoppes, etc.) - - Company maintaining strong market position with strategic initiatives to increase volume: - JV operations in Mexico - "Satellite" growing opportunities for farmers - - Few catalysts likely to significantly increase overall demand for fresh mushrooms and therefore spawn - - Recent initiatives to lower prices in an effort to increase volume yielded limited success due to competitors following Sylvan - - Limited capital requirements going forward to maintain world-class infrastructure and support projected global demand [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 16 Overview of the Company Summary Ownership Profile
TOTAL PERCENTAGE DILUTED PERCENTAGE REPORT DATE HOLDER NAME SHARES HELD (1) OF TOTAL SHARES (6) OF TOTAL - ----------- ----------- --------------- -------- ---------- --------- Insider Holdings 8/21/2003 Nelson Obus - Director 1,069,886 (2) 20.75% 1,080,886 18.18% 8/21/2003 Dennis C Zensen - Chairman, President and CEO 694,128 (3) 13.46% 724,128 12.18% 8/21/2003 Virgil H. Jurgensmeyer - Director 20,000 0.39% 55,000 0.92% 8/21/2003 Monir K. Elzalaki - Director & Pres. of Sylvan America 11,061 0.21% 56,061 0.94% 8/21/2003 William L. Bennett - Director 8,880 (4) 0.17% 24,880 0.42% 8/21/2003 Jeanie Heller - Director 1,000 0.02% 17,000 0.29% 8/21/2003 Donald A. Smith - CFO 0 0.00% 33,668 0.57% 8/21/2003 All Others 48,645 0.94% 241,440 4.06% --------- ------ --------- ------ 1,853,600 35.96% 2,233,063 37.55% 5% Owners 3/31/2003 Steel Partners 537,772 10.43% 537,772 9.04% --------- ------ --------- ------ 537,772 10.43% 537,772 9.04% Other Institutions 6/30/2003 Dimensional Fund Advisors 397,676 7.71% 397,676 6.69% 6/30/2003 Manning & Napier Advisors 199,925 3.88% 199,925 3.36% 6/30/2003 Paradigm Capital Mgmt (cl King & Associates) 170,100 3.30% 170,100 2.86% 6/30/2003 Gabelli Funds Llc 143,000 2.77% 143,000 2.40% 6/30/2003 Fidelity Mgmt & Research Co 142,100 2.76% 142,100 2.39% 6/30/2003 Loeb Arbitrage Management Inc. 115,110 2.23% 115,110 1.94% --------- ------ --------- ------ 1,167,911 22.66% 1,167,911 19.64% Total Holders Identified 3,559,283 69.04% 3,938,746 66.23% ========= ====== ========= ====== Retail Holdings & Other Institutions 1,595,848 30.96% 2,007,925 33.77% Total Shares Outstanding (5) 5,155,131 100.00% 5,946,671 100.00% ========= ====== ========= ======
(1) Based on Computershare Analytics and Company filings. (2) Mr. Obus is President of Wynnefield Capital, Inc. and a member of Wynnefield Capital Management. (3) Owned by Mr. and Mrs. Zensen as joint tenants. (4) Includes 2,000 shares held in Mr. Bennett's 401(k) account and 880 shares held by trusts for the benefit of his children. (5) Share count from draft 10-Q for the quarter ended Sept. 28, 2003. (6) Includes 791,540 options from 12/31/02 10-K. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 17 Price and Volume Graph [LINE GRAPH DEPICTING PRICE AND VOLUME] [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 18 Volume Traded SYLVAN INC. VOLUME WEIGHTED AVERAGE PRICE OF SHARES TRADED FROM 11/6/01 TO PRESENT
CUMULATIVE ----------------------------------------------- DAYS % OF TOTAL % OF TOTAL DAYS % OF TOTAL % OF TOTAL TRADING DAILY AVG. DAYS TRADING TRADING DAILY AVG. DAYS TRADING TRADING RANGE IN RANGE TRADED VOLUME VOLUME IN RANGE TRADED VOLUME VOLUME ----- -------- ------ ------ ------ -------- ------ ------ ------ $9.00 - $9.25 7 1.3% 14,400 0.3% 7 1.3% 14,400 0.3% $9.25 - $9.50 1 0.2% 7,000 0.1% 8 1.5% 21,400 0.4% $9.50 - $9.75 10 1.9% 27,400 0.6% 18 3.4% 48,800 1.0% $9.75 - $10.00 32 6.1% 175,914 3.7% 50 9.6% 224,714 4.7% $10.00 - $10.25 61 11.7% 415,870 8.7% 111 21.2% 640,584 13.4% $10.25 - $10.50 65 12.4% 214,994 4.5% 176 33.7% 855,578 17.9% $10.50 - $10.75 32 6.1% 286,568 6.0% 208 39.8% 1,142,146 23.9% $10.75 - $11.00 29 5.5% 344,400 7.2% 237 45.3% 1,486,546 31.1% $11.00 - $11.25 59 11.3% 1,378,600 28.9% 296 56.6% 2,865,146 60.0% - ------ ------ -- ---- --------- ---- --- ---- --------- ---- $11.25 - $11.50 67 12.8% 176,700 3.7% 363 69.4% 3,041,846 63.7% $11.50 - $11.75 40 7.6% 503,100 10.5% 403 77.1% 3,544,946 74.2% $11.75 - $12.00 30 5.7% 347,400 7.3% 433 82.8% 3,892,346 81.5% $12.00 - $12.25 7 1.3% 124,100 2.6% 440 84.1% 4,016,446 84.1% ====== ====== == === ======= === === ==== ========= ==== $12.25 - $12.50 13 2.5% 219,900 4.6% 453 86.6% 4,236,346 88.7% $12.50 - $12.75 49 9.4% 282,700 5.9% 502 96.0% 4,519,046 94.6% $12.75 - $13.00 14 2.7% 190,800 4.0% 516 98.7% 4,709,846 98.6% $13.00 - $13.25 6 1.1% 51,600 1.1% 522 99.8% 4,761,446 99.7% $13.25 - $13.50 1 0.2% 13,200 0.3% 523 100.0% 4,774,646 100.0% === ==== ========= ==== TOTAL: 523 100% 4,774,646 100%
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 19 Recent Quarter Earnings Announcement
NINE MONTHS ENDED ($ IN MILLIONS) --------------------------------- 3Q03 3Q02 VARIANCE ---- ---- -------- Revenue $ 69.8 $ 64.6 $ 5.2 Cost of Sales 44.0 38.2 5.7 ------ ------ ------ Gross Profit 25.8 26.3 (0.5) SG&A 16.5 15.6 0.9 EBITDA 9.4 10.8 (1.4) Depreciation and Amortization 4.8 4.4 0.4 ------ ------ ------ EBIT 4.5 6.3 (1.8) Other Income 0.1 0.1 0.1 Interest Expense, Net 1.2 1.4 (0.1) ------ ------ ------ EBT 3.4 5.0 (1.7) Income Tax Expense 1.1 1.7 (0.5) Minority Interest 0.1 0.1 0.1 ------ ------ ------ Net Income from Continuing Operations $ 2.1 $ 3.3 $ (1.2) ====== ====== ====== Earnings Per Share from Continuing Operations $ 0.41 $ 0.60 $(0.19) Fully-Diluted Shares Outstanding 5.2 5.5
Source: Company Press Release. 3Q03 VS. 3Q02 - Consolidated operating income for the nine-months ended September 28, 2003 decreased 29%, when compared to the corresponding 2002 period, reflecting a 14% decrease in operating income from the Spawn Products Segment, a 1% increase in operating income from the Fresh Mushrooms Segment and a 23% increase in unallocated corporate expenses. - The increase in corporate expenses during the 2003 nine-month period was related to the recording of a net periodic pension expense of $502,000. - Net sales of spawn and spawn-related products increased 4% due to a weaker U.S. dollar on overseas sales that was partially offset by a 6% decrease in spawn product sales volume. - Net sales of fresh mushrooms increased during the first nine months of 2003 to $21.9 million, as compared with $18.8 million for the corresponding period of 2002, reflecting a 7% increase in the number of pounds sold and a 1% increase in the average selling price per pound. - Operating income of the fresh mushrooms segment for the first nine-months of 2003 was $2.0 million, which is 1% higher than the amount reported for the first nine months of 2002. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 20 Overview of the Company Summary Income Statement
FISCAL YEAR ENDED DECEMBER, (1), (2) PROJECTED FISCAL YEAR ENDING DECEMBER, (1),(2), (3) ----------------------- --------------------------------------------------- LTM ENDED 2003E 9/28/2003 2001 2002 (2) (2) 2004 2005 2006 2007 2008 ---- ---- --- --- ---- ---- ---- ---- ---- Net sales $85,911 $88,192 $95,857 $93,401 $96,852 $97,670 $100,600 $103,618 $106,727 Operating costs and expenses Cost of sales 49,818 52,109 61,344 57,835 61,461 61,795 61,869 62,171 64,036 Selling and administration 17,806 19,216 20,472 20,115 20,388 20,495 21,020 21,624 22,245 Research and development 1,721 1,965 1,244 1,965 1,250 1,250 1,308 1,347 1,387 Depreciation and amortization 5,575 5,842 6,268 6,234 6,323 5,996 5,726 5,510 5,340 ------- ------- ------- ------- ------- ------- -------- -------- -------- 74,920 79,132 89,328 86,149 89,422 89,536 89,923 90,652 93,008 ------- ------- ------- ------- ------- ------- -------- -------- -------- Operating income 10,991 9,060 6,529 7,252 7,430 8,134 10,677 12,966 13,719 Interest expense, net 2,532 1,865 1,524 1,723 1,385 1,015 620 170 (335) Other income (expense) (19) (3) -- 57 -- -- -- -- -- ------- ------- ------- ------- ------- ------- -------- -------- -------- Income before income taxes 8,440 7,192 5,005 5,586 6,045 7,119 10,057 12,796 14,054 Income taxes 2,490 2,406 1,656 1,884 2,116 2,492 3,520 4,479 4,919 ------- ------- ------- ------- ------- ------- -------- -------- -------- Income before minority interest 5,950 4,786 3,349 3,703 3,929 4,627 6,537 8,317 9,135 Minority interest 121 117 184 203 117 117 117 117 117 ------- ------- ------- ------- ------- ------- -------- -------- -------- Net income $ 5,829 $ 4,669 $ 3,165 $ 3,500 $ 3,812 $ 4,510 $ 6,420 $ 8,200 $ 9,018 ======= ======= ======= ======= ======= ======= ======== ======== ======== Earnings per share $ 1.05 $ 0.86 $ 0.59 $ 0.65 $ 0.71 $ 0.84 $ 1.20 $ 1.53 $ 1.68 Diluted WASO 5,552 5,455 5,370 5,370 5,370 5,370 5,370 5,370 5,370 EBITDA (4) $17,200 $14,876 $13,080 $13,486 $13,953 $14,130 $ 16,603 $ 18,676 $ 19,259 Maintenance Cap Ex $ 4,100 $ 3,400 $ 3,850 $ 3,100 $ 3,850 $ 3,850 $ 3,850 $ 3,850 $ 3,850 Expansionary Cap Ex 4,644 2,744 -- 2,876 -- -- -- -- -- ------- ------- ------- ------- ------- ------- -------- -------- -------- Total Cap Ex $ 8,744 $ 6,144 $ 3,850 $ 5,976 $ 3,850 $ 3,850 $ 3,850 $ 3,850 $ 3,850 Revenue growth 0.0% 2.7% 8.7% n/a 1.0% 0.8% 3.0% 3.0% 3.0% EBITDA margin 20.0% 16.9% 13.6% 14.4% 14.4% 14.5% 16.5% 18.0% 18.0% Operating income margin 12.8% 10.3% 6.8% 7.8% 7.7% 8.3% 10.6% 12.5% 12.9% Income before income taxes margin 9.8% 8.2% 5.2% 6.0% 6.2% 7.3% 10.0% 12.3% 13.2% Net income margin 6.8% 5.3% 3.3% 3.7% 3.9% 4.6% 6.4% 7.9% 8.4% Effective tax rate 29.5% 33.5% 33.1% 33.7% 35.0% 35.0% 35.0% 35.0% 35.0%
(1) The Company maintains its accounting records on a 52-53 week fiscal year ending the Sunday nearest December 31. All of the above fiscal years are 52 weeks. (2) Excludes non-recurring expenses. (3) Based upon management estimates dated September 23, 2003. Includes public company expenses. Assumes an Euro to U.S. Dollar exchange rate of 1.09 and a normalized tax rate of 35%. (4) EBITDA = operating income plus depreciation and amortization. 2001-2002 EBITDA includes amortization embedded in other line items. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/22 Overview of the Company Balance Sheet
DEC. 31, 2000 DEC. 30, 2001 DEC. 29, 2002 JUN. 29, 2003 SEPT. 28, 2003 ------------- ------------- ------------- ------------- -------------- ASSETS: Current assets: Cash and cash equivalents $ 5,371 $ 5,072 $ 5,624 $ 4,504 $ 6,118 Trade accounts receivable 12,740 13,133 14,399 14,709 15,095 Inventories 10,398 10,119 11,425 12,831 12,010 Prepaid income taxes and other expenses 1,420 1,437 1,495 2,066 2,181 Other current assets 1,634 4,206 1,494 1,472 1,731 --------- --------- --------- --------- --------- Total current assets 31,563 33,967 34,437 35,582 37,135 Property, plant and equipment: Land and improvements 3,693 3,711 3,987 n/a n/a Buildings 35,540 38,021 43,699 n/a n/a Equipment 48,072 51,014 56,895 n/a n/a --------- --------- --------- --------- --------- Total property, plant and equipment 87,305 92,746 104,581 n/a n/a Less: accumulated depreciation (34,769) (38,470) (45,794) n/a n/a --------- --------- --------- --------- --------- Total property, plant and equipment, net 52,536 54,276 58,787 60,132 59,640 Intangible assets 11,899 11,036 12,321 13,104 13,197 Other assets 9,776 7,811 1,261 1,066 1,187 --------- --------- --------- --------- --------- TOTAL ASSETS $ 105,774 $ 107,090 $ 106,806 $ 109,884 $ 111,159 ========= ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Current portion of long-term debt $ 192 $ 2,430 $ 223 $ 163 $ 122 Accounts payable - trade 4,108 3,833 3,895 4,138 3,835 Accrued salaries, wages and employee 2,580 2,956 benefits 2,653 2,635 2,771 Other accrued liabilities 896 905 1,413 1,794 2,099 Income taxes payable 690 942 1,545 1,202 1,344 --------- --------- --------- --------- --------- Total current liabilities 8,539 10,745 9,847 9,877 10,356 Long-term and revolving-term debt 39,871 37,255 38,162 36,140 35,260 Other long-term liabilities: Other employee benefits 1,056 1,362 9,538 9,770 9,811 Other 5,215 5,162 256 289 324 --------- --------- --------- --------- --------- Total other long-term liabilities 6,271 6,524 9,794 10,059 10,135 Minority interest 1,559 1,680 1,741 2,122 2,176 Total shareholders' equity 49,534 50,886 47,262 51,686 53,232 --------- --------- --------- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 105,774 $ 107,090 $ 106,806 $ 109,884 $ 111,159 ========= ========= ========= ========= =========
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/22 5 OVERVIEW OF THE ACQUIROR [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/23 Overview of the Acquiror - - The Acquiror has been actively acquiring companies in a variety of industries since 1941 and currently maintains eleven separate operating segments that employ more than 450 people. - - The Acquiror was formally founded in 1975 in Kittening, Pennsylvania to provide management services for all Snyder subsidiaries. - - The Acquirer's subsidiaries operate in a broad range of businesses, including construction, mining, industrial equipment, energy, and agriculture. - - The Acquiror is partnered with Creekside Mushrooms, Ltd., which is the world's largest underground mushroom farm and owner of Moonlight(R) Brand mushrooms. - - Founders include: - Charles H. Snyder Sr. - Chairman of Snyder Associated Companies, Inc. - 1941 - PRESENT C.H. Snyder Co. Inc. - 1974 - PRESENT Bauer Company Inc. - Elmer A. Snyder [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/24 6/ANALYSIS OF PROPOSED TRANSACTION [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/25 Analysis of Proposed Transaction Summary Transaction Multiples CALCULATION OF TRANSACTION VALUE Offer Price $ 12.25 Sylvan Diluted Shares Outstanding (1) 5.2 Equity Value $ 64.2 Net Debt (2) 31.4 ------- Enterprise Value $ 95.6 =======

(1) Fully diluted shares outstanding based on the treasury stock method. (2) Includes minority interest of $2.2 million. IMPLIED TRANSACTION MULTIPLES
SYLVAN EV ESTIMATES MULTIPLE --------- -------- LTM 9/28/03 Revenue $ 93.4 1.0x EBITDA 13.5 7.1x FY 2003 ESTIMATE Revenue $ 95.9 1.0x EBITDA 13.1 7.3x FY 2004 ESTIMATE Revenue $ 96.9 1.0x EBITDA 14.0 6.9x
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/26 Analysis of Proposed Transaction Historical Stock Trading Analysis OFFER PRICE PREMIUM ANALYSIS RELATIVE TO HISTORY AS OF NOVEMBER 6, 2003 Offer Price: $12.25 125% April 15, 2003 (1) $ 9.82 107% of May 13, 2002 (2) 11.44 142% of 52 Week Low Trading - March 19, 2003 8.60 103% of 52 Week High Trading - September 24, 2002 11.95 106% of Twelve-Month Average Closing Price 11.52 111% of Six-Month Average Closing Price 11.02 123% of One-Month Average Closing Price 9.99 65% of All Time Trading High - June 17, 1998 18.75 75% of Five-Year High - December 28, 1998 16.37

(1) Day prior to announcement of Sylvan management group buyout proposal. (2) Day prior to press release indicating Sylvan's exploration of strategic alternatives. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/27 Analysis of Proposed Transaction Valuation Summary
($ IN MILLIONS) IMPLIED ENTERPRISE VALUE --------------------------------------------------- 25TH 75TH VALUATION METHODOLOGY LOW PERCENTILE MEDIAN PERCENTILE HIGH - --------------------- --- ---------- ------ ---------- ---- COMPARABLE COMPANIES $64.1 $ 69.9 $75.8 $ 89.4 $ 103.0 COMPARABLE TRANSACTIONS 84.9 85.2 85.6 95.7 105.9 DISCOUNTED CASH FLOW 79.0 84.4 89.8 95.7 101.6 LEVERAGED BUY-OUT 76.2 n/m n/m n/m 88.6 PROPOSED TRANSACTION $95.6

IMPLIED EQUITY VALUE PER SHARE ------------------------------------------------- 25TH 75TH VALUATION METHODOLOGY LOW PERCENTILE MEDIAN PERCENTILE HIGH - --------------------- --- ---------- ------ ---------- ---- COMPARABLE COMPANIES $ 6.33 $ 7.47 $ 8.60 $ 11.24 $ 13.88 COMPARABLE TRANSACTIONS 10.79 10.86 10.93 12.89 14.86 DISCOUNTED CASH FLOW 9.23 10.28 11.33 12.47 13.60 LEVERAGED BUY-OUT 8.69 n/m n/m n/m 11.03 PROPOSED TRANSACTION $12.25
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/28 Analysis of Proposed Transaction Valuation Summary - - The valuation ranges implied by the techniques employed are summarized below, based on the following: - LBO ANALYSIS - High and low values represent 20% and 30% IRRs - DCF ANALYSIS - Based on discount rates and EBITDA exit multiples of 12% - 14% and 5.0x - 6.5x - COMPARABLE TRANSACTION ANALYSIS (1) - Based on 2003E EBITDA and multiples of 6.5x - 8.1x - PUBLICLY-TRADED COMPARABLE COMPANY ANALYSIS (2) - Based on 2003E EBITDA and multiples of 4.9x - 7.9x ~~[BAR CHART DEPICTING IMPLIED ENTERPRISE VALUE] [BAR CHART DEPICTING IMPLIED EQUITY VALUE PER SHARE]~~

- - Based on best comparable transactions including: Savia acquiring Seminis, Inc., Investor Group acquiring Dole, Cal-Maine Foods acquiring Smith Farms, and Investor Group acquiring Maui Land & Pineapple. - - Based on best comparable companies including: BG, CQB, FDP and HORT. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/29 Analysis of Proposed Transaction Comparable Companies Analysis
RANGE OF VALUATION MULTIPLES IMPLIED BY COMPARABLE PUBLIC COMPANIES ANALYSIS -------------------------------------------- 2003E OPERATING 25TH 75TH DATA LOW PRTL MEDIAN PRTL HIGH ---- --- ---- ------ ---- ---- ENTERPRISE VALUE TO LTM: ALL COMPARABLES: EBITDA 4.0 x 5.1 x 6.2 x 9.1 x 12.0 x BEST COMPARABLES: EBITDA 4.9 x 5.3 x 5.8 x 6.8 x 7.9 x ($ IN MILLIONS) -------------------------------------------- IMPLIED ENTERPRISE VALUE BASED ON BEST COMPARABLES: EBITDA $ 13.1 $ 64.1 $ 69.9 $ 75.8 $ 89.4 $ 103.0 PROPOSED TRANSACTION ENTERPRISE VALUE $ 95.6 -------- IMPLIED EQUITY VALUE BASED ON BEST COMPARABLES: EBITDA $ 13.1 $ 6.33 $ 7.47 $ 8.60 $11.24 $ 13.88 PROPOSED TRANSACTION EQUITY VALUE/SHARE $ 12.25 --------
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/30 Analysis of Proposed Transaction Comparable Companies Analysis CAPITALIZATION & OPERATING DATA: (1)
($ millions, except per share data) MARKET CAPITALIZATION (2) ------------------- LTM OPERATING RESULTS % OF EQUITY ----------------------------------- TICKER PRICE 52-WK MKT ENTERPRISE EBITDA COMPANY SYMBOL 11/6/03 HIGH CAP VALUE SALES (3) EBIT NET INC - ------- ------ ------- ---- --- ----- ----- --- ---- ------- SYLVAN INC. (5) SYLN $10.07 84.3% $ 51.9 $ 83.4 $ 93.4 $ 13.5 $ 7.3 $ 3.5 GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. ADM 14.35 99.3% 9,288.2 13,161.3 30,708.0 1,423.1 779.4 460.0 Bunge Limited BG 26.53 85.2% 2,660.7 5,853.7 18,397.0 1,093.0 912.0 373.0 FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. CQB 20.01 100.9% 826.4 1,134.0 2,858.5 144.0 97.0 (63.4) Fresh Del Monte Produce Inc. FDP 26.00 87.5% 1,489.5 1,459.6 2,395.5 298.0 234.9 246.3 Northland Cranberries, Inc. NRCNA 0.50 46.7% 49.2 86.9 92.2 11.1 7.4 8.9 AG INPUTS Delta and Pine Land Co. DLP 24.03 94.3% 965.0 854.1 284.4 71.3 63.8 32.7 Hines Horticulture, Inc. HORT 4.10 91.7% 90.8 326.5 332.1 52.4 43.5 18.9 PROTEIN Cal-Maine Foods, Inc. CALM 11.00 100.0% 133.8 229.7 419.6 56.8 40.2 21.6 Sanderson Farms, Inc. SAFM 34.90 98.0% 467.6 486.7 818.6 87.2 62.6 33.0 High 100.9% 9,288.2 13,161.3 30,708.0 1,423.1 912.0 460.0 Median 94.3% 826.4 854.1 818.6 87.2 63.8 32.7 Mean 89.3% 1,774.6 2,621.4 6,256.2 359.6 249.0 125.7 Low 46.7% 49.2 86.9 92.2 11.1 7.4 (63.4)

($ millions, except per share data) LTM MARGINS 3 FISCAL YR. CAGR (4) ---------------------- ------------------------ NET COMPANY EBITDA EBIT INC SALES EBITDA NET INC - ------- ------ ---- --- ----- ------ ------- SYLVAN INC. (5) 14.4% 7.8% 3.7% 5.6% (13.1%) (30.8%) GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 4.6% 2.5% 1.5% 25.5% 5.7% 9.6% Bunge Limited 5.9% 5.0% 2.0% 20.7% 36.0% 128.3% FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 5.0% 3.4% N/M 2.5% (5.9%) N/A Fresh Del Monte Produce Inc. 12.4% 9.8% 10.3% 6.0% 45.2% 153.7% Northland Cranberries, Inc. 12.1% 8.0% 9.7% (30.0%) N/A N/A AG INPUTS Delta and Pine Land Co. 25.1% 22.4% 11.5% (7.5%) 0.9% (3.4%) Hines Horticulture, Inc. 15.8% 13.1% 5.7% 5.2% (4.7%) (17.5%) PROTEIN Cal-Maine Foods, Inc. 13.5% 9.6% 5.2% 4.0% 12.0% 43.5% Sanderson Farms, Inc. 10.6% 7.7% 4.0% 10.8% 60.5% N/A High 25.1% 22.4% 11.5% 25.5% 60.5% 153.7% Median 12.1% 8.0% 5.4% 5.2% 8.9% 26.5% Mean 11.7% 9.0% 6.2% 4.1% 18.7% 52.3% Low 4.6% 2.5% 1.5% (30.0%) (5.9%) (17.5%)
(1) Excludes non-recurring and extraordinary items. (2) Fully-diluted using the treasury-stock method. (3) EBITDA = income from operations plus the sum of depreciation, amortization and non-cash stock option compensation. (4) Historical results have not been adjusted to reflect the discontinuation of goodwill amortization. (5) Sylvan is shown for illustrative purposes only and is not included in high, median, mean and low calculations. (6) Earnings estimates are from First Call, where available, and calendarized, where appropriate. (7) Growth rates are from Bloomberg, where available. (8) ROIC = EBITDA divided by the sum of total equity and total debt. (9) Best comparables include BG, CQB, FDP and HORT. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/31 Analysis of Proposed Transaction Comparable Companies Analysis VALUATION & LEVERAGE STATISTICS:
($ millions, except per share data) 2004 ENTERPRISE EQUITY MKT CAP / EPS P/E / VALUE / LTM ---------------- ESTIMATES (6) PROJECTED P/E 5 YR. EPS ------------------------- NET BOOK ------------- --------------- GROWTH COMPANY SALES EBITDA EBIT INCOME VALUE 2003 2004 2003 2004 (7) ROIC (8) - ------- ----- ------ ---- ------ ----- ---- ---- ---- ---- --- -------- SYLVAN INC. (5) 0.9 X 6.2 X 11.5 X 14.8 X 1.0 X N/A N/A N/A N/A N/A 15.2% GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 0.4 x 9.2 x 16.9 x 20.2 x 1.3 x 0.77 0.96 18.7 x 14.9 x 177.6% 11.6% Bunge Limited 0.3 x 5.4 x 6.4 x 7.1 x 1.3 x 2.54 2.85 10.4 x 9.3 x 101.4% 21.0% FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 0.4 x 7.9 x 11.7 x N/M 1.1 x 1.91 2.68 10.5 x 7.5 x 62.2% 11.9% Fresh Del Monte Produce Inc. 0.6 x 4.9 x 6.2 x 6.0 x 1.6 x 3.78 3.86 6.9 x 6.7 x 89.8% 30.1% Northland Cranberries, Inc. 0.9 x 7.8 x 11.8 x 5.5 x 1.2 x N/A N/A N/A N/A N/A 12.8% AG INPUTS Delta and Pine Land Co. 3.0 x 12.0 x 13.4 x 29.5 x 4.2 x 1.05 1.29 23.0 x 18.6 x 195.6% 30.6% Hines Horticulture, Inc. 1.0 x 6.2 x 7.5 x 4.8 x 1.6 x N/A N/A N/A N/A N/A 17.9% PROTEIN Cal-Maine Foods, Inc. 0.5 x 4.0 x 5.7 x 6.2 x 1.8 x N/A N/A N/A N/A N/A 31.6% Sanderson Farms, Inc. 0.6 x 5.6 x 7.8 x 14.2 x 2.8 x N/A N/A N/A N/A N/A 41.5% ALL COMPARABLES High 3.0 x 12.0 x 16.9 x 29.5 x 4.2 x 3.78 3.86 23.0 x 18.6 x 195.6% 41.5% Median 0.6 x 6.2 x 7.8 x 6.7 x 1.6 x 1.91 2.68 10.5 x 9.3 x 101.4% 21.0% Mean 0.9 x 7.0 x 9.7 x 11.7 x 1.9 x 2.01 2.33 13.9 x 11.4 x 125.3% 23.2% Low 0.3 x 4.0 x 5.7 x 4.8 x 1.1 x 0.77 0.96 6.9 x 6.7 x 62.2% 11.6% BEST COMPARABLES (9) High 1.0 x 7.9 x 11.7 x 7.1 x 1.6 x 3.78 3.86 10.5 x 9.3 x 101.4% 30.1% Median 0.5 x 5.8 x 7.0 x 6.0 x 1.4 x 2.54 2.85 10.4 x 7.5 x 89.8% 19.5% Mean 0.6 x 6.1 x 8.0 x 6.0 x 1.4 x 2.74 3.13 9.3 x 7.8 x 84.5% 20.2% Low 0.3 x 4.9 x 6.2 x 4.8 x 1.1 x 1.91 2.68 6.9 x 6.7 x 62.2% 11.9%

($ millions, except per share data) LEVERAGE STATISTICS ------------------------------ DEBT / EQUITY EBITDA / DEBT / MKT COMPANY INTEREST EBITDA CAP - ------- -------- ------ --- SYLVAN INC. (5) 7.8 X 2.6 X 68.2% GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 6.0 x 3.6 x 55.8% Bunge Limited 42.0 x 2.8 x 116.3% FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 2.9 x 3.3 x 58.3% Fresh Del Monte Produce Inc. 32.4 x 0.2 x 3.2% Northland Cranberries, Inc. 5.7 x 4.0 x 91.5% AG INPUTS Delta and Pine Land Co. N/A 0.0 x 0.2% Hines Horticulture, Inc. 2.0 x 4.5 x 260.3% PROTEIN Cal-Maine Foods, Inc. 7.3 x 1.9 x 79.4% Sanderson Farms, Inc. 32.8 x 0.5 x 8.8% ALL COMPARABLES High 42.0 x 4.5 x 260.3% Median 6.6 x 2.8 x 58.3% Mean 16.4 x 2.3 x 74.9% Low 2.0 x 0.0 x 0.2% BEST COMPARABLES (9) High 42.0 x 4.5 x 260.3% Median 17.7 x 3.1 x 87.3% Mean 19.9 x 2.7 x 109.6% Low 2.0 x 0.2 x 3.2%
(1) Excludes non-recurring (2) Fully-diluted using the treasury-stock method. (3) EBITDA = income from operations plus the sum of depreciation, amortization and non-cash stock option compensation. (4) Historical results have not been adjusted to reflect the discontinuation of goodwill amortization. (5) Sylvan is shown for illustrative purposes only and is not included in high, median, mean and low calculations. (6) Earnings estimates are from First Call, where available, and calendarized, where appropriate. (7) Growth rates are from Bloomberg, where available. (8) ROIC = EBITDA divided by the sum of total equity and total debt. (9) Best comparables include BG, CQB, FDP and HORT. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/32 Analysis of Proposed Transaction Comparable Transactions Analysis
RANGE OF VALUATION MULTIPLES IMPLIED BY COMPARABLE TRANSACTIONS ANALYSIS 2003E ---------------------------------------------------- OPERATING 25TH 75TH DATA LOW PRTL MEDIAN PRTL HIGH ---- --- ---- ------ ---- ---- ENTERPRISE VALUE TO LTM: ENTIRE GROUP: EBITDA 5.9 x 7.0 x 8.1 x 15.6 x 23.1 x BEST COMPARABLES: EBITDA 6.5 x 6.5 x 6.5 x 7.3 x 8.1 x IMPLIED ENTERPRISE VALUE: ($ IN MILLIONS) ---------------------------------------------------------- EBITDA $ 13.1 $ 84.9 $ 85.2 $ 85.6 $ 95.7 $ 105.9 PROPOSED TRANSACTION ENTERPRISE VALUE $ 95.6 -------- IMPLIED EQUITY VALUE PER SHARE: EBITDA $ 13.1 $ 10.79 $ 10.86 $ 10.93 $ 12.89 $ 14.86 PROPOSED TRANSACTION EQUITY VALUE PER SHARE $ 12.25 --------
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003/33 Analysis of Proposed Transaction Comparable Transactions Analysis
($ in millions) ENTERPRISE VALUE MULTIPLES: ANNOUNCEMENT DATE ACQUIROR EQUITY -------------------------- CLOSING DATE TARGET EQUITY ENTERPRISE PREMIUM VALUE TO: LTM LTM LTM CONSIDERATION TARGET BUSINESS VALUE VALUE PAID LTM NI REVENUE EBITDA EBIT ------------- --------------- ----- ----- ---- ------ ------- ------ ---- 8/29/2003 Venture Group n/a n/a n/a n/a n/a n/a n/a 8/29/2003 Packers of Indian River Ltd. (Chiquita Brands International Inc.) Cash Producer and wholesaler of fresh and processed citrus products 8/18/2003 Tyson Foods Inc. 74.0 74.0 n/a 0.3 x n/a n/a n/a Pending Choctaw Maid Farms Inc. n/a Producer and manufacturer of wholesale poultry products 8/18/2003 BC Natural Foods LLC n/a n/a n/a n/a n/a n/a n/a 8/18/2003 Penn Valley Farms n/a Owner and operator of poultry farms 6/9/2003 Pilgrims Pride Corp 302.7 597.3 n/a n/a 0.3 x 23.1 x n/a Pending ConAgra Foods Inc-Chicken Business Cash/Stock/Sub. Notes Producer of meat, eggs, and cooking oil 2/4/2003 Riviana Foods Inc. 25.3 25.3 n/a n/a 0.7 x n/a n/a 2/10/2003 ACH Rice Specialties Business (Associated British Foods Plc) Cash Producer and marketer of rice products 12/13/2002 Savia, S.A. de C.V. 384.4 650.0 50.6% 126.0 x 1.4 x 8.1 x 13.3 x 9/30/2003 Seminis, Inc. Cash Producer and marketer of fruit and vegetable seeds 9/22/2002 Investor Group 2,017.8 2,500.0 36.8% 13.1 x 0.6 x 6.6 x 9.1 x 3/31/2003 Dole Food Co., Inc. Cash Producer and marketer of fresh fruit and vegetables 8/17/2001 Nippon Suisan 175.0 175.0 n/a n/a 0.7 x 8.8 x n/a 10/2/2001 Gorton's & Bluewater Seafoods Cash Producers of frozen seafood 1/23/2001 Hormel Foods Corp 334.4 334.4 n/a 16.0 x 1.0 x n/a 10.0 x 2/26/2001 The Turkey Store Co. (d/b/a Jerome Foods, Inc.) Cash Producer of poultry, food products 9/27/2000 Pilgrim's Pride Corp. 234.5 280.0 105.4% 65.2 x 0.3 x 10.2 x 31.2 x 1/28/2001 WLR Foods, Inc. Cash Producer of poultry products
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 34 Analysis of Proposed Transaction Comparable Transactions Analysis
ENTERPRISE VALUE MULTIPLES: ANNOUNCEMENT DATE ACQUIROR EQUITY ----------------------- CLOSING DATE TARGET EQUITY ENTERPRISE PREMIUM VALUE TO: LTM LTM LTM CONSIDERATION TARGET BUSINESS VALUE VALUE PAID LTM NI REVENUE EBITDA EBIT ------------- --------------- ----- ----- ---- ------ ------- ------ ---- 8/9/2000 Lesaffre et Compagnie $ 113.0 $ 113.0 n/a n/a 0.9 x n/a n/a 2/26/2001 Red Star Yeast and Products (Sensient Technologies Corp.) Cash Supplier of yeast to commercial bakery 12/20/1999 Money's Mushrooms Ltd. 50.0 50.0 n/a n/a 0.4 x n/a n/a 2/1/2000 Fresh Mushrooms Business (Vlasic Foods Int'l Inc.) Cash Producer of fresh mushrooms 12/6/1999 ConAgra, Inc. 360.0 376.0 n/a n/a 0.8 x n/a 11.1 x 1/3/2000 Seaboard Farms (Seaboard Corp.) Cash Producer of poultry products 9/15/1999 Cal-Maine Foods, Inc. 36.2 36.2 n/a 13.4 x 0.7 x 6.5 x 9.1 x 9/30/1999 Smith Farms, Inc. Cash Owns and operates egg farms 7/15/1999 Reservoir Capital Group LLC 72.2 153.8 8.7% 36.8 x 1.2 x 10.0 x 21.7 x 11/2/1999 Orange-co., Inc. Cash Producer of citrus fruit, juices 7/2/1999 Investor Group 95.2 119.6 (12.8%) 18.0 x 0.8 x 6.5 x 11.7 x 9/7/1999 Maui Land & Pineapple Co., Inc. n/a Producer of pineapples 5/14/1999 Pictsweet LLC 23.8 72.6 36.6% 39.3 x 0.4 x 5.9 x 13.9 x 9/23/1999 United Foods, Inc. Cash Producer and marketer of frozen fruits, vegetables Summary Multiples: Median 36.7% 18.0 x 0.7 x 8.1 x 11.7 x Mean 37.6% 36.4 x 0.7 x 9.5 x 14.6 x Low (12.8%) 0.3 x 0.3 x 5.9 x 9.1 x High 105.4% 126.0 x 1.4 x 23.1 x 31.2 x Summary Best Comparable Multiples (1): Median 36.8% 15.7 x 0.7 x 6.5 x 10.4 x Mean 24.9% 42.6 x 0.9 x 6.9 x 10.8 x Low -12.8% 13.1 x 0.6 x 6.5 x 9.1 x High 50.6% 126.0 x 1.4 x 8.1 x 13.3 x
Source: Thomson Financial, SEC filings and company press releases. Data includes transactions announced between January 1, 1999 and November 6, 2003. (1) Best transactions include Savia acquiring Seminis, Inc, Investor Group acquiring Dole, Cal-Maine Foods acquiring Smith Farms, and Investor Group acquiring Maui Land & Pineapple. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 35 Analysis of Proposed Transaction Discounted Cash Flow Analysis
PRESENT VALUE PRESENT VALUE OF TERMINAL OF FREE + VALUE = PRESENT VALUE OF ENTERPRISE CASH FLOWS MULTIPLE OF 2008 EBITDA VALUE DISCOUNT ----------- ---------------------------------- ------------------------------- RATE 2004 - 2008 5.00X 5.75X 6.50X 5.00X 5.75X 6.50X ---- ----------- ----- ----- ----- ----- ----- ----- 12.0% $30.5 $54.6 $62.8 $71.0 $85.2 $93.4 $101.6 13.0% 29.7 52.3 60.1 67.9 82.0 89.8 97.7 14.0% 29.0 50.0 57.5 65.0 79.0 86.5 94.0 TOTAL RANGE $79.0 -- $101.6 ASSUMED OFFER PRICE $95.6

IMPLIED EQUITY VALUE IMPLIED EQUITY VALUE PER SHARE DISCOUNT NET DEBT --------------------------- ------------------------------ RATE - SEPT. 28, 2003 = 5.00X 5.75X 6.50X 5.00X 5.75X 6.50X ------ -------------- ----- ----- ----- ----- ----- ----- 12.0% $31.4 $53.7 $61.9 $70.1 $10.42 $12.01 $13.60 13.0% 31.4 50.6 58.4 66.2 9.81 11.33 12.85 14.0% 31.4 47.6 55.1 62.6 9.23 10.68 12.14 TOTAL RANGE $47.6 -- $70.1 $9.23 -- $13.60 ASSUMED OFFER PRICE $64.2 $12.25
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 36 Analysis of Proposed Transaction Discounted Cash Flow Analysis HISTORICAL AND PROJECTED CASH FLOWS ($ in millions except per share data)
Fiscal Year End December, HISTORICAL CAGR PROJECTED (A) CAGR --------------------- ----- ------------------------------------------- ----- 2001 2002 2003 01-03 2004 2005 2006 2007 2008 04-08 ---- ---- ---- ----- ---- ---- ---- ---- ---- ----- Net Sales $85.9 $88.2 $95.9 5.6% $96.9 $97.7 $100.6 $103.6 $106.7 2.5% % Growth -- 2.7% 8.7% 1.0% 0.8% 3.0% 3.0% 3.0% EBITDA 17.2 14.9 13.1 -12.8% 14.0 14.1 16.6 18.7 19.3 8.4% % of Sales 20.0% 16.9% 13.6% 14.4% 14.5% 16.5% 18.0% 18.0% EBIT 11.6 9.0 6.8 -23.5% 7.6 8.1 10.9 13.2 13.9 16.2% % of Sales 13.5% 10.2% 7.1% 7.9% 8.3% 10.8% 12.7% 13.0% Less: Taxes @ 35% (4.1) (3.2) (2.4) (2.7) (2.8) (3.8) (4.6) (4.9) ----- ----- ----- ----- ----- ------ ------ ------ UNLEVERED NET INCOME 7.6 5.9 4.4 -23.5% 5.0 5.3 7.1 8.6 9.0 16.2% Plus: Depreciation and Amortization 5.6 5.8 6.3 6.3 6.0 5.7 5.5 5.3 Less: Capital Expenditures (4.1) (3.4) (3.9) (3.9) (3.9) (3.9) (3.9) (3.9) Less: Increase in Working Capital (2.9) (1.6) 3.0 0.5 (0.2) (0.6) (0.6) (0.7) ----- ----- ----- ----- ----- ------ ------ ------ UNLEVERED FREE CASH FLOW $ 6.2 $ 6.7 $9.9 26.3% $8.0 $7.3 $8.3 $9.6 $9.8 5.5% ===== ===== ==== ==== ==== ==== ==== ====
DISCOUNTED CASH FLOW VALUATION ANALYSIS
Discount Rate 12.0% 13.0% 14.0% ------------------------- ------------------------ -------------------------- Terminal EBITDA Multiple 5.00x 5.75x 6.50x 5.00x 5.75x 6.50x 5.00x 5.75x 6.50x EBITDA $19.3 $19.3 $19.3 $19.3 $19.3 $19.3 $19.3 $19.3 $19.3 Terminal Value 96.3 110.7 125.2 96.3 110.7 125.2 96.3 110.7 125.2 PV Terminal Value 54.6 62.8 71.0 52.3 60.1 67.9 50.0 57.5 65.0 PV Free Cash Flows 30.5 30.5 30.5 29.7 29.7 29.7 29.0 29.0 29.0 ----- ----- ------ ----- ----- ----- ----- ----- ----- IMPLIED ENTERPRISE VALUE $85.2 $93.4 $101.6 $82.0 $89.8 $97.7 $79.0 $86.5 $94.0 ===== ===== ====== ===== ===== ===== ===== ===== ===== Less: Net Debt (b) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) Less: Minority Interest (b) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) ----- ----- ------ ----- ----- ----- ----- ----- ----- EQUITY VALUE $53.7 $61.9 $70.1 $50.6 $58.4 $66.2 $47.6 $55.1 $62.6 Shares Outstanding (mm) 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 ----- ----- ------ ----- ----- ----- ----- ----- ----- EQUITY VALUE PER SHARE $10.42 $12.01 $13.60 $9.81 $11.33 $12.85 $9.23 $10.68 $12.14 ===== ===== ====== ===== ===== ===== ===== ===== ===== ENTERPRISE VALUE AS A MULTIPLE OF 2003E: Net Sales 0.89x 0.97x 1.06x 0.86x 0.94x 1.02x 0.82x 0.90x 0.98x EBITDA 6.51x 7.14x 7.76x 6.27x 6.87x 7.47x 6.04x 6.61x 7.19x EBIT 12.50x 13.70x 14.91x 12.04x 13.19x 14.34x 11.60x 12.70x 13.80x
(a) Based upon Management estimates dated September 23, 2003. Includes $1.1 million of public company expenses. Assumes an Euro to U.S. dollar exchange rate of 1.09. (b) Based on August 2003 Balance Sheet. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 37 Analysis of Proposed Transaction Leveraged Buy-Out Analysis - - The leveraged buy-out analysis is summarized on the following page and is based on the following assumptions: - Senior debt of approximately 3.0x at LIBOR +375 basis points 5 year amortization - Subordinated debt of approximately 1.25x - Coupon of 12% - Required return of 17-20% - Sponsor equity returns of 20-30% - Management incentive options of 10% - Enter and exit at the same multiple - Based on management projections as of September 26, 2003 and September 28, 2003 balance sheet [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 38 Analysis of Proposed Transaction Leveraged Buy-Out Analysis LBO TRANSACTION SUMMARY IMPLIED IRR = 20.0% PURCHASE PRICE: Equity value $57.2 Plus: debt (1) 37.6 Less: cash (6.1) ----- Net debt 31.4 Enterprise value $88.6 ===== PURCHASE MULTIPLES: Enterprise value / 2003 revenue 0.9 x Enterprise value / 2003 EBITDA 6.4 x IMPLIED PRICE PER SHARE: $11.03

USES: Equity purchase price $57.2 Refinance existing debt 35.4 Transaction expenses 3.2 ----- $95.8 ===== OWNERSHIP: Financial sponsor 82.0% Management 10.0% Sub-debt 8.0%

SOURCES: Excess cash $4.1 Bank debt 42.3 Sub-debt 18.2 Financial sponsor equity 31.2 ----- $95.8 ===== LEVERAGE STATISTICS: Bank debt / 2003 EBITDA 2.9 x Total debt / 2003 EBITDA 4.1 x 2003 EBITDA / Interest 3.3 x (2003 EBITDA - CapEx) / Interest 2.0 x 2004 EBITDA / Interest 1.9 x (2004 EBITDA - CapEx) / Interest 2.6 x

LBO TRANSACTION SUMMARY IMPLIED IRR = 30.0% PURCHASE PRICE: Equity value $44.8 Plus: debt (1) 37.6 Less: cash (6.1) ----- Net debt 31.4 Enterprise value $76.2 ===== PURCHASE MULTIPLES: Enterprise value / 2003 revenue 0.8 x Enterprise value / 2003 EBITDA 5.5 x IMPLIED PRICE PER SHARE: $ 8.69

USES: Equity purchase price $44.8 Refinance existing debt 35.4 Transaction expenses 3.2 ----- $83.4 ===== OWNERSHIP: Financial sponsor 82.5% Management 10.0% Sub-debt 7.5%

SOURCES: Excess cash $4.1 Sub-debt 42.3 Assumed debt 18.2 Financial sponsor equity 18.8 ----- $83.4 ===== LEVERAGE STATISTICS: Bank debt / 2003 EBITDA 2.9 x Total debt / 2003 EBITDA 4.1 x 2003 EBITDA / Interest 3.3 x (2003 EBITDA - CapEx) / Interest 2.0 x 2004 EBITDA / Interest 1.9 x (2004 EBITDA - CapEx) / Interest 2.6 x

NOTE: Analysis based on management estimates, anticipated financing parameters and required returns. (1) Debt includes minority interest of $2.2 million. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 39 Analysis of Proposed Transaction Premiums Paid Analysis - - The outside offer price of $12.25 represents a premium of 25% to the Company's closing price of $9.82 one day prior to the announcement of the management-led proposal. - A meaningful comparison of the premium implied by the Proposed Transaction to the average and median premiums analyzed is difficult due to the lengthy and public background of the Proposed Transaction. ANNOUNCED TRANSACTIONS $50MM - $150MM (APRIL 1, 2003 - NOVEMBER 3, 2003)
PREMIUM PAID RELATIVE TO: ----------------------------- VALUE OF PRICE DATE TRANSACTION PER 1 DAY 1 WEEK 4 WEEKS ANNOUNCED TARGET NAME ACQUIROR NAME ($MIL) SHARE PRIOR PRIOR PRIOR - --------- ----------- ------------- ------ ----- ----- ----- ----- 04/01/03 National Service Industries California Investment Fund LLC 111.9 10.00 93.8% 90.8% 67.5% 04/03/03 Elite Information Group Inc Thomson Corp 121.5 14.00 40.4% 44.3% 40.7% 04/04/03 Sports Club Co Investor Group 70.2 3.00 25.0% 24.5% 31.6% 04/07/03 Bruker AXS Inc Bruker Daltonics Inc 104.6 1.86 44.2% 38.8% 28.3% 04/09/03 Ramsay Youth Services Inc Psychiatric Solutions Inc 77.9 5.00 42.9% 31.6% 24.7% 04/16/03 Lillian Vernon Corp Investor Group 60.7 7.25 72.6% 74.7% 72.2% 04/16/03 Signal Technology Corp Crane Co 142.5 13.25 17.6% 15.6% 21.6% 04/22/03 Varsity Brands Inc Investor Group 136.8 6.57 39.8% 39.5% 42.2% 04/29/03 Thousand Trails Inc Kohlberg & Co LP 114.6 14.50 55.1% 55.9% 49.8% 05/14/03 MountainBank Financial Corp South Financial Corp. 123.1 32.75 11.0% 25.9% 28.9% 05/16/03 National Energy Group Inc American Re Partners LP 148.1 0.80 150.0% 14.3% 29.0% 05/27/03 TMBR/Sharp Drilling Inc Patterson-UTI Energy Inc 92.1 20.19 4.1% 5.3% 9.1% 05/28/03 CommerceSouth Inc,Eufaula,AL BancTrust Financial Group Inc 73.1 25.50 64.5% 59.2% 66.4% 05/30/03 Cysive Inc Snowbird Holdings Inc 74.5 3.23 0.9% 0.9% 11.4% 06/09/03 Grange National Banc Corp,PA Community Bank Sys Inc,NY 82.2 45.85 19.9% 17.6% 24.6% 06/25/03 United Park City Mines Co Capital Growth Partners LLC 68.7 21.00 3.4% 4.7% 5.5% 06/26/03 Elder-Beerman Stores Corp Wright Holdings Inc 68.5 6.00 13.0% 9.9% 14.9% 06/27/03 Acres Gaming Inc International Game Technology 136.5 11.50 1.0% 13.9% 31.4%
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 40 Analysis of Proposed Transaction Premiums Paid Analysis
PREMIUM PAID RELATIVE TO: --------------------------- VALUE OF PRICE DATE TRANSACTION PER 1 DAY 1 WEEK 4 WEEKS ANNOUNCED TARGET NAME ACQUIROR NAME ($MIL) SHARE PRIOR PRIOR PRIOR - --------- ----------- ------------- ------ ----- ----- ----- ----- 06/29/03 Information Resources Inc Investor Group 99.4 3.30 10.7% -2.4% -2.7% 07/03/03 Methode Electronics Inc Dura Automotive Systems Inc 54.4 50.00 153.2% 156.4% 155.0% 07/15/03 Klamath First Bancorp,Oregon Sterling Financial Corp,WA 148.0 20.44 17.1% 17.8% 16.8% 07/16/03 Alliance Bancorp of NE Inc New Haven Savings Bank,CT 72.1 25.00 -5.3% 2.2% 7.3% 07/16/03 Timberline Software Corp Best Software Inc 103.5 8.25 36.4% 38.0% 38.0% 07/23/03 Brio Software Inc Hyperion Solutions Corp 141.9 3.44 27.4% 24.2% 50.2% 07/23/03 Pinnacor Inc MarketWatch.com Inc 104.8 2.42 9.0% 8.5% 24.1% 07/29/03 Elder-Beerman Stores Corp Bon-Ton Stores Inc 97.8 8.00 32.9% 33.3% 36.3% 07/30/03 Community Bk,Pilot Mtn,NC Southern Community Finan Corp 77.3 48.65 56.9% 56.9% 62.2% 08/04/03 Mercator Software Inc Ascential Software Corp 115.0 3.00 22.4% 34.5% 86.3% 08/05/03 ResortQuest International Gaylord Entertainment Co 107.6 5.53 8.4% 10.8% 13.8% 08/12/03 California Independent Bancorp Humboldt Bancorp,Eureka,CA 81.7 35.50 22.8% 22.4% 18.3% 08/12/03 Jacksonville Bancorp,TX Franklin Bank Corp,Houston,TX 73.4 37.50 25.0% 29.3% 27.1% 09/04/03 Ross Systems Inc Chinadotcom Corp 66.2 19.00 9.9% 22.7% 22.6% 09/09/03 Lightspan Inc Plato Learning Inc 103.5 10.89 36.1% 29.6% 67.5% 09/11/03 CoVest Bancshares Inc,IL First Midwest Bancorp,IL 129.4 27.45 2.7% 1.7% 5.8% 09/11/03 Skibo Financial Corp,PA Northwest Bancorp MHC,PA 55.2 17.00 26.3% 28.1% 29.5% 09/22/03 Thistle Group Holdings Co Citizens Bank of Pennsylvania 147.8 26.00 35.4% 39.0% 58.7% 09/22/03 United States Exploration Inc DGL Acquisition Corp 53.3 2.82 0.7% -1.1% -1.1% 09/25/03 Caledonia Finl Corp,MI Chemical Financial Corp,MI 55.3 39.00 N/A N/A N/A 09/26/03 Business Bancorp,California UnionBanCal Corp,CA 114.9 28.57 N/A N/A N/A 09/29/03 Good Guys Inc CompUSA Inc 55.4 2.05 36.7% 31.4% 45.4% 09/30/03 Garden Fresh Restaurant Corp Fairmont Capital Inc 103.0 16.35 48.9% 54.8% 64.3% 10/03/03 OneSource Information Services ValueAct Capital Partners LP 80.9 9.50 9.3% 21.6% 17.7% 10/08/03 Crown Resources Corp Kinross Gold Corp 78.4 78.42 46.7% 46.7% 41.9% 10/20/03 Docent Inc click2learn.com inc 61.9 4.14 1.0% 0.7% 6.2% 10/22/03 Brass Eagle Inc K2 Inc 82.5 10.51 26.6% 25.1% 27.7% 10/24/03 Information Resources Inc Open Ratings Inc 114.9 3.30 -29.2% -27.3% -28.6% 10/27/03 SCB Computer Technology Inc CIBER Inc 52.5 2.15 13.2% 7.5% 22.9% 10/27/03 On Technology Corp Symantec Corp 101.1 4.00 15.9% 16.3% 57.5% AVERAGE $ 94.6 $16.6 30.4% 28.2% 34.1% MEDIAN $ 95.0 $10.7 23.9% 24.3% 28.6%
[MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 41 A / DESCRIPTIONS OF COMPARABLE COMPANIES [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 42 Descriptions of Comparable Companies ARCHER-DANIELS-MIDLAND COMPANY (NYSE:ADM) Archer-Daniels-Midland Company is principally engaged in procuring, transporting, storing, processing and merchandising agricultural commodities and products. The Company's operations are classified into four business segments: Oilseeds Processing, which includes the processing of oilseeds; Corn Processing, which includes its dry milling and wet milling corn operations; Wheat Processing, which includes the milling of wheat, corn and milo into flour, and Agricultural Services, which buys, stores, cleans and transports agricultural commodities. Archer-Daniels-Midland's remaining operations are classified as the Other segment, which primarily includes the production of value-added soy protein products. BUNGE LIMITED (NYSE:BG) Bunge Limited is an integrated, global agribusiness and food company operating in the farm-to-consumer food chain, which ranges from raw materials, such as grains and fertilizers, to retail food products, such as flour and margarine. The Company has primary operations in North America, Brazil, Argentina and Europe and worldwide distribution capabilities. Bunge conducts its operations in three divisions: agribusiness, fertilizer and food products. The agribusiness division consists of three business lines: grain origination, oilseed processing and international marketing. The Company's fertilizer division is comprised of nutrients and retail operations. The food products division consists of four business lines: edible oil products, wheat milling and bakery products, soy ingredients and corn products. CHIQUITA BRANDS INTERNATIONAL, INC. (NYSE:CQB) Chiquita Brands International, Inc. and its subsidiaries operate in two business segments: Fresh Produce and Processed Foods. The Company Fresh Produce segment sources, distributes and markets a line of fresh fruits and vegetables sold under the Chiquita and other brand names. Chiquita's fresh fruits and vegetables include bananas, berries, citrus, grapes, melons, mushrooms, stone fruit, tomatoes and a variety of other fresh produce. In Europe, the Company's Processed Foods segment sells Chiquita branded fruit juices, beverages, snacks and desserts, which are manufactured by third parties to Chiquita's specifications. In the United States, several national fruit juice and beverage producers manufacture and sell shelf-stable, refrigerated and frozen juice and beverage products using the Chiquita brand name, for which they pay Chiquita a license fee. Chiquita's processed banana products include banana puree, frozen banana pieces, sliced bananas and other specialty products. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 43 Descriptions of Comparable Companies FRESH DEL MONTE PRODUCE INC. (NYSE:FDP) Fresh Del Monte Produce Inc. is primarily engaged in the worldwide sourcing, transportation and marketing of fresh and fresh-cut produce. The Company's products include bananas, pineapples, cantaloupe, honeydew, watermelons, grapes, non-tropical fruits (including citrus, apples, pears, peaches, plums, nectarines, apricots and kiwi), plantains, Vidalia sweet onions and various greens. In January 2003, the Company has added tomatoes, potatoes and onions to its product offering. The Company sources its products primarily from Central and South America and the Philippines. Fresh Del Monte also sources products from North America, Africa and Europe and distributes its products in Europe, the Asia-Pacific region and South America. The Company also has non-produce businesses. These include its third-party ocean freight container business, a third-party plastics and box manufacturing business, its Jordanian poultry business and its Argentine grain business. HINES HORTICULTURE, INC. (NASD:HORT) Hines Horticulture, Inc. produces and distributes horticultural products through its wholly owned subsidiaries, Hines Nurseries, Inc. (Hines Nurseries) and Enviro-Safe Laboratories Inc. The Company is a national supplier of ornamental shrubs, color plants and container-grown plants, with 14 commercial nursery facilities located in Arizona, California, Florida, Georgia, New York, Oregon, Pennsylvania, South Carolina and Texas. Hines markets its products to retail and commercial customers throughout the United States. It produces approximately 5,500 varieties of ornamental shrubs and color plants and sells to more than 2,200 retail and commercial customers, representing more than 8,400 outlets throughout the United States and Canada. NORTHLAND CRANBERRIES (OTC:NRCNA) Northland Cranberries, Inc. is a vertically integrated grower, handler, processor and marketer of cranberries, branded cranberry products and fruit beverages. The Company markets and sells its Northland, Seneca, TreeSweet and Awake brand cranberry and other fruit juice products, as well as fresh, frozen and dried cranberries and cranberry concentrate domestically through retail supermarkets and through other distribution channels, both domestically and internationally. In addition, the Company produces and packages juice beverages for other companies on a contract-manufacturing basis. As of November 26, 2002, Northland owned or operated 21 cranberry-producing marshes with 2,009 planted acres in Wisconsin. It also maintains multi-year crop purchase contracts with 44 independent cranberry growers to purchase all of the cranberries harvested from an aggregate of up to 1,743 contracted acres. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 44 Descriptions of Comparable Companies DELTA AND PINE LAND COMPANY (NYSE:DLP) Delta and Pine Land Company (D&PL) and its subsidiaries breed, produce, condition and market cotton and soybean planting seed. In connection with its seed operations, the Company farms approximately 2,000 acres largely for the production of cotton and soybean foundation seed. D&PL is in a single line of business and operates in two business segments, domestic and international. The Company's reportable segments offer similar products, however, the business units are managed separately due to the geographic dispersion of their operations. The Company develops its proprietary seed products through research and development efforts in the United States and certain foreign countries. CAL-MAINE FOODS, INC. (NASD:CALM) Cal-Maine Foods, Inc. is primarily engaged in the production, cleaning, grading and packaging of fresh shell eggs for sale to shell egg retailers. The Company had sales of approximately 571 million dozen shell eggs during the fiscal year ended May 31, 2003 (fiscal 2003). It primarily markets shell eggs in the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States. Shell eggs are sold directly by the Company primarily to national and regional supermarket chains. Cal-Maine also produces specialty eggs such as Eggo land's Best and Farmhouse eggs and operates a dairy facility. SANDERSON FARMS, INC. (NASD:SAFM) Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and the preparation, processing, marketing and distribution of processed and prepared food items. The Company sells chill pack, ice pack and frozen chicken, both whole and cut-up, primarily under the Sanderson Farms brand name, to retailers, distributors and fast-food operators principally in the southeastern, southwestern and western United States. During the fiscal year ended October 31, 2002, the Company processed approximately 264.7 million chickens, or approximately 1.3 billion dressed pounds. In addition, it purchased and further processed 14.5 million pounds of poultry products. It sells over 200 processed and prepared food items nationally and regionally, primarily to distributors, national foodservice accounts, retailers and club stores. [MORGAN JOSEPH LOGO] PROJECT SPAWN / PRESENTATION TO THE BOARD OF DIRECTORS November 11, 2003 / 45 EX-99.C.5 9 j0476003exv99wcw5.txt PROJECT SPAWN DISCUSSION MATERIALS 11/09/03 Exhibit (c)(5) Discussion Materials for the Board of Directors (MORGAN JOSEPH LOGO) November 9, 2003 PROJECT SPAWN Disclaimer - - The following materials (the "Presentation") were prepared for the Special Committee of the Board of Directors of Sylvan Inc. ("Sylvan" or the "Company") which has requested that Morgan Joseph & Co. Inc. ("Morgan Joseph") provide its opinion as to the fairness, from a financial point of view, to the shareholders of the Company excluding Dennis Zensen, Virgil Jurgensmeyer, Roger Claypoole, Synder Associated Companies, Inc., and SAC Holding Company, of the consideration to be paid by a group formed by Snyder Associated Companies, Inc. and selected others (the "Acquiror') in connection with the proposed acquisition of the Company (the "Proposed Transaction"). - - In arriving at our opinion, we have assumed and relied upon the accuracy and completeness of the financial and other information used by us and have not attempted independently to verify such information, nor do we assume any responsibility to do so. We have assumed that the Company's forecasts and projections provided to or reviewed by us have been reasonably prepared based on the best current estimates and judgment of the Company's management as to the future financial condition and results of operations of the Company. While we have visited certain of the Company's locations, we have not conducted a physical inspection of the properties and facilities of the Company, nor have we made or obtained any independent evaluation or appraisal of the assets or liabilities of the Company. We have also taken into account our assessment of general economic, market and financial conditions and our experience in similar transactions, as well as our experience in securities valuation in general. Our opinion necessarily is based upon economic, market, financial and other conditions as they exist and can be evaluated on the date hereof and we assume no responsibility to update or revise our opinion based upon events or circumstances occurring after the date hereof. We reserve, however, the right to withdraw, revise or modify our opinion based upon additional information which may be provided to or obtained by us, which suggests, in our judgment, a material change in the assumptions (or the bases therefor) upon which our opinion is based. - - These materials are not intended to represent an opinion, but rather to serve as discussion materials for the Board to review and as a basis upon which Morgan Joseph may render an opinion. These materials do not address the Company's underlying business decision to approve the Proposed Transaction or constitute a recommendation to the Company or its shareholders as to any action it should take regarding the Proposed Transaction. These materials may not be reproduced, summarized, excerpted from or otherwise publicly referred to or disclosed in any manner without our prior written consent. - - The following materials are based upon Morgan Joseph's analysis of the Proposed Transaction as of November 7, 2003. In the event of material changes to the terms and conditions of the Proposed Transaction upon which these materials are based, the enclosed analysis and our conclusions may be affected. - - Certain portions of the enclosed analysis are based upon projected financial results. Any projected financial results are based upon analyst forecasts, internal projections and discussions with management of the Company. A number of factors, including industry conditions, changes in costs, labor issues and other factors which are beyond the scope of these projections and out of the control of the Company, the Acquiror and Morgan Joseph may cause actual results to differ materially from these projections. Material changes in the projections may affect the conclusions derived from our analysis. (MORGAN JOSEPH LOGO) PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 2 Table of Contents 1. INTRODUCTION 2. SUMMARY OF PROPOSED TRANSACTION 3. SUMMARY BACKGROUND OF PROPOSED TRANSACTION 4. OVERVIEW OF THE COMPANY 5. OVERVIEW OF THE ACQUIROR 6. ANALYSIS OF PROPOSED TRANSACTION APPENDIX A. DESCRIPTIONS OF COMPARABLE COMPANIES (MORGAN JOSEPH LOGO) PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 3 1 / INTRODUCTION (MORGAN JOSEPH LOGO) PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 4 Introduction - - Morgan Joseph & Co. Inc. ("Morgan Joseph") has been retained by the Special Committee of the Board of Directors of Sylvan Inc. (the "Company") and requested to render its opinion to the Board of Directors of the Company as to the fairness, from a financial point of view, of the consideration to be received by the shareholders of the Company pursuant to the proposed sale to a group formed by Snyder Associated Companies, Inc. (the "Acquiror") of all of the Common Stock of the Company (the "Proposed Transaction"). - - In conducting our analysis and arriving at our opinion, we have reviewed and analyzed, among other things, the following: - The draft Agreement and Plan of Merger dated [November 7, 2003] (the "Agreement"); - The Company's Annual Reports on Form 10-K for each of the fiscal years in the three-year period ended December 31, 2002, and the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003, and September 28, 2003 (draft as of November 6, 2003); - The indications of interest received by the Company; - Certain other publicly available information concerning the Company and the trading markets for the Company's common stock; - Certain internal information and other data relating to the Company, its business and prospects, including forecasts and projections prepared and provided to us by management of the Company; - Certain publicly available information concerning certain other companies engaged in businesses which we believe to be generally comparable to the Company and the trading markets for certain of such other companies' securities; and - The financial terms of certain recent business combinations which we believe to be relevant to the Proposed Transaction. - - We have also interviewed certain senior officers of the Company concerning the business and operations, assets, present condition and prospects of the Company, visited certain of the Company's locations and undertook such other studies, analyses and investigations as we deemed appropriate. (MORGAN JOSEPH LOGO) PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 5 Introduction - - The Acquiror has proposed to purchase all the outstanding shares of Common Stock, par value $0.001 per share. After the proposed transaction, Sylvan will become a privately held company. - - All shareholders will receive $12.25 in cash for each share of Common Stock held, or $64.2 million in aggregate. Merger consideration of $12.25 per share, plus assumed net debt as of September 28, 2003 of $31.4 million (including minority interest of $2.2 million), implies an enterprise value for the Proposed Transaction of $95.6 million. - - Process: - Sign the definitive merger agreement by November 9, 2003; - File proxy statement with SEC by November 28, 2003; - Receive approval from the SEC and mail proxies to the stockholders by December 26, 2003; - Hold special meeting and stockholder vote by the middle of February; and - Proposed Transaction closes; a subsidiary to be created by the Acquiror merges with and into Sylvan pursuant to a reverse triangular merger by the end of February 2004. (MORGAN JOSEPH LOGO) PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 6 2 / SUMMARY OF PROPOSED TRANSACTION (MORGAN JOSEPH LOGO) PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 7 Summary of Proposed Transaction Summary of Key Terms of the Proposed Transaction CONSIDERATION: - $12.25 cash consideration for Sylvan's Common Stock TRANSACTION STRUCTURE: - Reverse triangular merger PRINCIPAL CONDITIONS TO CLOSING: - Approval by the Company's shareholders - Material adverse change out - Fiduciary out in the event of a Superior Proposal (as determined by the Special Committee or the Board) TERMINATION FEE: - $2.0 million plus expense reimbursement of up to $0.5 million NON-COMPETITION: - None ESTIMATED CLOSING: - End of February 2004 OTHER: - In connection with the execution of the definitive agreement, certain shareholders will also execute a voting agreement. The shareholders are Nelson Obus and Warren Lichtenstein. - [Dennis Zensen, CEO of the Company, may contribute all or a portion of his shares in connection with the Proposed Transaction.]

(MORGAN JOSEPH LOGO) PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 8 3 / SUMMARY BACKGROUND OF PROPOSED TRANSACTION [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/9 Summary Background of Proposed Transaction MAY 14, 2002: - Sylvan retains Lane Berry as advisor to the Company and announces plans to explore strategic alternatives MAY - SEPTEMBER 2002: - Lane Berry conducts first marketing process - 14 prospective strategic buyers: 0 bids - 21 prospective financial buyers: 2 bids - American Securities Capital Partners: $10.00 - $11.00/share - Cadigan Investment Partners(1): $12.50 - $13.50/share - Based on 2003E Revenue and EBITDA of $88.9 million and $16.5 million OCTOBER 15, 2002: - Company announces major share repurchase program up to 1.3 million shares and completion of its review of strategic alternatives - 333,321 shares repurchased in 2002 at an average price of $10.60 (310,000 purchased following announcement of program) - No shares purchased in 2003; program suspended APRIL 16, 2003: - Company announces it has received a non-binding proposal from a management-led buyer group at $11.00/share with equity financing provided by the Snyder Associated Companies, Inc. APRIL 23, 2003: - Company forms a Special Committee and retains Morgan Joseph as financial advisor to the Special Committee

- ---------- (1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/10 Summary Background of Proposed Transaction MAY - JUNE 2003: - Lane Berry and Morgan Joseph conduct second marketing process - 32 prospective strategic buyers: 0 bids - 41 prospective financial buyers: 4 bids - American Securities Capital Partners: $8.00/share - Key Kosmont: $7.00-$9.00/share - Lake Pacific Partners: $11.50/share - The Tokarz Group(1): $10.00/share JUNE 16, 2003: - Management-led group withdraws proposal JULY 21, 2003: - Company signs exclusivity agreement with Lake Pacific Partners AUGUST 28, 2003: - Lake Pacific Partners receives extension of "exclusivity" and revises bid with two-tier offer - $11.50/share for Insiders - $12.00/share for Outsiders OCTOBER 2, 2003: - Lake Pacific Partners notifies Special Committee and financial advisors that the source of $15.0 million of their financing has withdrawn their commitment. OCTOBER 7, 2003: - Lake Pacific Partners exclusivity expires

- ---------- (1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/11 Summary Background of Proposed Transaction OCTOBER 29, 2003: - The Snyder Associated Companies, Inc. expressed interested in submitting an offer to acquire the Company at a price "higher" than $12.00/share. NOVEMBER 5, 2003: - The Snyder Associated Companies, Inc. orally communicated an offer of $12.25/share to acquire the Company. NOVEMBER 6, 2003: - The counsel to the Special Committee, Davis Polk, submitted a definitive agreement to the Snyder buyout group for comments and to begin formal negotiations. - Lake Pacific Partners re-submits their prior acquisition proposal with evidence of equity and debt financing. Lake Pacific expresses a desire to proceed expeditiously to closing with deadline to consummate a transaction by November 7, 2003. NOVEMBER 9, 2003: - Expected signing of definitive agreement.

[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/12 4 / OVERVIEW OF THE COMPANY [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/13 Company Summary COMPANY DESCRIPTION The Company is a worldwide producer and distributor of products for the mushroom industry, specializing in spawn (the equivalent of seed for mushrooms) and spawn-related products and services. The Company, which operates through its subsidiaries, is also a grower of fresh mushrooms in the United States. The Company has two business segments: spawn products and fresh mushrooms. Spawn-related products include casing inoculum, nutritional supplements and disease-control agents. The fresh mushrooms segment is comprised of Quincy Farms, a large, regional producer of fresh mushrooms. GENERAL COMPANY INFORMATION MANAGEMENT Dennis Zensen - Chairman, President and CEO Donald Smith - CFO Monir Elzalaki - Director; President of Sylvan America Gregory Verhagen - President of Quincy Farms Gary Walker - President of Sylvan Bioproducts, Inc. BOARD OF DIRECTORS Dennis Zensen (Chairman) William L. Bennett (Monitor Company Group, L.P.) Monir Elzalaki (President of Sylvan America) Jeanine C. Heller (Independent Investor Relations Consultant) Virgil H. Jurgensmeyer (Mid-West Custom Mixing Co.) Nelson Obus (Wynnefield Capital, Inc.) HEADQUARTERS: SAXONBURG, PENNSYLVANIA
SUMMARY FINANCIAL INFORMATION (A) - ------------------------------------------------------------------------- MARKET DATA AS OF 11/06/03 - ------------------------------------------------------------------------- Stock Price $ 10.07 52-Week High $11.95 84.3% 52-Week Low $8.60 117.1% FD Shares Outstanding 5.2 Equity Value 51.9 Enterprise Value ("EV") 83.4 BALANCE SHEET DATA AS OF 9/28/03 (A) - ------------------------------------------------------------------------- Cash and Equivalents $ 6.1 Debt 35.4 Minority Interest 2.2

ESTIMATES (a), (b) - ------------------------------------------------------------------------- $ IN MILLIONS EV MULTIPLE ------------- ----------- FY 2003 Revenue $ 95.9 0.9x FY 2003 EBITDA 13.1 6.4x FY 2004 Revenue $ 96.9 0.9x FY 2004 EBITDA 14.0 6.0x
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/14 Overview of the Company Business Overview - - Successor to the business of a Pennsylvania corporation that was chartered in 1937 - - Worldwide producer and distributor of products for the mushroom industry, specializing in spawn and spawn-related products and services, and is a major grower of fresh mushrooms in the U.S. - - The Company has two reportable business segments: - Spawn Operations - Accounts for 71% of the Company's total sales in 2002 and 79% of its operating income. - Conducts operations through subsidiaries in North America, Europe, Australia and South Africa - Plant operations are conducted in: the United States, England, Ireland, the Netherlands, France, Hungary, Australia, South Africa and Canada - Fresh Mushrooms Operations - Accounts for 29% of the Company's total sales in 2002 and 21% of its operating income - Operates a farm located in Quincy, Florida, one of the most modern and efficient mushroom production operations in North America - Within Quincy operations are four satellite mushroom growing facilities; two commenced operations in mid-2001 and two commenced operations in early 2003 - January 2000, Sylvan began selling all of its mushrooms to a leading U.S. mushroom marketing organization that packages and distributes them throughout the eastern United States [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/15 Overview of the Company Business Outlook - - Global "fresh" mushroom market is a mature industry growing at GDP growth rates - - Fresh producers in U.S. continue to struggle with high potential for further consolidation - - Certain international markets unstable and in state of transition/consolidation - French growers benefiting from government subsidies - Growers in Poland taking some market share away from Sylvan - Overall European market mature - - Modest upside potential in bioproducts; however, no "break-out" products near-term - Agaricus Blazei sales up due to Japanese demand for tea product - Red Yeast Rice revenue well above forecast due to strong GNC demand in Q2 - Company pursuing new sales channels for bioproducts (Whole Foods, Wild Oats, Vitamin Shoppes, etc.) - - Company maintaining strong market position with strategic initiatives to increase volume: - JV operations in Mexico - "Satellite" growing opportunities for farmers - - Few catalysts likely to significantly increase overall demand for fresh mushrooms and therefore spawn - - Recent initiatives to lower prices in an effort to increase volume yielded limited success due to competitors following Sylvan - - Limited capital requirements going forward to maintain world-class infrastructure and support projected global demand [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/16 Overview of the Company Summary Ownership Profile
TOTAL PERCENTAGE DILUTED PERCENTAGE REPORT DATE HOLDER NAME SHARES HELD (1) OF TOTAL SHARES (6) OF TOTAL - ----------- --------------------------------- --------------- --------- ------------ -------- Insider Holdings 8/21/2003 Nelson Obus - Director 1,069,886 (2) 20.75% 1,080,886 18.18% 8/21/2003 Dennis C Zensen - Chairman, President and CEO 694,128 (3) 13.46% 724,128 12.18% 8/21/2003 Virgil H. Jurgensmeyer - Director 20,000 0.39% 55,000 0.92% 8/21/2003 Monir K. Elzalaki - Director & Pres. of Sylvan America 11,061 0.21% 56,061 0.94% 8/21/2003 William L. Bennett - Director 8,880 (4) 0.17% 24,880 0.42% 8/21/2003 Jeanie Heller - Director 1,000 0.02% 17,000 0.29% 8/21/2003 Donald A. Smith - CFO 0 0.00% 33,668 0.57% 8/21/2003 All Others 48,645 0.94% 241,440 4.06% --------- ------ --------- ------ 1,853,600 35.96% 2,233,063 37.55% 5% Owners 3/31/2003 Steel Partners 537,772 10.43% 537,772 9.04% 537,772 10.43% 537,772 9.04% --------- ------ --------- ------ Other Institutions 6/30/2003 Dimensional Fund Advisors 397,676 7.71% 397,676 6.69% 6/30/2003 Manning & Napier Advisors 199,925 3.88% 199,925 3.36% 6/30/2003 Paradigm Capital Mgmt (cl King & Associates) 170,100 3.30% 170,100 2.86% 6/30/2003 Gabelli Funds Llc 143,000 2.77% 143,000 2.40% 6/30/2003 Fidelity Mgmt & Research Co 142,100 2.76% 142,100 2.39% 6/30/2003 Loeb Arbitrage Management Inc. 115,110 2.23% 115,110 1.94% --------- ------ --------- ------ 1,167,911 22.66% 1,167,911 19.64% Total Holders Identified 3,559,283 69.04% 3,938,746 66.23% ========= ====== ========= ====== Retail Holdings & Other Institutions 1,595,848 30.96% 2,007,925 33.77% Total Shares Outstanding (5) 5,155,131 100.00% 5,946,671 100.00% ========= ====== ========= ======
- ---------- (1) Based on Computershare Analytics and Company filings. (2) Mr. Obus is President of Wynnefield Capital, Inc. and a member of Wynnefield Capital Management. (3) Owned by Mr. and Mrs. Zensen as joint tenants. (4) Includes 2,000 shares held in Mr. Bennett's 401(k) account and 880 shares held by trusts for the benefit of his children. (5) Share count from draft 10-Q for the quarter ended Sept. 28, 2003. (6) Includes 791,540 options from 12/31/02 10-K. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/17 [LINE GRAPH DEPICTING PRICE AND VOLUME] [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/18 Volume Traded SYLVAN INC. VOLUME WEIGHTED AVERAGE PRICE OF SHARES TRADED FROM 11/6/01 TO PRESENT
CUMULATIVE ------------------------------------------------- DAYS % OF TOTAL % OF TOTAL DAYS % OF TOTAL % OF TOTAL TRADING DAILY AVG. DAYS TRADING TRADING DAILY AVG. DAYS TRADING TRADING RANGE IN RANGE TRADED VOLUME VOLUME IN RANGE TRADED VOLUME VOLUME - ------------------------------------------------------------------------------------------------------------------------------- $9.00 - $9.25 7 1.3% 14,400 0.3% 7 1.3% 14,400 0.3% $9.25 - $9.50 1 0.2% 7,000 0.1% 8 1.5% 21,400 0.4% $9.50 - $9.75 10 1.9% 27,400 0.6% 18 3.4% 48,800 1.0% $9.75 - $10.00 32 6.1% 175,914 3.7% 50 9.6% 224,714 4.7% $10.00 - $10.25 61 11.7% 415,870 8.7% 111 21.2% 640,584 13.4% $10.25 - $10.50 65 12.4% 214,994 4.5% 176 33.7% 855,578 17.9% $10.50 - $10.75 32 6.1% 286,568 6.0% 208 39.8% 1,142,146 23.9% $10.75 - $11.00 29 5.5% 344,400 7.2% 237 45.3% 1,486,546 31.1% $11.00 - $11.25 59 11.3% 1,378,600 28.9% 296 56.6% 2,865,146 60.0% $11.25 - $11.50 67 12.8% 176,700 3.7% 363 69.4% 3,041,846 63.7% $11.50 - $11.75 40 7.6% 503,100 10.5% 403 77.1% 3,544,946 74.2% $11.75 - $12.00 30 5.7% 347,400 7.3% 433 82.8% 3,892,346 81.5% $12.00 - $12.25 7 1.3% 124,100 2.6% 440 84.1% 4,016,446 84.1% - ------------------------------------------------------------------------------------------------------------------------------- $12.25 - $12.50 13 2.5% 219,900 4.6% 453 86.6% 4,236,346 88.7% $12.50 - $12.75 49 9.4% 282,700 5.9% 502 96.0% 4,519,046 94.6% $12.75 - $13.00 14 2.7% 190,800 4.0% 516 98.7% 4,709,846 98.6% $13.00 - $13.25 6 1.1% 51,600 1.1% 522 99.8% 4,761,446 99.7% $13.25 - $13.50 1 0.2% 13,200 0.3% 523 100.0% 4,774,646 100.0% -------------------------------------------------------- TOTAL: 523 100% 4,774,646 100%
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/19 Recent Quarter Earnings Announcement
NINE MONTHS ENDED ($ IN MILLIONS) --------------------------------- 3Q03 3Q02 VARIANCE ----- ----- -------- Revenue $ 69.8 $ 64.6 $ 5.2 Cost of Sales 44.0 38.2 5.7 ------ ------ ------ Gross Profit 25.8 26.3 (0.5) SG&A 16.5 15.6 0.9 EBITDA 9.4 10.8 (1.4) Depreciation and Amortization 4.8 4.4 0.4 ------ ------ ------ EBIT 4.5 6.3 (1.8) Other Income 0.1 0.1 0.1 Interest Expense, Net 1.2 1.4 (0.1) ------ ------ ------ EBT 3.4 5.0 (1.7) Income Tax Expense 1.1 1.7 (0.5) Minority Interest 0.1 0.1 0.1 ------ ------ ------ Net Income from Continuing Operations $ 2.1 $ 3.3 $ (1.2) ====== ====== ====== Earnings Per Share from Continuing Operations $ 0.41 $ 0.60 $(0.19) Fully-Diluted Shares Outstanding 5.2 5.5
3Q03 VS. 3Q02 - - Consolidated operating income for the nine-months ended September 28, 2003 decreased 29%, when compared to the corresponding 2002 period, reflecting a 14% decrease in operating income from the Spawn Products Segment, a 1% increase in operating income from the Fresh Mushrooms Segment and a 23% increase in unallocated corporate expenses. - - The increase in corporate expenses during the 2003 nine-month period was related to the recording of a net periodic pension expense of $502,000. - - Net sales of spawn and spawn-related products increased 4% due to a weaker U.S. dollar on overseas sales that was partially offset by a 6% decrease in spawn product sales volume. - - Net sales of fresh mushrooms increased during the first nine months of 2003 to $21.9 million, as compared with $18.8 million for the corresponding period of 2002, reflecting a 7% increase in the number of pounds sold and a 1% increase in the average selling price per pound. - - Operating income of the fresh mushrooms segment for the first nine-months of 2003 was $2.0 million, which is 1% higher than the amount reported for the first nine months of 2002. Source: Company Press Release. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/20 Overview of the Company Summary Income Statement
FISCAL YEAR ENDED DECEMBER, (1), (2) -------------------------------------- LTM ENDED 2001 2002 2003E (2) 9/28/2003 (2) ---- ---- --------- ------------- Net sales $ 85,911 $ 88,192 $95,857 $93,401 Operating costs and expenses Cost of sales 49,818 52,109 61,344 57,835 Selling and administration 17,806 19,216 20,472 20,115 Research and development 1,721 1,965 1,244 1,965 Depreciation and amortization 5,575 5,842 6,268 6,234 -------- -------- ------- ------- 74,920 79,132 89,328 86,149 -------- -------- ------- ------- Operating income 10,991 9,060 6,529 7,252 Interest expense, net 2,532 1,865 1,524 1,723 Other income (expense) (19) (3) -- 57 -------- -------- ------- ------- Income before income taxes 8,440 7,192 5,005 5,586 Income taxes 2,490 2,406 1,656 1,884 -------- -------- ------- ------- Income before minority interest 5,950 4,786 3,349 3,703 Minority interest 121 117 184 203 -------- -------- ------- ------- Net income $ 5,829 $ 4,669 $ 3,165 $ 3,500 ======== ======== ======= ======= Earnings per share $ 1.05 $ 0.86 $ 0.59 $ 0.65 Diluted WASO 5,552 5,455 5,370 5,370 EBITDA (4) $ 17,200 $ 14,876 $13,080 $13,486 Maintenance Cap Ex $ 4,100 $ 3,400 $ 3,850 $ 3,100 Expansionary Cap Ex 4,644 2,744 -- 2,876 -------- -------- ------- ------- Total Cap Ex $ 8,744 $ 6,144 $ 3,850 $ 5,976 Revenue growth 0.0% 2.7% 8.7% n/a EBITDA margin 20.0% 16.9% 13.6% 14.4% Operating income margin 12.8% 10.3% 6.8% 7.8% Income before income taxes margin 9.8% 8.2% 5.2% 6.0% Net income margin 6.8% 5.3% 3.3% 3.7% Effective tax rate 29.5% 33.5% 33.1% 33.7%

PROJECTED FISCAL YEAR ENDING DECEMBER, (1), (2), (3) ------------------------------------------------------------------- 2004 2005 2006 2007 2008 ---- ---- ---- ---- ---- Net sales $96,852 $97,670 $100,600 $103,618 $ 106,727 Operating costs and expenses Cost of sales 61,461 61,795 61,869 62,171 64,036 Selling and administration 20,388 20,495 21,020 21,624 22,245 Research and development 1,250 1,250 1,308 1,347 1,387 Depreciation and amortization 6,323 5,996 5,726 5,510 5,340 ------- ------- -------- -------- --------- 89,422 89,536 89,923 90,652 93,008 ------- ------- -------- -------- --------- Operating income 7,430 8,134 10,677 12,966 13,719 Interest expense, net 1,385 1,015 620 170 (335) Other income (expense) -- -- -- -- -- ------- ------- -------- -------- --------- Income before income taxes 6,045 7,119 10,057 12,796 14,054 Income taxes 2,116 2,492 3,520 4,479 4,919 ------- ------- -------- -------- --------- Income before minority interest 3,929 4,627 6,537 8,317 9,135 Minority interest 117 117 117 117 117 ------- ------- -------- -------- --------- Net income $ 3,812 $ 4,510 $ 6,420 $ 8,200 $ 9,018 ======= ======= ======== ======== ========= Earnings per share $ 0.71 $ 0.84 $ 1.20 $ 1.53 $ 1.68 Diluted WASO 5,370 5,370 5,370 5,370 5,370 EBITDA (4) $13,953 $14,130 $ 16,603 $ 18,676 $ 19,259 Maintenance Cap Ex $ 3,850 $ 3,850 $ 3,850 $ 3,850 $ 3,850 Expansionary Cap Ex -- -- -- -- -- ------- ------- -------- -------- --------- Total Cap Ex $ 3,850 $ 3,850 $ 3,850 $ 3,850 $ 3,850 Revenue growth 1.0% 0.8% 3.0% 3.0% 3.0% EBITDA margin 14.4% 14.5% 16.5% 18.0% 18.0% Operating income margin 7.7% 8.3% 10.6% 12.5% 12.9% Income before income taxes margin 6.2% 7.3% 10.0% 12.3% 13.2% Net income margin 3.9% 4.6% 6.4% 7.9% 8.4% Effective tax rate 35.0% 35.0% 35.0% 35.0% 35.0%
- ---------- (1) The Company maintains its accounting records on a 52-53 week fiscal year ending the Sunday nearest December 31. All of the above fiscal years are 52 weeks. (2) Excludes non-recurring expenses. (3) Based upon management estimates dated September 23, 2003. Includes public company expenses. Assumes an Euro to U.S. Dollar exchange rate of 1.09 and a normalized tax rate of 35%. (4) EBITDA = operating income plus depreciation and amortization. 2001-2002 EBITDA includes amortization embedded in other line items. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 / 21 Overview of the Company Balance Sheet
DEC. 31, DEC. 30, DEC. 29, JUN. 29, SEPT. 28, 2000 2001 2002 2003 2003 --------- --------- --------- -------- -------- ASSETS: Current assets: Cash and cash equivalents $ 5,371 $ 5,072 $ 5,624 $ 4,504 $ 6,118 Trade accounts receivable 12,740 13,133 14,399 14,709 15,095 Inventories 10,398 10,119 11,425 12,831 12,010 Prepaid income taxes and other expenses 1,420 1,437 1,495 2,066 2,181 Other current assets 1,634 4,206 1,494 1,472 1,731 --------- --------- --------- -------- -------- Total current assets 31,563 33,967 34,437 35,582 37,135 Property, plant and equipment: Land and improvements 3,693 3,711 3,987 n/a n/a Buildings 35,540 38,021 43,699 n/a n/a Equipment 48,072 51,014 56,895 n/a n/a --------- --------- --------- -------- -------- Total property, plant and equipment 87,305 92,746 104,581 n/a n/a Less: accumulated depreciation (34,769) (38,470) (45,794) n/a n/a --------- --------- --------- -------- -------- Total property, plant and equipment, net 52,536 54,276 58,787 60,132 59,640 Intangible assets 11,899 11,036 12,321 13,104 13,197 Other assets 9,776 7,811 1,261 1,066 1,187 --------- --------- --------- -------- -------- TOTAL ASSETS $ 105,774 $ 107,090 $ 106,806 $109,884 $111,159 ========= ========= ========= ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Current portion of long-term debt $ 192 $ 2,430 $ 223 $ 163 $ 122 Accounts payable - trade 4,108 3,833 3,895 4,138 3,835 Accrued salaries, wages and employee benefits 2,653 2,635 2,771 2,580 2,956 Other accrued liabilities 896 905 1,413 1,794 2,099 Income taxes payable 690 942 1,545 1,202 1,344 --------- --------- --------- -------- -------- Total current liabilities 8,539 10,745 9,847 9,877 10,356 Long-term and revolving-term debt 39,871 37,255 38,162 36,140 35,260 Other long-term liabilities: Other employee benefits 1,056 1,362 9,538 9,770 9,811 Other 5,215 5,162 256 289 324 --------- --------- --------- -------- -------- Total other long-term liabilities 6,271 6,524 9,794 10,059 10,135 Minority interest 1,559 1,680 1,741 2,122 2,176 Total shareholders' equity 49,534 50,886 47,262 51,686 53,232 --------- --------- --------- -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 105,774 $ 107,090 $ 106,806 $109,884 $111,159 ========= ========= ========= ======== ========
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 / 22 5 / OVERVIEW OF THE ACQUIROR [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/23 Overview of the Acquiror - - The Acquiror has been actively acquiring companies in a variety of industries since 1941 and currently maintains eleven separate operating segments that employ more than 450 people. - - The Acquiror was formally founded in 1975 in Kittening, Pennsylvania to provide management services for all Snyder subsidiaries. - - The Acquirer's subsidiaries operate in a broad range of businesses, including construction, mining, industrial equipment, energy, and agriculture. - - The Acquiror is partnered with Creekside Mushrooms, Ltd., which is the world's largest underground mushroom farm and owner of Moonlight(R) Brand mushrooms. - - Founders include: - Charles H. Snyder Sr. - Chairman of Snyder Associated Companies, Inc. - 1941 - PRESENT C.H. Snyder Co. Inc. - 1974 - PRESENT Bauer Company Inc. - Elmer A. Snyder [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/24 6 / ANALYSIS OF PROPOSED/TRANSACTION [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/25 Analysis of Proposed Transaction Summary Transaction Multiples CALCULATION OF TRANSACTION VALUE Offer Price $12.25 Sylvan Diluted Shares Outstanding (1) 5.2 Equity Value $ 64.2 Net Debt (2) 31.4 ------ Enterprise Value $ 95.6 ======

IMPLIED TRANSACTION MULTIPLES
SYLVAN EV ESTIMATES MULTIPLE --------- -------- LTM 9/28/03 Revenue $ 93.4 1.0x EBITDA 13.5 7.1x FY 2003 ESTIMATE Revenue $ 95.9 1.0x EBITDA 13.1 7.3x FY 2004 ESTIMATE Revenue $ 96.9 1.0x EBITDA 14.0 6.9x
(1) Fully diluted shares outstanding based on the treasury stock method. (2) Includes minority interest of $2.2 million. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/26 Analysis of Proposed Transaction Historical Stock Trading Analysis OFFER PRICE PREMIUM ANALYSIS RELATIVE TO HISTORY AS OF NOVEMBER 6, 2003 Offer Price: $12.25 125% April 15, 2003 (1) $9.82 107% of May 13, 2002 (2) 11.44 142% of 52 Week Low Trading - March 19, 2003 8.60 103% of 52 Week High Trading - September 24, 2002 11.95 106% of Twelve-Month Average Closing Price 11.52 111% of Six-Month Average Closing Price 11.02 123% of One-Month Average Closing Price 9.99 65% of All Time Trading High - June 17, 1998 18.75 75% of Five-Year High - December 28, 1998 16.37

(1) Day prior to announcement of Sylvan management group buyout proposal. (2) Day prior to press release indicating Sylvan's exploration of strategic alternatives. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/27 Analysis of Proposed Transaction Valuation Summary
($ IN MILLIONS) IMPLIED ENTERPRISE VALUE -------------------------------------------------------------- 25TH 75TH VALUATION METHODOLOGY LOW PERCENTILE MEDIAN PERCENTILE HIGH - --------------------- --- ---------- ------ ---------- ---- COMPARABLE COMPANIES $ 64.1 $ 69.9 $ 75.8 $ 89.4 $103.0 COMPARABLE TRANSACTIONS 84.9 85.2 85.6 95.7 105.9 DISCOUNTED CASH FLOW 79.0 84.4 89.8 95.7 101.6 LEVERAGED BUY-OUT 76.2 n/m n/m n/m 88.6 PROPOSED TRANSACTION $ 95.6

IMPLIED EQUITY VALUE PER SHARE --------------------------------------------------------------- 25TH 75TH VALUATION METHODOLOGY LOW PERCENTILE MEDIAN PERCENTILE HIGH - --------------------- --- ---------- ------ ---------- ---- COMPARABLE COMPANIES $ 6.33 $ 7.47 $ 8.60 $11.24 $13.88 COMPARABLE TRANSACTIONS 10.79 10.86 10.93 12.89 14.86 DISCOUNTED CASH FLOW 9.23 10.28 11.33 12.47 13.60 LEVERAGED BUY-OUT 8.69 n/m n/m n/m 11.03 PROPOSED TRANSACTION $12.25
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/28 Analysis of Proposed Transaction Valuation Summary - - The valuation ranges implied by the techniques employed are summarized below, based on the following: - LBO ANALYSIS - High and low values represent 20% and 30% IRRs - DCF ANALYSIS - Based on discount rates and EBITDA exit multiples of 12% - 14% and 5.0x - 6.5x - COMPARABLE TRANSACTION ANALYSIS (1) - Based on 2003E EBITDA and multiples of 6.5x - 8.1x - PUBLICLY-TRADED COMPARABLE COMPANY ANALYSIS (2) - Based on 2003E EBITDA and multiples of 4.9x - 7.9x (BAR CHART) (BAR CHART) - ---------- (1) Based on best comparable transactions including: Savia acquiring Seminis, Inc., Investor Group acquiring Dole, Cal-Maine Foods acquiring Smith Farms, and Investor Group acquiring Maui Land & Pineapple. (2) Based on best comparable companies including: BG, CQB, FDP and HORT. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/29 Analysis of Proposed Transaction Comparable Companies Analysis
RANGE OF VALUATION MULTIPLES IMPLIED BY COMPARABLE PUBLIC COMPANIES ANALYSIS 2003E ------------------------------------------------------------ OPERATING 25TH 75TH DATA LOW PRTL MEDIAN PRTL HIGH - ------------------------------------------------------------------------------------------------------------------------------- ENTERPRISE VALUE TO LTM: ALL COMPARABLES: EBITDA 4.0 x 5.1 x 6.2 x 9.1 x 12.0 x BEST COMPARABLES: EBITDA 4.9 x 5.3 x 5.8 x 6.8 x 7.9 x

($ IN MILLIONS) -------------------------------------------------------------- IMPLIED ENTERPRISE VALUE BASED ON BEST COMPARABLES: EBITDA $13.1 $64.1 $ 69.9 $ 75.8 $ 89.4 $103.0 PROPOSED TRANSACTION ENTERPRISE VALUE $ 95.6 IMPLIED EQUITY VALUE BASED ON BEST COMPARABLES: EBITDA $13.1 $6.33 $ 7.47 $ 8.60 $ 11.24 $13.88 PROPOSED TRANSACTION EQUITY VALUE/SHARE $ 12.25
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/30 Analysis of Proposed Transaction Comparable Companies Analysis CAPITALIZATION & OPERATING DATA: (1) ($ millions, except per share data)
MARKET CAPITALIZATION (2) ------------------------- % OF EQUITY LTM OPERATING RESULTS TICKER PRICE 52-WK MKT ENTERPRISE ------------------------------------------ COMPANY SYMBOL 11/6/03 HIGH CAP VALUE SALES EBITDA (3) EBIT NET INC - ------- ------ ------- ------ ------- ---------- -------- ---------- ------ -------- SYLVAN INC. (5) SYLN $10.07 84.3% $ 51.9 $ 83.4 $ 93.4 $ 13.5 $ 7.3 $ 3.5 GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. ADM 14.35 99.3% 9,288.2 13,161.3 30,708.0 1,423.1 779.4 460.0 Bunge Limited BG 26.53 85.2% 2,660.7 5,853.7 18,397.0 1,093.0 912.0 373.0 FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. CQB 20.01 100.9% 826.4 1,134.0 2,858.5 144.0 97.0 (63.4) Fresh Del Monte Produce Inc. FDP 26.00 87.5% 1,489.5 1,459.6 2,395.5 298.0 234.9 246.3 Northland Cranberries, Inc. NRCNA 0.50 46.7% 49.2 86.9 92.2 11.1 7.4 8.9 AG INPUTS Delta and Pine Land Co. DLP 24.03 94.3% 965.0 854.1 284.4 71.3 63.8 32.7 Hines Horticulture, Inc. HORT 4.10 91.7% 90.8 326.5 332.1 52.4 43.5 18.9 PROTEIN Cal-Maine Foods, Inc. CALM 11.00 100.0% 133.8 229.7 419.6 56.8 40.2 21.6 Sanderson Farms, Inc. SAFM 34.90 98.0% 467.6 486.7 818.6 87.2 62.6 33.0 High 100.9% 9,288.2 13,161.3 30,708.0 1,423.1 912.0 460.0 Median 94.3% 826.4 854.1 818.6 87.2 63.8 32.7 Mean 89.3% 1,774.6 2,621.4 6,256.2 359.6 249.0 125.7 Low 46.7% 49.2 86.9 92.2 11.1 7.4 (63.4)

LTM MARGINS 3 FISCAL YR. CAGR (4) -------------------------- ---------------------------- COMPANY EBITDA EBIT NET INC SALES EBITDA NET INC - ------- ------ ---- ------- ----- ------ ------- SYLVAN INC. (5) 14.4% 7.8% 3.7% 5.6% (13.1%) (30.8%) GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 4.6% 2.5% 1.5% 25.5% 5.7% 9.6% Bunge Limited 5.9% 5.0% 2.0% 20.7% 36.0% 128.3% FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 5.0% 3.4% N/M 2.5% (5.9%) N/A Fresh Del Monte Produce Inc. 12.4% 9.8% 10.3% 6.0% 45.2% 153.7% Northland Cranberries, Inc. 12.1% 8.0% 9.7% (30.0%) N/A N/A AG INPUTS Delta and Pine Land Co. 25.1% 22.4% 11.5% (7.5%) 0.9% (3.4%) Hines Horticulture, Inc. 15.8% 13.1% 5.7% 5.2% (4.7%) (17.5%) PROTEIN Cal-Maine Foods, Inc. 13.5% 9.6% 5.2% 4.0% 12.0% 43.5% Sanderson Farms, Inc. 10.6% 7.7% 4.0% 10.8% 60.5% N/A High 25.1% 22.4% 11.5% 5.5% 60.5% 153.7% Median 12.1% 8.0% 5.4% 5.2% 8.9% 26.5% Mean 11.7% 9.0% 6.2% 4.1% 18.7% 52.3% Low 4.6% 2.5% 1.5% (30.0%) (5.9%) (17.5%)
- ---------- (1) Excludes non-recurring and extraordinary items. (2) Fully-diluted using the treasury-stock method. (3) EBITDA = income from operations plus the sum of depreciation, amortization and non-cash stock option compensation. (4) Historical results have not been adjusted to reflect the discontinuation of goodwill amortization. (5) Sylvan is shown for illustrative purposes only and is not included in high, median, mean and low calculations. (6) Earnings estimates are from First Call, where available, and calendarized, where appropriate. (7) Growth rates are from Bloomberg, where available. (8) ROIC = EBITDA divided by the sum of total equity and total debt. (9) Best comparables include BG, CQB, FDP and HORT. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/31 Analysis of Proposed Transaction Comparable Companies Analysis VALUATION & LEVERAGE STATISTICS: ($ millions, except per share data)
EQUITY MKT CAP / ENTERPRISE VALUE / LTM ------------------- EPS Estimates (6) Projected P/E ----------------------- NET BOOK ---------------- --------------- COMPANY SALES EBITDA EBIT INCOME VALUE 2003 2004 2003 2004 - ------- ----- ------ ---- ------ ----- ---- ---- ---- ---- SYLVAN INC. (5) 0.9 X 6.2 X 11.5 X 14.8 X 1.0 X N/A N/A N/A N/A GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 0.4 x 9.2 x 16.9 x 20.2 x 1.3 x 0.77 0.96 18.7 x 14.9 x Bunge Limited 0.3 x 5.4 x 6.4 x 7.1 x 1.3 x 2.54 2.85 10.4 x 9.3 x FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 0.4 x 7.9 x 11.7 x N/M 1.1 x 1.91 2.68 10.5 x 7.5 x Fresh Del Monte Produce Inc. 0.6 x 4.9 x 6.2 x 6.0 x 1.6 x 3.78 3.86 6.9 x 6.7 x Northland Cranberries, Inc. 0.9 x 7.8 x 11.8 x 5.5 x 1.2 x N/A N/A N/A N/A AG INPUTS Delta and Pine Land Co. 3.0 x 12.0 x 13.4 x 29.5 x 4.2 x 1.05 1.29 23.0 x 18.6 x Hines Horticulture, Inc. 1.0 x 6.2 x 7.5 x 4.8 x 1.6 x N/A N/A N/A N/A PROTEIN Cal-Maine Foods, Inc. 0.5 x 4.0 x 5.7 x 6.2 x 1.8 x N/A N/A N/A N/A Sanderson Farms, Inc. 0.6 x 5.6 x 7.8 x 14.2 x 2.8 x N/A N/A N/A N/A ALL COMPARABLES High 3.0 x 12.0 x 16.9 x 29.5 x 4.2 x 3.78 3.86 23.0 x 18.6 x Median 0.6 x 6.2 x 7.8 x 6.7 x 1.6 x 1.91 2.68 10.5 x 9.3 x Mean 0.9 x 7.0 x 9.7 x 11.7 x 1.9 x 2.01 2.33 13.9 x 11.4 x Low 0.3 x 4.0 x 5.7 x 4.8 x 1.1 x 0.77 0.96 6.9 x 6.7 x BEST COMPARABLES (9) High 1.0 x 7.9 x 11.7 x 7.1 x 1.6 x 3.78 3.86 10.5 x 9.3 x Median 0.5 x 5.8 x 7.0 x 6.0 x 1.4 x 2.54 2.85 10.4 x 7.5 x Mean 0.6 x 6.1 x 8.0 x 6.0 x 1.4 x 2.74 3.13 9.3 x 7.8 x Low 0.3 x 4.9 x 6.2 x 4.8 x 1.1 x 1.91 2.68 6.9 x 6.7 x

LEVERAGE STATISTICS ------------------------------------- 2004 P/E / DEBT / 5 YR. EPS EBITDA / DEBT / EQUITY MKT COMPANY GROWTH (7) ROIC (8) INTEREST EBITDA CAP - ------- ---------- -------- -------- ------ ---------- SYLVAN INC. (5) N/A 15.2% 7.8 X 2.6 X 68.2% GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 177.6% 11.6% 6.0 x 3.6 x 55.8% Bunge Limited 101.4% 21.0% 42.0 x 2.8 x 116.3% FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 62.2% 11.9% 2.9 x 3.3 x 58.3% Fresh Del Monte Produce Inc. 89.8% 30.1% 32.4 x 0.2 x 3.2% Northland Cranberries, Inc. N/A 12.8% 5.7 x 4.0 x 91.5% AG INPUTS Delta and Pine Land Co. 195.6% 30.6% N/A 0.0 x 0.2% Hines Horticulture, Inc. N/A 17.9% 2.0 x 4.5 x 260.3% PROTEIN Cal-Maine Foods, Inc. N/A 31.6% 7.3 x 1.9 x 79.4% Sanderson Farms, Inc. N/A 41.5% 32.8 x 0.5 x 8.8% ALL COMPARABLES High 195.6% 41.5% 42.0 x 4.5 x 260.3% Median 101.4% 21.0% 6.6 x 2.8 x 58.3% Mean 125.3% 23.2% 16.4 x 2.3 x 74.9% Low 62.2% 11.6% 2.0 x 0.0 x 0.2% BEST COMPARABLES (9) High 101.4% 30.1% 42.0 x 4.5 x 260.3% Median 89.8% 19.5% 17.7 x 3.1 x 87.3% Mean 84.5% 20.2% 19.9 x 2.7 x 109.6% Low 62.2% 11.9% 2.0 x 0.2 x 3.2%
- ---------- (1) Excludes non-recurring and extraordinary items. (2) Fully-diluted using the treasury-stock method. (3) EBITDA = income from operations plus the sum of depreciation, amortization and non-cash stock option compensation. (4) Historical results have not been adjusted to reflect the discontinuation of goodwill amortization. (5) Sylvan is shown for illustrative purposes only and is not included in high, median, mean and low calculations. (6) Earnings estimates are from First Call, where available, and calendarized, where appropriate. (7) Growth rates are from Bloomberg, where available. (8) ROIC = EBITDA divided by the sum of total equity and total debt. (9) Best comparables include BG, CQB, FDP and HORT. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/32 ANALYSIS OF PROPOSED TRANSACTION Comparable Transactions Analysis
RANGE OF VALUATION MULTIPLES IMPLIED BY COMPARABLE TRANSACTIONS ANALYSIS 2003E ---------------------------------------------------- OPERATING 25TH 75TH DATA LOW PRTL MEDIAN PRTL HIGH ---- --- ---- ------ ---- ---- ENTERPRISE VALUE TO LTM: ENTIRE GROUP: EBITDA 5.9 x 7.0 x 8.1 x 15.6 x 23.1 x BEST COMPARABLES: EBITDA 6.5 x 6.5 x 6.5 x 7.3 x 8.1 x IMPLIED ENTERPRISE VALUE: ($ IN MILLIONS) ------------------------------------------------------- EBITDA $ 13.1 $ 84.9 $ 85.2 $ 85.6 $ 95.7 $ 105.9 PROPOSED TRANSACTION ENTERPRISE VALUE $ 95.6 IMPLIED EQUITY VALUE PER SHARE: EBITDA $ 13.1 $ 10.79 $ 10.86 $ 10.93 $ 12.89 $ 14.86 PROPOSED TRANSACTION EQUITY VALUE PER SHARE $ 12.25
[MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/33 ANALYSIS OF PROPOSED TRANSACTION Comparable Transactions Analysis
($ in millions) ENTERPRISE VALUE MULTIPLES: ANNOUNCEMENT DATE ACQUIROR EQUITY --------------------------- CLOSING DATE TARGET EQUITY ENTERPRISE PREMIUM VALUE TO: LTM LTM LTM CONSIDERATION TARGET BUSINESS VALUE VALUE PAID LTM NI REVENUE EBITDA EBIT - ------------- --------------- ----- ----- ---- ------ ------- ------ ---- 8/29/2003 Venture Group n/a n/a n/a n/a n/a n/a n/a 8/29/2003 Packers of Indian River Ltd. (Chiquita Brands International Inc.) Cash Producer and wholesaler of fresh and processed citrus products 8/18/2003 Tyson Foods Inc. 74.0 74.0 n/a 0.3 x n/a n/a n/a Pending Choctaw Maid Farms Inc. n/a Producer and manufacturer of wholesale poultry products 8/18/2003 BC Natural Foods LLC n/a n/a n/a n/a n/a n/a n/a 8/18/2003 Penn Valley Farms n/a Owner and operator of poultry farms 6/9/2003 Pilgrims Pride Corp 302.7 597.3 n/a n/a 0.3 x 23.1 x n/a Pending ConAgra Foods Inc-Chicken Business Cash/Stock/Sub. Notes Producer of meat, eggs, and cooking oil 2/4/2003 Riviana Foods Inc. 25.3 25.3 n/a n/a 0.7 x n/a n/a 2/10/2003 ACH Rice Specialties Business (Associated British Foods Plc) Cash Producer and marketer of rice products 12/13/2002 Savia, S.A. de C.V. 384.4 650.0 50.6% 126.0 x 1.4 x 8.1 x 13.3 x 9/30/2003 Seminis, Inc. Cash Producer and marketer of fruit and vegetable seeds 9/22/2002 Investor Group 2,017.8 2,500.0 36.8% 13.1 x 0.6 x 6.6 x 9.1 x 3/31/2003 Dole Food Co., Inc. Cash Producer and marketer of fresh fruit and vegetables 8/17/2001 Nippon Suisan 175.0 175.0 n/a n/a 0.7 x 8.8 x n/a 10/2/2001 Gorton's & Bluewater Seafoods Cash Producers of frozen seafood 1/23/2001 Hormel Foods Corp 334.4 334.4 n/a 16.0 x 1.0 x n/a 10.0 x 2/26/2001 The Turkey Store Co. (d/b/a Jerome Foods, Inc.) Cash Producer of poultry, food products 9/27/2000 Pilgrim's Pride Corp. 234.5 280.0 105.4% 65.2 x 0.3 x 10.2 x 31.2 x 1/28/2001 WLR Foods, Inc. Cash Producer of poultry products
[MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/34 ANALYSIS OF PROPOSED TRANSACTION Comparable Transactions Analysis
ENTERPRISE VALUE MULTIPLES: ANNOUNCEMENT DATE ACQUIROR EQUITY --------------------------- CLOSING DATE TARGET EQUITY ENTERPRISE PREMIUM VALUE TO: LTM LTM LTM CONSIDERATION TARGET BUSINESS VALUE VALUE PAID LTM NI REVENUE EBITDA EBIT - ------------- --------------- ----- ----- ---- ------ ------- ------ ---- 8/9/2000 Lesaffre et Compagnie $ 113.0 $ 113.0 n/a n/a 0.9 x n/a n/a 2/26/2001 Red Star Yeast and Products (Sensient Technologies Corp.) Cash Supplier of yeast to commercial bakery 12/20/1999 Money's Mushrooms Ltd. 50.0 50.0 n/a n/a 0.4 x n/a n/a 2/1/2000 Fresh Mushrooms Business (Vlasic Foods Int'l Inc.) Cash Producer of fresh mushrooms 12/6/1999 ConAgra, Inc. 360.0 376.0 n/a n/a 0.8 x n/a 11.1 x 1/3/2000 Seaboard Farms (Seaboard Corp.) Cash Producer of poultry products 9/15/1999 Cal-Maine Foods, Inc. 36.2 36.2 n/a 13.4 x 0.7 x 6.5 x 9.1 x 9/30/1999 Smith Farms, Inc. Cash Owns and operates egg farms 7/15/1999 Reservoir Capital Group LLC 72.2 153.8 8.7% 36.8 x 1.2 x 10.0 x 21.7 x 11/2/1999 Orange-co., Inc. Cash Producer of citrus fruit, juices 7/2/1999 Investor Group 95.2 119.6 (12.8%) 18.0 x 0.8 x 6.5 x 11.7 x 9/7/1999 Maui Land & Pineapple Co., Inc. n/a Producer of pineapples 5/14/1999 Pictsweet LLC 23.8 72.6 36.6% 39.3 x 0.4 x 5.9 x 13.9 x 9/23/1999 United Foods, Inc. Cash Producer and marketer of frozen fruits, vegetables Summary Multiples: Median 36.7% 18.0 x 0.7 x 8.1 x 11.7 x Mean 37.6% 36.4 x 0.7 x 9.5 x 14.6 x Low (12.8%) 0.3 x 0.3 x 5.9 x 9.1 x High 105.4% 126.0 x 1.4 x 23.1 x 31.2 x ----- ----- --- ---- ---- Summary Best Comparable Multiples (1): Median 36.8% 15.7 x 0.7 x 6.5 x 10.4 x Mean 24.9% 42.6 x 0.9 x 6.9 x 10.8 x Low -12.8% 13.1 x 0.6 x 6.5 x 9.1 x High 50.6% 126.0 x 1.4 x 8.1 x 13.3 x ----- ----- --- ---- ----
- ------------- Source: Thomson Financial, SEC filings and company press releases. Data includes transactions announced between January 1, 1999 and November 6, 2003. (1) Best transactions include Savia acquiring Seminis, Inc, Investor Group acquiring Dole, Cal-Maine Foods acquiring Smith Farms, and Investor Group acquiring Maui Land & Pineapple. [MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/35 ANALYSIS OF PROPOSED TRANSACTION Discounted Cash Flow Analysis
PRESENT VALUE PRESENT VALUE OF TERMINAL OF FREE + VALUE = PRESENT VALUE OF ENTERPRISE CASH FLOWS MULTIPLE OF 2008 EBITDA VALUE DISCOUNT ------------- ------------------------------ -------------------------------- RATE 2004 - 2008 5.00X 5.75X 6.50X 5.00X 5.75X 6.50X ---- ----------- ----- ----- ----- ----- ----- ----- 12.0% $ 30.5 $ 54.6 $ 62.8 $ 71.0 $ 85.2 $ 93.4 $101.6 13.0% 29.7 52.3 60.1 67.9 82.0 89.8 97.7 14.0% 29.0 50.0 57.5 65.0 79.0 86.5 94.0 TOTAL RANGE $ 79.0 -- $101.6 ASSUMED OFFER PRICE $ 95.6

IMPLIED EQUITY VALUE IMPLIED EQUITY VALUE PER SHARE DISCOUNT NET DEBT --------------------------------- ---------------------------------- RATE - SEPT. 28, 2003 = 5.00X 5.75X 6.50X 5.00X 5.75X 6.50X - ---- -------------- ----- ----- ----- ----- ----- ----- 12.0% $ 31.4 $ 53.7 $ 61.9 $ 70.1 $10.42 $12.01 $13.60 13.0% 31.4 50.6 58.4 66.2 9.81 11.33 12.85 14.0% 31.4 47.6 55.1 62.6 9.23 10.68 12.14 TOTAL RANGE $ 47.6 -- $ 70.1 $ 9.23 -- $13.60 ASSUMED OFFER PRICE $ 64.2 $12.25
[MORGAN JOSEPH LOGO] PROJECT SPAWN/PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/36 ANALYSIS OF PROPOSED TRANSACTION Discounted Cash Flow Analysis HISTORICAL AND PROJECTED CASH FLOWS ($ in millions except per share data)
Fiscal Year End December, HISTORICAL CAGR PROJECTED (A) CAGR ------------------------- ----- ---------------------------------------------- ----- 2001 2002 2003 01-03 2004 2005 2006 2007 2008 04-08 ---- ---- ---- ----- ---- ---- ---- ---- ---- ----- Net Sales $ 85.9 $ 88.2 $ 95.9 5.6% $ 96.9 $ 97.7 $ 100.6 $ 103.6 $ 106.7 2.5% % Growth -- 2.7% 8.7% 1.0% 0.8% 3.0% 3.0% 3.0% EBITDA 17.2 14.9 13.1 -12.8% 14.0 14.1 16.6 18.7 19.3 8.4% % of Sales 20.0% 16.9% 13.6% 14.4% 14.5% 16.5% 18.0% 18.0% EBIT 11.6 9.0 6.8 -23.5% 7.6 8.1 10.9 13.2 13.9 16.2% % of Sales 13.5% 10.2% 7.1% 7.9% 8.3% 10.8% 12.7% 13.0% Less: Taxes @ 35% (4.1) (3.2) (2.4) (2.7) (2.8) (3.8) (4.6) (4.9) ------ ------ ------ ------ ------ ------- ------- ------- UNLEVERED NET INCOME 7.6 5.9 4.4 -23.5% 5.0 5.3 7.1 8.6 9.0 16.2% Plus: Depreciation and Amortization 5.6 5.8 6.3 6.3 6.0 5.7 5.5 5.3 Less: Capital Expenditures (4.1) (3.4) (3.9) (3.9) (3.9) (3.9) (3.9) (3.9) Less: Increase in Working Capital (2.9) (1.6) 3.0 0.5 (0.2) (0.6) (0.6) (0.7) ------ ------ ------ ------ ------ ------- ------- ------- UNLEVERED FREE CASH FLOW $ 6.2 $ 6.7 $ 9.9 26.3% $ 8.0 $ 7.3 $ 8.3 $ 9.6 $ 9.8 5.5% ====== ====== ====== ====== ====== ======= ======= =======
DISCOUNTED CASH FLOW VALUATION ANALYSIS
Discount Rate 12.0% 13.0% 14.0% --------------------------- ---------------------------- ---------------------------- Terminal EBITDA Multiple 5.00x 5.75x 6.50x 5.00x 5.75x 6.50x 5.00x 5.75x 6.50x - ------------------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- EBITDA $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 $ 19.3 Terminal Value 96.3 110.7 125.2 96.3 110.7 125.2 96.3 110.7 125.2 PV Terminal Value 54.6 62.8 71.0 52.3 60.1 67.9 50.0 57.5 65.0 PV Free Cash Flows 30.5 30.5 30.5 29.7 29.7 29.7 29.0 29.0 29.0 ------- ------- ------- ------- ------- ------- ------- ------- ------- IMPLIED ENTERPRISE VALUE $ 85.2 $ 93.4 $ 101.6 $ 82.0 $ 89.8 $ 97.7 $ 79.0 $ 86.5 $ 94.0 ======= ======= ======= ======= ======= ======= ======= ======= ======= Less: Net Debt (b) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) (29.3) Less: Minority Interest (b) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) (2.2) ------- ------- ------- ------- ------- ------- ------- ------- ------- EQUITY VALUE $ 53.7 $ 61.9 $ 70.1 $ 50.6 $ 58.4 $ 66.2 $ 47.6 $ 55.1 $ 62.6 Shares Outstanding (mm) 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 ------- ------- ------- ------- ------- ------- ------- ------- ------- EQUITY VALUE PER SHARE $ 10.42 $ 12.01 $ 13.60 $ 9.81 $ 11.33 $ 12.85 $ 9.23 $ 10.68 $ 12.14 ======= ======= ======= ======= ======= ======= ======= ======= ======= ENTERPRISE VALUE AS A MULTIPLE OF 2003E: Net Sales 0.89x 0.97x 1.06x 0.86x 0.94x 1.02x 0.82x 0.90x 0.98x EBITDA 6.51x 7.14x 7.76x 6.27x 6.87x 7.47x 6.04x 6.61x 7.19x EBIT 12.50x 13.70x 14.91x 12.04x 13.19x 14.34x 11.60x 12.70x 13.80x
- ------------- (a) Based upon Management estimates dated September 23, 2003. Includes $1.1 million of public company expenses. Assumes an Euro to U.S. dollar exchange rate of 1.09. (b) Based on August 2003 Balance Sheet. [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/37 ANALYSIS OF PROPOSED TRANSACTION Leveraged Buy-Out Analysis - - The leveraged buy-out analysis is summarized on the following page and is based on the following assumptions: - Senior debt of approximately 3.0x at LIBOR +375 basis points - 5 year amortization - Subordinated debt of approximately 1.25x - Coupon of 12% - Required return of 17-20% - Sponsor equity returns of 20-30% - Management incentive options of 10% - Enter and exit at the same multiple - Based on management projections as of September 26, 2003 and September 28, 2003 balance sheet [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003/38 ANALYSIS OF PROPOSED TRANSACTION Leveraged Buy-Out Analysis LBO TRANSACTION SUMMARY IMPLIED IRR = 20.0% PURCHASE PRICE: Equity value $ 57.2 Plus: debt (1) 37.6 Less: cash (6.1) ------ Net debt 31.4 Enterprise value $ 88.6 ====== USES: Equity purchase price $ 57.2 Refinance existing debt 35.4 Transaction expenses 3.2 ------ $ 95.8 ====== SOURCES: Excess cash $ 4.1 Bank debt 42.3 Sub-debt 18.2 Financial sponsor equity 31.2 ------ $ 95.8 ====== PURCHASE MULTIPLES: Enterprise value / 2003 revenue 0.9 x Enterprise value / 2003 EBITDA 6.4 x ------ IMPLIED PRICE PER SHARE: $11.03 ------ OWNERSHIP: Financial sponsor 82.0% Management 10.0% Sub-debt 8.0% LEVERAGE STATISTICS: Bank debt / 2003 EBITDA 2.9 x Total debt / 2003 EBITDA 4.1 x 2003 EBITDA / Interest 3.3 x (2003 EBITDA - CapEx) / Interest 2.0 x 2004 EBITDA / Interest 1.9 x (2004 EBITDA - CapEx) / Interest 2.6 x

LBO TRANSACTION SUMMARY IMPLIED IRR = 30.0% PURCHASE PRICE: Equity value $ 44.8 Plus: debt (1) 37.6 Less: cash (6.1) ------ Net debt 31.4 Enterprise value $ 76.2 ====== USES: Equity purchase price $ 44.8 Refinance existing debt 35.4 Transaction expenses 3.2 ------ $ 83.4 ====== SOURCES: Excess cash $ 4.1 Sub-debt 42.3 Assumed debt 18.2 Financial sponsor equity 18.8 ------ $ 83.4 ====== PURCHASE MULTIPLES: Enterprise value / 2003 revenue 0.8 x Enterprise value / 2003 EBITDA 5.5 x ------ IMPLIED PRICE PER SHARE: $ 8.69 ------ OWNERSHIP: Financial sponsor 82.5% Management 10.0% Sub-debt 7.5% LEVERAGE STATISTICS: Bank debt / 2003 EBITDA 2.9 x Total debt / 2003 EBITDA 4.1 x 2003 EBITDA / Interest 3.3 x (2003 EBITDA - CapEx) / Interest 2.0 x 2004 EBITDA / Interest 1.9 x (2004 EBITDA - CapEx) / Interest 2.6 x

NOTE: Analysis based on management estimates, anticipated financing parameters and required returns. (1) Debt includes minority interest of $2.2 million. [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 / 39 ANALYSIS OF PROPOSED TRANSACTION Premiums Paid Analysis - - The outside offer price of $12.25 represents a premium of 25% to the Company's closing price of $9.82 one day prior to the announcement of the management-led proposal. - A meaningful comparison of the premium implied by the Proposed Transaction to the average and median premiums analyzed is difficult due to the lengthy and public background of the Proposed Transaction. ANNOUNCED TRANSACTIONS $50MM - $150MM (APRIL 1, 2003 - NOVEMBER 3, 2003)
PREMIUM PAID RELATIVE TO: VALUE OF PRICE ------------------------------ DATE TRANSACTION PER 1 DAY 1 WEEK 4 WEEKS ANNOUNCED TARGET NAME ACQUIROR NAME ($MIL) SHARE PRIOR PRIOR PRIOR - --------- ----------- ------------- ------ ----- ----- ----- ----- 04/01/03 National Service Industries California Investment Fund LLC 111.9 10.00 93.8% 90.8% 67.5% 04/03/03 Elite Information Group Inc Thomson Corp 121.5 14.00 40.4% 44.3% 40.7% 04/04/03 Sports Club Co Investor Group 70.2 3.00 25.0% 24.5% 31.6% 04/07/03 Bruker AXS Inc Bruker Daltonics Inc 104.6 1.86 44.2% 38.8% 28.3% 04/09/03 Ramsay Youth Services Inc Psychiatric Solutions Inc 77.9 5.00 42.9% 31.6% 24.7% 04/16/03 Lillian Vernon Corp Investor Group 60.7 7.25 72.6% 74.7% 72.2% 04/16/03 Signal Technology Corp Crane Co 142.5 13.25 17.6% 15.6% 21.6% 04/22/03 Varsity Brands Inc Investor Group 136.8 6.57 39.8% 39.5% 42.2% 04/29/03 Thousand Trails Inc Kohlberg & Co LP 114.6 14.50 55.1% 55.9% 49.8% 05/14/03 MountainBank Financial Corp South Financial Corp. 123.1 32.75 11.0% 25.9% 28.9% 05/16/03 National Energy Group Inc American Re Partners LP 148.1 0.80 150.0% 14.3% 29.0% 05/27/03 TMBR/Sharp Drilling Inc Patterson-UTI Energy Inc 92.1 20.19 4.1% 5.3% 9.1% 05/28/03 CommerceSouth Inc,Eufaula,AL BancTrust Financial Group Inc 73.1 25.50 64.5% 59.2% 66.4% 05/30/03 Cysive Inc Snowbird Holdings Inc 74.5 3.23 0.9% 0.9% 11.4% 06/09/03 Grange National Banc Corp,PA Community Bank Sys Inc,NY 82.2 45.85 19.9% 17.6% 24.6% 06/25/03 United Park City Mines Co Capital Growth Partners LLC 68.7 21.00 3.4% 4.7% 5.5% 06/26/03 Elder-Beerman Stores Corp Wright Holdings Inc 68.5 6.00 13.0% 9.9% 14.9% 06/27/03 Acres Gaming Inc International Game Technology 136.5 11.50 1.0% 13.9% 31.4%
[MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 / 40 ANALYSIS OF PROPOSED TRANSACTION Premiums Paid Analysis
PREMIUM PAID RELATIVE TO: ------------------------- VALUE OF PRICE DATE TRANSACTION PER 1 DAY 1 WEEK 4 WEEKS ANNOUNCED TARGET NAME ACQUIROR NAME ($MIL) SHARE PRIOR PRIOR PRIOR - --------- ----------- ------------- ------ ----- ----- ----- ----- 06/29/03 Information Resources Inc Investor Group 99.4 3.30 10.7% -2.4% -2.7% 07/03/03 Methode Electronics Inc Dura Automotive Systems Inc 54.4 50.00 153.2% 156.4% 155.0% 07/15/03 Klamath First Bancorp,Oregon Sterling Financial Corp,WA 148.0 20.44 17.1% 17.8% 16.8% 07/16/03 Alliance Bancorp of NE Inc New Haven Savings Bank,CT 72.1 25.00 -5.3% 2.2% 7.3% 07/16/03 Timberline Software Corp Best Software Inc 103.5 8.25 36.4% 38.0% 38.0% 07/23/03 Brio Software Inc Hyperion Solutions Corp 141.9 3.44 27.4% 24.2% 50.2% 07/23/03 Pinnacor Inc MarketWatch.com Inc 104.8 2.42 9.0% 8.5% 24.1% 07/29/03 Elder-Beerman Stores Corp Bon-Ton Stores Inc 97.8 8.00 32.9% 33.3% 36.3% 07/30/03 Community Bk,Pilot Mtn,NC Southern Community Finan Corp 77.3 48.65 56.9% 56.9% 62.2% 08/04/03 Mercator Software Inc Ascential Software Corp 115.0 3.00 22.4% 34.5% 86.3% 08/05/03 ResortQuest International Gaylord Entertainment Co 107.6 5.53 8.4% 10.8% 13.8% 08/12/03 California Independent Bancorp Humboldt Bancorp,Eureka,CA 81.7 35.50 22.8% 22.4% 18.3% 08/12/03 Jacksonville Bancorp,TX Franklin Bank Corp,Houston,TX 73.4 37.50 25.0% 29.3% 27.1% 09/04/03 Ross Systems Inc Chinadotcom Corp 66.2 19.00 9.9% 22.7% 22.6% 09/09/03 Lightspan Inc Plato Learning Inc 103.5 10.89 36.1% 29.6% 67.5% 09/11/03 CoVest Bancshares Inc,IL First Midwest Bancorp,IL 129.4 27.45 2.7% 1.7% 5.8% 09/11/03 Skibo Financial Corp,PA Northwest Bancorp MHC,PA 55.2 17.00 26.3% 28.1% 29.5% 09/22/03 Thistle Group Holdings Co Citizens Bank of Pennsylvania 147.8 26.00 35.4% 39.0% 58.7% 09/22/03 United States Exploration Inc DGL Acquisition Corp 53.3 2.82 0.7% -1.1% -1.1% 09/25/03 Caledonia Finl Corp,MI Chemical Financial Corp,MI 55.3 39.00 N/A N/A N/A 09/26/03 Business Bancorp,California UnionBanCal Corp,CA 114.9 28.57 N/A N/A N/A 09/29/03 Good Guys Inc CompUSA Inc 55.4 2.05 36.7% 31.4% 45.4% 09/30/03 Garden Fresh Restaurant Corp Fairmont Capital Inc 103.0 16.35 48.9% 54.8% 64.3% 10/03/03 OneSource Information Services ValueAct Capital Partners LP 80.9 9.50 9.3% 21.6% 17.7% 10/08/03 Crown Resources Corp Kinross Gold Corp 78.4 78.42 46.7% 46.7% 41.9% 10/20/03 Docent Inc click2learn.com inc 61.9 4.14 1.0% 0.7% 6.2% 10/22/03 Brass Eagle Inc K2 Inc 82.5 10.51 26.6% 25.1% 27.7% 10/24/03 Information Resources Inc Open Ratings Inc 114.9 3.30 -29.2% -27.3% -28.6% 10/27/03 SCB Computer Technology Inc CIBER Inc 52.5 2.15 13.2% 7.5% 22.9% 10/27/03 On Technology Corp Symantec Corp 101.1 4.00 15.9% 16.3% 57.5% ------ ------ ----- ----- ----- AVERAGE $ 94.6 $ 16.6 30.4% 28.2% 34.1% MEDIAN $ 95.0 $ 10.7 23.9% 24.3% 28.6% ------ ------ ----- ----- -----
[MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 / 41 A / DESCRIPTIONS OF COMPARABLE COMPANIES [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 / 42 DESCRIPTIONS OF COMPARABLE COMPANIES ARCHER-DANIELS-MIDLAND COMPANY (NYSE:ADM) Archer-Daniels-Midland Company is principally engaged in procuring, transporting, storing, processing and merchandising agricultural commodities and products. The Company's operations are classified into four business segments: Oilseeds Processing, which includes the processing of oilseeds; Corn Processing, which includes its dry milling and wet milling corn operations; Wheat Processing, which includes the milling of wheat, corn and milo into flour, and Agricultural Services, which buys, stores, cleans and transports agricultural commodities. Archer-Daniels-Midland's remaining operations are classified as the Other segment, which primarily includes the production of value-added soy protein products. BUNGE LIMITED (NYSE:BG) Bunge Limited is an integrated, global agribusiness and food company operating in the farm-to-consumer food chain, which ranges from raw materials, such as grains and fertilizers, to retail food products, such as flour and margarine. The Company has primary operations in North America, Brazil, Argentina and Europe and worldwide distribution capabilities. Bunge conducts its operations in three divisions: agribusiness, fertilizer and food products. The agribusiness division consists of three business lines: grain origination, oilseed processing and international marketing. The Company's fertilizer division is comprised of nutrients and retail operations. The food products division consists of four business lines: edible oil products, wheat milling and bakery products, soy ingredients and corn products. CHIQUITA BRANDS INTERNATIONAL, INC. (NYSE:CQB) Chiquita Brands International, Inc. and its subsidiaries operate in two business segments: Fresh Produce and Processed Foods. The Company Fresh Produce segment sources, distributes and markets a line of fresh fruits and vegetables sold under the Chiquita and other brand names. Chiquita's fresh fruits and vegetables include bananas, berries, citrus, grapes, melons, mushrooms, stone fruit, tomatoes and a variety of other fresh produce. In Europe, the Company's Processed Foods segment sells Chiquita branded fruit juices, beverages, snacks and desserts, which are manufactured by third parties to Chiquita's specifications. In the United States, several national fruit juice and beverage producers manufacture and sell shelf-stable, refrigerated and frozen juice and beverage products using the Chiquita brand name, for which they pay Chiquita a license fee. Chiquita's processed banana products include banana puree, frozen banana pieces, sliced bananas and other specialty products. [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 / 43 DESCRIPTIONS OF COMPARABLE COMPANIES FRESH DEL MONTE PRODUCE INC. (NYSE:FDP) Fresh Del Monte Produce Inc. is primarily engaged in the worldwide sourcing, transportation and marketing of fresh and fresh-cut produce. The Company's products include bananas, pineapples, cantaloupe, honeydew, watermelons, grapes, non-tropical fruits (including citrus, apples, pears, peaches, plums, nectarines, apricots and kiwi), plantains, Vidalia sweet onions and various greens. In January 2003, the Company has added tomatoes, potatoes and onions to its product offering. The Company sources its products primarily from Central and South America and the Philippines. Fresh Del Monte also sources products from North America, Africa and Europe and distributes its products in Europe, the Asia-Pacific region and South America. The Company also has non-produce businesses. These include its third-party ocean freight container business, a third-party plastics and box manufacturing business, its Jordanian poultry business and its Argentine grain business. HINES HORTICULTURE, INC. (NASD:HORT) Hines Horticulture, Inc. produces and distributes horticultural products through its wholly owned subsidiaries, Hines Nurseries, Inc. (Hines Nurseries) and Enviro-Safe Laboratories Inc. The Company is a national supplier of ornamental shrubs, color plants and container-grown plants, with 14 commercial nursery facilities located in Arizona, California, Florida, Georgia, New York, Oregon, Pennsylvania, South Carolina and Texas. Hines markets its products to retail and commercial customers throughout the United States. It produces approximately 5,500 varieties of ornamental shrubs and color plants and sells to more than 2,200 retail and commercial customers, representing more than 8,400 outlets throughout the United States and Canada. NORTHLAND CRANBERRIES (OTC:NRCNA) Northland Cranberries, Inc. is a vertically integrated grower, handler, processor and marketer of cranberries, branded cranberry products and fruit beverages. The Company markets and sells its Northland, Seneca, TreeSweet and Awake brand cranberry and other fruit juice products, as well as fresh, frozen and dried cranberries and cranberry concentrate domestically through retail supermarkets and through other distribution channels, both domestically and internationally. In addition, the Company produces and packages juice beverages for other companies on a contract-manufacturing basis. As of November 26, 2002, Northland owned or operated 21 cranberry-producing marshes with 2,009 planted acres in Wisconsin. It also maintains multi-year crop purchase contracts with 44 independent cranberry growers to purchase all of the cranberries harvested from an aggregate of up to 1,743 contracted acres. [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 / 44 DESCRIPTIONS OF COMPARABLE COMPANIES DELTA AND PINE LAND COMPANY (NYSE:DLP) Delta and Pine Land Company (D&PL) and its subsidiaries breed, produce, condition and market cotton and soybean planting seed. In connection with its seed operations, the Company farms approximately 2,000 acres largely for the production of cotton and soybean foundation seed. D&PL is in a single line of business and operates in two business segments, domestic and international. The Company's reportable segments offer similar products, however, the business units are managed separately due to the geographic dispersion of their operations. The Company develops its proprietary seed products through research and development efforts in the United States and certain foreign countries. CAL-MAINE FOODS, INC. (NASD:CALM) Cal-Maine Foods, Inc. is primarily engaged in the production, cleaning, grading and packaging of fresh shell eggs for sale to shell egg retailers. The Company had sales of approximately 571 million dozen shell eggs during the fiscal year ended May 31, 2003 (fiscal 2003). It primarily markets shell eggs in the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States. Shell eggs are sold directly by the Company primarily to national and regional supermarket chains. Cal-Maine also produces specialty eggs such as Eggo land's Best and Farmhouse eggs and operates a dairy facility. SANDERSON FARMS, INC. (NASD:SAFM) Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and the preparation, processing, marketing and distribution of processed and prepared food items. The Company sells chill pack, ice pack and frozen chicken, both whole and cut-up, primarily under the Sanderson Farms brand name, to retailers, distributors and fast-food operators principally in the southeastern, southwestern and western United States. During the fiscal year ended October 31, 2002, the Company processed approximately 264.7 million chickens, or approximately 1.3 billion dressed pounds. In addition, it purchased and further processed 14.5 million pounds of poultry products. It sells over 200 processed and prepared food items nationally and regionally, primarily to distributors, national foodservice accounts, retailers and club stores. [MORGAN JOSEPH LOGO] PROJECT SPAWN PRESENTATION TO THE BOARD OF DIRECTORS November 9, 2003 / 45 EX-99.C.6 10 j0476003exv99wcw6.txt PROJECT SPAWN DISCUSSION MATERIALS 9/29/03 Exhibit (c)(6) Preliminary Valuation Materials Prepared for: [MORGAN JOSEPH LOGO] September 26, 2003 PROJECT SPAWN DRAFT DATED 9/26/03 Confidential Disclaimer DRAFT - - The following materials (the "Presentation") were prepared for the Board of Directors of Sylvan Inc. ("Sylvan" or the "Company") which has requested that Morgan Joseph & Co. Inc. ("Morgan Joseph") provide its opinion as to the fairness, from a financial point of view to the Company, of the consideration to be paid by Lake Pacific Partners (the "Acquiror') in connection with the proposed acquisition of the Company (the "Proposed Transaction"). - - In arriving at our opinion, we have assumed and relied upon the accuracy and completeness of the financial and other information used by us and have not attempted independently to verify such information, nor do we assume any responsibility to do so. We have assumed that the Company's forecasts and projections provided to or reviewed by us have been reasonably prepared based on the best current estimates and judgment of the Company's management as to the future financial condition and results of operations of the Company. We have not conducted a physical inspection of the properties and facilities of the Company, nor have we made or obtained any independent evaluation or appraisal of the assets or liabilities of the Company. We have also taken into account our assessment of general economic, market and financial conditions and our experience in similar transactions, as well as our experience in securities valuation in general. Our opinion necessarily is based upon economic, market, financial and other conditions as they exist and can be evaluated on the date hereof and we assume no responsibility to update or revise our opinion based upon events or circumstances occurring after the date hereof. We reserve, however, the right to withdraw, revise or modify our opinion based upon additional information which may be provided to or obtained by us, which suggests, in our judgment, a material change in the assumptions (or the bases therefore) upon which our opinion is based. - - These materials are not intended to represent an opinion, but rather to serve as discussion materials for the Board to review and as a basis upon which Morgan Joseph may render an opinion. These materials do not address the Company's underlying business decision to approve the Proposed Transaction or constitute a recommendation to the Company as to any action it should take regarding the Proposed Transaction. These materials may not be reproduced, summarized, excerpted from or otherwise publicly referred to or disclosed in any manner without our prior written consent. - - The following materials are based upon Morgan Joseph's analysis of the Proposed Transaction as of September 26, 2003. In the event of material changes to the terms and conditions of the Proposed Transaction upon which these materials are based, the enclosed analysis and our conclusions may be affected. - - Certain portions of the enclosed analysis are based upon projected financial results. Any projected financial results are based upon analyst forecasts, internal projections and discussions with management of the Company. A number of factors, including industry conditions, changes in costs, labor issues and other factors which are beyond the scope of these projections and out of the control of the Company, the Acquiror and Morgan Joseph may cause actual results to differ materially from these projections. Material changes in the projections may affect the conclusions derived from our analysis. [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 2 Table of Contents DRAFT 1. INTRODUCTION 2. PRELIMINARY VALUATION METHODOLOGIES [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 3 1 / INTRODUCTION DRAFT [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 4 Introduction DRAFT - - On April 23, 2003, Morgan Joseph was retained as financial advisor to the Special Committee of the Board of Directors of the Company. - - At the request of the Special Committee, we have prepared the enclosed preliminary valuation materials. Specifically, we have utilized the following valuation methodologies: - An analysis of publicly-traded comparable companies; - An analysis of comparable transactions; - A discounted cash flow analysis (DCF); and - A leveraged buyout analysis (LBO). - - These valuation materials are based on financial information provided by the Company. - Historical audits - Projected financial performance - Year-to-date interim financials - - THESE MATERIALS REPRESENT A PRELIMINARY DRAFT OF THE VALUATION METHODOLOGIES UTILIZED BY MORGAN JOSEPH AND ARE NOT INTENDED TO ADDRESS ANY PROPOSED TRANSACTION OR REPRESENT AN OPINION REGARDING THE FAIRNESS OF ANY PROPOSED TRANSACTION. [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 5 2 / PRELIMINARY VALUATION METHODOLOGIES DRAFT [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 6 Preliminary Valuation Methodologies Historical and Projected Financial Performance DRAFT ($ in thousands, except per share amounts)
FISCAL YEAR ENDED DECEMBER,(1),(2) -------------------------------------------- LTM ENDED 2001 2002 2003E(2) 6/3/2003(2) -------- -------- -------- ----------- Net sales $ 85,911 $ 88,192 $ 95,857 $ 99,519 Operating costs and expenses Cost of sales 49,818 52,109 61,422 65,620 Selling and administration 17,806 19,216 20,189 20,566 Research and development 1,721 1,965 1,244 1,244 Depreciation and amortization 5,575 5,842 6,916 7,238 -------- -------- -------- -------- 74,920 79,132 89,771 94,668 -------- -------- -------- -------- Operating income 10,991 9,060 6,086 4,851 Interest expense, net 2,532 1,865 1,675 1,621 Other income (expense) (19) (3) -- (44) -------- -------- -------- -------- Income before income taxes 8,440 7,192 4,411 3,186 Income taxes 2,490 2,406 1,503 1,108 -------- -------- -------- -------- Income before minority interest 5,950 4,786 2,908 2,078 Minority interest 121 117 117 187 -------- -------- -------- -------- Net income $ 5,829 $ 4,669 $ 2,791 $ 1,891 ======== ======== ======== ======== Earnings per share $ 1.05 $ 0.86 $ 0.52 $ 0.35 Diluted WASO 5,552 5,455 5,370 5,370 EBITDA(4) $ 17,200 $ 14,876 $ 13,002 $ 12,089 Maintenance Cap Ex $ 4,100 $ 3,400 $ 3,850 $ 3,100 Expansionary Cap Ex 4,644 2,744 -- 2,876 -------- -------- -------- -------- Total Cap Ex $ 8,744 $ 6,144 $ 3,850 $ 5,976 Revenue growth 0.0% 2.7% 8.7% n/a EBITDA 20.0% 16.9% 13.6% 12.1% Operating income 12.8% 10.3% 6.3% 4.9% Income before income taxes 9.8% 8.2% 4.6% 3.2% Net income 6.8% 5.3% 2.9% 1.9% Tax Rate 29.5% 33.5% 34.1% 34.8%

PROJECTED FISCAL YEAR ENDING DECEMBER,(1),(2),(3) ---------------------------------------------------------------------------- 2004 2005 2006 2007 2008 -------- -------- -------- -------- -------- Net sales $ 96,852 $ 97,670 $100,600 $103,618 $106,727 Operating costs and expenses Cost of sales 61,461 61,795 61,869 62,171 64,036 Selling and administration 19,988 20,295 20,720 21,324 21,945 Research and development 1,250 1,250 1,308 1,347 1,387 Depreciation and amortization 6,523 6,196 5,926 5,710 5,540 -------- -------- -------- -------- -------- 89,222 89,536 89,823 90,552 92,908 -------- -------- -------- -------- -------- Operating income 7,630 8,134 10,777 13,066 13,819 Interest expense, net 1,449 1,204 905 508 -- Other income (expense) -- -- -- -- -- -------- -------- -------- -------- -------- Income before income taxes 6,181 6,930 9,872 12,558 13,819 Income taxes 2,163 2,426 3,455 4,395 4,837 -------- -------- -------- -------- -------- Income before minority interest 4,018 4,504 6,417 8,163 8,982 Minority interest 117 117 117 117 117 -------- -------- -------- -------- -------- Net income $ 3,901 $ 4,387 $ 6,300 $ 8,046 $ 8,865 ======== ======== ======== ======== ======== Earnings per share $ 0.73 $ 0.82 $ 1.17 $ 1.50 $ 1.65 Diluted WASO 5,370 5,370 5,370 5,370 5,370 EBITDA(4) $ 14,153 $ 14,330 $ 16,703 $ 18,776 $ 19,359 Maintenance Cap Ex $ 3,850 $ 3,850 $ 3,850 $ 3,850 $ 3,850 Expansionary Cap Ex -- -- -- -- -- -------- -------- -------- -------- -------- Total Cap Ex $ 3,850 $ 3,850 $ 3,850 $ 3,850 $ 3,850 Revenue growth 1.0% 0.8% 3.0% 3.0% 3.0% EBITDA 14.6% 14.7% 16.6% 18.1% 18.1% Operating income 7.9% 8.3% 10.7% 12.6% 12.9% Income before income taxes 6.4% 7.1% 9.8% 12.1% 12.9% Net income 4.0% 4.5% 6.3% 7.8% 8.3% Tax Rate 35.0% 35.0% 35.0% 35.0% 35.0%
- ------------------ (1) The Company maintains its accounting records on a 52-53 week fiscal year ending the Sunday nearest December 31. All of the above fiscal years are 52 weeks. (2) Excludes non-recurring expenses. (3) Based upon management estimates dated September 23, 2003. Includes public company expenses. Assumes an Euro to U.S. Dollar exchange rate of 1.09 and a normalized tax rate of 35%. (4) EBITDA = operating income plus depreciation and amortization. 2001-2002 EBITDA includes amortization embedded in other line items. [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 7 Preliminary Valuation Methodologies Valuation Summary DRAFT - - The preliminary valuation ranges implied by the techniques employed are summarized below, based on the following: - LBO ANALYSIS - High and low values represent 25% and 30% IRRs - DCF ANALYSIS - Based on discount rates and EBITDA exit multiples of 12% - 14% and 5.0x - 6.0x - COMPARABLE TRANSACTION ANALYSIS (1) - Based on 2003E EBITDA and multiples of 6.5x - 8.0x - PUBLICLY-TRADED COMPARABLE COMPANY ANALYSIS (2) - Based on 2003E EBITDA and multiples of 6.0x - 7.0x [BAR CHART DEPICTING IMPLIED ENTERPRISE VALUE] [BAR CHART DEPICTING EQUITY VALUE PER SHARE] - ------------------ (1) Based on best comparable transactions including: Savia acquiring Seminis, Inc., Investor Group acquiring Dole, Cal-Maine Foods acquiring Smith Farms, and Investor Group acquiring Maui Land & Pineapple. (2) Based on best comparable companies including: ADM, BG, CQB, FDP, HORT and NRCNA. [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 8 Preliminary Valuation Methodologies Publicly-Traded Comparable Company Analysis DRAFT CAPITALIZATION & OPERATING DATA: (1) ($ millions, except per share data)
MARKET CAPITALIZATION (2) % OF -------------------------- TICKER PRICE 52-WK EQUITY MKT ENTERPRISE COMPANY SYMBOL 9/26/03 HIGH CAP VALUE - ------- ------ ------- ---- --- ----- SYLVAN INC. (5) SYLN $ 10.00 81.8% $ 51.4 $ 84.9 GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. ADM 12.90 89.3% 8,332.8 12,205.9 Bunge Limited BG 27.47 88.2% 2,757.1 5,950.1 FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. CQB 17.86 93.4% 720.4 1,027.9 Fresh Del Monte Produce FDP 24.95 84.0% 1,428.6 1,435.9 Inc. Hines Horticulture, Inc. HORT 3.66 100.0% 80.9 316.6 Northland Cranberries, Inc. NRCNA 0.50 46.7% 49.2 86.9 AG INPUTS Delta and Pine Land Co. DLP 22.62 88.7% 904.2 793.3 PROTEIN Cal-Maine Foods, Inc. CALM 7.17 91.9% 86.5 210.0 Sanderson Farms, Inc. SAFM 31.11 90.3% 415.7 434.8 High 100.0% 8,332.8 12,205.9 Median 89.3% 720.4 793.3 Mean 85.8% 1,641.7 2,495.7 Low 46.7% 49.2 86.9

LTM OPERATING RESULTS LTM MARGINS -------------------------------------------- ---------------------------------- COMPANY SALES EBITDA(3) EBIT NET INC EBITDA EBIT NET INC - ------- ----- --------- ---- ------- ------ ---- ------- SYLVAN INC. (5) $ 99.5 $ 12.1 $ 4.9 $ 1.9 12.1% 4.9% 1.9% GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 30,708.0 1,423.1 779.4 460.0 4.6% 2.5% 1.5% Bunge Limited 18,397.0 1,093.0 912.0 373.0 5.9% 5.0% 2.0% FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 2,858.5 144.0 97.0 (63.4) 5.0% 3.4% N/M Fresh Del Monte Produce 2,330.3 304.3 241.3 242.6 13.1% 10.4% 10.4% Inc. Hines Horticulture, Inc. 332.1 52.4 43.5 18.9 15.8% 13.1% 5.7% Northland Cranberries, Inc. 92.2 11.1 7.4 8.9 12.1% 8.0% 9.7% AG INPUTS Delta and Pine Land Co. 284.4 71.3 63.8 32.7 25.1% 22.4% 11.5% PROTEIN Cal-Maine Foods, Inc. 387.5 42.9 26.3 12.2 11.1% 6.8% 3.2% Sanderson Farms, Inc. 818.6 87.2 62.6 33.0 10.6% 7.7% 4.0% High 30,708.0 1,423.1 912.0 460.0 25.1% 22.4% 11.5% Median 818.6 87.2 63.8 32.7 11.1% 7.7% 4.9% Mean 6,245.4 358.8 248.1 124.2 11.5% 8.8% 6.0% Low 92.2 11.1 7.4 (63.4) 4.6% 2.5% 1.5%

3 FISCAL YR. CAGR (4) ---------------------------------- COMPANY SALES EBITDA NET INC - ------- ----- ------ ------- SYLVAN INC. (5) 5.6% (13.1%) (30.8%) GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 25.5% 5.7% 9.6% Bunge Limited 20.7% 36.0% 128.3% FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 2.5% (5.9%) N/A Fresh Del Monte Produce 6.0% 45.2% 153.7% Inc. Hines Horticulture, Inc. 5.2% (4.7%) (17.5%) Northland Cranberries, Inc. (30.0%) N/A N/A AG INPUTS Delta and Pine Land Co. (7.5%) 0.9% (3.4%) PROTEIN Cal-Maine Foods, Inc. 4.0% 12.0% 43.5% Sanderson Farms, Inc. 10.8% 60.5% N/A High 25.5% 60.5% 153.7% Median 5.2% 8.9% 26.5% Mean 4.1% 18.7% 52.3% Low (30.0%) (5.9%) (17.5%)
[MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 9 Preliminary Valuation Methodologies Publicly-Traded Comparable Company Analysis DRAFT VALUATION & LEVERAGE STATISTICS:
($ millions, except per share data) EQUITY MKT CAP / ENTERPRISE VALUE / LTM ---------------- EPS ESTIMATES (6) PROJECTED P/E ------------------------- NET BOOK ----------------- ---------------- COMPANY SALES EBITDA EBIT INCOME VALUE 2003 2004 2003 2004 - ------- ----- ------ ---- ------ ----- ---- ---- ---- ---- SYLVAN INC. (5) 0.9 X 7.0 X 17.5 X 27.2 X 1.0 X N/A N/A N/A N/A GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 0.4 x 8.6 x 15.7 x 18.1 x 1.2 x 0.77 0.96 16.8 x 13.4 x Bunge Limited 0.3 x 5.4 x 6.5 x 7.4 x 1.3 x 2.54 2.85 10.8 x 9.6 x FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 0.4 x 7.1 x 10.6 x N/M 1.0 x 1.91 2.68 9.4 x 6.7 x Fresh Del Monte Produce Inc. 0.6 x 4.7 x 6.0 x 5.9 x 1.6 x 3.79 4.03 6.6 x 6.2 x Hines Horticulture, Inc. 1.0 x 6.0 x 7.3 x 4.3 x 1.4 x N/A N/A N/A N/A Northland Cranberries, Inc. 0.9 x 7.8 x 11.8 x 5.5 x 1.2 x N/A N/A N/A N/A AG INPUTS Delta and Pine Land Co. 2.8 x 11.1 x 12.4 x 27.7 x 3.9 x 1.05 1.29 21.6 x 17.5 x PROTEIN Cal-Maine Foods, Inc. 0.5 x 4.9 x 8.0 x 7.1 x 1.3 x N/A N/A N/A N/A Sanderson Farms, Inc. 0.5 x 5.0 x 6.9 x 12.6 x 2.5 x N/A N/A N/A N/A ALL COMPARABLES High 2.8 x 11.1 x 15.7 x 27.7 x 3.9 x 3.79 4.03 21.6 x 17.5 x Median 0.5 x 6.0 x 8.0 x 7.2 x 1.3 x 1.91 2.68 10.8 x 9.6 x Mean 0.8 x 6.7 x 9.5 x 11.1 x 1.7 x 2.01 2.36 13.0 x 10.7 x Low 0.3 x 4.7 x 6.0 x 4.3 x 1.0 x 0.77 0.96 6.6 x 6.2 x BEST COMPARABLES (9) High 1.0 x 8.6 x 15.7 x 18.1 x 1.6 x 3.79 4.03 16.8 x 13.4 x Median 0.5 x 6.6 x 8.9 x 5.9 x 1.2 x 2.23 2.77 10.1 x 8.1 x Mean 0.6 x 6.6 x 9.6 x 8.2 x 1.3 x 2.25 2.63 10.9 x 9.0 x Low 0.3 x 4.7 x 6.0 x 4.3 x 1.0 x 0.77 0.96 6.6 x 6.2 x

($ millions, except per share data) LEVERAGE STATISTICS -------------------------------- 2004 P/E / DEBT / 5 YR. EPS EBITDA / DEBT / EQUITY MKT COMPANY GROWTH (7) ROIC (8) INTEREST EBITDA CAP - ------- ---------- -------- -------- ------ ---------- SYLVAN INC. (5) N/A 14.0% 7.5 X 3.0 X 69.5% GRAIN HANDLING & PROCESSING Archer-Daniels-Midland Co. 159.7% 11.6% 6.0 x 3.6 x 62.2% Bunge Limited 105.0% 21.0% 42.0 x 2.8 x 112.3% FRUITS & VEGETABLES Chiquita Brands Int'l, Inc. 55.5% 11.9% 2.9 x 3.3 x 66.9% Fresh Del Monte Produce Inc. 82.5% 31.5% 27.2 x 0.2 x 3.8% Hines Horticulture, Inc. N/A 17.9% 2.0 x 4.5 x 292.2% Northland Cranberries, Inc. N/A 12.8% 5.7 x 4.0 x 91.5% AG INPUTS Delta and Pine Land Co. 184.1% 30.6% N/A 0.0 x 0.2% PROTEIN Cal-Maine Foods, Inc. N/A 21.9% 5.3 x 3.0 x 149.9% Sanderson Farms, Inc. N/A 41.5% 32.8 x 0.5 x 9.9% ALL COMPARABLES High 184.1% 41.5% 42.0 x 4.5 x 292.2% Median 105.0% 21.0% 5.8 x 3.0 x 66.9% Mean 117.4% 22.3% 15.5 x 2.5 x 87.7% Low 55.5% 11.6% 2.0 x 0.0 x 0.2% BEST COMPARABLES (9) High 159.7% 31.5% 42.0 x 4.5 x 292.2% Median 93.7% 15.4% 5.8 x 3.5 x 79.2% Mean 100.7% 17.8% 14.3 x 3.1 x 104.8% Low 55.5% 11.6% 2.0 x 0.2 x 3.8%
(1) Excludes non-recurring and extraordinary items. (2) Fully-diluted using the treasury-stock method. (3) EBITDA = income from operations plus the sum of depreciation, amortization and non-cash stock option compensation. (4) Historical results have not been adjusted to reflect the discontinuation of goodwill amortization. (5) Sylvan is shown for illustrative purposes only and is not included in high, median, mean and low calculations. (6) Earnings estimates are from First Call, where available, and calendarized, where appropriate. (7) Growth rates are from Bloomberg, where available. (8) ROIC = EBITDA divided by the sum of total equity and total debt. (9) Best comparables include ADM, BG, CQB, FDP, HORT and NRCNA. [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 10 Preliminary Valuation Methodologies Comparable Transaction Analysis DRAFT
ANNOUNCEMENT DATE ACQUIROR ENTERPRISE VALUE MULTIPLES: EQUITY --------------------------- CLOSING DATE TARGET EQUITY ENTERPRISE PREMIUM VALUE TO: LTM LTM LTM CONSIDERATION TARGET BUSINESS VALUE VALUE PAID LTM NI REVENUE EBITDA EBIT - ------------- --------------- ----- ----- ---- ------ ------- ------ ---- 8/29/2003 Venture Group n/a n/a n/a n/a n/a n/a n/a 8/29/2003 Packers of Indian River Ltd. (Chiquita Brands International Inc.) Cash Producer and wholesaler of fresh and processed citrus products 8/18/2003 Tyson Foods Inc. $74.0 $74.0 n/a 0.3x n/a n/a n/a Pending Choctaw Maid Farms Inc. n/a Producer and manufacturer of wholesale poultry products 8/18/2003 BC Natural Foods LLC n/a n/a n/a n/a n/a n/a n/a 8/18/2003 Penn Valley Farms n/a Owner and operator of poultry farms 6/9/2003 Pilgrims Pride Corp 302.7 597.3 n/a n/a 0.3x 23.1x n/a Pending ConAgra Foods Inc-Chicken Business Cash/Stock /Sub. Notes Producer of meat, eggs, and cooking oil 2/4/2003 Riviana Foods Inc. 25.3 25.3 n/a n/a 0.7x n/a n/a 2/10/2003 ACH Rice Specialties Business (Associated British Foods Plc) Cash Producer and marketer of rice products 12/13/2002 Savia, S.A. de C.V. 384.4 650.0 50.6% 126.0x 1.4x 8.0x 14.1x 9/30/2003 Seminis, Inc. Cash Producer and marketer of fruit and vegetable seeds 9/22/2002 Investor Group 2,017.8 2,500.0 36.8% 13.1x 0.6x 6.6x 9.1x 3/31/2003 Dole Food Co., Inc. Cash Producer and marketer of fresh fruit and vegetables 8/17/2001 Nippon Suisan 175.0 175.0 n/a n/a 0.7x 8.8x n/a 10/2/2001 Gorton's & Bluewater Seafoods Cash Producers of frozen seafood 1/23/2001 Hormel Foods Corp 334.4 334.4 n/a 16.0x 1.0x n/a 10.0x 2/26/2001 The Turkey Store Co. (d/b/a Jerome Foods, Inc.) Cash Producer of poultry, food products 9/27/2000 Pilgrim's Pride Corp. 234.5 280.0 105.4% 65.2x 0.3x 10.2x 31.2x 1/28/2001 WLR Foods, Inc. Cash Producer of poultry products
[MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 11 Preliminary Valuation Methodologies Comparable Transactions Analysis DRAFT
ANNOUNCEMENT DATE ACQUIROR EQUITY ENTERPRISE VALUE MULTIPLES: CLOSING DATE TARGET EQUITY ENTERPRISE PREMIUM VALUE TO: LTM LTM LTM CONSIDERATION TARGET BUSINESS VALUE VALUE PAID LTM NI REVENUE EBITDA EBIT - ------------- --------------- ----- ----- ---- ------ ------- ------ ---- 8/9/2000 Lesaffre et Compagnie $113.0 $113.0 n/a n/a 0.9 x n/a n/a 2/26/2001 Red Star Yeast and Products (Sensient Technologies Corp.) Cash Supplier of yeast to commercial bakery 12/20/1999 Money's Mushrooms Ltd. 50.0 50.0 n/a n/a 0.4 x n/a n/a 2/1/2000 Fresh Mushrooms Business (Vlasic Foods Int'l Inc.) Cash Producer of fresh mushrooms 12/6/1999 ConAgra, Inc. 360.0 376.0 n/a n/a 0.8 x n/a 11.1 x 1/3/2000 Seaboard Farms (Seaboard Corp.) Cash Producer of poultry products 9/15/1999 Cal-Maine Foods, Inc. 36.2 36.2 n/a 13.4 x 0.7 x 6.5 x 9.1 x 9/30/1999 Smith Farms, Inc. Cash Owns and operates egg farms 7/15/1999 Reservoir Capital Group LLC 72.2 153.8 8.7% 36.8 x 1.2 x 10.0 x 21.7 x 11/2/1999 Orange-co., Inc. Cash Producer of citrus fruit, juices 7/2/1999 Investor Group 95.2 119.6 (12.8%) 18.0 x 0.8 x 6.5 x 11.7 x 9/7/1999 Maui Land & Pineapple Co., Inc. n/a Producer of pineapples 5/14/1999 Pictsweet LLC 23.8 72.6 36.6% 39.3 x 0.4 x 5.9 x 13.9 x 9/23/1999 United Foods, Inc. Cash Producer and marketer of frozen fruits, vegetables Summary Multiples: Median 36.7% 18.0 x 0.7 x 8.0 x 11.7 x Mean 37.6% 36.4 x 0.7 x 9.5 x 14.7 x Low (12.8%) 0.3 x 0.3 x 5.9 x 9.1 x High 105.4% 126.0 x 1.4 x 23.1 x 31.2 x
Source: Thomson Financial, SEC filings and company press releases. Data includes transactions announced between January 1, 1999 and September 19, 2003. [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 12 Preliminary Valuation Methodologies Discounted Cash Flow Analysis DRAFT HISTORICAL AND PROJECTED CASH FLOWS ($ in millions except per share data)
Fiscal Year End December, HISTORICAL CAGR PROJECTED (A) CAGR -------------------- ----- ------------------------------------------- ----- 2001 2002 2003 01-03 2004 2005 2006 2007 2008 04-08 ---- ---- ---- ----- ---- ---- ---- ---- ---- ----- Net Sales $85.9 $88.2 $95.9 5.6% $96.9 $97.7 $100.6 $103.6 $106.7 2.5% % Growth - 2.7% 8.7% 1.0% 0.8% 3.0% 3.0% 3.0% EBITDA 17.2 14.9 13.0 -13.1% 14.2 14.3 16.7 18.8 19.4 8.1% % of Sales 20.0% 16.9% 13.6% 14.6% 14.7% 16.6% 18.1% 18.1% EBIT 11.6 9.0 6.1 -27.6% 7.6 8.1 10.8 13.1 13.8 16.0% % of Sales 13.5% 10.2% 6.3% 7.9% 8.3% 10.7% 12.6% 12.9% Less: Taxes @ 35% (4.1) (3.2) (2.1) (2.7) (2.8) (3.8) (4.6) (4.8) ---- ---- ----- ---- ---- ---- ---- ----- UNLEVERED NET INCOME 7.6 5.9 4.0 -27.6% 5.0 5.3 7.0 8.5 9.0 16.0% Plus: Depreciation and Amortization 5.6 5.8 6.9 6.5 6.2 5.9 5.7 5.5 6.5% 6.6% 7.2% 6.7% 6.3% 5.9% 5.5% 5.2% Less: Capital Expenditures (4.1) (3.4) (3.9) (3.9) (3.9) (3.9) (3.9) (3.9) 4.8% 3.9% 4.0% 0.0 0.0 0.0 0.0 0.0 Less: Increase in Working Capital (2.9) (1.6) 3.0 1.8 (0.2) (0.5) (0.6) (0.7) 3.3% 1.9% -3.1% -1.9% 0.2% 2.0% 2.0% 2.0% ---- ---- ----- ---- ---- ---- ---- ----- UNLEVERED FREE CASH FLOW $6.2 $6.7 $10.0 27.4% $9.5 $7.5 $8.6 $9.8 $10.0 1.4% ==== ==== ===== ==== ==== ==== ==== =====
DISCOUNTED CASH FLOW VALUATION ANALYSIS
12.0% 13.0% 14.0% Discount Rate ------------------------ --------------------------- --------------------------- Terminal EBITDA Multiple 5.0x 5.5x 6.0x 5.0x 5.5x 6.0x 5.0x 5.5x 6.0x EBITDA $19.4 $19.4 $19.4 $19.4 $19.4 $19.4 $19.4 $19.4 $19.4 Terminal Value 96.8 106.5 116.2 96.8 106.5 116.2 96.8 106.5 116.2 PV Terminal Value 54.9 60.4 65.9 52.5 57.8 63.0 50.3 55.3 60.3 PV Free Cash Flows 32.4 32.4 32.4 31.6 31.6 31.6 30.8 30.8 30.8 ------ ------ ------ ----- ------ ------ ----- ------ ------ IMPLIED ENTERPRISE VALUE $87.3 $92.8 $98.3 $84.1 $89.4 $94.7 $81.1 $86.1 $91.2 ====== ====== ====== ===== ====== ====== ===== ====== ====== Less: Net Debt (D) (31.3) (31.3) (31.3) (31.3) (31.3) (31.3) (31.3) (31.3) (31.3) Less: Minority Interest (D) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) ------ ------ ------ ----- ------ ------ ----- ------ ------ EQUITY VALUE $53.9 $59.4 $64.9 $50.7 $55.9 $61.2 $47.7 $52.7 $57.7 Shares Outstanding (mm) 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1 ------ ------ ------ ----- ------ ------ ----- ------ ------ EQUITY VALUE PER SHARE $10.47 $11.54 $12.61 $9.85 $10.88 $11.90 $9.26 $10.24 $11.22 ====== ====== ====== ===== ====== ====== ===== ====== ====== ENTERPRISE VALUE AS A MULTIPLE OF 2003E: Net Sales 0.91x 0.97x 1.03x 0.88x 0.93x 0.99x 0.85x 0.90x 0.95x EBITDA 6.72x 7.14x 7.56x 6.47x 6.88x 7.28x 6.24x 6.62x 7.01x EBIT 14.35x 15.25x 16.16x 13.83x 14.69x 15.55x 13.33x 14.15x 14.98x
(a) Based upon Management estimates dated September 23, 2003. Includes $1.1 million of public company expenses. Assumes an Euro to U.S. Dollar exchange rate of 1.09. (b) Based on July 2003 Balance Sheet. [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 13 Preliminary Valuation Methodologies Leveraged Buyout Analysis DRAFT LBO TRANSACTION SUMMARY IMPLIED IRR = 25.03% PURCHASE PRICE: Equity value $48.0 Plus: debt 35.7 Less: cash (4.4) ------ Enterprise value $79.4 ====== PURCHASE MULTIPLES: Enterprise value / 2003 revenue 0.8x Enterprise value / 2003 EBITDA 5.6x IMPLIED PRICE PER SHARE: $ 9.34 ------ USES: Equity purchase price $48.0 Refinance existing debt 35.7 Transaction expenses 3.2 ------ $87.0 ====== OWNERSHIP: Financial sponsor 82.0% Management 10.0% Sub-debt 8.0% SOURCES: Excess cash $2.4 Bank debt 42.3 Assumed debt 17.6 Financial sponsor equity 24.6 ------ $87.0 ====== LEVERAGE STATISTICS: Bank debt / 2003 EBITDA 3.0x Total debt / 2003 EBITDA 4.2x 2003 EBITDA / Interest 3.4x (2003 EBITDA - CapEx) / Interest 2.1x 2004 EBITDA / Interest 1.9x (2004 EBITDA - CapEx) / Interest 2.5x

LBO TRANSACTION SUMMARY IMPLIED IRR = 30.04% PURCHASE PRICE: Equity value $41.6 Plus: debt 35.7 Less: cash (4.4) ------ Enterprise value $72.9 ====== PURCHASE MULTIPLES: Enterprise value / 2003 revenue 0.8x Enterprise value / 2003 EBITDA 5.2x IMPLIED PRICE PER SHARE: $ 8.09 ------ USES: Equity purchase price $41.6 Refinance existing debt 35.7 Transaction expenses 3.2 ------ $80.6 ====== OWNERSHIP: Financial sponsor 82.5% Management 10.0% Sub-debt 7.5% SOURCES: Excess cash $2.4 Bank debt 42.3 Assumed debt 17.6 Financial sponsor equity 18.2 ------ $80.6 ====== LEVERAGE STATISTICS: Bank debt / 2003 EBITDA 3.0x Total debt / 2003 EBITDA 4.2x 2003 EBITDA / Interest 3.4x (2003 EBITDA - CapEx) / Interest 2.1x 2004 EBITDA / Interest 1.9x (2004 EBITDA - CapEx) / Interest 2.5x

~~NOTE: Analysis based on management estimates, anticipated financing parameters and required returns. [MORGAN JOSEPH LOGO] PROJECT SPAWN \ SEPTEMBER 26, 2003 14~~ EX-99.C.7 11 j0476003exv99wcw7.txt SPECIAL COMMITTEE DISCUSSION MATERIALS 11/11/03 Exhibit (c)(7) CONFIDENTIAL Discussion Materials For The Special Committee of [SYLVAN LOGO] November 11, 2003 LANE,BERRY & CO. International [SYLVAN LOGO] DISCLAIMER - THE FOLLOWING MATERIALS HAVE BEEN PREPARED BY LANE, BERRY & CO. INTERNATIONAL ("LBCI") AS PART OF A PRESENTATION BEING MADE TO AND AT THE REQUEST OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF SYLVAN INC. ("SYLVAN" OR THE "COMPANY"). - IN PREPARING THIS PRESENTATION, WE HAVE ASSUMED AND RELIED, UPON THE ACCURACY AND COMPLETENESS OF THE FINANCIAL AND OTHER INFORMATION SUPPLIED OR OTHERWISE MADE AVAILABLE TO US FROM PUBLIC SOURCES OR BY THE COMPANY AND HAVE NOT INDEPENDENTLY VERIFIED SUCH INFORMATION. WE HAVE NEITHER OBTAINED NOR PERFORMED ANY INDEPENDENT VALUATION OR APPRAISAL OF THE ASSETS OR LIABILITIES OF THE COMPANY. IN ADDITION, THE COMPANY HAS NOT REQUESTED AND WE HAVE NOT PERFORMED A LIQUIDATION ANALYSIS. - PLEASE NOTE THAT THIS PRESENTATION IS BASED ON ECONOMIC, MARKET AND OTHER CONDITIONS AS IN EFFECT ON, AND THE INFORMATION AND AGREEMENTS (OR DRAFTS THEREOF) MADE AVAILABLE TO US AS OF, THE DATE HEREOF AND DOES NOT PURPORT TO TAKE INTO CONSIDERATION SUBSEQUENT DEVELOPMENTS WHICH MAY AFFECT THE INFORMATION PRESENTED HEREIN. LBCI DOES NOT HAVE ANY OBLIGATION TO UPDATE, REVISE, OR REAFFIRM THE INFORMATION PRESENTED HEREIN. - THIS PRESENTATION HAS BEEN PREPARED FOR THE BENEFIT AND USE OF THE SPECIAL COMMITTEE IN CONNECTION WITH AND FOR THE PURPOSES OF ITS EVALUATION OF THE PROPOSED TRANSACTION AND IS NOT ON BEHALF OF, AND SHALL NOT CONFER RIGHTS OR REMEDIES UPON, ANY PERSON OTHER THAN THE SPECIAL COMMITTEE. - IN ADDITION, THIS PRESENTATION DOES NOT CONSTITUTE AN OPINION OR RECOMMENDATION TO A STOCKHOLDER OF THE COMPANY ON HOW TO VOTE WITH RESPECT TO THE PROPOSED TRANSACTION. FURTHER, WE DO NOT ADDRESS THE RELATIVE MERITS OF THE PROPOSED TRANSACTION COMPARED WITH OTHER BUSINESS STRATEGIES OR ALTERNATIVE TRANSACTIONS THAT MIGHT BE AVAILABLE TO THE COMPANY, THE COMPANY'S UNDERLYING BUSINESS DECISION TO PROCEED OR EFFECT THE PROPOSED TRANSACTION, OR ANY OTHER ASPECT OF THE PROPOSED TRANSACTION. LANE,BERRY & CO. International 2 [SYLVAN LOGO] AGENDA 1. EXECUTIVE SUMMARY 2. SUMMARY OF PROPOSED TRANSACTION 3. SUMMARY BACKGROUND OF PROPOSED TRANSACTION 4. OVERVIEW OF SYLVAN 5. ANALYSIS OF PROPOSED TRANSACTION 6. VALUATION OVERVIEW 7. CONCLUSION LANE,BERRY & CO. International 3 [SYLVAN LOGO] EXECUTIVE SUMMARY LANE,BERRY & CO. International 4 [SYLVAN LOGO] INTRODUCTION - LANE, BERRY & CO. INTERNATIONAL ("LBCI") HAS BEEN ASKED BY THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS (THE "SPECIAL COMMITTEE") OF SYLVAN INC. ("SYLVAN" OR THE "COMPANY") TO OPINE AS TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE CASH CONSIDERATION TO BE RECEIVED BY THE HOLDERS (OTHER THAN DENNIS ZENSEN, VIRGIL JURGENSMEYER, ROGER CLAYPOOLE, SNYDER ASSOCIATED COMPANIES, INC., SAC HOLDING COMPANY AND THEIR RESPECTIVE AFFILIATES) OF SYLVAN'S COMMON STOCK (THE "COMMON STOCKHOLDERS") PURSUANT TO THE MERGER (AS DESCRIBED IN THE DRAFT AGREEMENT AND PLAN OF MERGER DATED NOVEMBER 7, 2003 (THE "MERGER AGREEMENT"), AMONG THE COMPANY, SNYDER ASSOCIATED COMPANIES, INC. ("PARENT" OR THE "SNYDER GROUP") AND SAC HOLDING COMPANY ("SUB")) (THE "PROPOSED TRANSACTION") - IN CONDUCTING OUR ANALYSIS, WE HAVE ANALYZED, AMONG OTHER THINGS, THE FOLLOWING: - The Merger Agreement - The results of the first sales process conducted by LBCI between April 2002 and December 2002 - The results of the second sales process conducted between April 2003 and November 2003 - The Company's Annual Reports on Form 10-K and the Company's Quarterly Reports on Form 10-Q - Certain internal information and other data relating to the Company, including standalone forecasts and projections prepared and provided to us by management of the Company - Certain other publicly available information concerning the Company and the trading markets for the Company's common stock - Certain publicly available information concerning other companies engaged in businesses which we believe to be generally comparable to the Company and the trading markets for certain of such other companies - Certain publicly available information concerning the terms of recent business combinations which we believe to be relevant - WE HAVE ALSO INTERVIEWED CERTAIN SENIOR MANAGEMENT OF THE COMPANY CONCERNING THE BUSINESS AND OPERATIONS, PRESENT CONDITION AND FUTURE PROSPECTS OF THE COMPANY AND UNDERTOOK OTHER STUDIES, ANALYSES AND INVESTIGATIONS AS WE DEEMED APPROPRIATE UNDER THE CIRCUMSTANCES LANE,BERRY & CO. International 5 [SYLVAN LOGO] EXECUTIVE SUMMARY - SUMMARY OF PROPOSED TRANSACTION - The Snyder Group has proposed to purchase all the outstanding shares of common stock (not owned by Parent or any subsidiary of Parent), par value $0.001 per share (the "Common Stock"), in a one-step cash merger - After the Proposed Transaction, Sylvan will become a privately held corporation - CONSIDERATION FOR THE PROPOSED TRANSACTION - At the effective time, i.e. the date of consummation of the Proposed Transaction, the Common Stockholders will receive $12.25 in cash for each share of Common Stock (the "Merger Consideration") which aggregates to $64.2 million - The Snyder Group is expected to contribute up to $56.5 million as equity (1) - Roger Claypoole is expected to contribute up to $1.0 million as equity (1) - Sylvan management is expected to contribute up to $9.2 million through a rollover of a portion or all of its equity (1) - The remaining source of funds will come from Citizens Bank or an alternative senior lender (1) - PROCESS & TIMING OF THE PROPOSED TRANSACTION - Sign the definitive Merger Agreement on November 11, 2003 - File proxy statement with the SEC by November 25, 2003 - Receive approval from the SEC and mail proxies to the stockholders by late December 2003 or early January 2004 - Hold special meeting and stockholder vote by late January 2004 or early February 2004 - Proposed Transaction closes during Q1'2004 (1) Per the Snyder Group's proposed sources and uses of funds. LANE,BERRY & CO. International 6 [SYLVAN LOGO] SUMMARY OF PROPOSED TRANSACTION LANE,BERRY & CO. International 7 [SYLVAN LOGO] SUMMARY OF KEY TERMS OF THE PROPOSED TRANSACTION THE PROPOSED TRANSACTION INCLUDES THE FOLLOWING KEY ELEMENTS WHICH ARE TAKEN FROM THE DRAFT MERGER AGREEMENT DATED AS OF NOVEMBER 7, 2003 BY AND AMONG THE COMPANY, PARENT AND SUB: MERGER CONSIDERATION - The Common Stockholders receive $12.25 in cash for each share of Common Stock - Sylvan management is expected to contribute up to $9.2 million through a rollover of a portion or all of its equity - All outstanding and unexercised options to purchase shares of Common Stock that have exercise prices less than the Merger Consideration (as defined in the Merger Agreement) shall be cancelled and exchanged for the right to receive a cash amount equal to the difference between the Merger Consideration and the per share exercise price of such option TRANSACTION STRUCTURE - Reverse triangular merger (i.e. merger of Sub, a wholly owned subsidiary of Parent, with and into the Company, with the Company being the surviving entity) PRINCIPAL CONDITIONS TO CLOSING - Stockholder vote approval - Wynnefield Capital and Steel Partners must sign a voting agreement simultaneously with the signing of the definitive Merger Agreement Customary representations and warranties of the - Company, Parent and Sub remain true and correct with only such exceptions as do not in the aggregate have a material adverse effect (as defined in the Merger Agreement) - Since June 30, 2003, there shall not have been any change, circumstance or event which constitutes, has resulted in, or that would reasonably be likely to result in, a material adverse effect (as defined in the Merger Agreement) - Other customary approvals, consents, waivers and clearances (e.g. HSR) LANE,BERRY & CO. International 8 [SYLVAN LOGO] SUMMARY OF KEY TERMS OF THE PROPOSED TRANSACTION (CONT'D) THE PROPOSED TRANSACTION INCLUDES THE FOLLOWING KEY ELEMENTS WHICH ARE TAKEN FROM THE DRAFT MERGER AGREEMENT DATED AS OF NOVEMBER 7, 2003 BY AND AMONG THE COMPANY, PARENT AND SUB: TERMINATION/BREAK-UP FEE - The Merger Agreement may be terminated and the Proposed Transaction may be abandoned, at any time prior to the Effective Time, in the following circumstances: - By mutual written agreement of the Company, Parent and Sub - By either the Company or Parent if the Merger Agreement is not approved and adopted by the Common Stockholders - By judgment or injunction - By material breach of either Parent or Company - By either the Company or Parent if the Proposed Transaction has not been consummated on or before May 1, 2004 - Upon the occurrence of certain events listed below, the Merger Agreement will be terminated and the Company will pay $2.0 million as a break-up fee to Parent and will pay up to $500,000 to Parent for expense reimbursements: - Lack or withdrawal of Board of Directors or Special Committee recommendation - No stockholder meeting is held within 30 business days of proxy's clearance with the SEC - The Company enters into a Superior Proposal (as defined within the Merger Agreement) - Consummation of certain transactions within 12 months of termination pursuant to lack of stockholder approval - Parent shall be entitled to expense reimbursement in the event the Merger Agreement is not approved and adopted by the Common Stockholders LANE,BERRY & CO. International 9 [SYLVAN LOGO] SUMMARY BACKGROUND OF PROPOSED TRANSACTION LANE,BERRY & CO. International 10 [SYLVAN LOGO] BACKGROUND OF PROPOSED TRANSACTION APRIL 2002 - Special Committee retains LBCI to explore strategic alternatives - LBCI performs business and financial due diligence MAY 2002 - LBCI continues to perform business and financial due diligence - Sylvan issues a press release announcing the exploration of strategic alternatives process - Sylvan holds its stockholder meeting and LBCI provides an update to the Board of Directors JUNE 2002 - Special Committee decides to run a targeted sales process - LBCI together with the Company prepares sales process materials JULY 2002 - LBCI together with the Company receives final approval from the Board of Directors regarding the sales process materials - LBCI begins making calls to prospective buyers AUGUST 2002 - LBCI continues to make calls to prospective buyers; 35 parties were contacted - LBCI communicates bidding process and deadline to prospective buyers SEPTEMBER 2002 - Deadline for submitting non-binding indications of interest - Sylvan receives one non-binding indication of interest from American Securities Capital Partners at $10.00 - $11.00 per share - LBCI presents to the Board of Directors regarding the sales process and future strategic alternatives OCTOBER 2002 - Sylvan receives a second non-binding indication of interest from Cadigan Investment Partners at $12.50 - $13.50 per share (Cadigan Investment Partners subsequently verbally rescinded this non-binding indication of interest) - Dissatisfied with offers received, Sylvan issues a press release announcing a major share repurchase program and the completion of its review of strategic alternatives NOVEMBER 2002 - Sylvan announces Q3'02 financial results and lower 2002 earnings expectations due partially to increased competitive pressures in spawn operations DECEMBER 2002 - Sylvan terminates engagement with LBCI APRIL 2003 - Wynnefield Capital and Steel Partners announce in a 13D filing that they have formed a group and intend to nominate a new slate of directors through a proxy solicitation process - Sylvan issues a press release announcing that it received a non-binding indication of interest from the Snyder Group to acquire the Company at $11.00 per share and announces the formation of the Special Committee - Special Committee retains LBCI and Morgan Joseph as financial advisors - Wynnefield Capital and Steel Partners announce in a 13D filing that they will not agree to vote their shares in favor of the proposed Snyder Group buyout - LBCI and Morgan Joseph perform business and financial due diligence Special Committee decides to run a second sales process - LBCI and Morgan Joseph together with the Company prepare sales process materials LANE,BERRY & CO. International 11 [SYLVAN LOGO] BACKGROUND OF PROPOSED TRANSACTION (CONT'D) MAY 2003 - LBCI and Morgan Joseph receive final approval from the Special Committee regarding the sales process materials - LBCI and Morgan Joseph begin making calls to prospective buyers JUNE 2003 - LBCI and Morgan Joseph continue making calls to prospective buyers; 73 prospective buyers are contacted - The Snyder Group issues a press release announcing the official withdrawal of its non-binding indication of interest - LBCI and Morgan Joseph communicate bidding process and deadline to prospective buyers JULY 2003 - Deadline for submitting non-binding indication of interest - Sylvan receives four non-binding indications of interest from the following parties: American Securities Capital Partners, Key Kosmont, Lake Pacific Partners and The Tokarz Group (affiliated with Cadigan Investment Partners) - Special Committee decides to continue discussions with Lake Pacific Partners on an exclusive basis due to the superiority of their offer - Lake Pacific Partners performs financial, business and legal due diligence - Lake Pacific Partners receives a draft merger agreement AUGUST 2003 - Lake Pacific Partners continues to perform financial, business and legal due diligence - Lake Pacific Partners submits a revised non-binding indication of interest calling for a two-tiered offer, increasing from $11.50 per share for all stockholders to $12.00 per share for the outside stockholders and $11.50 per share for the inside stockholders (as defined in their offer) SEPTEMBER 2003 - Lake Pacific Partners continues to perform financial, business and legal due diligence - Lake Pacific Partners, the Special Committee and their respective counsels continue to negotiate the merger agreement OCTOBER 2003 - State of Wisconsin Investment Board, a Lake Pacific Partners financing source, decides not to participate in the Proposed Transaction - Lake Pacific Partners' period of exclusivity expires - Lake Pacific Partners actively looks for an alternative source of financing - The Snyder Group verbally indicates that it has interest in acquiring the Company; however, refuses to formally engage with the Special Committee NOVEMBER 2003 - Lake Pacific Partners receives commitments from John Hancock Life Insurance Company and Wingate Partners to serve as financing sources in their bid to acquire the Company - The Snyder Group expresses interest to the Special Committee at $12.25 cash per share for all Common Stockholders - Lake Pacific Partners orally expresses offer to acquire all of the Common Stock at $12.50 cash per share subject to mutually acceptable management agreement with Dennis Zensen - Negotiations continue with both interested parties LANE,BERRY & CO. International 12 [SYLVAN LOGO] OVERVIEW OF SYLVAN LANE,BERRY & CO. International 13 [SYLVAN LOGO] KEY PERFORMANCE METRICS
($ in millions) 2000 2001 2002 2003 (1) ------------------------ ---------------------------------------- Old Wrap. New Wrap. Rev. 2003 Current Actual Actual Actual Proj. Proj. Proj. Proj. ------------------------ ---------------------------------------- Net Sales $85.9 $85.9 $88.2 $88.9 $97.0 $97.4 $95.9 Cost of Sales 47.9 49.8 52.1 53.0 61.9 62.6 61.3 ----- ----- ----- ----- ----- ----- ----- Gross Profit 38.0 36.1 36.1 35.9 35.1 34.8 34.5 Selling and Administration 19.5 18.0 19.4 17.7 19.7 20.6 20.5 Private Company Expenses and Fees -- -- -- -- -- -- -- Research and Development 1.8 1.7 2.0 1.9 1.2 1.2 1.2 Depreciation 5.2 5.4 5.6 5.7 5.6 6.3 6.3 ----- ----- ----- ----- ----- ----- ----- Operating Income 11.5 11.0 9.1 10.6 8.5 6.6 6.5 Depreciation 5.2 5.4 5.6 5.7 5.6 6.3 6.3 Other Amortization/Non-Cash Items (2) 0.7 0.8 0.2 0.2 0.9 1.1 0.3 ----- ----- ----- ----- ----- ----- ----- EBITDA 17.4 17.2 14.9 16.5 15.1 14.0 13.1 Plus: Public Company Expenses 0.7 0.7 0.7 1.3 Plus: Management Annuity Expense (3) 0.4 0.4 0.4 0.4 Less: Non-Cash Pension-Related Items (2) -- (0.7) (0.7) -- Less: Private Company Expenses and Fees (0.2) (0.2) (0.2) (0.2) ----- ----- ----- ----- Adjusted EBITDA (Assumed private ownership) 17.4 15.3 14.2 14.5

($ in millions) YTD September 2003 -------------------------- Actual Revised Var. -------------------------- Net Sales $69.8 $69.6 0.3% Cost of Sales 44.0 43.9 (0.1%) ----- ----- --- Gross Profit 25.8 25.7 (0.5%) Selling and Administration 15.5 15.6 1.0% Private Company Expenses and Fees -- -- -- Research and Development 1.1 1.1 (5.4%) Depreciation 4.7 4.6 (0.8%) ----- ----- --- Operating Income 4.5 4.4 4.2% Depreciation 4.7 4.6 (0.8%) Other Amortization/Non-Cash Items (2) 0.1 0.2 19.7% ----- ----- --- EBITDA 9.4 9.2 2.0% Plus: Public Company Expenses Plus: Management Annuity Expense (3) Less: Non-Cash Pension-Related Items (2) Less: Private Company Expenses and Fees Adjusted EBITDA (Assumed private ownership)
(1) The Old Wrapper Projections are from September 2002; the New Wrapper Projections are from May 2003; the Revised 2003 Projections are from June 2003; the Current Projections are from November 2003. (2) The New Wrapper and the Revised Projections added back non-cash pension related expense to devise EBITDA. We deducted it to allow Adjusted EBITDA for the various projections to be comparable. Additionally, YTD September 2003 Amortization expense is an estimate. (3) Under private ownership, Management Annuity expenses of $400K forecasted in each model are assumed to be eliminated, which is reflected in the Adjusted EBITDA figures. LANE,BERRY & CO. International 14 [SYLVAN LOGO] KEY PERFORMANCE METRICS (CONT'D)
($ in millions) 2004 (1) 2005 (1) --------------------------- ---------------------------- New Wrap. Current New Wrap. Current Proj. Proj. Var. Proj. Proj. Var. -------- ------- ------ --------- ------- ------ Net Sales $ 99.4 $ 96.9 (2.6%) $101.5 $ 97.7 (3.8%) Cost of Sales 62.7 61.5 2.0% 63.4 61.8 2.5% ------ ------ ------ ------ ------ ------ Gross Profit 36.7 35.4 (3.5%) 38.1 35.9 (5.9%) Selling and Administration 20.3 19.5 4.1% 20.7 19.6 5.5% Private Company Expenses and Fees -- 0.2 NM -- 0.2 NM Research and Development 1.3 1.3 0.4% 1.3 1.3 2.3% Depreciation 5.5 6.3 (15.6%) 5.3 6.0 (12.1%) ------ ------ ------ ------ ------ ------ Operating Income 9.6 8.1 (15.5%) 10.8 8.8 (18.1%) Depreciation 5.5 6.3 (15.6%) 5.3 6.0 (12.1%) Other Amortization/Non-Cash Items (2) 0.9 0.2 78.3% 0.9 0.2 78.3% ------ ------ ------ ------ ------ ------ EBITDA 16.0 14.7 (8.5%) 17.1 15.0 (11.9%) Plus: Public Company Expenses (3) 0.7 -- NM 0.7 -- NM Plus: Management Annuity Expense (4) 0.4 0.4 0.0% 0.4 0.4 0.0% Less: Non-Cash Pension-Related Items (2) (0.7) -- NM (0.7) -- NM Less: Private Company Expenses and Fees (0.2) -- NM (0.2) -- NM ------ ------ ------ ------ ------ ------ Adjusted EBITDA (Assumed private ownership) 16.2 15.1 (7.3%) 17.3 15.4 (10.7%)

($ in millions) 2006 (1) 2007 (1) ----------------------------- ------------------------------ New Wrap. Current New Wrap. Current Proj. Proj. Var. Proj. Proj. Var. --------- ------- ------ --------- ------- ------ Net Sales $103.3 $100.6 (2.6%) $104.0 $103.6 (0.4%) Cost of Sales 64.0 61.9 3.3% 64.4 62.2 3.5% ------ ------ ------ ------ ------ ------ Gross Profit 39.3 38.7 (1.5%) 39.6 41.4 4.7% Selling and Administration 21.0 20.1 4.1% 21.2 20.7 2.4% Private Company Expenses and Fees -- 0.2 NM -- 0.2 NM Research and Development 1.3 1.3 (0.2%) 1.3 1.3 (1.3%) Depreciation 5.2 5.7 (9.6%) 5.1 5.5 (8.0%) ------ ------ ------ ------ ------ ------ Operating Income 11.8 11.4 (3.5%) 11.9 13.7 14.6% Depreciation 5.2 5.7 (9.6%) 5.1 5.5 (8.0%) Other Amortization/Non-Cash Items (2) 0.9 0.2 78.3% 0.9 0.2 78.3% ------ ------ ------ ------ ------ ------ EBITDA 17.9 17.3 (3.6%) 17.9 19.4 8.0% Plus: Public Company Expenses (3) 0.7 -- NM 0.7 -- NM Plus: Management Annuity Expense (4) 0.4 0.4 0.0% 0.4 0.4 0.0% Less: Non-Cash Pension-Related Items (2) (0.7) -- NM (0.7) -- NM Less: Private Company Expenses and Fees (0.2) -- NM (0.2) -- NM ------ ------ ------ ------ ------ ------ Adjusted EBITDA (Assumed private ownership) 18.2 17.7 (2.6%) 18.2 19.8 8.8%
(1) The New Wrapper Projections are from May 2003; the Current Projections are from November 2003. (2) The New Wrapper and the Revised Projections added back non-cash pension related expense to devise EBITDA. We deducted it to allow Adjusted EBITDA for the various projections to be comparable. (3) In the Current Projections, Public Company Expenses of $900K were eliminated from Corporate Expenses beginning in 2004. (4) Under private ownership, Management Annuity expenses of $400K forecasted in each model are assumed to be eliminated, which is reflected in the Adjusted EBITDA figures. LANE,BERRY & CO. International 15 [SYLVAN LOGO] [LINE GRAPH DEPICTING STOCK PRICE/VOLUME NOVEMBER 8, 2001 - NOVEMBER 10, 2003] LANE,BERRY & CO. International 16 [SYLVAN LOGO] STOCK TRADING ACTIVITY NOVEMBER 8, 2001 - NOVEMBER 10, 2003 [BAR CHART]
TOTAL TRADING VOLUME CLOSING STOCK PRICE RANGE Volume in Thousands ------------------------- ------------------- <$10.00 207 $10.00-$10.99 993 $11.00-$11.99 1,986 $12.00-$12.25 170 $12.25 < 634
LANE,BERRY & CO. International 17 [SYLVAN LOGO] ANALYSIS OF PROPOSED TRANSACTION LANE,BERRY & CO. International 18 [SYLVAN LOGO] SUMMARY TRANSACTION MULTIPLES
(USD in millions, except per share data) Purchase Price Per Share $12.25 Premium to November 10th Closing Price of $10.07 21.6% Fully Diluted Shares Outstanding 5.2 ------ EQUITY VALUE 64.2 Expected Debt as of 12/31/03: Revolver 30.0 Other Debt 1.3 Minority Interest 2.2 Cash and cash equivalents 4.0 ------ ENTERPRISE VALUE 93.7 Implied LTM Revenue Multiple 1.0x Implied FY'03E Revenue Multiple 1.0x Implied LTM EBITDA Multiple (1) 6.9x Implied FY'03E EBITDA Multiple (1) 7.2x Implied FY'03E Adjusted EBITDA Multiple (2) 6.4x Implied LTM P/E Ratio 18.3x Implied FY'03E P/E Ratio (1) 20.0x
(1) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K and it does include all public company expenses which are $1.25mm in 2003. (2) Financial figures assume Sylvan becomes a private company. EBITDA adjusted for add-backs of $1.25mmand $400K for elimination of public company expenses and executive annuity expenses respectively in 2003. LANE,BERRY & CO. International 19 [SYLVAN LOGO] SOURCES AND USES OF FUNDS FOR PROPOSED TRANSACTION SOURCES & USES OF FUNDS (USD IN MILLIONS) (1)
CUM. MULT. FY'03E SOURCES AMT. % TOTAL ADJUSTED EBITDA USES AMT. - ------- ---- ------- --------------- ---- ---- Roll-Over Debt $32.0 32.4% 2.2x Equity Purchase Price $64.2 ----- ----- Subtotal 32.0 32.4% 2.2x Net Debt (2) 32.0 Transaction Fees and Expenses (2) 2.5 Management Equity (Rollover) 9.2 9.3% Snyder Equity (Existing Funds/Bank Line) 56.5 57.2% Claypoole Equity (Existing Funds) 1.0 1.0% ----- ----- Total Equity 66.7 67.6% 6.8x ----- ----- ----- TOTAL SOURCES $98.7 100.0% 6.8x TOTAL USES $98.7
(1) Per the Snyder Group's proposed Sources and Uses of Funds. (2) Net Debt and Transaction Fees and Expenses are estimates made by the Snyder Group. LANE,BERRY & CO. International 20 [SYLVAN LOGO] SUMMARY OF FIRST SYLVAN SALES PROCESS - - LBCI CONTACTED A TOTAL OF 35 PROSPECTIVE BUYERS - - 8 OF THE 14 STRATEGIC BUYERS RECEIVED A "TEASER" AND 1 OF THESE 8 RECEIVED A CONFIDENTIALITY AGREEMENT - None of the strategic buyers executed a Confidentiality Agreement; therefore, no strategic buyer received a "Wrapper" - The other 6 strategic buyers immediately declined further interest - - 15 OF THE 21 FINANCIAL BUYERS RECEIVED A "TEASER" AND 10 OF THESE 15 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - Some financial buyers that did not receive a "Teaser" or execute a Confidentiality Agreement evaluated the merits of a deal by using public filings - - TWO FINANCIAL BUYERS, AMERICAN SECURITIES CAPITAL PARTNERS AND CADIGAN INVESTMENT PARTNERS, SUBMITTED A NON-BINDING INDICATION OF INTEREST - American Securities Capital Partners valued Sylvan at $10.00 - $11.00 per share - Cadigan Investment Partners valued Sylvan at $12.50 - $13.50 per share - - THESE BUYERS WERE PROVIDED 2002E REVENUE AND EBITDA ESTIMATES OF $88.0 MILLION AND $16.1 MILLION RESPECTIVELY - American Securities Capital Partners' bid range: 1.0x 2002E Revenue & 5.3x 2002E EBITDA - 1.0x 2002E Revenue & 5.7x 2002E EBITDA - Cadigan Investment Partners' bid range: 1.1x 2002E Revenue & 6.3x 2002E EBITDA - 1.2x 2002E Revenue & 6.6x 2002E EBITDA
CALL TEASER BOOK BID ---- ------ ---- --- STRATEGIC 14 8 0 0 FINANCIAL 21 15 10 2 -- -- -- - TOTAL 35 23 10 2 == == == =
LANE,BERRY & CO. International 21 [SYLVAN LOGO] THE SNYDER GROUP ORIGINAL PRELIMINARY BID DETAILS THE ORIGINAL SNYDER GROUP OFFER INCLUDED THE FOLLOWING KEY ELEMENTS: DEAL CONSIDERATION - $11.00 cash for each share of Common Stock IMPLIED MULTIPLES (1) - 0.9x 2003E revenue - 6.0x 2003E EBITDA TRANSACTION STRUCTURE - Cash merger PRINCIPAL CONDITIONS TO CLOSING - Stock voting agreement for all stockholders who own 5% or more of the Common Stock of Sylvan (the "Significant Stockholders") - Agree to vote shares in favor of merger - Grant an irrevocable proxy to Newco to vote the shares in favor of the merger - Agree not to sell or otherwise dispose of their shares - Debt financing of at least $65mm of which approximately $15mm would be subordinated debt - Representations and warranties will be true in all material respects - No material adverse change in the financial condition, business or prospects of Sylvan will have occurred - Other customary approvals, consents, waivers and clearances (e.g. HSR) BREAK-UP FEE - Break-up fee in an amount to be determined payable if the merger is abandoned or fails to close as a result of: - A material breach by Sylvan or any Significant Stockholder - Acceptance by Sylvan's Board of Directors of a superior bid proposal - ---------- (1) Implied multiples are calculated off of the New Wrapper Projections for Revenue and EBITDA ($97.0mm and $15.1mm respectively). LANE, BERRY & CO. International 22 [SYLVAN LOGO] SUMMARY OF SECOND SYLVAN SALES PROCESS - LBCI AND MORGAN JOSEPH CONTACTED A TOTAL OF 73 PROSPECTIVE BUYERS - 13 OF THE 32 STRATEGIC BUYERS RECEIVED A "TEASER" AND 1 OF THESE 13 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - The other 19 strategic buyers immediately declined further interest - 27 OF THE 41 FINANCIAL BUYERS RECEIVED A "TEASER" AND 12 OF THESE 27 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - Some financial buyers that did not receive a "Teaser" or execute a Confidentiality Agreement evaluated the merits of a deal by using public filings - THE FOLLOWING FOUR FINANCIAL BUYERS SUBMITTED A NON-BINDING INDICATION OF INTEREST: AMERICAN SECURITIES CAPITAL PARTNERS, KEY KOSMONT, LAKE PACIFIC PARTNERS AND THE TOKARZ GROUP (1) - THESE BUYERS WERE PROVIDED 2003E REVENUE AND EBITDA ESTIMATES OF $97.0 MILLION AND $15.1 MILLION RESPECTIVELY
CALL TEASER BOOK BID ---- ------ ---- --- STRATEGIC 32 13 1 0 FINANCIAL 41 27 12 4 -- -- -- -- TOTAL 73 40 13 4
- ---------- (1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. LANE, BERRY & CO. International 23 [SYLVAN LOGO] PRELIMINARY BID DETAILS THE COMPREHENSIVE SALES PROCESS CONDUCTED BY LBCI AND MORGAN JOSEPH PRODUCED FOUR PRELIMINARY BIDS WHICH ARE SUMMARIZED BELOW:
PRICE PER PROSPECTIVE BUYER SHARE RANGE IMPLIED MULTIPLES (1) FINANCING SOURCES COMMENTS - ----------------- ----------- --------------------- ----------------- -------- AMERICAN SECURITIES $8.00 0.8x 2003E Revenue Not disclosed - Submitted verbal bid CAPITAL PARTNERS 5.0x 2003E EBITDA KEY KOSMONT $7.00 - $9.00 0.7x - 0.8x 2003E Revenue Not disclosed - Tender offer 4.6x - 5.3x 2003E EBITDA - 5% - 10% management ownership - Lock-up agreements with large stockholders LAKE PACIFIC PARTNERS $11.50 1.0x 2003E Revenue Senior Debt - Merger Submitted a second two- 6.2x 2003E EBITDA Equity: - Agreement by D. Zensen to roll tiered preliminary bid: Lake Pacific half of his shares $12.00 for Outsiders 1.0x 2003E Revenue SWIB $11.50 for Insiders 7.1x 2003E EBITDA (2) Dennis Zensen - Obtain financing from SWIB and bank lenders Orally expresses a third Senior Debt - Subject to mutually acceptable preliminary bid: Equity: management agreement with $12.50 Lake Pacific Dennis Zensen Hancock/Wingate Dennis Zensen THE TOKARZ GROUP $10.00 0.9x 2003E Revenue Senior Debt - Tender offer or statutory merger 5.7x 2003E EBITDA Equity
- ---------- (1) Implied Revenue and EBITDA multiples calculated from projected 2003 financials on prior page except for Lake Pacific's revised offer multiples which are calculated off of the September 2003E Revenue and EBITDA projections ($95.9 million and $13.0 million respectively) as their revised bid was based on these projections. (2) Implied Revenue and EBITDA multiples assume $12.00 per share is paid in cash to all Sylvan stockholders. LANE, BERRY & CO. International 24 [SYLVAN LOGO] VALUATION OVERVIEW LANE, BERRY & CO. International 25 [SYLVAN LOGO] SUMMARY - SYLVAN IMPLIED PRICE PER SHARE [BAR CHART DEPICTING SUMMARY - SYLVAN IMPLIED PRICE PER SHARE] IMPLIED MULTIPLES 2003E EBITDA 4.75x to 6.55x 5.05x to 7.90x 6.45x to 6.95x 6.90x to 7.60x 2003E Adj. EBITDA 4.30x to 5.90x 4.60x to 7.10x 5.80x to 6.20x 6.20x to 6.80x

LANE, BERRY & CO. International 26 [SYLVAN LOGO] PUBLIC EQUITY COMPARABLES OVERVIEW METHODOLOGY - To determine the current public market value and trading multiples of companies similar to Sylvan, thereby imputing a "public market" valuation range COMPANY SELECTION - LBCI analyzed a range of public food and agricultural producers and selected three sectors comprising six trading comparables for analysis:
Food Processors: Fresh Produce Companies: Agricultural Companies: ---------------- ------------------------ ----------------------- ~~Archer-Daniels-Midland Chiquita Brands Delta and Pine Bunge Fresh Del Monte Hines Horticulture~~
ISSUES - No control premium is reflected in the results of the public market valuation - There are no direct public company comparables to the Company - Many of the listed companies are substantially larger than the Company which affects their direct applicability vis-a-vis valuation LANE, BERRY & CO. International 27 [SYLVAN LOGO] PUBLIC EQUITY COMPARABLES ANALYSIS
(USD in Millions) STOCK % OF FD EV / REVENUE EV / EBITDA P / E PRICE 52-WEEK EQUITY ENTERPRISE -------------------- -------------------- -------------------- COMPANY 11/10/03 HIGH VALUE VALUE LTM CY'03E CY'04E LTM CY'03E CY'04E LTM CY'03E CY'04E - -------------------------- -------- ---- ----- ----- --- ------ ------ --- ------ ------ --- ------ ------ SYLVAN $10.07 84% $51.9 $83.4 0.9X 0.9X 0.9X 6.2X 6.4X 6.0X 15.1X 16.4X 13.6X FOOD PROCESSING COMPANIES Archer-Daniels-Midland (1) $14.18 95% $9,181.5 $11,014.2 0.3x 0.3x 0.3x 7.5x 7.1x 5.7x 18.6x 17.2x 12.9x Bunge (2) 26.87 86% 2,710.6 4,718.6 0.2x 0.2x 0.2x 6.8x 6.4x 5.1x 9.9x 11.0x 9.3x FRESH PRODUCE COMPANIES Chiquita Brands (3) 19.47 97% 780.7 1,006.9 0.3x 0.4x 0.4x 5.6x 6.4x 5.2x 9.0x 11.2x 7.2x Fresh DelMonte 25.57 88% 1,463.3 1,413.6 0.6x 0.6x 0.5x 5.0x 4.7x 4.3x 6.5x 6.7x 6.5x AGRICULTURAL COMPANIES Delta and Pine 24.03 94% 977.1 838.7 3.0x 2.8x 2.5x 12.8x 11.5x 9.2x 28.5x 24.3x 18.0x Hines Horticulture (4) 4.09 91% 90.3 332.8 1.0x NA NA 5.8x NA NA 7.8x 2.4x NA HIGH 97% 3.0X 2.8X 2.5X 12.8X 11.5X 9.2X 28.5X 24.3X 18.0X MEDIAN 93% 0.5X 0.4X 0.4X 6.3X 6.4X 5.2X 9.4X 11.1X 9.3X LOW 86% 0.2X 0.2X 0.2X 5.0X 4.7X 4.3X 6.5X 2.4X 6.5X

REVENUE EBITDA EARNINGS PER SHARE --------------------------- ------------------------------ ------------------------------ LTM CY'03E CY'04E LTM CY'03E (5) CY'04E (5) LTM CY'03E (5) CY'04E (5) --- ------ ------ --- ---------- ---------- --- ---------- ---------- SYLVAN FINANCIALS $93.4 $95.9 $96.9 $13.5 $13.1 $14.0 $0.67 $0.61 $0.74 IMPLIED SYLVAN PRICE PER SHARE HIGH $47.92 $46.62 $41.27 $27.55 $23.02 $18.70 $19.06 $14.92 $13.29 MEDIAN $ 2.36 $ 0.45 $ 1.33 $10.43 $10.25 $ 7.97 $ 6.31 $ 6.82 $ 6.85 LOW NM NM NM $ 7.13 $ 5.72 $ 5.63 $ 4.36 $ 1.44 $ 4.79
- ---------- (1) Pro forma for the acquisition of Minnesota Corn Processsors LLC. (2) Pro forma for the acquisition of Cereol S.A. and for the sale of its Lesieur bottled oil business. (3) Pro forma for the acquisition of Scipio and the sale of Chiquita Processed Foods. (4) Pro forma for the 9/11/03 issuance of $175mm in senior notes. (5) Financial figures assume Sylvan remains a public company. CY'03E and CY'04E EBITDA, and CY'03E and CY'04E EPS do not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K, and do include all public company expenses, which are $1.25mm in 2003 and $900K in 2004. LANE, BERRY & CO. International 28 [SYLVAN LOGO] M&A COMPARABLES OVERVIEW METHODOLOGY - To determine the historical private market value and transaction multiples of companies similar to the Company, thereby imputing a "transaction" valuation range ISSUES - Multiples paid in the transaction analysis may reflect potential synergies an acquiror could realize as a result of the target's operating scale - There are no direct M&A comparable transactions LANE, BERRY & CO. International 29 [SYLVAN LOGO] M&A COMPARABLES ANALYSIS
(USD in Millions) ANN. DATE ACQUIROR TARGET - --------- -------- ------ 6/2/03 Fox Paine and Co. Seminis 2/4/03 Riviana Foods ACH Food Companies, Rice Business 12/18/02 Investor Group (1) Dole Food Company 7/22/02 Bunge Cereol S.A. 1/7/02 Kerry Group Stearns & Lehman 8/17/01 Nippon Suisan Gorton's Seafood & Bluewater Seafoods 2/20/01 Lesaffre et Compagnie Sensient Technologies' Red Star Yeast & Products (2) 12/21/00 Investor Group Michael Foods 10/17/00 Kerry Group Armour Food Ingredients 12/17/99 Moneys Mushrooms Vlasic Foods, Vlasic Farms Fresh Mushrooms Business 9/16/98 Pictsweet LLC United Foods Inc.

TRANSACTION (USD in Millions) TRANS. VALUE / LTM ------------------ ANN. DATE DESCRIPTION VALUE REVENUE EBITDA - --------- ----------- ----- ------- ------ 6/2/03 Worldwide producer and marketer of vegetable and fruit seeds. $ 625.0 1.3x 7.8x 2/4/03 Producer of rice products. 24.0 0.7x NA 12/18/02 Producer and marketer of fruits and vegetables. 2,500.0 0.6x 6.4x 7/22/02 Manufacturer of seed oils and olive oils. 1,496.3 0.3x 5.5x 1/7/02 Stearns & Lehman is a manufacturer of coffeehouse chain, foodservice and branded Italian-style flavoured syrups. 26.0 1.3x NA 8/17/01 Gorton's is a retail frozen seafood brand in the U.S. & Bluewater is a brand in Canada. 175.0 0.7x 8.8x 2/20/01 Supplier of yeast to the commercial bakery market. 122.0 1.0x 7.1x 12/21/00 Producer and distributor of food products in four areas: egg products, refrigerated distribution, dairy products and potato products. 747.2 0.7x 5.5x 10/17/00 Provide a wide range of specialty food ingredients. 35.0 0.9x NA 12/17/99 Producer of fresh mushrooms. 50.0 0.4x NM 9/16/98 Grower, processor, marketer and distributor of food products. 63.1 0.3x 4.9x HIGH $2,500.0 1.3X 8.8X MEDIAN $ 122.0 0.7X 6.4X LOW $ 24.0 0.3X 4.9X

LTM ------------------ REVENUE EBITDA ------- ------- SYLVAN FINANCIALS $93.4 $13.5 IMPLIED SYLVAN PRICE PER SHARE HIGH $18.18 $16.84 MEDIAN $ 6.43 $10.66 LOW NM $ 6.77
- ---------- (1) David H. Murdock, Chairman and CEO of Dole, acquired the 76% of Dole's outstanding common stock that he and his family did not own. (2) Revenue is an actual figure, EBITDA is an estimate. LANE, BERRY & CO. International 30 [SYLVAN LOGO] LBO ANALYSIS OVERVIEW METHODOLOGY - To determine the potential price a financial buyer could pay assuming certain benchmarks of financial leverage and required returns - This analysis uses "private company" figures to reflect the operations as if the Company were no longer a public company BENCHMARK SELECTION - LBCI identified the following key benchmarks in performing its analysis: -- Maximum pro forma Senior Debt / 2003E Adjusted EBITDA of 3.25x -- Maximum pro forma Total Debt / 2003E Adjusted EBITDA of 4.25x -- Minimum equity returns of approximately 17% to the mezzanine debt holders -- Minimum equity returns to the sponsor of approximately 25% LANE, BERRY & CO. International 31 [SYLVAN LOGO] LBO ANALYSIS SOURCES & USES OF FUNDS (USD IN MILLIONS)
CUM. MULT. FY03E SOURCES AMT. % TOTAL ADJUSTED EBITDA USES AMT. - ------- ---- ------- --------------- ---- ---- Revolver (1) $27.2 29.9% 1.9x Equity Purchase Price $55.8 Term Loan A 20.0 22.0% 3.3x Refinance Debt 31.3 Mezzanine 14.5 16.0% 4.3x Transaction Fees & Expenses 3.9 ----- ----- Subtotal 61.8 67.8% 4.3x Sponsor Equity 29.3 32.2% 6.3x ----- ----- ----- TOTAL SOURCES $91.1 100.0% 6.3x TOTAL USES $91.1 ===== ===== =====
TRANSACTION SUMMARY Current Stock Price $10.07 PURCHASE PRICE PER SHARE 10.75 Shares Outstanding 5.2 ------ Equity Value 55.8 Plus: Existing Debt 31.3 Plus: Existing Minority Interest 2.2 Less: Existing Cash 4.0 ------ Total Enterprise Value 85.3 TEV AS A MULTIPLE OF: FY'03E EBITDA (2) 6.5x FY'03E Adjusted EBITDA (3) 5.9x ------

OWNERSHIP TABLE
PF DILUTED VALUE IN OWNER. WARRANTS OWNER. 2008 IRR ------ -------- ------ ---- --- Sponsor Group 94.5% 0.0% 94.5% $ 90.6 25.3% Mezzanine (12.0%) 0.0% 5.5% 5.5% 21.5 17.1% ---- --- ---- ------ ---- TOTAL 94.5% 5.5% 100.0% 112.2 ==== === ===== =====
SUMMARY CREDIT AND LEVERAGE STATISTICS
PROJECTED FISCAL YEARS ENDING DECEMBER 31, PRO FORMA ---------------------------------- 12/31/03E 2004 2005 2006 2007 --------- ---- ---- ---- ---- Bank Debt / Adj. EBITDA (3) 3.3x 2.8x 2.4x 1.7x 1.1x Total Debt / Adj. EBITDA (3) 4.3 3.8 3.3 2.5 1.8 Adj. EBITDA / Interest Expense (3) 3.2 3.3 3.6 4.5 5.6 Adj. EBITDA-CapEx / Int Expense (3) 2.4 2.5 2.7 3.5 4.5
RETURNS TO SPONSOR'S EQUITY
PURCHASE PRICE PER SHARE ------------------------------------------------------ $9.75 $10.25 $10.75 $11.25 $11.75 $12.25 ----- ------ ------ ------ ------ ------ 5.50X 28.4% 25.7% 23.3% 21.1% 19.1% 17.3% 2008 5.75X 29.9% 27.1% 24.7% 22.5% 20.4% 18.6% ADJ. EBITDA 6.00X 31.2% 28.5% 26.0% 23.8% 21.7% 19.8% EXIT MULTIPLE (3) 6.25X 32.6% 29.8% 27.3% 25.0% 22.9% 21.1% 6.50X 33.9% 31.0% 28.5% 26.2% 24.1% 22.2%
- ---------- (1) Assumes a $30mm revolver that is drawn $27.2mm at close. Also, assumes that $1.3mm of other debt is refinanced as well. (2) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K and it does include all public company expenses which are $1.25mm in 2003 and $900K in 2004-2008. (3) Financial figures assume Sylvan becomes a private company. EBITDA adjusted for add-backs of $1.25mm and $400K for elimination of public company expenses and executive annuity expenses respectively in 2003 and for aforementioned amounts in all future periods. LANE, BERRY & CO. International 32 [SYLVAN LOGO] DCF ANALYSIS OVERVIEW METHODOLOGY - To determine the present value of the projected after-tax free cash flows of the Company utilizing an EBITDA exit multiple terminal value and a range of discount rates
VARIABLES VARIABLE SELECTED RANGE -------- -------------- ~~-- EBITDA Exit Multiple (2008): -- 5.50x-6.50x -- Discount Rate Range: -- 12.0%-14.0%~~
LANE, BERRY & CO. International 33 [SYLVAN LOGO] DCF ANALYSIS
YEAR ENDING DECEMBER 31, ----------------------------------------------------------- (USD in Millions) 2004 2005 2006 2007 2008 TV - -------------------------------- ------- ------- ------- ------- ------- ------- SUMMARY FINANCIALS: REVENUE $ 96.9 $ 97.7 $ 100.6 $ 103.6 $ 106.7 Growth % -- 0.8% 3.0% 3.0% 3.0% ADJUSTED EBITDA (1) 14.0 14.3 16.6 18.7 19.3 Margin % 14.4% 14.7% 16.5% 18.0% 18.0% EBIT 7.4 8.1 10.7 13.0 13.7 Margin % 7.7% 8.3% 10.6% 12.5% 12.9% FREE CASH FLOW ANALYSIS: EBIT * (1 - Tax Rate) 4.9 5.3 7.0 8.5 9.0 Plus: Depreciation 6.3 6.0 5.7 5.5 5.3 Plus: Amortization 0.2 0.2 0.2 0.2 0.2 Plus: Change in Working Capital (0.1) (0.1) (0.4) (0.4) (0.6) Less: Capital Expenditures 3.9 3.9 3.9 3.9 3.9 ------- ------- ------- ------- ------- FREE CASH FLOW 7.4 7.5 8.7 10.0 10.0 EBITDA (2008) 19.3 EBITDA Multiple 6.00X ----- TERMINAL VALUE 115.6 Total Free Cash Flow 7.4 7.5 8.7 10.0 10.0 115.6 Weighted Average Cost of Capital 13.0% PRESENT VALUE OF FCF 6.6 5.9 6.0 6.1 5.5 62.7 ======= ======= ======= ======= ======= =====

IMPLIED ENTERPRISE VALUE: SENSITIVITY ANALYSIS: 5.50X 5.75X 6.00X 6.25X 6.50X ------ ------ ------ ------ ------ TOTAL ENTERPRISE VALUE $ 92.8 Less: Net Debt 29.4 12.0% $11.94 $12.47 $13.00 $13.53 $14.06 ------ EQUITY VALUE 63.3 12.5% 11.60 12.12 12.64 13.16 13.67 FD Shares Outstanding 5.2 13.0% 11.27 11.78 12.29 12.80 13.30 IMPLIED PRICE PER SHARE $12.29 13.5% 10.96 11.45 11.95 12.44 12.94 ====== 14.0% 10.65 11.13 11.62 12.10 12.59
- ---------- (1) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K and it does include all public company expenses which are $900K in 2004-2008. LANE, BERRY & CO. International 34 [SYLVAN LOGO] WACC ANALYSIS
TOTAL DEBT & COMPARABLE COMPANIES COST OF EQUITY TOTAL PREFERRED EFFECTIVE UNLEVERED PREF'D STOCK / (USD in Millions) BETA (1) EQUITY (2)(8) VALUE DEBT STOCK TAX RATE BETA (3) CAPITAL - -------------------- ------- ------------ ------ ----- --------- --------- --------- -------------- Archer-Daniels-Midland 0.64 10.2% $9,181.5 $3,543.5 $0.0 28.5% 0.50 27.8% Bunge 0.60 10.4% 2,710.6 2,072.0 0.0 26.3% 0.38 43.3% Chiquita Brands 0.79 12.2% 780.7 276.5 0.0 12.0% 0.60 26.2% Delta and Pine 0.51 10.3% 977.1 (141.7) 0.0 35.5% 0.56 (17.0%) Fresh DelMonte 0.71 11.4% 1,463.3 (33.6) 0.0 8.5% 0.73 (2.4%) Hines Horticulture NA NA 90.3 242.5 0.0 41.0% NA 72.9% MEAN 0.65 10.9% $2,533.9 $ 993.2 $0.0 25.3% 0.56 25.1% MEDIAN 0.64 10.4% $1,220.2 $ 259.5 $0.0 27.4% 0.56 27.0% SYLVAN 0.44 17.5% 51.9 29.3 0.0 34.5% 0.31 38.0%

WEIGHTED AVERAGE COST OF CAPITAL (4) LEVERED COST OF EQUITY (5) --------------------------------------- --------------------------------------- TARGET DEBT & PREF'D / ENTERPRISE VALUE TARGET DEBT & PREF'D / ENTERPRISE VALUE UNLEVERED --------------------------------------- --------------------------------------- ASSUMPTIONS BETA 35.0% 40.0% 45.0% 35.0% 40.0% 45.0% - -------------------------- --------- ----- ----- ----- ----- ----- ----- Pretax Cost of Debt (Kd)(6) 5.0% Risk-Free Rate (Rf)(7) 5.3% Equity Risk Premium (Rm-Rf)(8) 7.0% 0.45 13.3% 12.7% 12.1% 18.7% 19.0% 19.3% Size Premia (Sp)(9) 9.2% 0.50 13.6% 13.0% 12.4% 19.2% 19.5% 19.8% Tax Rate For Target (Tr) 34.5% 0.55 13.9% 13.3% 12.7% 19.6% 20.0% 20.3% Equity Political Risk Premium (Rp) 0.0% 0.60 14.2% 13.6% 13.0% 20.1% 20.5% 20.9% Other Risk Premium (Ro) 0.0% 0.65 14.5% 13.9% 13.3% 20.6% 21.0% 21.4%
- ---------- (1) Source: two years of weekly data vs. the S&P 500 from Bloomberg. (2) Cost of Equity = Risk-Free Rate (Rf) + (Equity Beta (Be) * Equity Risk Premium (Rm-Rf)) + Size Premia (Sp). (3) Unlevered Beta = Be / (1+(D*(1-Tr) + P) / E). (4) WACC= [(Rf +Be * (Rm-Rf) + Sp + Rp) *%E] +[Kd * (1-Tr) * % D] + Ro. Assumes pretax cost of debt remains constant. (5) Levered Cost of Equity = [Rf + Be * (Rm-Rf) + Sp +Rp)] +Ro. (6) Any political risk premium (Rp) associated with debt is included in the pretax cost of debt (Kp). (7) Risk-Free Rate based on 30-year U.S. Treasury Yield as of 11/10/03. (8) Source: 2003 Ibbotson Risk Premia Report. Based on the differences of large company total arithmetic mean returns minus long-term bond income returns from 1926-2002. (9) Cost of equity premia based on equity market capitalization. Micro-cap (within $0.5mm - $64.8mm) =9.2%. Amounts per 2003 Ibbotson Risk Premia Report. LANE, BERRY & CO. International 35 [SYLVAN LOGO] CONCLUSION LANE, BERRY & CO. International 36 [SYLVAN LOGO] CONCLUSION AS OF THE DATE HEREOF, LBCI IS PREPARED TO DELIVER ITS FAIRNESS OPINION WITH RESPECT TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE MERGER CONSIDERATION TO BE RECEIVED BY THE COMMON STOCKHOLDERS. LANE, BERRY & CO. International 37 EX-99.C.8 12 j0476003exv99wcw8.txt SPECIAL COMMITTEE DISCUSSION MATERIALS 11/09/03 Exhibit(c)(8) CONFIDENTIAL Discussion Materials For The Special Committee of [SYLVAN LOGO] November 9, 2003 LANE, BERRY & CO. International [SYLVAN LOGO] DISCLAIMER o THE FOLLOWING MATERIALS HAVE BEEN PREPARED BY LANE, BERRY & CO. INTERNATIONAL ("LBCI") AS PART OF A PRESENTATION BEING MADE TO AND AT THE REQUEST OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF SYLVAN INC. ("SYLVAN" OR THE "COMPANY"). o IN PREPARING THIS PRESENTATION, WE HAVE ASSUMED AND RELIED, UPON THE ACCURACY AND COMPLETENESS OF THE FINANCIAL AND OTHER INFORMATION SUPPLIED OR OTHERWISE MADE AVAILABLE TO US FROM PUBLIC SOURCES OR BY THE COMPANY AND HAVE NOT INDEPENDENTLY VERIFIED SUCH INFORMATION. WE HAVE NEITHER OBTAINED NOR PERFORMED ANY INDEPENDENT VALUATION OR APPRAISAL OF THE ASSETS OR LIABILITIES OF THE COMPANY. IN ADDITION, THE COMPANY HAS NOT REQUESTED AND WE HAVE NOT PERFORMED A LIQUIDATION ANALYSIS. o PLEASE NOTE THAT THIS PRESENTATION IS BASED ON ECONOMIC, MARKET AND OTHER CONDITIONS AS IN EFFECT ON, AND THE INFORMATION AND AGREEMENTS (OR DRAFTS THEREOF) MADE AVAILABLE TO US AS OF, THE DATE HEREOF AND DOES NOT PURPORT TO TAKE INTO CONSIDERATION SUBSEQUENT DEVELOPMENTS WHICH MAY AFFECT THE INFORMATION PRESENTED HEREIN. LBCI DOES NOT HAVE ANY OBLIGATION TO UPDATE, REVISE, OR REAFFIRM THE INFORMATION PRESENTED HEREIN. o THIS PRESENTATION HAS BEEN PREPARED FOR THE BENEFIT AND USE OF THE SPECIAL COMMITTEE IN CONNECTION WITH AND FOR THE PURPOSES OF ITS EVALUATION OF THE PROPOSED TRANSACTION AND IS NOT ON BEHALF OF, AND SHALL NOT CONFER RIGHTS OR REMEDIES UPON, ANY PERSON OTHER THAN THE SPECIAL COMMITTEE. o IN ADDITION, THIS PRESENTATION DOES NOT CONSTITUTE AN OPINION OR RECOMMENDATION TO A STOCKHOLDER OF THE COMPANY ON HOW TO VOTE WITH RESPECT TO THE PROPOSED TRANSACTION. FURTHER, WE DO NOT ADDRESS THE RELATIVE MERITS OF THE PROPOSED TRANSACTION COMPARED WITH OTHER BUSINESS STRATEGIES OR ALTERNATIVE TRANSACTIONS THAT MIGHT BE AVAILABLE TO THE COMPANY, THE COMPANY'S UNDERLYING BUSINESS DECISION TO PROCEED OR EFFECT THE PROPOSED TRANSACTION, OR ANY OTHER ASPECT OF THE PROPOSED TRANSACTION. LANE, BERRY & CO. International 2 [SYLVAN LOGO] AGENDA 1. EXECUTIVE SUMMARY 2. SUMMARY OF PROPOSED TRANSACTION 3. SUMMARY BACKGROUND OF PROPOSED TRANSACTION 4. OVERVIEW OF SYLVAN 5. ANALYSIS OF PROPOSED TRANSACTION 6. VALUATION OVERVIEW 7. CONCLUSION LANE, BERRY & CO International 3 [SYLVAN LOGO] EXECUTIVE SUMMARY LANE, BERRY & CO. International 4 [SYLVAN LOGO] INTRODUCTION o LANE, BERRY & CO. INTERNATIONAL ("LBCI") HAS BEEN ASKED BY THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS (THE "SPECIAL COMMITTEE") OF SYLVAN INC. ("SYLVAN" OR THE "COMPANY") TO OPINE AS TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE CASH CONSIDERATION TO BE RECEIVED BY THE HOLDERS (OTHER THAN DENNIS ZENSEN, VIRGIL JURGENSMEYER, SNYDER ASSOCIATED COMPANIES, INC., SAC HOLDING COMPANY AND THEIR RESPECTIVE AFFILIATES) OF SYLVAN'S COMMON STOCK (THE "COMMON STOCKHOLDERS") PURSUANT TO THE MERGER (AS DESCRIBED IN THE DRAFT AGREEMENT AND PLAN OF MERGER DATED NOVEMBER 7, 2003 (THE "MERGER AGREEMENT"), AMONG THE COMPANY, SNYDER ASSOCIATED COMPANIES, INC. ("PARENT" OR THE "SNYDER GROUP") AND SAC HOLDING COMPANY ("SUB")) (THE "PROPOSED TRANSACTION") o IN CONDUCTING OUR ANALYSIS, WE HAVE ANALYZED, AMONG OTHER THINGS, THE FOLLOWING: - The Merger Agreement - The results of the first sales process conducted by LBCI between April 2002 and December 2002 - The results of the second sales process conducted between April 2003 and November 2003 - The Company's Annual Reports on Form 10-K and the Company's Quarterly Reports on Form 10-Q - Certain internal information and other data relating to the Company, including standalone forecasts and projections prepared and provided to us by management of the Company - Certain other publicly available information concerning the Company and the trading markets for the Company's common stock - Certain publicly available information concerning other companies engaged in businesses which we believe to be generally comparable to the Company and the trading markets for certain of such other companies - Certain publicly available information concerning the terms of recent business combinations which we believe to be relevant o WE HAVE ALSO INTERVIEWED CERTAIN SENIOR MANAGEMENT OF THE COMPANY CONCERNING THE BUSINESS AND OPERATIONS, PRESENT CONDITION AND FUTURE PROSPECTS OF THE COMPANY AND UNDERTOOK OTHER STUDIES, ANALYSES AND INVESTIGATIONS AS WE DEEMED APPROPRIATE UNDER THE CIRCUMSTANCES LANE, BERRY & CO. International 5 [SYLVAN LOGO] EXECUTIVE SUMMARY o SUMMARY OF PROPOSED TRANSACTION - The Snyder Group has proposed to purchase all the outstanding shares of common stock (not owned by Parent or any subsidiary of Parent), par value $0.001 per share (the "Common Stock"), in a one-step cash merger - After the Proposed Transaction, Sylvan will become a privately held corporation o CONSIDERATION FOR THE PROPOSED TRANSACTION - At the effective time, i.e. the date of consummation of the Proposed Transaction, the Common Stockholders will receive $12.25 in cash for each share of Common Stock (the "Merger Consideration") which aggregates to $64.2 million o The Snyder Group will contribute the majority of the equity financing - Both Roger Claypoole and Virgil Jurgensmeyer are expected to contribute equity o Dennis Zensen, Sylvan's Chairman and CEO, may contribute a portion or all of his shares o The remaining source of funds will come from Citizens Bank or an alternative senior lender o PROCESS & TIMING OF THE PROPOSED TRANSACTION - Sign the definitive Merger Agreement on November 9, 2003 - File proxy statement with the SEC by November 23, 2003 - Receive approval from the SEC and mail proxies to the stockholders by late December 2003 - Hold special meeting and stockholder vote by late January 2004 - Proposed Transaction closes during Q1'2004 LANE, BERRY & CO. International 6 [SYLVAN LOGO] SUMMARY OF PROPOSED TRANSACTION LANE, BERRY & CO. International 7 [SYLVAN LOGO] SUMMARY OF KEY TERMS OF THE PROPOSED TRANSACTION THE PROPOSED TRANSACTION INCLUDES THE FOLLOWING KEY ELEMENTS WHICH ARE TAKEN FROM THE DRAFT MERGER AGREEMENT DATED AS OF NOVEMBER 7, 2003 BY AND AMONG THE COMPANY, PARENT AND SUB: MERGER CONSIDERATION - The Common Stockholders receive $12.25 in cash for each share of Common Stock - Dennis Zensen may contribute a portion or all of his shares - All outstanding and unexercised options to purchase shares of Common Stock that have exercise prices less than the Merger Consideration (as defined in the Merger Agreement) shall be cancelled and exchanged for the right to receive a cash amount equal to the difference between the Merger Consideration and the per share exercise price of such option TRANSACTION STRUCTURE - Reverse triangular merger (i.e. merger of Sub, a wholly owned subsidiary of Parent, with and into the Company, with the Company being the surviving entity) PRINCIPAL CONDITIONS TO CLOSING - Stockholder vote approval - Wynnefield Capital and Steel Partners must sign a voting agreement simultaneously with the signing of the definitive Merger Agreement - Customary representations and warranties of the Company, Parent and Sub remain true and correct with only such exceptions as do not in the aggregate have a material adverse effect (as defined in the Merger Agreement) - Since June 30, 2003, there shall not have been any change, circumstance or event which constitutes, has resulted in, or that would reasonably be likely to result in, a material adverse effect - Other customary approvals, consents, waivers and clearances (e.g. HSR) LANE, BERRY & CO. International 8 [SYLVAN LOGO] SUMMARY OF KEY TERMS OF THE PROPOSED TRANSACTION (CONT'D) THE PROPOSED TRANSACTION INCLUDES THE FOLLOWING KEY ELEMENTS WHICH ARE TAKEN FROM THE DRAFT MERGER AGREEMENT DATED AS OF NOVEMBER 7, 2003 BY AND AMONG THE COMPANY, PARENT AND SUB: TERMINATION/BREAK-UP FEE - The Merger Agreement may be terminated and the Proposed Transaction may be abandoned, at any time prior to the Effective Time, in the following circumstances: - By mutual written agreement of the Company, Parent and Sub - By either the Company or Parent if the Merger Agreement is not approved and adopted by the Common Stockholders - By judgment or injunction - By material breach of either Parent or Company - By either the Company or Parent if the Proposed Transaction has not been consummated on or before May 1, 2004 - Upon the occurrence of certain events listed below, the Merger Agreement will be terminated and the Company will pay $2.0 million as a break-up fee to Parent and will pay up to $500,000 to Parent for expense reimbursements: - Lack or withdrawal of Board of Directors or Special Committee recommendation - No stockholder meeting is held within 30 business days of proxy's clearance with the SEC - The Company enters into a Superior Proposal (as defined within the Merger Agreement) - Consummation of certain transactions within 12 months of termination pursuant to lack of stockholder approval - Parent shall be entitled to expense reimbursement in the event the Merger Agreement is not approved and adopted by the Common Stockholders LANE, BERRY & CO. International 9 [SYLVAN LOGO] SUMMARY BACKGROUND OF PROPOSED TRANSACTION LANE, BERRY & CO. International 10 [SYLVAN LOGO] BACKGROUND OF PROPOSED TRANSACTION APRIL 2002 - Special Committee retains LBCI to explore strategic alternatives - LBCI performs business and financial due diligence MAY 2002 - LBCI continues to perform business and financial due diligence - Sylvan issues a press release announcing the exploration of strategic alternatives process - Sylvan holds its stockholder meeting and LBCI provides an update to the Board of Directors JUNE 2002 - Special Committee decides to run a targeted sales process - LBCI together with the Company prepares sales process materials JULY 2002 - LBCI together with the Company receives final approval from the Board of Directors regarding the sales process materials - LBCI begins making calls to prospective buyers AUGUST 2002 - LBCI continues to make calls to prospective buyers; 35 parties were contacted - LBCI communicates bidding process and deadline to prospective buyers SEPTEMBER 2002 - Deadline for submitting non-binding indications of interest - Sylvan receives one non-binding indication of interest from American Securities Capital Partners at $10.00 - $11.00 per share - LBCI presents to the Board of Directors regarding the sales process and future strategic alternatives OCTOBER 2002 - Sylvan receives a second non-binding indication of interest from Cadigan Investment Partners at $12.50 - $13.50 per share (Cadigan Investment Partners subsequently verbally rescinded this non-binding indication of interest) - Dissatisfied with offers received, Sylvan issues a press release announcing a major share repurchase program and the completion of its review of strategic alternatives NOVEMBER 2002 - Sylvan announces Q3'02 financial results and lower 2002 earnings expectations due partially to increased competitive pressures in spawn operations DECEMBER 2002 - Sylvan terminates engagement with LBCI APRIL 2003 - Wynnefield Capital and Steel Partners announce in a 13D filing that they have formed a group and intend to nominate a new slate of directors through a proxy solicitation process - Sylvan issues a press release announcing that it received a non-binding indication of interest from the Snyder Group to acquire the Company at $11.00 per share and announces the formation of the Special Committee - Special Committee retains LBCI and Morgan Joseph as financial advisors - Wynnefield Capital and Steel Partners announce in a 13D filing that they will not agree to vote their shares in favor of the proposed Snyder Group buyout - LBCI and Morgan Joseph perform business and financial due diligence - Special Committee decides to run a second sales process - LBCI and Morgan Joseph together with the Company prepare sales process materials LANE, BERRY & CO. 11 International [SYLVAN LOGO] BACKGROUND OF PROPOSED TRANSACTION (CONT'D) MAY 2003 - LBCI and Morgan Joseph receive final approval from the Special Committee regarding the sales process materials - LBCI and Morgan Joseph begin making calls to prospective buyers JUNE 2003 - LBCI and Morgan Joseph continue making calls to prospective buyers; 73 prospective buyers are contacted - The Snyder Group issues a press release announcing the official withdrawal of its non-binding indication of interest - LBCI and Morgan Joseph communicate bidding process and deadline to prospective buyers JULY 2003 - Deadline for submitting non-binding indication of interest - Sylvan receives four non-binding indications of interest from the following parties: American Securities Capital Partners, Key Kosmont, Lake Pacific Partners and The Tokarz Group (affiliated with Cadigan Investment Partners) - Special Committee decides to continue discussions with Lake Pacific Partners on an exclusive basis due to the superiority of their offer - Lake Pacific Partners performs financial, business and legal due diligence - Lake Pacific Partners receives a draft merger agreement AUGUST 2003 - Lake Pacific Partners continues to perform financial, business and legal due diligence - Lake Pacific Partners submits a revised non-binding indication of interest calling for a two-tiered offer, increasing from $11.50 per share for all stockholders to $12.00 per share for the outside stockholders and $11.50 per share for the inside stockholders (as defined in their offer) SEPTEMBER 2003 - Lake Pacific Partners continues to perform financial, business and legal due diligence - Lake Pacific Partners, the Special Committee and their respective counsels continue to negotiate the merger agreement OCTOBER 2003 - State of Wisconsin Investment Board, a Lake Pacific Partners financing source, decides not to participate in the Proposed Transaction - Lake Pacific Partners' period of exclusivity expires - Lake Pacific Partners actively looks for an alternative source of financing - The Snyder Group verbally indicates that it has interest in acquiring the Company; however, refuses to formally engage with the Special Committee NOVEMBER 2003 - Lake Pacific Partners receives commitments from John Hancock Life Insurance Company and Wingate Partners to serve as financing sources in their bid to acquire the Company - The Snyder Group expresses interest to the Special Committee at $12.25 cash per share for all Common Stockholders - Negotiations continue with both interested parties LANE, BERRY & CO. 12 International [SYLVAN LOGO] OVERVIEW OF SYLVAN LANE, BERRY & CO. 13 International [SYLVAN LOGO] KEY PERFORMANCE METRICS
($ in millions) 2000 2001 2002 2003 (1) ---- ---- ---- ------------------------------------------ Old Wrap. New Wrap Rev. 2003 Current Actual Actual Actual Proj. Proj. Proj. Proj. ------ ------ ------ ----- ----- ----- ----- Net Sales $85.9 $85.9 $88.2 $88.9 $97.0 $97.4 $95.9 Cost of Sales 47.9 49.8 52.1 53.0 61.9 62.6 61.3 ----- ----- ----- ----- ----- ----- ----- Gross Profit 38.0 36.1 36.1 35.9 35.1 34.8 34.5 Selling and Administration 19.5 18.0 19.4 17.7 19.7 20.6 20.5 Private Company Expenses and Fees -- -- -- -- -- -- -- Research and Development 1.8 1.7 2.0 1.9 1.2 1.2 1.2 Depreciation 5.2 5.4 5.6 5.7 5.6 6.3 6.3 ----- ----- ----- ----- ----- ----- ----- Operating Income 11.5 11.0 9.1 10.6 8.5 6.6 6.5 Depreciation 5.2 5.4 5.6 5.7 5.6 6.3 6.3 Other Amortization/Non-Cash Items (2) 0.7 0.8 0.2 0.2 0.9 1.1 0.3 ----- ----- ----- ----- ----- ----- ----- EBITDA 17.4 17.2 14.9 16.5 15.1 14.0 13.1 Plus: Public Company Expenses 0.7 0.7 0.7 1.3 Plus: Management Annuity Expense (3) 0.4 0.4 0.4 0.4 Less: Non-Cash Pension-Related Items (2) -- (0.7) (0.7) -- Less: Private Company Expenses and Fees (0.2) (0.2) (0.2) (0.2) ----- ----- ----- ----- Adjusted EBITDA (Assumed private ownership) 17.4 15.3 14.2 14.5 ===== ===== ===== =====

($ in millions) YTD September 2003 ---------------------------------- Actual Revised Var. -------- ------- ----- Net Sales $69.8 $69.6 0.3% Cost of Sales 44.0 43.9 (0.1%) ----- ----- ----- Gross Profit 25.8 25.7 (0.5%) Selling and Administration 15.5 15.6 1.0% Private Company Expenses and Fees -- -- -- Research and Development 1.1 1.1 (5.4%) Depreciation 4.7 4.6 (0.8%) ----- ----- ----- Operating Income 4.5 4.4 4.2% Depreciation 4.7 4.6 (0.8%) Other Amortization/Non-Cash Items (2) 0.1 0.2 19.7% ----- ----- ----- EBITDA 9.4 9.2 2.0% Plus: Public Company Expenses Plus: Management Annuity Expense (3) Less: Non-Cash Pension-Related Items (2) Less: Private Company Expenses and Fees Adjusted EBITDA (Assumed private ownership)
- --------------- (1) The Old Wrapper Projections are from September 2002; the New Wrapper Projections are from May 2003; the Revised 2003 Projections are from June 2003; the Current Projections are from November 2003. (2) The New Wrapper and the Revised Projections added back non-cash pension related expense to devise EBITDA. We deducted it to allow Adjusted EBITDA for the various projections to be comparable. Additionally, YTD September 2003 Amortization expense is an estimate. (3) Under private ownership, Management Annuity expenses of $400K forecasted in each model are assumed to be eliminated, which is reflected in the Adjusted EBITDA figures. LANE, BERRY & CO. International 14 [SYLVAN LOGO] KEY PERFORMANCE METRICS (CONT'D)
($ in millions) 2004 (1) 2005 (1) --------------------------------- ------------------------------- New Wrap. Current New Wrap. Current Proj. Proj. Var. Proj. Proj. Var. Net Sales $ 99.4 $ 96.9 (2.6%) $101.5 $ 97.7 (3.8%) Cost of Sales 62.7 61.5 2.0% 63.4 61.8 2.5% ------ ------ ------ ------ ------ ------ Gross Profit 36.7 35.4 (3.5%) 38.1 35.9 (5.9%) Selling and Administration 20.3 19.5 4.1% 20.7 19.6 5.5% Private Company Expenses and Fees -- 0.2 NM -- 0.2 NM Research and Development 1.3 1.3 0.4% 1.3 1.3 2.3% Depreciation 5.5 6.3 (15.6%) 5.3 6.0 (12.1%) ------ ------ ------ ------ ------ ------ Operating Income 9.6 8.1 (15.5%) 10.8 8.8 (18.1%) Depreciation 5.5 6.3 (15.6%) 5.3 6.0 (12.1%) Other Amortization/Non-Cash Items (2) 0.9 0.2 78.3% 0.9 0.2 78.3% ------ ------ ------ ------ ------ ------ EBITDA 16.0 14.7 (8.5%) 17.1 15.0 (11.9%) Plus: Public Company Expenses (3) 0.7 -- NM 0.7 -- NM Plus: Management Annuity Expense (4) 0.4 0.4 0.0% 0.4 0.4 0.0% Less: Non-Cash Pension-Related Items (2) (0.7) -- NM (0.7) -- NM Less: Private Company Expenses and Fees (0.2) -- NM (0.2) -- NM ------ ------ ------ ------ ------ ------ Adjusted EBITDA (Assumed private ownership) 16.2 15.1 (7.3%) 17.3 15.4 (10.7%) ====== ====== ====== ====== ====== ======

($ in millions) 2006 (1) 2007 (1) ------------------------------- ------------------------------- New Wrap. Current New Wrap. Current Proj. Proj. Var. Proj. Proj. Var. Net Sales $103.3 $100.6 (2.6%) $104.0 $103.6 (0.4%) Cost of Sales 64.0 61.9 3.3% 64.4 62.2 3.5% ------ ------ ------ ------ ------ ------ Gross Profit 39.3 38.7 (1.5%) 39.6 41.4 4.7% Selling and Administration 21.0 20.1 4.1% 21.2 20.7 2.4% Private Company Expenses and Fees -- 0.2 NM -- 0.2 NM Research and Development 1.3 1.3 (0.2%) 1.3 1.3 (1.3%) Depreciation 5.2 5.7 (9.6%) 5.1 5.5 (8.0%) ------ ------ ------ ------ ------ ------ Operating Income 11.8 11.4 (3.5%) 11.9 13.7 14.6% Depreciation 5.2 5.7 (9.6%) 5.1 5.5 (8.0%) Other Amortization/Non-Cash Items (2) 0.9 0.2 78.3% 0.9 0.2 78.3% ------ ------ ------ ------ ------ ------ EBITDA 17.9 17.3 (3.6%) 17.9 19.4 8.0% Plus: Public Company Expenses (3) 0.7 -- NM 0.7 -- NM Plus: Management Annuity Expense (4) 0.4 0.4 0.0% 0.4 0.4 0.0% Less: Non-Cash Pension-Related Items (2) (0.7) -- NM (0.7) -- NM Less: Private Company Expenses and Fees (0.2) -- NM (0.2) -- NM ------ ------ ------ ------ ------ ------ Adjusted EBITDA (Assumed private ownership) 18.2 17.7 (2.6%) 18.2 19.8 8.8% ====== ====== ====== ====== ====== ======
- ---------- (1) The New Wrapper Projections are from May 2003; the Current Projections are from November 2003. (2) The New Wrapper and the Revised Projections added back non-cash pension related expense to devise EBITDA. We deducted it to allow Adjusted EBITDA for the various projections to be comparable. (3) In the Current Projections, Public Company Expenses of $900K were eliminated from Corporate Expenses beginning in 2004. (4) Under private ownership, Management Annuity expenses of $400K forecasted in each model are assumed to be eliminated, which is reflected in the Adjusted EBITDA figures. LANE, BERRY & CO. International 15 [SYLVAN LOGO] STOCK PRICE / VOLUME NOVEMBER 7, 2001 - NOVEMBER 7, 2003 [LINE GRAPH DEPICTING STOCK PRICE/VOLUME NOVEMBER 7, 2001 - NOVEMBER 7, 2003] LANE, BERRY & CO. International 16 [SYLVAN LOGO] STOCK TRADING ACTIVITY NOVEMBER 7, 2001 - NOVEMBER 7, 2003 Volume in Thousands
CLOSING STOCK TOTAL TRADING PRICE RANGE VALUE - ------------- ------------- ~~$10.00 207 $10.00-$10.99 992 $11.00-$11.99 1,986 $12.00-$12.25 170 $12.25 < 634~~
LANE, BERRY & CO. International 17 [SYLVAN LOGO] ANALYSIS OF PROPOSED TRANSACTION LANE, BERRY & CO. International 18 [SYLVAN LOGO] SUMMARY TRANSACTION MULTIPLES
(USD in millions, except per share data) - ---------------------------------------- Purchase Price Per Share $12.25 Premium to November 7th Closing Price of $10.04 22.0% Fully Diluted Shares Outstanding 5.2 ------ EQUITY VALUE 64.2 Expected Debt as of 12/31/03: Revolver 30.0 Other Debt 1.3 Minority Interest 2.2 Cash and cash equivalents 4.0 ------ ENTERPRISE VALUE 93.7 Implied LTM Revenue Multiple 1.0x Implied FY'03E Revenue Multiple 1.0x Implied LTM EBITDA Multiple (1) 6.9x Implied FY'03E EBITDA Multiple (1) 7.2x Implied FY'03E Adjusted EBITDA Multiple (2) 6.4x Implied LTM P/E Ratio 18.3x Implied FY'03E P/E Ratio (1) 20.0x ------
- --------------- (1) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K and it does include all public company expenses which are $1.25mm in 2003. (2) Financial figures assume Sylvan becomes a private company. EBITDA adjusted for add-backs of $1.25mm and $400K for elimination of public company expenses and executive annuity expenses respectively in 2003. LANE, BERRY & CO. International 19 [SYLVAN LOGO] SUMMARY OF FIRST SYLVAN SALES PROCESS o LBCI CONTACTED A TOTAL OF 35 PROSPECTIVE BUYERS o 8 OF THE 14 STRATEGIC BUYERS RECEIVED A "TEASER" AND 1 OF THESE 8 RECEIVED A CONFIDENTIALITY AGREEMENT - None of the strategic buyers executed a Confidentiality Agreement; therefore, no strategic buyer received a "Wrapper" - The other 6 strategic buyers immediately declined further interest o 15 OF THE 21 FINANCIAL BUYERS RECEIVED A "TEASER" AND 10 OF THESE 15 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - Some financial buyers that did not receive a "Teaser" or execute a Confidentiality Agreement evaluated the merits of a deal by using public filings o TWO FINANCIAL BUYERS, AMERICAN SECURITIES CAPITAL PARTNERS AND CADIGAN INVESTMENT PARTNERS, SUBMITTED A NON-BINDING INDICATION OF INTEREST - American Securities Capital Partners valued Sylvan at $10.00 - $11.00 per share - Cadigan Investment Partners valued Sylvan at $12.50 - $13.50 per share o THESE BUYERS WERE PROVIDED 2002E REVENUE AND EBITDA ESTIMATES OF $88.0 MILLION AND $16.1 MILLION RESPECTIVELY - American Securities Capital Partners' bid range: 1.0x 2002E Revenue & 5.3x 2002E EBITDA - 1.0x 2002E Revenue & 5.7x 2002E EBITDA - Cadigan Investment Partners' bid range: 1.1x 2002E Revenue & 6.3x 2002E EBITDA - 1.2x 2002E Revenue & 6.6x 2002E EBITDA
CALL TEASER BOOK BID ---- ------ ---- --- STRATEGIC 14 8 0 0 FINANCIAL 21 15 10 2 -- -- -- -- TOTAL 35 23 10 2 == == == ==
LANE, BERRY & CO. 20 International [SYLVAN LOGO] THE SNYDER GROUP ORIGINAL PRELIMINARY BID DETAILS THE ORIGINAL SNYDER GROUP OFFER INCLUDED THE FOLLOWING KEY ELEMENTS: DEAL CONSIDERATION - $11.00 cash for each share of Common Stock IMPLIED MULTIPLES (1) - 0.9x 2003E revenue - 6.0x 2003E EBITDA TRANSACTION STRUCTURE - Cash merger PRINCIPAL CONDITIONS TO CLOSING - Stock voting agreement for all stockholders who own 5% or more of the Common Stock of Sylvan (the "Significant Stockholders") - Agree to vote shares in favor of merger - Grant an irrevocable proxy to Newco to vote the shares in favor of the merger - Agree not to sell or otherwise dispose of their shares - Debt financing of at least $65mm of which approximately $15mm would be subordinated debt - Representations and warranties will be true in all material respects - No material adverse change in the financial condition, business or prospects of Sylvan will have occurred - Other customary approvals, consents, waivers and clearances (e.g. HSR) BREAK-UP FEE - Break-up fee in an amount to be determined payable if the merger is abandoned or fails to close as a result of: - A material breach by Sylvan or any Significant Stockholder - Acceptance by Sylvan's Board of Directors of a superior bid proposal - --------------- (1) Implied multiples are calculated off of the New Wrapper Projections for Revenue and EBITDA ($97.0mm and $15.1mm respectively). LANE, BERRY & CO. International 21 [SYLVAN LOGO] SUMMARY OF SECOND SYLVAN SALES PROCESS o LBCI AND MORGAN JOSEPH CONTACTED A TOTAL OF 73 PROSPECTIVE BUYERS o 13 OF THE 32 STRATEGIC BUYERS RECEIVED A "TEASER" AND 1 OF THESE 13 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - The other 19 strategic buyers immediately declined further interest o 27 OF THE 41 FINANCIAL BUYERS RECEIVED A "TEASER" AND 12 OF THESE 27 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - Some financial buyers that did not receive a "Teaser" or execute a Confidentiality Agreement evaluated the merits of a deal by using public filings o THE FOLLOWING FOUR FINANCIAL BUYERS SUBMITTED A NON-BINDING INDICATION OF INTEREST: AMERICAN SECURITIES CAPITAL PARTNERS, KEY KOSMONT, LAKE PACIFIC PARTNERS AND THE TOKARZ GROUP (1) o THESE BUYERS WERE PROVIDED 2003E REVENUE AND EBITDA ESTIMATES OF $97.0 MILLION AND $15.1 MILLION RESPECTIVELY
CALL TEASER BOOK BID ---- ------ ---- --- STRATEGIC 32 13 1 0 FINANCIAL 41 27 12 4 -- -- -- -- TOTAL 73 40 13 4 == == == ==
- --------------- (1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. LANE, BERRY & CO. International 22 [SYLVAN LOGO] PRELIMINARY BID DETAILS THE COMPREHENSIVE SALES PROCESS CONDUCTED BY LBCI AND MORGAN JOSEPH PRODUCED FOUR PRELIMINARY BIDS WHICH ARE SUMMARIZED BELOW:
PRICE PER FINANCING PROSPECTIVE BUYER SHARE RANGE IMPLIED MULTIPLES (1) SOURCES COMMENTS - ----------------- ----------- --------------------- ------------- -------- AMERICAN SECURITIES $8.00 0.8x 2003E Revenue Not disclosed o Submitted verbal bid CAPITAL PARTNERS 5.0x 2003E EBITDA KEY KOSMONT $7.00 - $9.00 0.7x - 0.8x 2003E Revenue Not disclosed o Tender offer 4.6x - 5.3x 2003E EBITDA o 5% - 10% management ownership o Lock-up agreements with large stockholders LAKE PACIFIC PARTNERS $11.50 1.0x 2003E Revenue Senior Debt o Merger Submitted a second two- 6.2x 2003E EBITDA Equity: o Agreement by D. Zensen to roll tiered preliminary bid: half of his shares Lake Pacific o Obtain financing from SWIB and bank lenders $12.00 for Outsiders 1.0x 2003E Revenue SWIB $11.50 for Insiders 7.1x 2003E EBITDA (2) Dennis Zensen THE TOKARZ GROUP $10.00 0.9x 2003E Revenue Senior Debt o Tender offer or statutory merger 5.7x 2003E EBITDA Equity
- --------------- (1) Implied Revenue and EBITDA multiples calculated from projected 2003 financials on prior page except for Lake Pacific's revised offer multiples which are calculated off of the September 2003E Revenue and EBITDA projections ($95.9 million and $13.0 million respectively) as their revised bid was based on these projections. (2) Implied Revenue and EBITDA multiples assume $12.00 per share is paid in cash to all Sylvan stockholders. LANE, BERRY & CO. International 23 [SYLVAN LOGO] VALUATION OVERVIEW LANE, BERRY & CO. International 24 [SYLVAN LOGO] SUMMARY - SYLVAN IMPLIED PRICE PER SHARE [BAR CHART DEPICTING SUMMARY - SYLVAN IMPLIED PRICE PER SHARE] IMPLIED MULTIPLES ~~2003E EBITDA 4.75x to 6.55x 5.05x to 7.90x 6.45x to 6.95x 6.90x to 7.60x 2003E Adj. EBITDA 4.25x to 5.80x 4.50x to 7.00x 5.70x to 6.15x 6.15x to 6.75x~~

LANE, BERRY & CO. International 25 [SYLVAN LOGO] PUBLIC EQUITY COMPARABLES OVERVIEW METHODOLOGY o To determine the current public market value and trading multiples of companies similar to Sylvan, thereby imputing a "public market" valuation range COMPANY SELECTION o LBCI analyzed a range of public food and agricultural producers and selected three sectors comprising six trading comparables for analysis: Food Processors: Fresh Produce Companies: Agricultural Companies: Archer-Daniels-Midland Chiquita Brands Delta and Pine Bunge Fresh Del Monte Hines Horticulture

ISSUES o No control premium is reflected in the results of the public market valuation o There are no direct public company comparables to the Company o Many of the listed companies are substantially larger than the Company which affects their direct applicability vis-a-vis valuation LANE, BERRY & CO. International 26 [SYLVAN LOGO] PUBLIC EQUITY COMPARABLES ANALYSIS
(USD in Millions) STOCK % OF FD EV / REVENUE PRICE 52-WEEK EQUITY ENTERPRISE ------------------------------ COMPANY 11/7/03 HIGH VALUE VALUE LTM CY'03E CY'04E - ------- ------- ---- ----- ----- --- ------ ------ SYLVAN $10.04 84% $51.8 $83.2 0.9X 0.9X 0.9X FOOD PROCESSING COMPANIES Archer-Daniels-Midland (1) $14.28 96% $9,247.5 $11,080.1 0.3x 0.3x 0.3x Bunge (2) 26.75 86% 2,698.5 4,706.5 0.2x 0.2x 0.2x FRESH PRODUCE COMPANIES Chiquita Brands (3) 19.78 99% 793.2 1,019.3 0.3x 0.4x 0.4x Fresh DelMonte 25.95 89% 1,485.1 1,435.4 0.6x 0.6x 0.6x AGRICULTURAL COMPANIES Delta and Pine 24.55 96% 998.2 859.8 3.1x 2.9x 2.6x Hines Horticulture (4) 4.00 89% 88.3 330.8 1.0x NA NA HIGH 99% 3.1X 2.9X 2.6X MEDIAN 93% 0.5X 0.4X 0.4X LOW 86% 0.2X 0.2X 0.2X

EV / EBITDA P / E -------------------------------- ---------------------------------- LTM CY'03E CY'04E LTM CY'03E CY'04E --- ------ ------ --- ------ ------ SYLVAN 6.2X 6.4X 6.0X 15.0X 16.4X 13.6X FOOD PROCESSING COMPANIES Archer-Daniels-Midland (1) 7.6x 7.1x 5.7x 18.7x 17.4x 13.0x Bunge (2) 6.8x 6.4x 5.1x 9.8x 11.0x 9.2x FRESH PRODUCE COMPANIES Chiquita Brands (3) 5.7x 6.5x 5.3x 9.1x 11.4x 7.3x Fresh DelMonte 5.1x 4.7x 4.4x 6.6x 6.8x 6.6x AGRICULTURAL COMPANIES Delta and Pine 13.2x 11.8x 9.4x 29.1x 24.8x 18.4x Hines Horticulture (4) 5.7x NA NA 7.6x 2.3x NA HIGH 13.2X 11.8X 9.4X 29.1X 24.8X 18.4X MEDIAN 6.3X 6.5X 5.3X 9.5X 11.2X 9.2X LOW 5.1X 4.7X 4.4X 6.6X 2.3X 6.6X

REVENUE EBITDA EARNINGS PER SHARE -------------------------- ------------------------------- ------------------------------ LTM CY'03E CY'04E LTM CY'03E (5) CY'04E (5) LTM CY'03E (5) CY'04E (5) ----- ------ ------ ----- ---------- ---------- ----- ---------- ---------- SYLVAN FINANCIALS $ 93.4 $ 95.9 $ 96.9 $ 13.5 $ 13.1 $ 14.0 $ 0.67 $ 0.61 $ 0.74 IMPLIED SYLVAN PRICE PER SHARE HIGH $49.29 $47.95 $42.47 $28.39 $23.76 $19.33 $19.47 $15.24 $13.58 MEDIAN $ 2.46 $ 0.53 $ 1.42 $10.37 $10.29 $ 8.14 $ 6.35 $ 6.86 $ 6.82 LOW NM NM NM $ 7.34 $ 5.91 $ 5.81 $ 4.42 $ 1.41 $ 4.86
- --------------- (1) Pro forma for the acquisition of Minnesota Corn Processsors LLC. (2) Pro forma for the acquisition of Cereol S.A. and for the sale of its Lesieur bottled oil business. (3) Pro forma for the acquisition of Scipio and the sale of Chiquita Processed Foods. (4) Pro forma for the 9/11/03 issuance of $175mm in senior notes. (5) Financial figures assume Sylvan remains a public company. CY'03E and CY'04E EBITDA, and CY'03E and CY'04E EPS do not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K, and do include all public company expenses, which are $1.25mm in 2003 and $900K in 2004. LANE, BERRY & CO. International 27 [SYLVAN LOGO] M&A COMPARABLES OVERVIEW METHODOLOGY o To determine the historical private market value and transaction multiples of companies similar to the Company, thereby imputing a "transaction" valuation range ISSUES o Multiples paid in the transaction analysis may reflect potential synergies an acquiror could realize as a result of the target's operating scale o There are no direct M&A comparable transactions LANE, BERRY & CO. International 28 [SYLVAN LOGO] M&A COMPARABLES ANALYSIS
(USD in Millions) ANN. DATE ACQUIROR TARGET - --------- -------- ------ 6/2/03 Fox Paine and Co. Seminis 2/4/03 Riviana Foods ACH Food Companies, Rice Business 12/18/02 Investor Group (1) Dole Food Company 7/22/02 Bunge Cereol S.A. 1/7/02 Kerry Group Stearns & Lehman 8/17/01 Nippon Suisan Gorton's Seafood & Bluewater Seafoods 2/20/01 Lesaffre et Compagnie Sensient Technologies' Red Star Yeast & Products (2) 12/21/00 Investor Group Michael Foods 10/17/00 Kerry Group Armour Food Ingredients 12/17/99 Moneys Mushrooms Vlasic Foods, Vlasic Farms Fresh Mushrooms Business 9/16/98 Pictsweet LLC United Foods Inc.

TRANSACTION VALUE / LTM TRANS. --------------------- DESCRIPTION VALUE REVENUE EBITDA - ----------- ----- ------- ------ Worldwide producer and marketer of vegetable and fruit seeds $ 625.0 1.3x 7.8x Producer of rice products 24.0 0.7x NA Producer and marketer of fruits and vegetables 2,500.0 0.6x 6.4x Manufacturer of seed oils and olive oils 1,496.3 0.3x 5.5x Stearns & Lehman is a manufacturer of coffeehouse chain, 26.0 1.3x NA foodservice and branded Italian-style flavoured syrups Gorton's is a retail frozen seafood brand in 175.0 0.7x 8.8x the U.S. & Bluewater is a brand in Canada Supplier of yeast to the commercial bakery market 122.0 1.0x 7.1x Producer and distributor of food products in four areas: egg products, 747.2 0.7x 5.5x refrigerated distribution, dairy products and potato products Provide a wide range of specialty food ingredients 35.0 0.9x NA Producer of fresh mushrooms 50.0 0.4x NM Grower, processor, marketer and distributor of food products 63.1 0.3x 4.9x HIGH $2,500.0 1.3X 8.8X MEDIAN $ 122.0 0.7X 6.4X LOW $ 24.0 0.3X 4.9X

LTM ----------------- REVENUE EBITDA ------- ------ SYLVAN FINANCIALS $ 93.4 $ 13.5 IMPLIED SYLVAN PRICE PER SHARE HIGH $18.18 $16.84 MEDIAN $ 6.43 $10.66 LOW NM $ 6.77
- ---------------- (1) David H. Murdock, Chairman and CEO of Dole, acquired the 76% of Dole's outstanding common stock that he and his family did not own. (2) Revenue is an actual figure, EBITDA is an estimate. LANE, BERRY & CO. 29 International [SYLVAN LOGO] LBO ANALYSIS OVERVIEW METHODOLOGY o To determine the potential price a financial buyer could pay assuming certain benchmarks of financial leverage and required returns o This analysis uses "private company" figures to reflect the operations as if the Company were no longer a public company BENCHMARK SELECTION o LBCI identified the following key benchmarks in performing its analysis: -- Maximum pro forma Senior Debt / 2003E Adjusted EBITDA of 3.25x -- Maximum pro forma Total Debt / 2003E Adjusted EBITDA of 4.25x -- Minimum equity returns of approximately 17% to the mezzanine debt holders -- Minimum equity returns to the sponsor of approximately 25% LANE, BERRY & CO. 30 International [SYLVAN LOGO] LBO ANALYSIS SOURCES & USES OF FUNDS (USD IN MILLIONS) CUM. MULT. FY03E
ADJUSTED SOURCES AMT. % TOTAL EBITDA USES AMT. - ------- ----- ------- ---------- ---- ----- Revolver (1) $27.9 30.6% 1.9x Equity Purchase Price $55.8 Term Loan A 20.0 22.0% 3.3x Refinance Debt 31.3 Mezzanine 14.7 16.2% 4.3x Transaction Fees & Expenses 4.0 ----- ----- Subtotal 62.6 68.8% 4.3x Sponsor Equity 28.4 31.2% 6.2x ----- ----- ----- TOTAL SOURCES $91.0 100.0% 6.2x TOTAL USES $91.0 ===== ===== ==== =====
TRANSACTION SUMMARY Current Stock Price $10.04 PURCHASE PRICE PER SHARE 10.75 Shares Outstanding 5.2 ------ Equity Value 55.8 Plus: Existing Debt 31.3 Plus: Existing Minority Interest 2.2 Less: Existing Cash 4.0 ------ Total Enterprise Value 85.3 TEV AS A MULTIPLE OF: FY'03E EBITDA (2) 6.5x FY'03E Adjusted EBITDA (3) 5.8x ======

OWNERSHIP TABLE
PF DILUTED VALUE IN OWNER. WARRANTS OWNER. 2008 IRR ------ -------- ------- -------- ---- Sponsor Group 94.5% 0.0% 94.5% $ 88.0 25.4% Mezzanine (12.0%) 0.0% 5.5% 5.5% 21.6 17.0% ---- --- ----- ----- ---- TOTAL 94.5% 5.5% 100.0% 109.7 ==== === ===== =====
SUMMARY CREDIT AND LEVERAGE STATISTICS
PROJECTED FISCAL YEARS ENDING DECEMBER 31, PRO FORMA ------------------------------------ 12/31/03E 2004 2005 2006 2007 --------- ---- ---- ---- ---- Bank Debt / Adj. EBITDA (3) 3.3x 2.8x 2.4x 1.7x 1.1x Total Debt / Adj. EBITDA (3) 4.3 3.8 3.4 2.6 1.9 Adj. EBITDA / Interest Expense (3) 3.2 3.2 3.6 4.4 5.5 Adj. EBITDA-CapEx / Int Expense (3) 2.4 2.4 2.7 3.4 4.4
RETURNS TO SPONSOR'S EQUITY
PURCHASE PRICE PER SHARE ------------------------------------------------------------------------------- $ 9.75 $ 10.25 $10.75 $11.25 $11.75 $12.25 ------ ------- ------ ------ ------ ------ 5.50X 28.8% 26.1% 23.7% 21.6% 19.7% 17.9% 2008 5.75X 30.3% 27.6% 25.1% 23.0% 21.0% 19.2% ADJ. EBITDA 6.00X 31.7% 28.9% 26.5% 24.3% 22.3% 20.5% EXIT MULTIPLE (3) 6.25X 33.0% 30.3% 27.8% 25.6% 23.6% 21.7% 6.50X 34.3% 31.5% 29.0% 26.8% 24.8% 22.9%
- ---------- (1) Assumes a $30mm revolver that is drawn $27.9mm at close. Also, assumes that $1.3mm of other debt is refinanced as well. (2) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K and it does include all public company expenses which are $1.25mm in 2003 and $900K in 2004-2008. (3) Financial figures assume Sylvan becomes a private company. EBITDA adjusted for add-backs of $1.25mm and $400K for elimination of public company expenses and executive annuity expenses respectively in 2003 and for aforementioned amounts in all future periods. LANE, BERRY & CO. 31 International [SYLVAN LOGO] DCF ANALYSIS OVERVIEW METHODOLOGY o To determine the present value of the projected after-tax free cash flows of the Company utilizing an EBITDA exit multiple terminal value and a range of discount rates VARIABLES VARIABLE SELECTED RANGE -------- -------------- -- EBITDA Exit Multiple (2008): -- 5.50x-6.50x -- Discount Rate Range: -- 12.0%-14.0% LANE, BERRY & Co. International 32 [SYLVAN LOGO] DCF ANALYSIS
YEAR ENDING DECEMBER 31, --------------------------------------------------------------- (USD in Millions) 2004 2005 2006 2007 2008 TV - ----------------- ---- ---- ---- ---- ---- -- SUMMARY FINANCIALS: REVENUE $ 96.9 $ 97.7 $ 100.6 $ 103.6 $ 106.7 Growth % -- 0.8% 3.0% 3.0% 3.0% ADJUSTED EBITDA (1) 14.0 14.3 16.6 18.7 19.3 Margin % 14.4% 14.7% 16.5% 18.0% 18.0% EBIT 7.4 8.1 10.7 13.0 13.7 Margin % 7.7% 8.3% 10.6% 12.5% 12.9% FREE CASH FLOW ANALYSIS: EBIT * (1 - Tax Rate) 4.9 5.3 7.0 8.5 9.0 Plus: Depreciation 6.3 6.0 5.7 5.5 5.3 Plus: Amortization 0.2 0.2 0.2 0.2 0.2 Plus: Change in Working Capital (0.1) (0.1) (0.4) (0.4) (0.6) Less: Capital Expenditures 3.9 3.9 3.9 3.9 3.9 --- --- --- ---- ---- FREE CASH FLOW 7.4 7.5 8.7 10.0 10.0 EBITDA (2008) 19.3 EBITDA Multiple 6.00x TERMINAL VALUE 115.6 --- --- --- ---- ---- ------- Total Free Cash Flow 7.4 7.5 8.7 10.0 10.0 115.6 Weighted Average Cost of Capital 13.0% PRESENT VALUE OF FCF 6.6 5.9 6.0 6.1 5.5 62.7 === === === ==== ==== =======
IMPLIED ENTERPRISE VALUE: TOTAL ENTERPRISE VALUE $92.8 Less: Net Debt 29.4 EQUITY VALUE 63.3 FD Shares Outstanding 5.2 IMPLIED PRICE PER SHARE $12.29

SENSITIVITY ANALYSIS: 5.50X 5.75X 6.00X 6.25X 6.50X ----- ----- ----- ----- ----- 12.0% $11.94 $12.47 $13.00 $13.53 $14.06 12.5% 11.60 12.12 12.64 13.16 13.67 13.0% 11.27 11.78 12.29 12.80 13.30 13.5% 10.96 11.45 11.95 12.44 12.94 14.0% 10.65 11.13 11.62 12.10 12.59
- --------------- (1) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Private Company fees and expenses of $200K and it does include all public company expenses which are $900K in 2004-2008. LANE, BERRY & CO. International 33 [SYLVAN LOGO] WACC ANALYSIS
TOTAL DEBT & COMPARABLE COMPANIES COST OF EQUITY TOTAL PREFERRED EFFECTIVE UNLEVERED PREF'D STOCK / (USD in Millions) BETA (1) EQUITY (2)(8) VALUE DEBT STOCK TAX RATE BETA (3) CAPITAL - -------------------- -------- ------------- -------- -------- ---------- --------- --------- -------------- Archer-Daniels-Midland 0.64 10.2% $9,247.5 $3,543.5 $ 0.0 28.5% 0.50 27.7% Bunge 0.60 10.4% 2,698.5 2,072.0 0.0 26.3% 0.38 43.4% Chiquita Brands 0.79 12.1% 793.2 276.5 0.0 12.0% 0.60 25.8% Delta and Pine 0.51 10.3% 998.2 (141.7) 0.0 35.5% 0.56 (16.5%) Fresh DelMonte 0.71 11.4% 1,485.1 (33.6) 0.0 8.5% 0.73 (2.3%) Hines Horticulture NA NA 88.3 242.5 0.0 41.0% NA 73.3% MEAN 0.65 10.9% $2,551.8 $ 993.2 $ 0.0 25.3% 0.56 25.2% MEDIAN 0.64 10.4% $1,241.7 $ 259.5 $ 0.0 27.4% 0.56 26.8% SYLVAN 0.44 17.5% 51.8 29.3 0.0 34.5% 0.31 38.0%

WEIGHTED AVERAGE COST ASSUMPTIONS UNLEVERED OF CAPITAL (4) LEVERED COST OF EQUITY (5) - ----------- ---------------------------- ---------------------------------- Pretax Cost of Debt (Kd)(6) 5.0% Risk-Free Rate (Rf)(7) 5.3% BETA TARGET DEBT & PREF'D / TARGET DEBT & PREF'D / ENTERPRISE VALUE ENTERPRISE VALUE ---------------------------- ---------------------------------- 35.0% 40.0% 45.0% 35.0% 40.0% 45.0% ---------- ----- ----- ----- ----- ----- ----- Equity Risk Premium (Rm-Rf)(8) 7.0% 0.45% 13.3% 12.7% 12.1% 18.7% 18.9% 19.3% Size Premia (Sp)(9) 9.2% 0.50% 13.6% 13.0% 12.4% 19.2% 19.4% 19.8% Tax Rate For Target (Tr) 34.5% 0.55% 13.9% 13.3% 12.7% 19.6% 20.0% 20.3% Equity Political Risk Premium (Rp) 0.0% 0.60% 14.2% 13.6% 13.0% 20.1% 20.5% 20.9% Other Risk Premium (Ro) 0.0% 0.65% 14.5% 13.9% 13.2% 20.6% 21.0% 21.4%
- ----------------- (1) Source: two years of weekly data vs. the S&P 500 from Bloomberg. (2) Cost of Equity = Risk-Free Rate (Rf) + (Equity Beta (Be) * Equity Risk Premium (Rm-Rf)) + Size Premia (Sp). (3) Unlevered Beta = Be / (1+(D*(1-Tr) + P) / E). (4) WACC= [(Rf +Be * (Rm-Rf) + Sp + Rp) *%E] +[Kd * (1-Tr) * % D] + Ro. Assumes pretax cost of debt remains constant. (5) Levered Cost of Equity = [Rf + Be * (Rm-Rf) + Sp +Rp)] +Ro. (6) Any political risk premium (Rp) associated with debt is included in the pretax cost of debt (Kp). (7) Risk-Free Rate based on 30-year U.S. Treasury Yield as of 11/7/03. (8) Source: 2003 Ibbotson Risk Premia Report. Based on the differences of large company total arithmetic mean returns minus long-term bond income returns from 1926-2002. (9) Cost of equity premia based on equity market capitalization. Micro-cap (within $0.5mm - $64.8mm) =9.2%. Amounts per 2003 Ibbotson Risk Premia Report. LANE, BERRY & CO. 34 International [SYLVAN LOGO] CONCLUSION LANE, BERRY & CO. 35 International [SYLVAN LOGO] CONCLUSION AS OF THE DATE HEREOF, LBCI IS PREPARED TO DELIVER ITS FAIRNESS OPINION WITH RESPECT TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE MERGER CONSIDERATION TO BE RECEIVED BY THE COMMON STOCKHOLDERS. LANE, BERRY & CO. International 36 EX-99.C.9 13 j0476003exv99wcw9.txt SPECIAL COMMITTEE DISCUSSION MATERIALS 9/29/03 EXHIBIT(c)(9) CONFIDENTIAL Discussion Materials For The Special Committee of [SYLVAN LOGO] September 29, 2003 LANE, BERRY & CO. International [SYLVAN LOGO] AGENDA 1. EXECUTIVE SUMMARY 2. SUMMARY OF PROPOSED TRANSACTION 3. OVERVIEW OF SYLVAN 4. ANALYSIS OF PROPOSED TRANSACTION 5. VALUATION OVERVIEW LANE, BERRY & CO. International 2 [SYLVAN LOGO] EXECUTIVE SUMMARY LANE, BERRY & CO. International 3 [SYLVAN LOGO] EXECUTIVE SUMMARY - SUMMARY OF PROPOSED TRANSACTION - Lake Pacific Partners has proposed to purchase all the outstanding shares of Common Stock, par value $0.001 per share (the "Common Stock") - After the Proposed Transaction, Sylvan will become a privately held company - CONSIDERATION FOR THE PROPOSED TRANSACTION - The shareholders deemed not to be Insiders (the "Outsiders" or "Outside Shareholders") receive $12.00 cash for each share of Common Stock which aggregates to [ ] million - The Inside Shareholders receive $11.50 cash for each share of Common Stock which aggregates to [ ] million - Lake Pacific Partners will contribute up to $40 million as equity - State of Wisconsin Investment Board will contribute up to $15 million as either equity or as a mezzanine security - Dennis Zensen, Sylvan's Chairman and CEO, will contribute at least [$4.3] million through a rollover of at least 50% of his [724,128] shares - The remaining source of funds will come from either renewing the existing bank loan with Citizens or a new senior debt financing - PROCESS & TIMING OF THE PROPOSED TRANSACTION - Sign the definitive merger, agreement by October 7, 2003 - File proxy statement with the SEC by October 15, 2003 - Receive approval from the SEC and mail proxies to the shareholders by November 26, 2003 - Hold special meeting and shareholder vote by the middle of December - Proposed Transaction Closes; a subsidiary to be created by Lake Pacific Partners merges with and into Sylvan pursuant to a [reverse triangular merger] by the end of December 2003 LANE, BERRY & CO. International 4 [SYLVAN LOGO] SUMMARY OF PROPOSED TRANSACTION LANE, BERRY & CO. International 5 [SYLVAN LOGO] SUMMARY OF KEY TERMS OF THE PROPOSED TRANSACTION THE LAKE PACIFIC PARTNERS OFFER INCLUDES THE FOLLOWING KEY ELEMENTS: DEAL CONSIDERATION - Two-tiered cash consideration for Sylvan's Common Stock - The Outside Shareholders receive $12.00 cash for each share of Common Stock - The Inside Shareholders receive $11.50 cash for each share of Common Stock TRANSACTION STRUCTURE - [Reverse triangular merger] PRINCIPAL CONDITIONS TO CLOSING - Shareholder vote approval - Dennis Zensen must have consummated his stock roll-over - Indebtedness of the Company must not exceed $40mm (1) - Lake Pacific Partners must obtain financing on terms at least as favorable as the terms in the commitment letters - Material adverse change out BREAK-UP FEE - 1.5% bid by Special Committee vs. $2.5mm ask by Lake Pacific Partners - ---------- (1) As stated in Lake Pacific's preliminary bid letter. Exact amount to be negotiated. LANE, BERRY & CO. International 6 [SYLVAN LOGO] OVERVIEW OF SYLVAN LANE, BERRY & CO. International 7 [SYLVAN LOGO] KEY PERFORMANCE METRICS
($ in millions) 2003 2000 2001 2002 ---------------------------------------------------- -------------------------- Old Wrap. New Wrap. Rev. 2003 Current Actual Actual Actual Proj. Proj. Proj. Proj. ------ ------ ------ ----- ----- ----- ----- Net Sales $85.9 $85.9 $88.2 $88.9 $97.0 $95.9 Cost of Sales 47.9 49.8 52.1 53.0 61.9 61.4 ----- ----- ----- ----- ----- ----- Gross Profit 38.0 36.1 36.1 35.9 35.1 34.4 Selling and Administration 19.5 18.0 19.4 17.7 19.7 20.4 Lake Pacific Expenses and Fees 0.0 0.0 0.0 0.0 0.0 0.0 Research and Development 1.8 1.7 2.0 1.9 1.2 1.2 Depreciation 5.2 5.4 5.6 5.7 5.6 6.7 ----- ----- ----- ----- ----- ----- Operating Income 11.5 11.0 9.1 10.6 8.5 6.6 6.1 Depreciation 5.2 5.4 5.6 5.7 5.6 6.3 6.7 Other Amortization/Non-Cash Items (1) 0.7 0.8 0.2 0.2 0.9 1.1 0.2 ----- ----- ----- ----- ----- ---- ----- EBITDA 17.4 17.2 14.9 16.5 15.1 14.0 13.0 Public Company Expenses (2) 0.7 0.7 0.7 1.1 Management Annuity Expense (3) 0.4 0.4 0.4 0.4 ----- ----- ---- ----- Adjusted EBITDA 17.6 16.2 15.1 14.5

YTD July 2003 ----------------------------- Revised Actual Var. ------- ------ ---- Net Sales $53.3 $53.2 (0.2%) Cost of Sales 33.6 33.4 0.6% ----- ----- ---- Gross Profit 19.7 19.8 0.5% Selling and Administration 12.1 12.1 0.4% Lake Pacific Expenses and Fees 0.0 0.0 Research and Development 0.9 0.9 (1.3%) Depreciation 3.6 3.7 (1.0%) ----- ----- ---- Operating Income 3.1 3.2 3.6% Depreciation 3.6 3.7 (1.0%) Other Amortization/Non-Cash Items (1) 0.1 0.1 ----- ----- ---- EBITDA 6.8 7.0 2.2% Public Company Expenses (2) Management Annuity Expense (3) Adjusted EBITDA
- ---------- (1) In defining EBITDA, Lake Pacific Partners does not add-back non-cash pension related items of $670K per year. This difference is reflected in the variances between the Old and Current Projections figures for Other Amortization/Non-Cash Items. Additionally, YTD July 2003 Amortization expense is an estimate. (2) In the New Wrapper and Current projections, Public Company Expenses of $700K and $1.1mm, respectively, were eliminated from Corporate Expenses in 2004 and assumed to be eliminated thereafter in the amounts of $900K in 2005 and $800K in 2006 and 2007. (3) In the the New Wrapper and Current projections, Management Annuity expenses of $400K are assumed to be eliminated from Corporate Expenses beginning in 2004 which is reflected in the Adjusted EBITDA figures. LANE, BERRY & CO. International 8 [SYLVAN LOGO] KEY PERFORMANCE METRICS (CONT'D)
($ in millions) 2004 2005 ------------------------------ ------------------------------- New Wrap. Current New Wrap. Current Proj. Proj. Var. Proj. Proj. Var. ----- ----- ---- ----- ----- ---- Net Sales $99.4 $96.9 (2.6%) $101.5 $97.7 (3.8%) Cost of Sales 62.7 61.5 2.0% 63.4 61.8 2.5% ----- ----- ---- ------ ----- ---- Gross Profit 36.7 35.4 (3.5%) 38.1 35.9 (5.9%) Selling and Administration 19.6 19.5 0.7% 20.0 19.6 2.2% Lake Pacific Expenses and Fees 0.0 0.2 0.0 0.2 Research and Development 1.3 1.3 0.4% 1.3 1.3 2.3% Depreciation 5.5 6.3 (15.6%) 5.3 6.0 (12.1%) ----- ----- ---- ------ ----- ---- Operating Income 10.3 8.1 (21.2%) 11.5 8.8 (23.1%) Depreciation 5.5 6.3 (15.6%) 5.3 6.0 (12.1%) Other Amortization/Non-Cash Items (1) 0.9 0.2 78.3% 0.9 0.2 78.3% ----- ----- ---- ------ ----- ---- EBITDA 16.7 14.7 (12.3%) 17.8 15.0 (15.3%) Public Company Expenses (2) Management Annuity Expense (3) 0.4 0.4 0.0% 0.4 0.4 0.0% ----- ----- ---- ------ ----- ---- Adjusted EBITDA 17.1 15.1 (12.0%) 18.2 15.4 (15.0%) ===== ===== ==== ====== ===== ====

($ in millions) 2006 2007 ------------------------------- --------------------------------- New Wrap. Current New Wrap. Current Proj. Proj. Var. Proj. Proj. Var. ----- ----- ---- ----- ----- ---- Net Sales $103.3 $100.6 (2.6%) $104.0 $103.6 (0.4%) Cost of Sales 64.0 61.9 3.3% 64.4 62.2 3.5% ------ ------ ----- ------ ------ ---- Gross Profit 39.3 38.7 (1.5%) 39.6 41.4 4.7% Selling and Administration 20.3 20.1 0.8% 20.5 20.7 (0.9%) Lake Pacific Expenses and Fees 0.0 0.2 0.0 0.2 Research and Development 1.3 1.3 (0.2%) 1.3 1.3 (1.3%) Depreciation 5.2 5.7 (9.6%) 5.1 5.5 (8.0%) ------ ------ ----- ------ ------ ---- Operating Income 12.5 11.4 (8.9%) 12.6 13.7 8.3% Depreciation 5.2 5.7 (9.6%) 5.1 5.5 (8.0%) Other Amortization/Non-Cash Items (1) 0.9 0.2 78.3% 0.9 0.2 78.3% ------ ------ ------ ------ ------ ---- EBITDA 18.6 17.3 (7.2%) 18.6 19.4 3.9% Public Company Expenses (2) Management Annuity Expense (3) 0.4 0.4 0.0% 0.4 0.4 0.0% ------ ------ ----- ------ ------ ---- Adjusted EBITDA 19.0 17.7 (7.0%) 19.0 19.8 3.8% ====== ====== ====== ====== ====== ====
- ---------- (1) In defining EBITDA, Lake Pacific Partners does not add-back non-cash pension related items of $670K per year. This difference is reflected in the variances between the Old and Current Projections figures for Other Amortization/Non-Cash Items. Additionally, YTD July 2003 Amortization expense is an estimate. (2) In the New Wrapper and Current projections, Public Company Expenses of $700K and $1.1mm, respectively, were eliminated from Corporate Expenses in 2004 and assumed to be eliminated thereafter in the amounts of $900K in 2005 and $800K in 2006 and 2007. (3) In the the New Wrapper and Current projections, Management Annuity expenses of $400K are assumed to be eliminated from Corporate Expenses beginning in 2004 which is reflected in the Adjusted EBITDA figures. LANE, BERRY & CO. International 9 [SYLVAN LOGO] STOCK PRICE / VOLUME SEPTEMBER 26, 2001 - SEPTEMBER 26, 2003 [LINEGRAPH DEPICTING STOCK PRICE/VOLUME SEPTEMBER 26, 2001 - SEPTEMBER 26, 2003] LANE, BERRY & CO. International 10 [SYLVAN LOGO] ANALYSIS OF PROPOSED TRANSACTION LANE, BERRY & CO. International 11 [SYLVAN LOGO] SUMMARY TRANSACTION MULTIPLES
(USD in millions, except per share data) - ---------------------------------------- Purchase Price Per Share $12.00 Fully Diluted Shares Outstanding 5.2 ------ EQUITY VALUE 62.7 Expected Debt as of 12/31/03: Revolver 30.0 Other Debt 1.3 Minority Interest 2.1 Cash and cash equivalents 4.0 ------ ENTERPRISE VALUE 92.1 Implied LTM Revenue Multiple 1.0x Implied FY'03E Revenue Multiple 1.0x Implied LTM EBITDA Multiple 6.6x Implied FY'03E EBITDA Multiple (1) 7.1x Implied FY'03E Adjusted EBITDA Multiple (2) 6.4x Implied LTM P/E Ratio 16.9x Implied FY'03E P/E Ratio (1) 22.1x
- ---------- (1) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Lake Pacific fees and expenses of $200K and it does include all public company expenses which are $1.1mm in 2003. (2) Financial figures assume Sylvan becomes a private company. EBITDA adjusted for add-backs of $1.1mm and $400K for elimination of public company expenses and executive annuity expenses respectively in 2003. LANE, BERRY & CO. International 12 [SYLVAN LOGO] SUMMARY OF FIRST SYLVAN SALES PROCESS - - LBCI CONTACTED A TOTAL OF 35 PROSPECTIVE BUYERS - - 8 OF THE 14 STRATEGIC BUYERS RECEIVED A "TEASER" AND 1 OF THESE 8 RECEIVED A CONFIDENTIALITY AGREEMENT - None of the strategic buyers executed a Confidentiality Agreement; therefore, no strategic buyer received a "Wrapper" - The other 6 strategic buyers immediately declined further interest - - 15 OF THE 21 FINANCIAL BUYERS RECEIVED A "TEASER" AND 10 OF THESE 15 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - Some financial buyers that did not receive a "Teaser" or execute a Confidentiality Agreement evaluated the merits of a deal by using public filings - - TWO FINANCIAL BUYERS, AMERICAN SECURITIES CAPITAL PARTNERS AND CADIGAN INVESTMENT PARTNERS, SUBMITTED A NON-BINDING INDICATION OF INTEREST - American Securities Capital Partners valued Sylvan at $10.00 - $11.00 per share - Cadigan Investment Partners valued Sylvan at $12.50 - $13.50 per share - - THESE BUYERS WERE PROVIDED 2003E REVENUE AND EBITDA ESTIMATES OF $88.9 MILLION AND $16.5 MILLION RESPECTIVELY - American Securities Capital Partners' bid range: 1.0x 2003E Revenue & 5.2x 2003E EBITDA - 1.0x 2003E Revenue & 5.6x 2003E EBITDA - Cadigan Investment Partners' bid range: 1.1x 2003E Revenue & 6.1x 2003E EBITDA - 1.2x 2003E Revenue & 6.5x 2003E EBITDA
CALL TEASER BOOK BID ---- ------ ---- --- STRATEGIC 14 8 0 0 FINANCIAL 21 15 10 2 -- -- -- -- TOTAL 35 23 10 2 == == == ==
LANE, BERRY & CO. International 13 [SYLVAN LOGO] SUMMARY OF SECOND SYLVAN SALES PROCESS - LBCI AND MORGAN JOSEPH CONTACTED A TOTAL OF 73 PROSPECTIVE BUYERS - 13 OF THE 32 STRATEGIC BUYERS RECEIVED A "TEASER" AND 1 OF THESE 13 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - The other 19 strategic buyers immediately declined further interest - 27 OF THE 41 FINANCIAL BUYERS RECEIVED A "TEASER" AND 12 OF THESE 27 EXECUTED A CONFIDENTIALITY AGREEMENT AND RECEIVED A "WRAPPER" - Some financial buyers that did not receive a "Teaser" or execute a Confidentiality Agreement evaluated the merits of a deal by using public filings - THE FOLLOWING FOUR FINANCIAL BUYERS SUBMITTED A NON-BINDING INDICATION OF INTEREST: AMERICAN SECURITIES CAPITAL PARTNERS, KEY KOSMONT, LAKE PACIFIC PARTNERS AND THE TOKARZ GROUP (1) - THESE BUYERS WERE PROVIDED 2003E REVENUE AND EBITDA ESTIMATES OF $97.0 MILLION AND $15.1 MILLION RESPECTIVELY
CALL TEASER BOOK BID ---- ------ ---- --- STRATEGIC 32 13 1 0 FINANCIAL 41 27 12 4 -- -- -- - TOTAL 73 40 13 2 == == == =
- ------------- (1) The Tokarz Group is run by Michael Tokarz who is the Chairman of Cadigan Investment Partners. LANE, BERRY & CO. International 14 [SYLVAN LOGO] PRELIMINARY BID DETAILS THE COMPREHENSIVE SALES PROCESS CONDUCTED BY LBCI AND MORGAN JOSEPH PRODUCED FOUR PRELIMINARY BIDS WHICH ARE SUMMARIZED BELOW:
PRICE PER FINANCING PROSPECTIVE BUYER SHARE RANGE IMPLIED MULTIPLES (1) SOURCES - ----------------- ----------- --------------------- ------- AMERICAN SECURITIES $8.00 0.8x 2003E Revenue Not disclosed CAPITAL PARTNERS 5.0x 2003E EBITDA KEY KOSMONT $7.00 - $9.00 0.7x - 0.8x 2003E Revenue Not disclosed 4.6x - 5.3x 2003E EBITDA LAKE PACIFIC PARTNERS $11.50 Equity: Submitted a second two- Lake Pacific tiered preliminary bid: SWIB $12.00 for Outsiders 1.0x 2003E Revenue Dennis Zensen $11.50 for Insiders 6.4x 2003E EBITDA (2) Senior Debt THE TOKARZ GROUP $10.00 0.9x 2003E Revenue Equity 5.7x 2003E EBITDA Senior Debt
PROSPECTIVE BUYER COMMENTS - ----------------- -------- AMERICAN SECURITIES - Submitted verbal bid CAPITAL PARTNERS KEY KOSMONT - Tender offer - 5% - 10% management ownership - Lock-up agreements with large shareholders LAKE PACIFIC PARTNERS - Merger - Agreement by D. Zensen to roll half of his shares - Obtain financing from SWIB and bank lenders THE TOKARZ GROUP - Tender offer or statutory merger
- ---------------- (1) Implied Revenue and EBITDA multiples calculated from projected 2003 financials on prior page. (2) Implied Revenue and EBITDA multiples assume $12.00 per share is paid in cash to all Sylvan shareholders. LANE, BERRY & CO. International 15 [SYLVAN LOGO] VALUATION OVERVIEW LANE, BERRY & CO. International 16 [SYLVAN LOGO] PUBLIC EQUITY COMPARABLES OVERVIEW METHODOLOGY - To determine the current public market value and trading multiples of companies similar to Sylvan, thereby imputing a "public market" valuation range COMPANY SELECTION - LBCI analyzed a range of public food and agricultural producers and selected three sectors comprising six trading comparables for analysis:
Food Processors: Fresh Produce Companies: Agricultural Companies: - ---------------- ------------------------ ----------------------- ~~Archer Daniels Midland Chiquita Brands Delta and Pine Bunge Fresh Del Monte Hines Horticulture~~
ISSUES - No control premium is reflected in the results of the public market valuation - There are no direct public company comparables to the Company - Many of the listed companies are substantially larger than the Company which affects their direct applicability vis-a-vis valuation LANE, BERRY & CO. International 17 [SYLVAN LOGO] PUBLIC EQUITY COMPARABLES ANALYSIS
(USD in Millions) STOCK % OF FD EV / REVENUE EV / EBITDA PRICE 52-WEEK EQUITY ENTERPRISE ---------------------- ---------------------- COMPANY 9/25/03 HIGH VALUE VALUE LTM CY'03E CY'04E LTM CY'03E CY'04E - ------- ------- ---- ----- ----- --- ------ ------ --- ------ ------ SYLVAN $10.05 82% $ 51.7 $ 85.6 0.9X 0.9X 0.9X 6.1X 6.6X 6.0X FOOD PROCESSING COMPANIES Archer-Daniels Midland (1) $12.99 90% $8,397.0 $10,506.6 0.3x 0.3x 0.3x 7.3x 6.8x 6.2x Bunge (2) 27.55 88% 2,780.4 5,155.4 0.3x 0.2x 0.2x 7.6x 6.4x 4.8x FRESH PRODUCE COMPANIES Chiquita Brands (3) 18.25 95% 734.7 913.9 0.3x 0.4x 0.3x 8.8x 5.7x 4.8x Fresh DelMonte 25.22 85% 1,443.8 1,577.9 0.7x 0.6x 0.6x 5.2x 5.2x 4.8x AGRICULTURAL COMPANIES Delta and Pine 22.71 89% 899.3 787.6 2.8x 2.7x NA 11.9x 11.8x NA Hines Horticulture (4) 3.35 96% 73.9 321.2 1.0x NA NA 6.2x NA NA HIGH 96% 2.8X 2.7X 0.6X 11.9X 11.8X 6.2X MEDIAN 89% 0.5X 0.4X 0.3X 7.4X 6.4X 4.8X LOW 85% 0.3X 0.2X 0.2X 5.2X 5.2X 4.8X

(USD in Millions) P/E ----------------------------- COMPANY LTM CY'03E CY'04E - ------- --- ------ ------ SYLVAN 14.2X 18.5X 21.8X FOOD PROCESSING COMPANIES Archer-Daniels Midland 18.6x 15.7x 13.0x Bunge 7.3x 10.8x 9.8x FRESH PRODUCE COMPANIES Chiquita Brands NM 9.6x 6.8x Fresh DelMonte 6.2x 6.6x 6.4x AGRICULTURAL COMPANIES Delta and Pine 29.8x 31.1x NA Hines Horticulture 10.0x 1.9x NA HIGH 29.8X 31.1X 13.0X MEDIAN 10.0X 10.2X 8.3X LOW 6.2X 1.9X 6.4X

REVENUE ADJUSTED EBITDA EARNINGS PER SHARE ------------------------- ------------------------------ -------------------------------- LTM CY'03E CY'04E LTM CY'03E (5) CY'04E (5) LTM CY'03E (5) CY'04E (5) --- ------ ------ --- ---------- ----------- --- ----------- ---------- SYLVAN FINANCIALS $ 91.9 $ 95.9 $96.9 $ 14.0 $ 13.0 $ 14.2 $ 0.71 $ 0.54 $0.76 IMPLIED SYLVAN PRICE PER SHARE HIGH $42.86 $44.27 $4.55 $25.76 $23.21 $10.46 $21.12 $16.87 $9.84 MEDIAN $ 2.49 NM NM $13.69 $ 9.46 $ 6.70 $ 7.09 $ 5.52 $6.31 LOW NM NM NM $ 7.58 $ 6.55 $ 6.52 $ 4.38 $ 1.04 $4.84
- -------------------- (1) Pro forma for the acquisition of Minnesota Corn Processsors LLC. (2) Pro forma for the acquisition of Cereol S.A. and for the sale of its Lesieur bottled oil business. (3) Pro forma for the acquisition of Scipio and the sale of Chiquita Processed Foods. LTM as of 3/31/03. (4) Pro forma for the 9/11/03 issuance of $175mm in senior notes. (5) Financial figures assume Sylvan remains a public company. CY'03E and CY'04E EBITDA, and CY'03E and CY'04E EPS do not include the management annuity add-back of $400K and the Lake Pacific fees and expenses of $200K, and do include all public company expenses, which are $1.1mm in 2003 and $700K in 2004. LANE, BERRY & CO. International 18 [SYLVAN LOGO] M&A COMPARABLES OVERVIEW METHODOLOGY - To determine the historical private market value and transaction multiples of companies similar to the Company, thereby imputing a "transaction" valuation range ISSUES - Multiples paid in the transaction analysis may reflect potential synergies an acquiror could realize as a result of the target's operating scale - There are no direct M&A comparable transactions LANE, BERRY & CO. International 19 [SYLVAN LOGO] M&A COMPARABLES ANALYSIS
(USD in Millions) ANN. DATE ACQUIROR TARGET - --------- -------- ------ 6/2/03 Fox Paine and Co. Seminis 2/4/03 Riviana Foods ACH Food Companies, Rice Business 12/18/02 Investor Group Dole Food Company 7/22/02 Bunge Cereol S.A. 1/7/02 Kerry Group Stearns & Lehman 8/17/01 Nippon Suisan Gorton's Seafood & Bluewater Seafoods 2/20/01 Lesaffre et Compagnie Sensient Technologies' Red Star Yeast & Products (1) 12/21/00 Investor Group Michael Foods 10/17/00 Kerry Group Armour Food Ingredients 12/17/99 Moneys Mushrooms Vlasic Foods, Vlasic Farms Fresh Mushrooms Business 9/16/98 Pictsweet LLC United Foods Inc.

TRANSACTION VALUE / LTM (USD in Millions) TRANS. ------------------ ANN. DATE DESCRIPTION VALUE REVENUE EBITDA - --------- ----------- ------ ------- ------ 6/2/03 Worldwide producer and marketer of vegetable and fruit seeds. $625.0 1.3x 7.8x 2/4/03 Producer of rice products. 24.0 0.7x NA 12/18/02 Producer and marketer of fruits and vegetables. 2,500.0 0.6x 6.4x 7/22/02 Manufacturer of seed oils and olive oils. 1,496.3 0.3x 5.5x 1/7/02 Stearns & Lehman is a manufacturer of coffeehouse chain, 26.0 1.3x NA foodservice and branded Italian-style flavoured syrups. 8/17/01 Gorton's is a retail frozen seafood brand in 175.0 0.7x 8.8x the U.S. & Bluewater is a brand in Canada. 2/20/01 Supplier of yeast to the commercial bakery market. 122.0 1.0x 7.1x 12/21/00 Producer and distributor of food products in four areas: egg 747.2 0.7x 5.5x products refrigerated distribution, dairy products and potato products. 10/17/00 Provide a wide range of specialty food ingredients. 35.0 0.9x NA 12/17/99 Producer of fresh mushrooms. 50.0 0.4x NM 9/16/98 Grower, processor, marketer and distributor of food products. 63.1 0.3x 4.9x HIGH $2,500.0 1.3X 8.8X MEDIAN $ 122.0 0.7X 6.4X LOW $ 24.0 0.3X 4.9X

LTM ------------------ REVENUE EBITDA ------- ------ SYLVAN FINANCIALS $ 91.9 $ 14.0 IMPLIED SYLVAN PRICE PER SHARE HIGH $17.34 $17.25 MEDIAN $ 5.75 $10.83 LOW NM $ 6.79
- ---------- (1) Revenue is an actual figure, EBITDA is an estimate. LANE, BERRY & CO. International 20 [SYLVAN LOGO] LBO ANALYSIS OVERVIEW METHODOLOGY - To determine the potential price a financial buyer could pay assuming certain benchmarks of financial leverage and required returns - This analysis uses "private company" figures to reflect the operations as if the Company were no longer a public company BENCHMARK SELECTION - LBCI identified the following key benchmarks in performing its analysis: - Maximum pro forma Senior Debt / 2003E Adjusted EBITDA of 3.25x - Maximum pro forma Total Debt / 2003E Adjusted EBITDA of 4.25x - Minimum equity returns of approximately 17% to the mezzanine debt holders - Minimum equity returns to the sponsor of approximately 25% LANE, BERRY & CO. 21 International [SYLVAN LOGO] LBO ANALYSIS SOURCES & USES OF FUNDS (USD IN MILLIONS)
CUM. MULT. FY03E SOURCES AMT. % TOTAL ADJUSTED EBITDA USES AMT. - ------- ---- ------- --------------- ---- ---- Revolver (1) $27.1 29.7% 1.9x Equity Purchase Price $56.1 Term Loan A 20.0 21.9% 3.3x Refinance Debt 31.3 Mezzanine 14.5 15.9% 4.3x Transaction Fees & Expense 3.9 ----- ----- Subtotal 61.6 67.4% 4.3x Sponsor Equity 29.7 32.6% 6.0x ----- ----- ----- TOTAL SOURCES $91.4 100.0% 6.0x TOTAL USES $91.4 ===== ===== =====
TRANSACTION SUMMARY Current Stock Price $ 10.00 PURCHASE PRICE PER SHARE 10.75 Shares Outstanding 5.2 --------- Equity Value 56.1 Plus: Existing Debt 31.3 Plus: Existing Minority Interest 2.1 Less: Existing Cash 4.0 --------- Total Enterprise Value 85.6 TEV AS A MULTIPLE OF: FY'02A EBITDA 5.8x FY'03E EBITDA (2) 6.6x FY'03E Adjusted EBITDA (3) 5.9x ---------

OWNERSHIP TABLE
PF DILUTED VALUE IN OWNER. WARRANTS OWNER. 2008 IRR ------ -------- ------ ---- --- Sponsor Group 94.5% 0.0% 94.5% $ 91.3 25.2% Mezzanine (12.0%) 0.0% 5.5% 5.5% 21.6 17.2% ---- --- ---- -------- ---- TOTAL 94.5% 5.5% 100.0% 112.9 ==== === ===== ========
SUMMARY CREDIT AND LEVERAGE STATISTICS
PROJECTED FISCAL YEARS ENDING DECEMBER 31, PRO FORMA -------------------------------- 12/31/03E 2004 2005 2006 2007 --------- ---- ---- ---- ---- Bank Debt / Adj. EBITDA (3) 3.3x 2.8x 2.4x 1.7x 1.1x Total Debt / Adj. EBITDA (3) 4.3 3.8 3.3 2.5 1.8 Adj. EBITDA / Interest Expense (3) 3.2 3.3 3.6 4.5 5.6 Adj. EBITDA-CapEx / Int Expense (3) 2.4 2.5 2.7 3.5 4.5
RETURNS TO SPONSOR'S EQUITY
PURCHASE PRICE PER SHARE ------------------------------------------------------------ $9.75 $10.25 $10.75 $11.25 $11.75 $12.25 ----- ------ ------ ------ ------ ------ 5.50X 27.8% 25.3% 23.0% 20.9% 19.1% 17.4% 2008 5.75X 29.3% 26.7% 24.4% 22.3% 20.4% 18.7% ADJ. EBITDA 6.00X 30.6% 28.0% 25.7% 23.6% 21.7% 19.9% EXIT MULTIPLE (3) 6.25X 31.9% 29.3% 27.0% 24.8% 22.9% 21.2% 6.50X 33.2% 30.5% 28.2% 26.0% 24.1% 22.3%
- ---------------- (1) Assumes a $30mm revolver that is drawn $27.1mm at close. Also, assumes that $1.3mm of other debt is refinanced as well. (2) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Lake Pacific fees and expenses of $200K and it does include all public company expenses which are $1.1mm in 2003, $700K in 2004, $900K in 2005, $800K in 2006-2008. (3) Financial figures assume Sylvan becomes a private company. EBITDA adjusted for add-backs of $1.1mm and $400K for elimination of public company expenses and executive annuity expenses respectively in 2003 and for aforementioned amounts in all future periods. LANE, BERRY & CO. International 22 [SYLVAN LOGO] DCF ANALYSIS OVERVIEW METHODOLOGY - To determine the present value of the projected after-tax free cash flows of the Company utilizing an EBITDA exit multiple terminal value and a range of discount rates VARIABLES
VARIABLE SELECTED RANGE -------- --------------- ~~-- EBITDA Exit Multiple (2008): -- 5.50x-6.50x -- Discount Rate Range: -- 12.0%-14.0%~~
LANE, BERRY & CO. International 23 [SYLVAN LOGO] DCF ANALYSIS
YEAR ENDING DECEMBER 31, ------------------------------------------------- (USD in Millions) 2004 2005 2006 2007 2008 TV ------ ------ ------ ------ ------ ------ SUMMARY FINANCIALS: REVENUE $96.9 $97.7 $100.6 $103.6 $106.7 Growth % -- 0.8% 3.0% 3.0% 3.0% ADJUSTED EBITDA (1) 14.2 14.3 16.7 18.8 19.4 Margin % 14.6% 14.7% 16.6% 18.1% 18.1% EBIT 7.6 8.1 10.8 13.1 13.8 Margin % 7.9% 8.3% 10.7% 12.6% 12.9% FREE CASH FLOW ANALYSIS: EBIT * (1 - Tax Rate) 5.0 5.3 7.1 8.6 9.1 Plus: Depreciation 6.3 6.0 5.7 5.5 5.3 Plus: Amortization 0.2 0.2 0.2 0.2 0.2 Plus: Change in Working Capital (0.1) (0.1) (0.4) (0.4) (0.6) Less: Capital Expenditures 3.9 3.9 3.9 3.9 3.9 ----- ----- ------ ------ ------ FREE CASH FLOW 7.5 7.5 8.8 10.0 10.1 EBITDA (2008) 19.4 EBITDA Multiple 6.00X ----- TERMINAL VALUE 116.2 Total Free Cash Flow 7.5 7.5 8.8 10.0 10.1 116.2 Weighted Average Cost of Capital 13.0% PRESENT VALUE OF FCF 6.7 5.9 6.1 6.1 5.5 63.0 ===== ===== ====== ====== ====== =====
IMPLIED ENTERPRISE VALUE: TOTAL ENTERPRISE VALUE $ 93.3 Less: Net Debt 29.4 ------ EQUITY VALUE 63.9 FD Shares Outstanding 5.1 IMPLIED PRICE PER SHARE $12.43 ======

SENSITIVITY ANALYSIS:
5.50X 5.75X 6.00X 6.25X 6.50X ------- ------- ------- ------- ------- 12.0% $12.07 $12.61 $13.14 $13.67 $14.21 12.5% 11.73 12.26 12.78 13.30 13.82 13.0% 11.40 11.92 12.43 12.94 13.45 13.5% 11.08 11.58 12.08 12.58 13.08 14.0% 10.77 11.26 11.75 12.24 12.73
- -------------- (1) Financial figures assume Sylvan remains a public company. EBITDA does not include the management annuity add-back of $400K and the Lake Pacific fees and expenses of $200K and it does include all public company expenses which are $1.1mm in 2003, $700K in 2004, $900K in 2005, $800K in 2006-2008. LANE, BERRY & CO. International 24 [SYLVAN LOGO] WACC ANALYSIS
TOTAL DEBT & COMPARABLE COMPANIES COST OF EQUITY TOTAL PREFERRED EFFECTIVE UNLEVERED PREF'D STOCK/ (USD in Millions) BETA (1) EQUITY (2)(8) VALUE DEBT STOCK TAX RATE BETA (3) CAPITAL - ----------------------- -------- ------------ ---------- ---------- --------- --------- --------- ----------- Archer-Daniels Midland 0.60 9.7% $ 8,397.0 $ 3,873.0 $ 0.0 28.5% 0.45 31.6% Bunge 0.58 10.0% 2,823.8 2,439.0 0.0 26.3% 0.35 46.3% Chiquita Brands 1.00 13.5% 741.3 179.2 0.0 12.0% 0.82 19.5% Delta and Pine 0.47 9.9% 966.6 (110.9) 0.0 35.5% 0.51 (13.0%) Fresh DelMonte 0.69 11.1% 1,493.7 150.2 0.0 8.5% 0.63 9.1% Hines Horticulture NA NA 61.4 247.3 0.0 41.0% NA 80.1% MEAN 0.67 10.8% $ 2,414.0 $ 1,129.6 $ 0.0 25.3% 0.55 28.9% MEDIAN 0.60 10.0% $ 1,230.1 $ 213.2 $ 0.0 27.4% 0.51 25.5% SYLVAN 0.46 17.5% 51.9 36.3 0.0 34.5% 0.33 38.0%
ASSUMPTIONS Pretax Cost of Debt (Kd)(6) 5.0% Risk-Free Rate (Rf)(7) 5.1% Equity Risk Premium (Rm-Rf)(8) 7.0% Size Premia (Sp)(9) 9.2% Tax Rate For Target (Tr) 34.5% Equity Political Risk Premium (Rp) 0.0% Other Risk Premium (Ro) 0.0%

WEIGHTED AVERAGE COST OF CAPITAL (4) UNLEVERED ------------------------------------------ BETA TARGET DEBT & PREF'D / ENTERPRISE VALUE ------------------------------------------ 35.0% 40.0% 45.0% ----- ----- ----- Equity Risk Premium (Rm-Rf)(8) 0.45 13.2% 12.6% 12.0% Size Premia (Sp)(9) 0.50 13.5% 12.9% 12.3% Tax Rate For Target (Tr) 0.55 13.8% 13.2% 12.6% Equity Political Risk Premium (Rp) 0.60 14.1% 13.5% 12.9% Other Risk Premium (Ro) 0.65 14.4% 13.8% 13.2%

LEVERED COST OF EQUITY (5) ----------------------------------------------- TARGET DEBT & PREF'D / ENTERPRISE VALUE ----------------------------------------------- 35.0% 40.0% 45.0% ----- ----- ----- Equity Risk Premium (Rm-Rf)(8) 18.5% 18.8% 19.1% Size Premia (Sp)(9) 19.0% 19.3% 19.6% Tax Rate For Target (Tr) 19.5% 19.8% 20.2% Equity Political Risk Premium (Rp) 19.9% 20.3% 20.7% Other Risk Premium (Ro) 20.4% 20.8% 21.2%
- ------------------ (1) Source: two years of weekly data vs. the S&P 500 from Bloomberg. (2) Cost of Equity = Risk-Free Rate (Rf) + (Equity Beta (Be) * Equity Risk Premium (Rm-Rf)) + Size Premia (Sp). (3) Unlevered Beta = Be / (1+(D*(1-Tr) + P) / E). (4) WACC= [(Rf +Be * (Rm-Rf) + Sp + Rp) *%E] +[Kd * (1-Tr) * % D] + Ro. Assumes pretax cost of debt remains constant. (5) Levered Cost of Equity = [Rf + Be * (Rm-Rf) + Sp +Rp)] +Ro. (6) Any political risk premium (Rp) associated with debt is included in the pretax cost of debt (Kp). (7) Risk-Free Rate based on 30-year U.S. Treasury Yield as of 09/24/03. (8) Source: 2003 Ibbotson Risk Premia Report. Based on the differences of large company total arithmetic mean returns minus long-term bond income returns from 1926-2002. (9) Cost of equity premia based on equity market capitalization. Micro-cap (within $0.5mm - $64.8mm) =9.2%. Amounts per 2003 Ibbotson Risk Premia Report. LANE, BERRY & CO. International 25 EX-99.C.10 14 j0476003exv99wcw10.txt EXHIBIT 99.C.10 Whenever confidential information is omitted herein (such omissions are denoted by an asterisk), such confidential information has been submitted separately to the Securities and Exchange Commission pursuant to a request for confidential treatment. Exhibit C-10 CONFIDENTIAL PRESENTATION TO THE BOARD OF DIRECTORS OF: [SYLVAN LOGO] September 18, 2002 LANE, BERRY & CO. INTERNATIONAL TIMELINE OF SIGNIFICANT EVENTS / ACTIONS MAY 2002 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 JUNE 2002 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29/30 JULY 2002 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 AUGUST 2002 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 SEPTEMBER 2002 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
- -------------------------------------------------------------------------------- DATE: ACTIVITY: - -------------------------------------------------------------------------------- 5/14 Sylvan Announces Plans To Explore Strategic Alternatives - -------------------------------------------------------------------------------- 5/30 Shareholder Meeting, Board of Directors Update - -------------------------------------------------------------------------------- 6/25 Preliminary Sale Process Materials Circulated To Board of Directors - -------------------------------------------------------------------------------- 7/11 Lane Berry Conference Call with Board of Directors To Finalize Sale Process Materials - -------------------------------------------------------------------------------- 7/23 Lane Berry Begins Making Calls To Prospective Buyers - -------------------------------------------------------------------------------- 8/05 Angelo Sartor Issues Press Release - -------------------------------------------------------------------------------- 8/08 Sylvan Announces Second Quarter Earnings / Results - -------------------------------------------------------------------------------- 8/19 - 8/23 Lane Berry Communicates Bidding Process and Deadline to Prospective Buyer - -------------------------------------------------------------------------------- 9/05 Deadline For Submitting Non-Binding Indication of Interest - --------------------------------------------------------------------------------
LANE, BERRY & CO. INTERNATIONAL 2 PRICE/VOLUME CHART SINCE MAY 1, 2002 May 1, 2002 - September 10, 2002 (LINE GRAPH) LANE, BERRY & CO. INTERNATIONAL 3 SUMMARY OF CALLING EFFORTS AND BUYER INTEREST - - Lane Berry contacted a total of 31 prospective buyers - - 8 of the 14 strategic buyers received a "Teaser" and 1 of these 8 received a Confidentiality Agreement - None of the strategic buyers executed a Confidentiality Agreement; therefore, no strategic buyer received a "Wrapper" - All of the 8 parties eventually declined further interest - The other 6 strategic buyers immediately declined further interest - - 11 of the 17 financial buyers received a "Teaser" and 7 of these 11 executed a Confidentiality Agreement and received a "Wrapper" - Some financial buyers that did not receive a "Teaser" or executed a Confidentiality Agreement evaluated the merits of a deal by using public filings - One financial buyer, Brynwood Partners, just recently received a book, and therefore has yet to submit a bid or decline further interest - - One financial buyer, American Securities Capital Partners, submitted a non-binding indication of interest
- ------------------------------------------------------- CALL TEASER BOOK BID - ------------------------------------------------------- STRATEGIC 14 8 0 0 FINANCIAL 17 11 7 1 --------------------------------------- TOTAL 31 19 7 1 - -------------------------------------------------------
LANE, BERRY & CO. INTERNATIONAL 4 (Confidential information omitted pursuant to the request for confidential treatment.) SUMMARY CALL SHEET POTENTIAL STRATEGIC BUYERS
SENT CA DECLINED AND/OR SIGNED RECEIVED FURTHER POTENTIAL BUYERS TEASER CA BOOK INTEREST - -------------------------------------------------------------------- 1. * X - -------------------------------------------------------------------- 2. * X - -------------------------------------------------------------------- 3. * X X - -------------------------------------------------------------------- 4. * X - -------------------------------------------------------------------- 5. * X - -------------------------------------------------------------------- 6. * X - -------------------------------------------------------------------- 7. * X X - -------------------------------------------------------------------- 8. * X X - -------------------------------------------------------------------- 9. * X X - -------------------------------------------------------------------- 10. * X X - -------------------------------------------------------------------- 11. * X X - -------------------------------------------------------------------- 12. * X X - -------------------------------------------------------------------- 13. * X - -------------------------------------------------------------------- 14. * X X - --------------------------------------------------------------------
POTENTIAL FINANCIAL BUYERS
SENT CA DECLINED AND/OR SIGNED RECEIVED FURTHER POTENTIAL BUYERS TEASER CA BOOK INTEREST - ---------------------------------------------------------------------------------- 1. * X X - ---------------------------------------------------------------------------------- 2. * X X X X - ---------------------------------------------------------------------------------- 3. * X X X - ---------------------------------------------------------------------------------- 4. * X - ---------------------------------------------------------------------------------- 5. * X X X X - ---------------------------------------------------------------------------------- 6. * X X X - ---------------------------------------------------------------------------------- 7. * X X - ---------------------------------------------------------------------------------- 8. * X X X X - ---------------------------------------------------------------------------------- 9. * X - ---------------------------------------------------------------------------------- 10. Lake Pacific Partners X - ---------------------------------------------------------------------------------- 11. * X - ---------------------------------------------------------------------------------- 12. * X X - ---------------------------------------------------------------------------------- 13. * X - ---------------------------------------------------------------------------------- 14. * X X X X - ---------------------------------------------------------------------------------- 15. * X X - ---------------------------------------------------------------------------------- 16. * X X X X - ---------------------------------------------------------------------------------- 17. * X - ----------------------------------------------------------------------------------
LANE, BERRY & CO. INTERNATIONAL 5 GENERAL REASONS FOR A DECLINE OF INTEREST STRATEGIC PARTIES - - Both spawn and fresh mushrooms are not their core businesses - Currently, only focusing on their areas of expertise FINANCIAL PARTIES - - Valuation issues - High levels of capital expenditures with a relatively low associated rate of return - Stock price already fully valued - - Lack of quality growth opportunities - Down to flat projections -- both top line and bottom line - - Size of the deal (equity investment) too small LANE, BERRY & CO. INTERNATIONAL 6 (Confidential information omitted pursuant to the request for confidential treatment.) BID SUMMARY PARTY: * PRICE PER SHARE RANGE: $10.00 - $11.00 FINANCING SOURCES: Equity and Senior Debt ADDITIONAL COMMENTS: - In order to reach the higher end of the above price range, * stated that they would need to see growth opportunities in excess of those presented in the provided materials - Equity component would come from *'s $650MM fund - * stated that they would offer management the opportunity to "roll-over" or invest in the transaction on the same terms as * - Key managers would have the chance to participate in a performance-based management stock option program

LANE, BERRY & CO. INTERNATIONAL 7 OVERVIEW OF ALTERNATIVES
ALTERNATIVE CONTINUE WITH SALE PROCESS DUTCH AUCTION TENDER OPEN MARKET SHARE REPURCHASE - ------------------------------------------------------------------------------------------------------------------------------------ MECHANICS - Choose final round participant(s) - Set a price range and the amount - Choose between three approaches: - Help buyer(s) perform due of shares for the tender offer systematic, opportunistic and diligence - Repurchase shares at the lowest blended - Conduct management presentations price within the range which - A systematic approach sets - Set a deadline for final bid(s) allows the Company to repurchase regular purchases of a constant - Choose parties with which to the desired amount of stock amount and sends a strong signal negotiate further to the market - Reach agreement in principle - All shareholders receive the same - An opportunistic approach buys - Negotiate and close price stock on weakness and provides - Shareholders can withdraw their greater flexibility; however, shares at any time prior to sends a weaker signal to the expiration of the tender market - Blended utilizes both approaches and calls for regular minimum purchases - ------------------------------------------------------------------------------------------------------------------------------------ REQUIREMENTS - Draft management presentation - Tender for a specific number of - Sufficient projected cash flow - Organize a data room shares - A liquid market for the Company's - Be available for due diligence - Hold tender offer open for at stock presentations, conference calls least 20 business days and a 10 and interviews day extension for any change in desired number of repurchased shares - ------------------------------------------------------------------------------------------------------------------------------------ TIMING - Prepare management presentation: - Secure additional financing - Not applicable 2-3 weeks - Preparation work: 2-3 weeks - Due diligence: 4 weeks - Process: 4-6 weeks - Close transaction: 2-3 months - ------------------------------------------------------------------------------------------------------------------------------------
LANE, BERRY & CO. INTERNATIONAL 8 ALTERNATIVE 1 - CONTINUE WITH SALE PROCESS ADVANTAGES - - Continuation of process would provide for full information from which to make strategic alternatives decision - - Provides full liquidity for large shareholders at price close to current market price - - Removal of public company pressures could allow the Company to better pursue business/market opportunities and remove distractions - - Announcement that the Company will not be sold will have a likely negative impact on the stock price POTENTIAL ISSUES - - The Company will need to demonstrate additional growth opportunities in order to reach the higher end of the prospective buyer's share price range - - Could result in further disruption to existing operations, relations with employees and relations with customers - - It is not guaranteed that the prospective buyer(s) will remain in the price range that they originally bid - - The price range being discussed is not guaranteed of being ratified by a shareholder vote LANE, BERRY & CO. INTERNATIONAL 9 ALTERNATIVE 2 - SELF-FINANCED PARTIAL TENDER OFFER ADVANTAGES - - Provides some liquidity to existing shareholders near the 52-week high share price - - Tax efficient to shareholders versus a dividend - - May represent best investment opportunity for the Company's expected cash flow generation - - Additional leverage may increase focus on profitable investment opportunities and cost saving initiatives - - Share price should experience accelerated growth and returns - - Limited disruption to existing operations - - Shows conclusion to strategic alternatives process POTENTIAL ISSUES - - Stock price is currently near its 52-week high and may be fully valued - buying shares at the peak - - Exacerbates "micro cap" public company issues - Reduces public float - Limited liquidity for shares - High concentration of ownership - No analyst coverage - Continued public company administrative costs - - Leverage and risk profile increase which will limit financial flexibility - - Potential for some change in ownership concentration depending on final allocation of tendered shares LANE, BERRY & CO. INTERNATIONAL 10 ALTERNATIVE 3 - OPEN MARKET SHARE REPURCHASES ADVANTAGES - - Continued stock support - - Flexibility on the number of shares and timing of purchase - - More appropriate when target amount is less than 10% of shares outstanding - - Communicates management's belief that shares are undervalued - - Lowers the overall cost of capital - - Maintains relatively low leverage and therefore the Company's financial flexibility POTENTIAL ISSUES - - Shareholders likely to perceive this alternative as a "do nothing" strategy - - Likely to be adverse market response due to past market experiences with announced share repurchase programs - - Shareholders may pressure the Company to reduce capital investments in business in order to fund the repurchase of shares - - Shares are tainted for two years from purchase LANE, BERRY & CO. INTERNATIONAL 11 LBO RETURN ANALYSIS IMPROVED GROWTH WILL LIKELY LEAD TO A HIGHER SHARE PURCHASE PRICE. Equity Returns To Sponsor Sensitivity Tables:
0.0% EBITDA GROWTH ------------------------------------------------------------- $10.00 $11.00 $12.00 $13.00 ------ ------ ------ ------ 3.0X 15.3% 12.6% 10.3% 8.2% LEVERAGE 3.5X 17.3% 14.1% 11.3% 8.9% 4.0X 20.3% 16.1% 12.7% 9.8%

2.5% EBITDA GROWTH ------------------------------------------------------------ $10.00 $11.00 $12.00 $13.00 ------ ------ ------ ------ 3.0X 19.4% 16.6% 14.2% 12.1% LEVERAGE 3.5X 21.9% 18.6% 15.7% 13.2% 4.0X 25.6% 21.2% 17.7% 14.6%

5.0% EBITDA GROWTH ------------------------------------------------------------ $10.00 $11.00 $12.00 $13.00 ------ ------ ------ ------ 3.0X 22.7% 19.9% 17.4% 15.3% LEVERAGE 3.5X 25.7% 22.2% 19.3% 16.7% 4.0X 29.8% 25.4% 21.7% 18.5%

10.0% EBITDA GROWTH ----------------------------------------------------------- $10.00 $11.00 $12.00 $13.00 ------ ------ ------ ------ 3.0X 29.8% 26.8% 24.2% 21.9% LEVERAGE 3.5X 33.4% 29.8% 26.6% 23.9% 4.0X 38.5% 33.7% 29.7% 26.4%
LANE, BERRY & CO. INTERNATIONAL 12 DUTCH TENDER ANALYSIS A LARGE SHARE REPURCHASE WILL LEAD TO IMPROVED EPS GROWTH IN ALL SCENARIOS. 2007 Earnings Per Share Sensitivity Tables:
0.0% EBITDA GROWTH ---------------------------------------------------------------------- $10.00 $11.00 $12.00 $13.00 $14.00 ------ ------ ------ ------ ------ 3.0X $1.27 $1.24 $1.21 $1.19 $1.18 LEVERAGE 3.5X 1.46 1.39 1.33 1.29 1.25 4.0X 1.76 1.61 1.50 1.42 1.36

2.5% EBITDA GROWTH ---------------------------------------------------------------------- $10.00 $11.00 $12.00 $13.00 $14.00 ------ ------ ------ ------ ------ 3.0X $1.63 $1.59 $1.55 $1.53 $1.51 LEVERAGE 3.5X 1.89 1.80 1.73 1.68 1.63 4.0X 2.33 2.13 1.99 1.88 1.80

5.0% EBITDA GROWTH ---------------------------------------------------------------------- $10.00 $11.00 $12.00 $13.00 $14.00 ------ ------ ------ ------ ------ 3.0X $2.00 $1.95 $1.91 $1.88 $1.85 LEVERAGE 3.5X 2.35 2.24 2.15 2.08 2.03 4.0X 2.92 2.67 2.49 2.36 2.26

10.0% EBITDA GROWTH ---------------------------------------------------------------------- $10.00 $11.00 $12.00 $13.00 $14.00 ------ ------ ------ ------ ------ 3.0X $2.87 $2.80 $2.75 $2.70 $2.66 LEVERAGE 3.5X 3.43 3.26 3.13 3.03 2.95 4.0X 4.31 3.94 3.68 3.48 3.33
LANE, BERRY & CO. INTERNATIONAL 13 ALTERNATIVE COMPARISON -- THEORETICAL FUTURE STOCK PRICES
2007 STOCK 2007 EARNINGS PER SHARE PRICE @ STOCK -------------------------------------------------- 5.5X PRICE @ 2003 2004 2005 2006 2007 EBITDA 12.0X P/E ------ ------ ------ ------ ------ ------ ------ 0.0% EBITDA GROWTH Status Quo $ 0.95 $ 0.97 $ 1.01 $ 1.04 $ 1.12 $17.57 $13.41 Dutch Tender (1) 1.17 1.20 1.24 1.28 1.39 19.40 16.63 Share Repurchase 0.95 1.04 1.16 1.29 1.51 20.26 18.15 2.5% EBITDA GROWTH Status Quo $ 1.00 $ 1.08 $ 1.16 $ 1.26 $ 1.40 $20.54 $16.76 Dutch Tender (1) 1.25 1.35 1.47 1.60 1.80 23.82 21.62 Share Repurchase 1.00 1.15 1.35 1.59 1.95 24.36 23.35 5.0% EBITDA GROWTH Status Quo $ 1.05 $ 1.18 $ 1.32 $ 1.48 $ 1.69 $23.27 $20.27 Dutch Tender (1) 1.32 1.50 1.71 1.94 2.24 27.90 26.87 Share Repurchase 1.05 1.25 1.53 1.87 2.35 27.74 28.17 10.0% EBITDA GROWTH Status Quo $ 1.15 $ 1.39 $ 1.67 $ 1.98 $ 2.36 $30.05 $28.31 Dutch Tender (1) 1.47 1.82 2.22 2.68 3.26 38.02 39.10 Share Repurchase 1.15 1.48 1.94 2.52 3.33 36.67 40.01
(1) The Dutch tender scenario assumes that the company can lever up to 3.5x EBITDA and clears a tender price of $11.00 per share. LANE, BERRY & CO. INTERNATIONAL 14 COST OF EQUITY CALCULATION
(USD IN MILLIONS) CURRENT 3.0X DEBT 3.5X DEBT 4.0X DEBT ------- ------- ------- ------- Market Capitalization $ 66.3 $ 53.5 $ 45.4 $ 37.3 Plus: Debt 35.5 48.4 56.5 64.5 Less: Cash 5.6 5.6 5.6 5.6 ------- ------- ------- ------- Enterprise Value 96.3 96.3 96.3 96.3 Debt / Market Equity 53.6% 90.5% 124.4% 172.9% Levered Beta (1) 0.55 0.65 0.74 0.87 Derived Cost of Equity (2) (3) 10.7% 11.8% 12.7% 14.1%
(1) The levered beta = unlevered beta * (1 + (1 - taxrate) * debt / market equity) (2) The derived cost of equity = risk free rate + [company's beta * equity risk premium] (3) Equity Risk Premium of 10.6% relates to Ibbotson's micro-cap companies with an equity value less than $252 million LANE, BERRY & CO. INTERNATIONAL 15 ALTERNATIVE COMPARISON -- IMPLIED 2002 STOCK PRICES
2007 STOCK 2002 STOCK PRICE DISCOUNTED AT: PRICE @ ------------------------------------------------------ 5.5X EBITDA 10.0% 11.0% 12.0% 13.0% 14.0% 0.0% EBITDA GROWTH Status Quo $17.57 $10.91 $10.42 $ 9.97 $ 9.53 $ 9.12 Dutch Tender (1) 19.40 12.04 11.51 11.01 10.53 10.07 Share Repurchase 20.26 12.58 12.02 11.50 11.00 10.52 2.5% EBITDA GROWTH Status Quo $20.54 $12.75 $12.19 $11.65 $11.15 $10.67 Dutch Tender (1) 23.82 14.79 14.14 13.52 12.93 12.37 Share Repurchase 24.36 15.13 14.46 13.82 13.22 12.65 5.0% EBITDA GROWTH Status Quo $23.27 $14.45 $13.81 $13.20 $12.63 $12.09 Dutch Tender (1) 27.90 17.32 16.55 15.83 15.14 14.49 Share Repurchase 27.74 17.23 16.46 15.74 15.06 14.41 10.0% EBITDA GROWTH Status Quo $30.05 $18.66 $17.83 $17.05 $16.31 $15.61 Dutch Tender (1) 38.02 23.61 22.56 21.57 20.63 19.75 Share Repurchase 36.67 22.77 21.76 20.81 19.90 19.05
(1) The Dutch tender scenario assumes that the company can lever up to 3.5x EBITDA and clears a tender price of $11.00 per share. LANE, BERRY & CO. INTERNATIONAL 16 ALTERNATIVE COMPARISON -- IMPLIED 2002 STOCK PRICES
2007 STOCK 2002 STOCK PRICE DISCOUNTED AT: PRICE @ -------------------------------------------------------- 12.0X P/E 10.0% 11.0% 12.0% 13.0% 14.0% --------- ----- ----- ----- ----- ----- 0.0% EBITDA GROWTH Status Quo $ 13.41 $ 8.33 $ 7.96 $ 7.61 $ 7.28 $ 6.97 Dutch Tender (1) 16.63 10.33 9.87 9.44 9.03 8.64 Share Repurchase 18.15 11.27 10.77 10.30 9.85 9.42 2.5% EBITDA GROWTH Status Quo $ 16.76 $ 10.41 $ 9.95 $ 9.51 $ 9.10 $ 8.71 Dutch Tender (1) 21.62 13.43 12.83 12.27 11.74 11.23 Share Repurchase 23.35 14.50 13.86 13.25 12.68 12.13 5.0% EBITDA GROWTH Status Quo $ 20.27 $ 12.59 $ 12.03 $ 11.50 $ 11.00 $ 10.53 Dutch Tender (1) 26.87 16.68 15.95 15.25 14.58 13.95 Share Repurchase 28.17 17.49 16.72 15.98 15.29 14.63 10.0% EBITDA GROWTH Status Quo $ 28.31 $ 17.58 $ 16.80 $ 16.06 $ 15.37 $ 14.70 Dutch Tender (1) 39.10 24.28 23.20 22.19 21.22 20.31 Share Repurchase 40.01 24.84 23.74 22.70 21.72 20.78
(1) The Dutch tender scenario assumes that the company can lever up to 3.5x EBITDA and clears a tender price of $11.00 per share. LANE, BERRY & CO. INTERNATIONAL 17 EX-99.C.11 15 j0476003exv99wcw11.txt EXHIBIT 99.C.11 Whenever confidential information is omitted herein (such omissions are denoted by an asterisk), such confidential information has been submitted separately to the Securities and Exchange Commission pursuant to a request for confidential treatment. EXHIBIT C-11 CONFIDENTIAL PRESENTATION TO THE BOARD OF DIRECTORS OF (SYLVAN LOGO) MAY 30, 2002 LANE, BERRY & CO. INTERNATIONAL AGENDA - - UPDATE OF SITUATION ANALYSIS AND STRATEGIC ALTERNATIVES EVALUATION PROCESS - - REFINED VALUATION ANALYSIS - - REVISED STRATEGIC ALTERNATIVE UNIVERSE - - PRELIMINARY CONCLUSIONS AND NEXT STEPS LANE, BERRY & CO. INTERNATIONAL 2 UPDATE OF SITUATION ANALYSIS AND STRATEGIC ALTERNATIVES EVALUATION PROCESS LANE, BERRY & CO. INTERNATIONAL LANE BERRY PROCESS UNDERTAKEN TO DATE MARCH 2002 ---------- S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 APRIL 2002 ---------- S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 MAY 2002 -------- S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
DATE ACTIVITY: PARTICIPANTS: - -------------- ------------- 3/28 LBCI Initial Meeting with Sylvan LBCI, DZ, DS, BB, NO, VJ 4/11 Due Diligence Meeting with Nelson Obus LBCI, NO 4/12 Engagement Letter Signed Between Lane Berry and Sylvan LBCI, DZ, BB 4/22 Tour of Kittaning, PA Facilities & Meeting with Mark Wach, Mark LBCI, DS, MW, MB Began, et al 4/22 Financial Due Diligence Session with Don Smith & Meeting with LBCI, DS, GW Gary Walker in Saxonburg, PA 4/24 Due Diligence Conference Call with Mike Walton, Monir Elzalaki LBCI, MW, ME, DS and Don Smith 4/30 Sylvan Investor Conference Call LBCI, DZ, DS, Investors 5/02 Tour of Quincy Farm & Satellite Facilities LBCI, DZ 5/02 Meeting with Dennis Zensen & Greg Verhagen LBCI, DZ, GV 5/06 Due Diligence Meeting with Bill Bennett LBCI, BB 5/14 Strategic Alternatives Press Release Issued LBCI, SYLN 5/15 Strategic Alternatives Engagement Announced in The Wall Street Journal 5/16 Follow-up Conference Call with Mike Walton LBCI, MW 5/17 Auditor Due Diligence Conference Call with Pete Robinson of LBCI, PR Arthur Andersen 5/20 Strategic Alternatives Engagement Announced in The Daily Deal 5/22 Financial Model Due Diligence Call with Don Smith LBCI, DS 5/30 Shareholder Meeting, BOD Update LBCI, BOD
LANE, BERRY & CO. INTERNATIONAL 4 OBSERVATIONS FROM DUE DILIGENCE - - Impressive leading worldwide spawn manufacturing business and U.S. industry leading fresh mushroom producing operations - State-of-the-art facilities and market leading expertise, sales and service - Meticulous procedures and 2-3x redundancy of key inputs are crucial to protect the strength of the franchise - - Successful production of spawn is much more of an "art" than a science - Tenuous and sophisticated manufacturing processes given the susceptibility of the spawn to unwanted organisms - Collection of employees, their tenure at the Company and their depth of experience are of critical importance to the success of the business - The people, more than the hard assets, contribute to the success of the product - As a result of the vast consolidation in the U.S. and the strength of the "grapevine" in Europe, reputation is of utmost importance with customer LANE, BERRY & CO. INTERNATIONAL 5 OBSERVATIONS FROM DUE DILIGENCE (CONT'D) - - Unfavorable industry characteristics continue to plague certain producers and make financial success more elusive - Several large multinational firms with significant resources have entered and exited the market with little success (Heinz, Campbells, Ralston Purina, etc.); as a result remaining market participants view such entities with trepidation - Fresh producers in the U.S. continue to struggle and further consolidation is expected - Many European growers (Netherlands, France, etc.) employ superior production capabilities but growth in those countries is usually at the expense of others (i.e. U.K.) given the maturity of the overall European market - The rest of the world will increase in sophistication to the benefit of quality spawn producers but growth will be slow in coming to fruition LANE, BERRY & CO. INTERNATIONAL 6 OBSERVATIONS FROM DUE DILIGENCE (CONT'D) - - Despite the low cost of spawn relative to the total cost of mushroom production and Sylvan's dominant market share, it has been difficult to raise prices given an already 20%+/- price premium worldwide and the credible threat of other competitors - - Growth opportunities are limited with the exception of "break-out" products - - Considering Sylvan's size, the cost of being a public company and the costs of managing multinational operations are not insignificant - - Shareholders, as evidenced in the Q1'2002 investor call, are becoming increasingly more vocal in their dissatisfaction with the status quo - Most angst was directed towards a perception of substantial CAPEX spending at low-to-negative returns - - Based on status quo business model and expected base case growth assumptions, management anticipates current infrastructure is sufficient to support growth for next 3-4 years - - Initial feedback from the press release indicates moderate-strong initial interest from the financial sponsor community - - Interest from strategic parties has been negligible to date and the Company maintains that no credible takeover offer has ever been presented LANE, BERRY & CO. INTERNATIONAL 7 CURRENT TRADING STATUS (numbers in millions except share price and volume) STOCK PRICE (MAY 28, 2002) $12.68 TOTAL FLOAT 4.7 52 WEEK HIGH $13.15 FLOAT AS A % OF SHARES O/S 84.6% 52 WEEK LOW $10.85 LTM AVERAGE DAILY VOLUME 5,792 FD SHARES OUTSTANDING 5.5 LTM AVERAGE DAILY VOLUME PRE-MARCH 28, 2002 3,798 MARKET CAPITALIZATION $70.3 NET DEBT $30.9 MINORITY INTEREST $1.7 ------ ENTERPRISE VALUE $102.9 ENTERPRISE VALUE / 2001A REVENUE 1.2x / 2002E REVENUE 1.2x / 2001A EBITDA 6.3x / 2002E EBITDA 6.5x 2001 PRICE / EARNINGS 12.1x 2002E PRICE / EARNINGS 14.1x TOTAL DEBT / 2001A EBITDA 2.1x

LANE, BERRY & CO. INTERNATIONAL 8 PRICE/VOLUME CHART SINCE MARCH 28, 2002 May 23, 2000 - May 28, 2002 (LINE GRAPH) LANE, BERRY & CO. INTERNATIONAL 9 RELATIVE STOCK PRICE PERFORMANCE OVER THE PAST 2-YEARS May 22, 2000 - May 28, 2002 (LINE GRAPH) Note: The Food Processing Composite includes Archer Daniels Midland and Bunge. The Fresh Produce Composite includes Chiquita Brands, Dole, and Fresh Delmonte. The Agriculture Composite includes Delta and Pine, Hines Horticulture, Pro-Fac Cooperative and Seminis. LANE, BERRY & CO. INTERNATIONAL 10 CURRENT EQUITY OWNERSHIP Ownership remains highly concentrated among a few institutions:
% OF SHARES (1) CLASS (1) ---------- --------- INSTITUTIONAL HOLDERS Wynnefield Capital Management 1,068,886 19.7% T. Rowe Price Associates 638,100 11.7% Dimensional Fund Advisors 454,876 8.4% FMR Corp. 386,600 7.1% Weiss, Peck & Greer 291,100 5.4% Security Management Co. 277,200 5.1% --------- ----- SUBTOTAL 3,116,762 57.4% MANAGEMENT Dennis C. Zensen (2) 729,128 13.4% OTHER 1,585,941 29.2% --------- ----- TOTAL 5,431,831 100.0%
(1) Source: Sylvan, Inc. proxy dated April 25, 2002. (2) Deducted 15,000 shares filed to be sold on March 4, 2002 and 25,000 shares filed to be sold on May 16, 2002. LANE, BERRY & CO. INTERNATIONAL 11 (Confidential information omitted pursuant to the request for confidential treatment.) PARTIES INDICATING INTEREST
FIRM DESCRIPTION LOCATION - ---- ----------- -------- * Private Equity Firm New York, NY * Private Equity Firm New York, NY * Private Equity Firm New York, NY * Brokerage Firm on Behalf of Japanese Strategic New York, NY * Strategic Party Pennsylvania * Private Equity Firm San Francisco, CA * Private Equity Firm Minneapolis, MN * Private Equity Firm Boston, MA Lake Pacific Partners Private Equity Firm Chicago, IL * Private Equity Firm New York, NY * Private Equity Firm Boston, MA * Private Equity Firm New York, NY * Law Firm on Behalf of Undisclosed Party New York, NY
LANE, BERRY & CO. INTERNATIONAL 12 REFINED VALUATION ANALYSIS LANE, BERRY & CO. INTERNATIONAL EXECUTIVE SUMMARY - - Previous valuation analysis was prepared based only upon publicly available information - - Prior to our engagement, Company's forecast consisted only of 2002 budget - - While we concur with the limits and imperfections of an extended plan, we felt it necessary to prepare a detailed 5-year financial forecast to complete our valuation work - - Based upon the feedback we received in due diligence and in conjunction with Don Smith we built a preliminary detailed 5-year plan by division and for the consolidated Company ("Base Case") - - Once the Base Case was established, we further built sensitivities to accommodate various scenarios in future periods ("Upside Case" and "Downside Case") - - Lane Berry believes that as part of any next steps, further evaluation and refinement of each forecast case should be performed LANE, BERRY & CO. INTERNATIONAL 14 DESCRIPTION OF CASES - -------------------------------------------------------------------------------- Base Case - Represents most likely expected scenario of stand-alone business - 2.5%-3.0% growth in European liters sold and 3.5%-4.0% unit growth in America with pricing flat at 2002 budgeted levels - Slight shift in Quincy with a decline in fresh mushrooms sales more than offset at operating income by higher compost sales at more favorable margins. Total operating income at Quincy grows from $3.1MM in 2002 to $3.5 million by 2006 - Gross Margin improves from 40.4% as reflected in the 2002 budget to 41.9% in 2006 reflecting a more profitable product mix, certain economies of scale and a return to breakeven profitability in Bioproducts - Pension contributions are expected to be required beginning in 2004 - -------------------------------------------------------------------------------- Upside Case - Incorporates certain successful new product introductions in Spawn and Bioproducts divisions as well as a minimal price increase in terms of US$ from Europe (less than 1% per year) and no required pension contributions - "Other Sales" grow at a slightly higher rate than the base case reflecting successful product introductions - Core Spawn business in America grows at a slightly higher rate reflecting a stronger rebound of the U.S. Market - Bioproducts develops a new product generating up to $400 thousand in sales by 2006 at a 20-25% gross margin - No pension contributions are expected to be required - -------------------------------------------------------------------------------- Downside - Reflects continued pricing pressure in US$, less robust Case unit and "other sales" growth, a slower transition from fresh mushrooms to compost sales, extended losses in Bioproducts, higher SG&A than in the base case due to fewer economies and higher required contributions to the pension fund - -------------------------------------------------------------------------------- LANE, BERRY & CO. INTERNATIONAL 15 BASE CASE FINANCIAL PROJECTIONS
Projected Fiscal Year Ending December 31, ----------------------------------------- (USD in Millions) 2002 2003 2004 2005 2006 - ---------------------------------- -------- -------- -------- -------- -------- Total Sales .......................... $ 88.0 $ 90.7 $ 92.9 $ 95.4 $ 98.0 Cost of Sales ........................ 52.5 53.7 54.7 55.7 57.0 -------- -------- -------- -------- -------- Gross Profit ......................... 35.5 37.0 38.3 39.7 41.1 SG&A (excluding depreciation) ........ 19.7 20.2 20.5 20.9 21.3 -------- -------- -------- -------- -------- EBITDA ............................... 15.8 16.8 17.7 18.8 19.8 Depreciation ......................... 5.8 6.0 6.1 6.3 6.5 -------- -------- -------- -------- -------- EBIT ................................. 10.0 10.8 11.6 12.5 13.3 Interest on: Revolver ........................... 2.4 2.1 1.9 1.5 1.1 -------- -------- -------- -------- -------- Total Interest Expense ........... 2.4 2.1 1.9 1.5 1.1 Interest Income on S-T Investments ... 0.0 0.1 0.1 0.1 0.1 Pension Adjustments (Inc)/Exp ........ (0.2) (0.2) 0.0 0.0 1.3 -------- -------- -------- -------- -------- Pretax Income ...................... 7.8 8.9 9.8 11.0 11.0 Income Taxes ......................... 2.5 2.9 3.2 3.6 3.6 Minority Interest .................... 0.1 0.1 0.1 0.1 0.1 -------- -------- -------- -------- -------- Net Income ......................... $ 5.1 $ 5.9 $ 6.5 $ 7.3 $ 7.3 Shares Outstanding ................... 5.5 5.5 5.5 5.5 5.5 EPS .................................. $ 0.92 $ 1.07 $ 1.17 $ 1.32 $ 1.31 Adjusted EPS (1) ..................... $ 0.90 $ 1.05 $ 1.17 $ 1.32 $ 1.46 ======== ======== ======== ======== ========
(1) Adjusted EPS adds back to pretax income all pension-related items. LANE, BERRY & CO. INTERNATIONAL 16 BASE CASE FINANCIAL PROJECTIONS - DIVISIONAL ASSUMPTIONS
Projected Fiscal Year Ending December 31, ----------------------------------------- (USD in Millions) 2002 2003 2004 2005 2006 - ----------------- ---- ---- ---- ---- ---- SALES Europe $ 35.0 $ 35.8 $ 36.6 $ 37.3 $ 38.0 America 26.4 27.4 28.4 29.4 30.3 Quincy 26.9 27.5 27.7 28.3 29.1 Bioproducts 0.8 1.1 1.4 1.7 1.8 Intercompany/Other (1.1) (1.1) (1.2) (1.2) (1.2) -------- -------- -------- -------- -------- TOTAL SALES 88.0 90.7 92.9 95.4 98.0 EBITDA Europe $ 9.4 $ 9.8 $ 10.2 $ 10.5 $ 10.8 America 7.2 7.6 8.0 8.4 8.7 Quincy 4.6 4.8 4.8 5.0 5.2 Bioproducts (0.4) (0.2) (0.0) 0.2 0.3 Research and Development (1.9) (1.9) (1.9) (1.9) (1.9) Corporate OH (4.0) (4.1) (4.1) (4.2) (4.3) Intercompany/Other 0.8 0.8 0.8 0.8 0.9 -------- -------- -------- -------- -------- TOTAL EBITDA 15.8 16.8 17.7 18.8 19.8 EBITDA MARGINS Europe 26.9% 27.4% 27.7% 28.1% 28.4% America 27.4% 27.8% 28.2% 28.5% 28.7% Quincy 17.2% 17.3% 17.3% 17.6% 17.9% Bioproducts (46.1%) (20.0%) (2.0%) 12.5% 17.5% Research and Development NM NM NM NM NM Corporate OH NM NM NM NM NM Intercompany/Other (71.7%) (71.5%) (71.2%) (70.9%) (70.5%) -------- -------- -------- -------- -------- TOTAL EBITDA MARGINS 17.9% 18.5% 19.1% 19.7% 20.1% ======== ======== ======== ======== ========
LANE, BERRY & CO. INTERNATIONAL 17 BASE CASE VALUATION SUMMARY [BASE CASE VALUATION SUMMARY BAR GRAPH]
Current Price $12.68 --------------------- Under Over Current Current Price Price ---------- -------- Public Comparables Analysis $ 9.50 $13.50 M&A Comparables Analysis $10.00 $15.00 DCF Analysis $11.00 $14.00 LBO Analysis $ 9.50 LBO Analysis $11.00
LANE, BERRY & CO. INTERNATIONAL 18 UPSIDE / DOWNSIDE CASE SUMMARIES
Projected Fiscal Year Ending December 31, ----------------------------------------- (USD in Millions) 2002 2003 2004 2005 2006 - ----------------- ---- ---- ---- ---- ---- BASE CASE Revenue $ 88.0 $ 90.7 $ 92.9 $ 95.4 $ 98.0 EBITDA 15.8 16.8 17.7 18.8 19.8 EBIT 10.0 10.8 11.6 12.5 13.3 Adjusted EPS (1) $ 0.90 $ 1.05 $ 1.17 $ 1.32 $ 1.46 Implied Stock Price (2) $ 11.28 $ 13.13 $ 14.67 $ 16.53 $ 18.31 Total Debt $ 36.7 $ 32.6 $ 26.6 $ 19.8 $ 12.9 UPSIDE CASE Revenue $ 88.0 $ 91.7 $ 94.8 $ 98.2 $ 101.5 EBITDA 15.8 17.2 18.4 19.8 21.0 EBIT 10.0 11.2 12.2 13.3 14.3 Adjusted EPS (1) $ 0.90 $ 1.09 $ 1.24 $ 1.43 $ 1.60 Implied Stock Price (2) $ 11.28 $ 13.65 $ 15.56 $ 17.84 $ 20.01 Total Debt $ 36.7 $ 32.6 $ 26.2 $ 18.9 $ 10.5 DOWNSIDE CASE Revenue $ 88.0 $ 89.3 $ 90.8 $ 92.5 $ 94.3 EBITDA 15.8 16.0 16.3 16.6 16.8 EBIT 10.0 10.2 10.3 10.5 10.6 Adjusted EPS (1) $ 0.90 $ 0.97 $ 1.02 $ 1.09 $ 1.14 Implied Stock Price (2) $ 11.28 $ 12.13 $ 12.80 $ 13.58 $ 14.21 Total Debt $ 36.7 $ 31.9 $ 25.7 $ 20.2 $ 14.3
(1) Adjusted EPS adds back to pretax income all pension-related items. (2) Calculated by using a constant 2002E P/E ratio of 12.5x derived from the price post the announcement of SYLN's Q1'02 results but prior to the strategic alternatives press release. Represents estimated mid-year stock price. LANE, BERRY & CO. INTERNATIONAL 19 VALUATION IMPACT OF UPSIDE/DOWNSIDE CASES
Base Case Upside Case Downside Case --------- ----------- ------------- Public Comps $ 9.50 - $13.50 $10.00 - $14.00 $ 8.50 - $12.50 M&A Comps $10.00 - $15.00 $12.00 - $15.00 $10.00 - $13.00 DCF $11.00 - $14.00 $12.00 - $15.00 $ 9.00 - $12.00 LBO $ 9.50 - $11.00 $10.50 - $12.00 $ 8.00 - $ 9.50 ====== ====== ====== ====== ====== ======
LANE, BERRY & CO. INTERNATIONAL 20 REVISED STRATEGIC ALTERNATIVES LANE, BERRY & CO. INTERNATIONAL ALTERNATIVE 1 - STATUS QUO ADVANTAGES - - Valuation analysis supports current stock price as being "fairly valued" - Excluding any impact from potential synergies - - Uniqueness of the Sylvan asset and its respective market limits the number of logical strategic buyers - - Industry and Company growth characteristics and prospects limit the universe of potential financial buyers - - No disruption to existing operations, financial flexibility, leverage or risk profile POTENTIAL ISSUES - - Increasing shareholder dissatisfaction has been voiced since announcing expected decline in financial performance for 2002 - Shareholders continue to have very limited access to liquidity - High concentration of ownership among a few institutions could increase the chance of a successful proxy fight - - Despite valuation considerations, financial and other costs of being a public company may outweigh benefits LANE, BERRY & CO. INTERNATIONAL 22 STATUS QUO - INCREASING SHAREHOLDER DISSATISFACTION "SO OVER THAT SEVEN YEAR PERIOD (1994-2001) THERE WERE INCREMENTAL ASSETS OF ABOUT $32.5 MM, INCREMENTAL NET INCOME OF $600K LOWER, AND THEREFORE A NEGATIVE RETURN. AND WITH YOUR FORWARD GUIDANCE FROM THIS YEAR WE ARE GOING TO GO LOWER AGAIN FOR THE EIGHTH YEAR. WHY WITH A NEGATIVE EIGHT-YEAR RETURN ON INCREMENTAL INVESTMENT ARE WE PUTTING ANY MONEY AT ALL INTO THIS COMPANY?" PATRICK FLAVIN FLAVIN BLAKE & COMPANY "ONE OF THE DISCIPLINES OF RUNNING A BUSINESS IS TO UNDERSTAND YOUR COST OF CAPITAL AND TO INVEST WHERE YOU GET A HIGHER RETURN THAN YOUR COST OF CAPITAL. WE, DEMONSTRABLY, HAVE NOT DONE THIS FOR EIGHT YEARS. SO I'M MYSTIFIED AS TO HOW WE PROCEED HERE." PATRICK FLAVIN FLAVIN BLAKE & COMPANY "IT SEEMS TO ME THAT HAVING FAILED TO BRING THE COMPANY, OVER THIS PERIOD OF TIME, INTO A GOOD RETURN FOR THE SHAREHOLDERS, IT DOES RAISE THE QUESTION ABOUT WHETHER THE COMPANY HAS THE SCALE AS AN INDEPENDENT COMPANY TO MOVE FORWARD. THE PROJECTS THAT YOU HAVE PUT IN PLACE, UNDOUBTEDLY SOME OF THEM HAVE WORKED WELL, BUT PERHAPS WITHIN THE CONTEXT OF SOMEBODY WITH A LOWER COST OF CAPITAL, SOMEBODY LARGER AND SOMEBODY WITH THE ABILITY TO SPREAD IT OVER A LOT MORE PROJECTS THAN YOU CAN, WOULD BE A GOOD PARTNER." JOHN WALTHAUSEN PARADIGM CAPITAL MANAGEMENT LANE, BERRY & CO. INTERNATIONAL 23 ALTERNATIVE 2 - SELF-FINANCED PARTIAL TENDER OFFER ADVANTAGES - - Provides some liquidity to existing shareholders near the 52-week high share price - - Tax efficient to shareholders versus a dividend - - May represent best investment opportunity for the Company's expected cash flow generation - - Additional leverage may increase focus on profitable investment opportunities and cost saving initiatives - - Remaining equity outstanding should experience accelerated growth and returns due to the benefits of higher leverage - - Limited disruption to existing operations POTENTIAL ISSUES - - Stock price is currently near its 52-week high and in line with valuation analysis - - Exacerbates "micro-cap" public company issues - Limited liquidity for shares - High concentration of ownership - No analyst coverage - Continued public company administrative costs - - Leverage and risk profile increase; may limit financial flexibility - - Potential for some change in ownership concentration depending on final allocation of tendered shares LANE, BERRY & CO. INTERNATIONAL 24 OVERVIEW OF DUTCH TENDER AUCTION MECHANICS [ARROW GRAPHIC] - A price range for the tender offer is pre-determined - The lowest price within the range which allows the Company to repurchase the desired amount of stock is the price at which all shares are repurchased - All shareholders receive the same price - Shareholders can withdraw their shares at any time prior to expiration of the tender REQUIREMENTS [ARROW GRAPHIC] - The tender offer must be made for a specific number of shares - The tender offer must be held open for at least 20 business days - Any change to the amount of shares being tendered results in the tender offer being extended for 10 days (no extension is necessary if the additional purchase is less than 2% of outstanding shares) SHARE SELECTION [ARROW GRAPHIC] - If the tender offer is over-subscribed the repurchase is on a pro-rata basis - Odd-lot shares are repurchased first, before calculating the pro-ration LANE, BERRY & CO. INTERNATIONAL 25 DUTCH TENDER AUCTION PRICING - - On average, companies ended up paying a 10% premium on their tender offer as compared to where the stock traded prior to announcement
PREMIUM / (DISCOUNT) INITIAL PRICE RANGE ANN. DATE PRICE TO ------------------- PRICE PAID % OF ------------------------------ ANN. DATE COMPANY LOW HIGH PER SHARE SHARES ACQUIRED LOW HIGH PAID - --------- ------- --- ---- --------- --------------- --- ---- ---- 03/15/02 DaVita Inc $22.00 $26.00 $26.00 24.3% (13.62%) 2.08% 2.08% 12/17/01 Maritrans Inc 11.00 12.50 11.50 21.4% (7.56%) 5.04% (3.36%) 11/19/01 First Years Inc 10.65 12.65 12.65 11.0% (4.31%) 13.66% 13.66% 07/16/01 Independence Holding Co 15.00 16.75 16.75 2.5% (5.30%) 5.74% 5.74% 06/28/01 TB Wood's Corp 8.50 11.50 11.00 2.8% 5.99% 43.39% 37.16% 06/28/01 Todd Shipyards Corp 7.00 8.25 8.25 44.2% (7.28%) 9.27% 9.27% 04/03/01 PW Eagle Inc 7.50 9.00 9.00 14.9% 0.84% 21.01% 21.01% 04/03/01 Quipp Inc 20.00 23.00 20.00 29.0% (3.90%) 10.51% (3.90%) 03/19/01 Security Capital Group Inc 18.50 21.50 20.50 9.3% (10.41%) 4.12% (0.73%) 03/08/01 Rohn Industries Inc 3.75 4.50 4.13 11.0% (7.69%) 10.77% 1.66% 12/20/00 Supreme Industries Inc 2.25 3.00 3.00 13.5% (5.26%) 26.32% 26.32% 11/06/00 kforce.com Inc 4.75 5.50 5.50 23.7% (4.40%) 10.69% 10.69% 11/03/00 Designs Inc 2.50 3.00 2.50 10.8% 2.56% 23.08% 2.56% 10/31/00 Citizens First Financial Corp 15.00 17.00 16.00 20.0% 0.84% 14.29% 7.56% 10/11/00 BT Financial Corp,Johnstown, PA 18.00 20.00 19.50 10.4% 0.70% 11.89% 9.09% 08/29/00 Elder-Beerman Stores Corp 4.50 6.00 5.00 23.2% 4.35% 39.13% 15.94% 08/15/00 Resource America Inc 9.00 11.00 9.00 23.3% 5.11% 28.47% 5.11% 05/02/00 Amrep Corp 5.25 7.00 7.00 8.1% (13.40%) 15.46% 15.46% 04/03/00 Green Mountain Coffee Inc 14.50 16.00 16.00 8.3% 3.57% 14.29% 14.29% 03/21/00 Sylvan Learning Systems Inc 15.25 17.00 15.25 16.7% (1.61%) 9.68% (1.61%) 03/16/00 Chicago Rivet & Machine Co 20.00 23.00 23.00 14.1% (7.25%) 6.67% 6.67% 03/13/00 Shaw Industries Inc 13.50 15.50 15.50 3.0% 11.34% 27.84% 27.84% 03/08/00 Payless ShoeSource Inc 48.00 53.00 53.00 25.5% (0.78%) 9.56% 9.56% 02/25/00 Hasbro Inc 15.25 17.50 17.25 9.5% (4.69%) 9.38% 7.81% 02/23/00 Escalade Inc 14.50 18.00 18.00 23.8% 3.57% 28.57% 28.57% 02/04/00 DPL Inc 20.00 23.00 23.00 16.0% (6.98%) 6.98% 6.98% 02/03/00 Telesoft Corp 7.00 7.50 7.25 62.0% 10.89% 18.81% 14.85% 02/01/00 Hemlock Federal Financial Corp 15.00 17.50 15.00 27.5% (0.83%) 15.70% (0.83%) 01/26/00 Sempra Energy 17.50 20.00 20.00 15.0% (6.04%) 7.38% 7.38% AVERAGE 18.09% (2.12%) 15.51% 10.24%
LANE, BERRY & CO. INTERNATIONAL 26 SAMPLE SYLVAN DUTCH TENDER AUCTION (USD in millions except share prices) 2002E EBITDA $ 15.8 MAXIMUM LEVERAGE RATIO 3.25X MAXIMUM LEVERAGE $ 51.3 LESS: DEBT OUTSTANDING 36.7 ------ AVAILABLE CAPACITY $ 14.6 LESS: ESTIMATED TRANSACTION EXPENSES 1.0 ------ POTENTIAL TENDER SIZE $ 13.6 ASSUMED SHARE PRICE $12.68 SHARES TENDERED 1.1 % OF SHARES O/S 19.4%

LANE, BERRY & CO. INTERNATIONAL 27 SAMPLE SYLVAN DUTCH TENDER AUCTION (CONT'D)
PROJECTED FISCAL YEARS ENDING DECEMBER 31, ---------------------------------------------------------- PF 12/31/02 2003 2004 2005 2006 ----------- ---- ---- ---- ---- BASE CASE Revenue $ 90.7 $ 92.9 $ 95.4 $ 98.0 EBITDA 16.8 17.7 18.8 19.8 Interest Expense 2.1 1.9 1.5 1.1 Net Income 5.1 5.8 6.3 7.1 7.1 Shares O/S 5.5 5.5 5.5 5.5 5.5 Adjusted EPS (1) $ 0.90 $ 1.05 $ 1.17 $ 1.32 $ 1.46 Implied Stock Price (2) $11.28 $13.13 $14.67 $16.53 $18.31 Implied Growth NA 16.4% 11.7% 12.7% 10.7% Total Debt 36.7 32.6 26.6 19.8 12.9 Total Debt / EBITDA 2.3x 1.9x 1.5x 1.1x 0.7x DUTCH TENDER OFFER Revenue $ 90.7 $ 92.9 $ 95.4 $ 98.0 EBITDA 16.8 17.7 18.8 19.8 Interest Expense 3.0 2.8 2.4 2.1 Net Income 5.1 5.1 5.6 6.4 6.4 Shares O/S 5.5 4.5 4.5 4.5 4.5 Adjusted EPS (1) $ 0.90 $ 1.16 $ 1.30 $ 1.48 $ 1.66 Implied Stock Price (2) $11.28 $14.44 $16.30 $18.55 $20.70 Implied Growth NA 28.4% 12.8% 13.8% 11.6% Total Debt 51.3 47.8 42.3 36.0 29.7 Total Debt / EBITDA 3.3x 2.8x 2.4x 1.9x 1.5x
(1) Adjusted EPS adds back to pretax income all pension-related items. (2) Calculated by using a constant 2002E P/E ratio of 12.5x derived from the price post the announcement of SYLN's Q1'02 results but prior to the strategic alternatives press release. Represents estimated mid-year stock price. LANE, BERRY & CO. INTERNATIONAL 28 ALTERNATIVE 3 - PURSUE SALE ALTERNATIVES WITH STRATEGIC OR FINANCIAL BUYERS ADVANTAGES - - Satisfy restive shareholders that Company is evaluating all strategic alternatives - - If successful, could result in maximum cash proceeds to existing shareholders - - Could garner substantial additional value for shareholders if synergies are compelling--each $1.0 million in pretax synergies could correspond to $1.00-$1.50 in additional value per share - - Targeted process, rather than a full auction, signals that Company has other attractive alternatives and limits potential disruption to operations POTENTIAL ISSUES - - Uniqueness of the Sylvan asset and its respective market limits the number of logical strategic buyers - - Industry and Company growth characteristics and prospects limit the universe of potential financial buyers - - Could result in substantial disruption to existing operations, relations with employees and relations with customers - - Senior Management will need to buy-in and embrace sales alternative otherwise conversations with prospective purchasers will be futile LANE, BERRY & CO. INTERNATIONAL 29 TARGETED SALES PROCESS - - 5 - 10 targeted potential buyers - - Moderately confidential - - Generally a two phase process (Initial Bid Round, Final Bid Round) - Short Confidential Information Memorandum distributed to targeted buyers - Preliminary bids submitted with preliminary terms - Small group of buyers selected by management, followed by due diligence - Data room visits - Management presentations - - Definitive bids submitted - - Final negotiation, structuring and closing - - Approximately a 15-18 week process LANE, BERRY & CO. INTERNATIONAL 30 (Confidential information omitted pursuant to the request for confidential treatment.) ALTERNATIVE 3 - SAMPLE ACQUIROR UNIVERSE STRATEGIC ACQUIRORS - - * - - * - - * - - * - - * - - * FINANCIAL ACQUIRORS - - * - - * - - * - - * - - * - - * - - * LANE, BERRY & CO. INTERNATIONAL 31 STRATEGIC ALTERNATIVES REJECTED REFOCUS THROUGH THE - Lose important vertical integration between spawn SALE OF QUINCY OR SPAWN business and fresh business BUSINESS - Limited profitable reinvestment opportunities for use of proceeds were identified - Utilizing proceeds to buyback shares, neither financially nor strategically as attractive as "leveraged tender offer" - Exacerbates "micro cap" public company issues ACCELERATE GROWTH - Limited profitable reinvestment opportunities for use of THROUGH EQUITY proceeds were identified INFUSION FROM FINANCIAL PARTY OR STRATEGIC JOINT - Valuation issues would be substantial VENTURE - Limited-to-no known potential financial or strategic parties willing to hold minority positions - Existing shareholders would not receive liquidity and could suffer substantial dilution based on valuation RECAPITALIZE WITH A - Not conducive to existing operating strategy FINANCIAL PARTY - Financial parties would want ownership and control - Would be difficult to justify a premium to current share price even with substantial potential synergies

LANE, BERRY & CO. INTERNATIONAL 32 PRELIMINARY CONCLUSIONS AND NEXT STEPS LANE, BERRY & CO. INTERNATIONAL CONCLUSIONS AND NEXT STEPS BASED UPON OUR PRELIMINARY ANALYSIS AND DUE DILIGENCE, LANE BERRY RECOMMENDS THAT SYLVAN INVESTIGATE FURTHER THE POTENTIAL ADVANTAGES AND ISSUES OF ALTERNATIVES I, II AND III NEXT STEPS: All Alternatives Lane Berry and Sylvan to further diligence and refine 5-year financial models Alternative I - Status Quo Lane Berry in conjunction with Sylvan management to: - - Further review and prepare analysis regarding Capital Investment spending and related returns to provide additional information to shareholders Alternative II - Dutch Tender Offer Lane Berry in conjunction with Sylvan management to: - - Approach existing lenders to determine leverage capacity and terms - - Coordinate with Company counsel issues of structure - - Finalize valuation analysis and determine Dutch Tender offer pricing Alternative III - "Market Test" Lane Berry in conjunction with Sylvan management to: - - Prepare abbreviated marketing materials - - Agree upon 3-5 potential strategic and 5-7 potential financial acquirors - - Contact, on a confidential basis, potential acquirors and ask them to provide an initial indication of interest LANE, BERRY & CO. INTERNATIONAL 34 APPENDIX LANE, BERRY & CO. INTERNATIONAL VALUATION FRAMEWORK
STRATEGIC CONSIDERATIONS FINANCIAL CONSIDERATIONS - ------------------------ ------------------------ HOW WILL POTENTIAL COMPARABLE ACQUIRORS VIEW PUBLICLY TRADED GROWTH PROSPECTS COMPANIES ANALYSIS - ------------------------ ------------------------ WILL POTENTIAL ACQUIRORS VIEW THE COMPARABLE M&A ACQUISITION AS TRANSACTIONS COMPLEMENTARY / [ARROW ESTIMATED [ARROW ANALYSIS SYNERGISTIC GRAPHIC] ENTERPRISE GRAPHIC] - ------------------------ VALUE OF THE ------------------------ WHAT RISKS WILL A COMPANY DCF PROSPECTIVE ANALYSIS ACQUIROR PERCEIVE - ------------------------ ------------------------ WHAT IS THE STRATEGIC VALUE OF LBO THE COMPANY TO A ANALYSIS POTENTIAL ACQUIROR - ------------------------ ------------------------
LANE, BERRY & CO. INTERNATIONAL 36 UPSIDE CASE FINANCIAL PROJECTIONS
Projected Fiscal Year Ending December 31, -------------------------------------------------------------------- (USD in Millions) 2002 2003 2004 2005 2006 -------- -------- -------- -------- -------- Total Sales $ 88.0 $ 91.7 $ 94.8 $ 98.2 $ 101.5 Cost of Sales 52.5 54.2 55.6 57.0 58.6 -------- -------- -------- -------- -------- Gross Profit 35.5 37.5 39.2 41.1 42.9 SG&A (excluding depreciation) 19.7 20.3 20.8 21.3 21.9 -------- -------- -------- -------- -------- EBITDA 15.8 17.2 18.4 19.8 21.0 Depreciation 5.8 6.0 6.2 6.5 6.7 -------- -------- -------- -------- -------- EBIT 10.0 11.2 12.2 13.3 14.3 Interest on: Revolver 2.4 2.1 1.9 1.5 1.1 -------- -------- -------- -------- -------- Total Interest Expense 2.4 2.1 1.9 1.5 1.1 Interest Income on S-T Investments 0.0 0.1 0.1 0.1 0.1 Pension Adjustments (Inc)/Exp (0.2) (0.2) (0.2) (0.2) (0.2) -------- -------- -------- -------- -------- Pretax Income 7.8 9.3 10.5 12.1 13.5 Income Taxes 2.5 3.0 3.4 3.9 4.4 Minority Interest 0.1 0.1 0.1 0.1 0.1 -------- -------- -------- -------- -------- Net Income $ 5.1 $ 6.2 $ 7.0 $ 8.0 $ 9.0 Shares Outstanding 5.5 5.5 5.5 5.5 5.5 EPS $ 0.92 $ 1.11 $ 1.26 $ 1.45 $ 1.62 Adjusted EPS (1) $ 0.90 $ 1.09 $ 1.24 $ 1.43 $ 1.60
(1) Adjusted EPS adds back to pretax income all pension-related items. LANE, BERRY & CO. INTERNATIONAL 37 UPSIDE CASE FINANCIAL PROJECTIONS - DIVISIONAL ASSUMPTIONS
Projected Fiscal Year Ending December 31, ------------------------------------------------------------------- (USD in Millions) 2002 2003 2004 2005 2006 ------- ------- ------- ------- ------- SALES Europe $ 35.0 $ 36.2 $ 37.4 $ 38.5 $ 39.6 America 26.4 27.8 29.1 30.5 31.8 Quincy 26.9 27.5 27.7 28.3 29.1 Bioproducts 0.8 1.3 1.7 2.1 2.2 Intercompany/Other (1.1) (1.1) (1.2) (1.2) (1.2) ------- ------- ------- ------- ------- TOTAL SALES 88.0 91.7 94.8 98.2 101.5 EBITDA Europe $ 9.4 $ 10.0 $ 10.5 $ 11.0 $ 11.5 America 7.2 7.7 8.2 8.6 9.0 Quincy 4.6 4.8 4.9 5.1 5.4 Bioproducts (0.4) (0.2) 0.0 0.3 0.4 Research and Development (1.9) (1.9) (1.9) (1.9) (1.9) Corporate OH (4.0) (4.1) (4.2) (4.3) (4.3) Intercompany/Other 0.8 0.8 0.9 0.9 0.9 ------- ------- ------- ------- ------- TOTAL EBITDA 15.8 17.2 18.4 19.8 21.0 EBITDA MARGINS Europe 26.9% 27.6% 28.1% 28.6% 29.0% America 27.4% 27.8% 28.1% 28.3% 28.3% Quincy 17.2% 17.5% 17.7% 18.0% 18.5% Bioproducts (46.1%) (15.4%) 2.0% 14.8% 18.8% Research and Development NM NM NM NM NM Corporate OH NM NM NM NM NM Intercompany/Other (71.7%) (73.4%) (74.7%) (75.8%) (76.5%) ------- ------- ------- ------- ------- TOTAL EBITDA MARGINS 17.9% 18.7% 19.4% 20.2% 20.7% ======= ======= ======= ======= =======
LANE, BERRY & CO. INTERNATIONAL 38 DOWNSIDE CASE FINANCIAL PROJECTIONS
Projected Fiscal Year Ending December 31, ----------------------------------------------------------------- (USD in Millions) 2002 2003 2004 2005 2006 -------- -------- -------- -------- -------- Total Sales $ 88.0 $ 89.3 $ 90.8 $ 92.5 $ 94.3 Cost of Sales 52.5 53.3 54.3 55.4 56.6 -------- -------- -------- -------- -------- Gross Profit 35.5 36.0 36.5 37.1 37.7 SG&A (excluding depreciation) 19.7 19.9 20.2 20.5 20.8 -------- -------- -------- -------- -------- EBITDA 15.8 16.0 16.3 16.6 16.8 Depreciation 5.8 5.9 6.0 6.1 6.3 -------- -------- -------- -------- -------- EBIT 10.0 10.2 10.3 10.5 10.6 Interest on: Revolver 2.4 2.1 1.8 1.5 1.2 -------- -------- -------- -------- -------- Total Interest Expense 2.4 2.1 1.8 1.5 1.2 Interest Income on S-T Investments 0.0 0.1 0.1 0.1 0.1 Pension Adjustments (Inc)/Exp (0.2) 0.2 0.4 1.9 1.7 -------- -------- -------- -------- -------- Pretax Income 7.8 8.0 8.2 7.2 7.8 Income Taxes 2.5 2.6 2.7 2.3 2.5 Minority Interest 0.1 0.1 0.1 0.1 0.1 -------- -------- -------- -------- -------- Net Income $ 5.1 $ 5.3 $ 5.4 $ 4.7 $ 5.2 Shares Outstanding 5.5 5.5 5.5 5.5 5.5 EPS $ 0.92 $ 0.95 $ 0.98 $ 0.85 $ 0.93 Adjusted EPS (1) $ 0.90 $ 0.97 $ 1.02 $ 1.09 $ 1.14 ======== ======== ======== ======== ========
(1) Adjusted EPS adds back to pretax income all pension-related items. LANE, BERRY & CO. INTERNATIONAL 39 DOWNSIDE CASE FINANCIAL PROJECTIONS - DIVISIONAL ASSUMPTIONS
Projected Fiscal Year Ending December 31, ------------------------------------------------------------------- (USD in Millions) 2002 2003 2004 2005 2006 ------- ------- ------- ------- ------- SALES Europe $ 35.0 $ 35.5 $ 35.9 $ 36.3 $ 36.6 America 26.4 26.6 26.9 27.2 27.4 Quincy 26.9 27.1 27.7 28.5 29.6 Bioproducts 0.8 1.1 1.4 1.7 1.8 Intercompany/Other (1.1) (1.1) (1.2) (1.2) (1.2) ------- ------- ------- ------- ------- TOTAL SALES 88.0 89.3 90.8 92.5 94.3 EBITDA Europe $ 9.4 $ 9.7 $ 9.9 $ 10.0 $ 10.2 America 7.2 7.3 7.4 7.5 7.6 Quincy 4.6 4.4 4.3 4.2 4.2 Bioproducts (0.4) (0.2) (0.0) 0.1 0.2 Research and Development (1.9) (1.9) (1.9) (1.9) (1.9) Corporate OH (4.0) (4.1) (4.1) (4.2) (4.3) Intercompany/Other 0.8 0.8 0.8 0.8 0.8 ------- ------- ------- ------- ------- TOTAL EBITDA 15.8 16.0 16.3 16.6 16.8 EBITDA MARGINS Europe 26.9% 27.2% 27.4% 27.6% 27.8% America 27.4% 27.5% 27.6% 27.7% 27.8% Quincy 17.2% 16.3% 15.5% 14.8% 14.2% Bioproducts (46.1%) (20.7%) (2.6%) 7.0% 10.0% Research and Development NM NM NM NM NM Corporate OH NM NM NM NM NM Intercompany/Other (71.7%) (68.8%) (67.2%) (65.7%) (64.0%) ------- ------- ------- ------- ------- TOTAL EBITDA MARGINS 17.9% 18.0% 18.0% 18.0% 17.9% ======= ======= ======= ======= =======
LANE, BERRY & CO. INTERNATIONAL 40 PUBLIC COMPARABLES OVERVIEW METHODOLOGY - - To determine the current public market value and trading multiples of companies similar to Sylvan, thereby imputing a "public market" valuation range COMPANY SELECTION - - LBCI analyzed a range of public food and agricultural producers and selected three sectors comprising nine trading comparables for analysis:
Food Processors Fresh Produce Companies Agricultural Companies - --------------- ----------------------- ---------------------- Archer Daniels Midland Chiquita Brands Hines Horticulture Bunge Fresh Del Monte Pro-Fac Cooperative Dole Delta and Pine Seminis
ISSUES - - No control premium is reflected in the results of the public market valuation - - It is difficult to find direct comparables to the Company - - A number of these companies are substantially larger than Sylvan and may impact the relevancy of the data LANE, BERRY & CO. INTERNATIONAL 41 PUBLIC COMPARABLES BASE CASE ANALYSIS (USD in Millions except per share figures)
EV / REVENUE EV / EBITDA P / E STOCK % OF FD ------------------ ------------------- ------------------- PRICE 52-WEEK EQUITY ENTERPRISE CY02E CY03E COMPANY 5/28/02 HIGH VALUE VALUE CY01 CY02E CY03E CY01 CY02E CY03E CY01 (1) (1) - ------------------------- ------- ------- -------- ---------- ---- ----- ----- ----- ----- ----- ----- ----- ---- SYLVAN $ 12.68 96% $ 70.3 $ 102.9 1.2X 1.2X 1.1X 6.3X 6.5X 6.1X 12.1X 14.1X 12.1X FOOD PROCESSING COMPANIES Archer Daniels Midland $ 14.12 89% $9,227.0 $ 11,887.4 0.6x 0.5 NA 8.3x 7.8 NA 19.6x 18.8x 15.3 Bunge 21.70 87% 2,102.7 3,196.7 0.3 0.3 0.3 4.6 4.6 4.5 11.6 11.3 10.2 FRESH PRODUCE COMPANIES Chiquita Brands 16.90 90% 747.7 1,484.1 0.7 0.6 0.6 9.6 7.5 7.0 NM 10.1 NA Dole 32.00 94% 1,826.0 2,373.8 0.5 0.5 0.5 14.2 7.2 NA 19.5 13.0 12.3 Fresh DelMonte 23.49 95% 1,319.0 1,634.0 0.8 0.8 0.8 7.2 6.6 6.3 13.3 10.0 9.1 AGRICULTURAL COMPANIES Delta and Pine 19.29 77% 750.0 737.1 2.1 NA NA 10.0 11.6 NA 21.9 22.8 18.7 Hines Horticulture 4.30 82% 94.9 398.1 1.2 1.2 NA 6.7 6.8 NA 16.5 7.4 NA Pro-Fac Cooperative 17.20 97% 35.0 746.5 0.6 NA NA 5.9 NA NA 7.4 NA NA Seminis 2.95 74% 185.1 506.0 1.1 NA NA 7.5 NA NA NM NA NA LOW 77% 0.3X 0.3X 0.3X 4.6X 4.6X 4.5X 7.4X 7.4X 9.1X MEDIAN 90% 0.6X 0.6X 0.6X 7.8X 7.2X 6.3X 16.5X 11.3X 12.3X HIGH 97% 2.1X 1.2X 0.8X 14.2X 11.6X 7.0X 21.9X 22.8X 18.7X

REVENUE EBITDA EARNINGS PER SHARE -------------------------- -------------------------- ---------------------------- CY01 CY02E CY03E CY01 CY02E CY03E CY01 CY02E (1) CY03E (1) ---- ----- ----- ---- ----- ----- ---- --------- -------- SYLVAN FINANCIALS $ 85.9 $ 88.0 $ 90.7 $ 16.4 $ 15.8 $ 16.8 $ 1.05 $ 0.90 $ 1.05 IMPLIED SYLVAN PRICE PER SHARE LOW NM NM NM $ 8.02 $ 7.44 $ 8.02 $ 7.81 $ 6.69 $ 9.56 MEDIAN $ 4.13 $ 3.59 $ 3.70 $17.31 $14.79 $13.49 $17.37 $10.20 $12.92 HIGH $27.47 $13.24 $ 7.36 $36.19 $27.34 $15.47 $23.02 $20.56 $19.60
(1) Adjusted EPS adds back to pretax income all pension-related items. LANE, BERRY & CO. INTERNATIONAL 42 PUBLIC COMPARABLES UPSIDE CASE ANALYSIS (USD in Millions except per share figures)
EV / REVENUE EV / EBITDA P / E STOCK % OF FD ------------------ ------------------- ------------------- PRICE 52-WEEK EQUITY ENTERPRISE CY02E CY03E COMPANY 5/28/02 HIGH VALUE VALUE CY01 CY02E CY03E CY01 CY02E CY03E CY01 (1) (1) - ------------------------- ------- ------- -------- ---------- ---- ----- ----- ----- ----- ----- ----- ----- ---- SYLVAN $ 12.68 96% $ 70.3 $ 102.9 1.2X 1.2X 1.1X 6.3X 6.5X 6.0X 12.1X 14.1X 11.6X FOOD PROCESSING COMPANIES Archer Daniels Midland $ 14.12 89% $9,227.0 $ 11,887.4 0.6x 0.5 NA 8.3x 7.8 NA 19.6x 18.8x 15.3 Bunge 21.70 87% 2,102.7 3,196.7 0.3 0.3 0.3 4.6 4.6 4.5 11.6 11.3 10.2 FRESH PRODUCE COMPANIES Chiquita Brands 16.90 90% 747.7 1,484.1 0.7 0.6 0.6 9.6 7.5 7.0 NM 10.1 NA Dole 32.00 94% 1,826.0 2,373.8 0.5 0.5 0.5 14.2 7.2 NA 19.5 13.0 12.3 Fresh DelMonte 23.49 95% 1,319.0 1,634.0 0.8 0.8 0.8 7.2 6.6 6.3 13.3 10.0 9.1 AGRICULTURAL COMPANIES Delta and Pine 19.29 77% 750.0 737.1 2.1 NA NA 10.0 11.6 NA 21.9 22.8 18.7 Hines Horticulture 4.30 82% 94.9 398.1 1.2 1.2 NA 6.7 6.8 NA 16.5 7.4 NA Pro-Fac Cooperative 17.20 97% 35.0 746.5 0.6 NA NA 5.9 NA NA 7.4 NA NA Seminis 2.95 74% 185.1 506.0 1.1 NA NA 7.5 NA NA NM NA NA LOW 77% 0.3X 0.3X 0.3X 4.6X 4.6X 4.5X 7.4X 7.4X 9.1X MEDIAN 90% 0.6X 0.6X 0.6X 7.8X 7.2X 6.3X 16.5X 11.3X 12.3X HIGH 97% 2.1X 1.2X 0.8X 14.2X 11.6X 7.0X 21.9X 22.8X 18.7X

REVENUE EBITDA EARNINGS PER SHARE -------------------------- -------------------------- ---------------------------- CY01 CY02E CY03E CY01 CY02E CY03E CY01 CY02E (1) CY03E (1) ---- ----- ----- ---- ----- ----- ---- --------- --------- SYLVAN FINANCIALS $ 85.9 $ 88.0 $ 91.7 $ 16.4 $ 15.8 $ 17.2 $ 1.05 $ 0.90 $ 1.09 IMPLIED SYLVAN PRICE PER SHARE LOW NM NM NM $ 8.02 $ 7.44 $ 8.35 $ 7.81 $ 6.69 $ 9.94 MEDIAN $ 4.13 $ 3.59 $ 3.80 $17.31 $14.79 $13.95 $17.37 $10.20 $13.44 HIGH $27.47 $13.24 $ 7.50 $36.19 $27.34 $15.98 $23.02 $20.56 $20.39
(1) Adjusted EPS adds back to pretax income all pension-related items. LANE, BERRY & CO. INTERNATIONAL 43 PUBLIC COMPARABLES DOWNSIDE CASE ANALYSIS (USD in Millions except per share figures)
STOCK % OF FD EV / REVENUE EV / EBITDA P / E PRICE 52-WEEK EQUITY ENTERPRISE ------------------ ------------------- ------------------------- COMPANY 5/28/02 HIGH VALUE VALUE CY01 CY02E CY03E CY01 CY02E CY03E CY01 CY02E(1) CY03E(1) - ------------------------------------------------------------------------------------------------------------------------------------ SYLVAN $12.68 96% $ 70.3 $ 102.9 1.2X 1.2X 1.2X 6.3X 6.5X 6.4X 12.1X 14.1X 13.1X FOOD PROCESSING COMPANIES Archer Daniels Midland $14.12 89% $9,227.0 $11,887.4 0.6x 0.5 NA 8.3x 7.8 NA 19.6x 18.8x 15.3 Bunge 21.70 87% 2,102.7 3,196.7 0.3 0.3 0.3 4.6 4.6 4.5 11.6 11.3 10.2 FRESH PRODUCE COMPANIES Chiquita Brands 16.90 90% 747.7 1,484.1 0.7 0.6 0.6 9.6 7.5 7.0 NM 10.1 NA Dole 32.00 94% 1,826.0 2,373.8 0.5 0.5 0.5 14.2 7.2 NA 19.5 13.0 12.3 Fresh DelMonte 23.49 95% 1,319.0 1,634.0 0.8 0.8 0.8 7.2 6.6 6.3 13.3 10.0 9.1 AGRICULTURAL COMPANIES Delta and Pine 19.29 77% 750.0 737.1 2.1 NA NA 10.0 11.6 NA 21.9 22.8 18.7 Hines Horticulture 4.30 82% 94.9 398.1 1.2 1.2 NA 6.7 6.8 NA 16.5 7.4 NA Pro-Fac Cooperative 17.20 97% 35.0 746.5 0.6 NA NA 5.9 NA NA 7.4 NA NA Seminis 2.95 74% 185.1 506.0 1.1 NA NA 7.5 NA NA NM NA NA LOW 77% 0.3X 0.3X 0.3X 4.6X 4.6X 4.5X 7.4X 7.4X 9.1X MEDIAN 90% 0.6X 0.6X 0.6X 7.8X 7.2X 6.3X 16.5X 11.3X 12.3X HIGH 97% 2.1X 1.2X 0.8X 14.2X 11.6X 7.0X 21.9X 22.8X 18.7X

REVENUE EBITDA EARNINGS PER SHARE --------------------------- ------------------------ ------------------------------- CY01 CY02E CY03E CY01 CY02E CY03E CY01 CY02E(1) CY03E(1) ----------------------------------------------------------------------------------------- SYLVAN FINANCIALS $ 85.9 $ 88.0 $89.3 $ 16.4 $ 15.8 $ 16.0 $ 1.05 $ 0.90 $ 0.97 IMPLIED SYLVAN PRICE PER SHARE LOW NM NM NM $ 8.02 $ 7.44 $ 7.42 $ 7.81 $ 6.69 $ 8.84 MEDIAN $ 4.13 $ 3.59 $3.55 $17.31 $14.79 $12.65 $17.37 $10.20 $11.95 HIGH $27.47 $13.24 $7.16 $36.19 $27.34 $14.54 $23.02 $20.56 $18.12
(1) Adjusted EPS adds back to pretax income all pension-related items. Lane, Berry & Co. International 44 M&A COMPARABLES OVERVIEW METHODOLOGY - To determine the historical private market value and transaction multiples of companies similar to the Company, thereby imputing a "transaction" valuation range ISSUES - Multiples paid in the transaction analysis may reflect potential synergies an acquiror could realize as a result of the target's operating scale - It is difficult to find direct comparable M&A transactions Lane, Berry & Co. International 45 M&A COMPARABLES ANALYSIS (USD in Millions)
TRANSACTION VALUE / LTM ANN. TRANS. ----------------------- DATE ACQUIROR TARGET DESCRIPTION VALUE REVENUE EBITDA - ------------------------------------------------------------------------------------------------------------------------------------ 1/7/02 Kerry Group Stearns & Lehman Stearns & Lehman is a manufacturer $ 26.0 1.3x NA of coffeehouse chain, foodservice and branded Italian-style flavoured syrups. 8/17/01 Nippon Suisan Gorton's Seafood & Gorton's is a retail frozen seafood 175.0 0.7 8.8 Bluewater Seafoods brand in the U.S. & Bluewater is a brand in Canada. 7/18/01 Simgar SA Louis Dreyfus Citrus SA Producer of citrus fruit products. 316.2 1.0 7.1 2/20/01 Lesaffre et Compagnie Sensient Technologies' Red Supplier of yeast to the commercial 122.0 1.0 7.3 Star Yeast & Products bakery market. 10/17/00 Kerry Group Armour Food Ingredients Provide a wide range of specialty 35.0 0.9 NA food ingredients including savoury flavorings & cheese & dairy flavorings. 8/5/00 McCormick & Company Ducros SA Manufacturer & marketer of spices 379.0 1.5 NA and herbs. 9/27/99 Reservoir Capital Group Orange Company Grower of oranges. 153.8 1.2 8.6 7/1/99 Investor Group Maui Land & Pineapple Producer, grower & canner of 119.6 0.8 6.1 pineapple products. 8/12/98 U.S. Home & Garden Ampro Industries Manufactures & distributes wholesale 24.2 1.2 NM lawn & garden products. 3/4/98 Central Garden & Pet Pennington Seed Produces proprietary branded grass 233.0 0.8 8.4 & wild bird seeds. 1/26/98 Agribiotech Williamette Seed Producer of wholesale turfgrass 14.0 0.3 12.5 seed. 9/30/96 Mycogen Morgan Seeds Diversified agricultural 27.4 1.1 NA biotechnology company. LOW $ 14.0 0.3X 6.1X MEDIAN $120.8 1.0X 8.4X HIGH $379.0 1.5X 12.5X

LTM --------------------- REVENUE EBITDA - -------------------------------------------------------------------------------- SYLVAN FINANCIALS $ 85.9 $ 16.8 IMPLIED SYLVAN PRICE PER SHARE LOW NM $12.91 MEDIAN $10.01 $19.88 HIGH $17.87 $32.26
LANE, BERRY & CO. INTERNATIONAL 46 DISCOUNTED CASH FLOW OVERVIEW METHODOLOGY - To determine the present value of the projected after-tax free cash flows of the Company utilizing an EBITDA exit multiple terminal value and a range of discount rates VARIABLES VARIABLE SELECTED RANGE -- EBITDA Exit Multiple (2006): -- 5.0x-7.0x -- Discount Rate Range: -- 9.0%-11.0% LANE, BERRY & CO. INTERNATIONAL 47 DISCOUNTED CASH FLOW BASE CASE ANALYSIS (USD in Millions)
YEAR ENDING DECEMBER 31, -------------------------------------------- TERMINAL 2002 2003 2004 2005 2006 VALUE - ------------------------------------------------------------------------------------------------------------------------ REVENUE 88.0 90.7 92.9 95.4 98.0 Growth % NA 3.0% 2.5% 2.7% 2.7% EBITDA 15.8 16.8 17.7 18.8 19.8 Margin % 17.9% 18.5% 19.1% 19.7% 20.1% EBIT 10.0 10.8 11.6 12.5 13.3 Margin % 11.4% 11.9% 12.5% 13.1% 13.5% FREE CASH FLOW ANALYSIS: EBIT*(1-Tax Rate) 6.7 7.2 7.8 8.4 8.9 Plus: Depreciation & Amortization 5.8 6.0 6.1 6.3 6.5 Plus: Change in Working Capital (0.7) (1.7) (0.4) (0.5) (0.5) Less: Capital Expenditures 7.5 6.0 6.0 6.1 6.2 - -------------------------------------------------------------------------------------------------------- FREE CASH FLOW 4.3 5.6 7.5 8.1 8.6 EBITDA (2006) 19.8 EBITDA Multiple 6.0X - ---------------------------------------------------------------------------------------------------------------------- TERMINAL VALUE 118.5 Total Free Cash Flow 4.3 5.6 7.5 8.1 8.6 118.5 Weighted Average Cost of Capital 10.0% PRESENT VALUE OF FCF 4.0 4.7 5.7 5.6 5.5 75.4 ======================================================================================================================

IMPLIED PRICE PER SHARE: TOTAL ENTERPRISE VALUE $101.0 Less: Net Debt 30.9 - ---------------------------------------------------------- EQUITY VALUE 70.1 FD Shares Outstanding 5.5 IMPLIED PRICE PER SHARE $12.63 - ---------------------------------------------------------- Premium to Stock Price as of 05/28/02 (0.4%) ==========================================================

SENSITIVITY ANALYSIS: 5.0X 5.5X 6.0X 6.5X 7.0X ----------------------------------------- 9.0% 11.00 12.18 13.36 14.54 15.73 9.5% 10.68 11.84 12.99 14.15 15.31 10.0% 10.37 11.50 12.63 13.77 14.90 10.5% 10.07 11.18 12.28 13.39 14.50 11.0% 9.77 10.86 11.94 13.03 14.11 -----------------------------------------
LANE, BERRY & CO. INTERNATIONAL 48 DISCOUNTED CASH FLOW UPSIDE CASE ANALYSIS (USD in Millions)
YEAR ENDING DECEMBER 31, ----------------------------------------------- TERMINAL 2002 2003 2004 2005 2006 VALUE - ------------------------------------------------------------------------------------------------------------------------- REVENUE 88.0 91.7 94.8 98.2 101.5 Growth % NA 4.2% 3.4% 3.5% 3.4% EBITDA 15.8 17.2 18.4 19.8 21.0 Margin % 17.9% 18.7% 19.4% 20.2% 20.7% EBIT 10.0 11.2 12.2 13.3 14.3 Margin % 11.4% 12.2% 12.8% 13.6% 14.1% FREE CASH FLOW ANALYSIS: EBIT*(1-Tax Rate) 6.7 7.5 8.2 8.9 9.6 Plus: Depreciation & Amortization 5.8 6.0 6.2 6.5 6.7 Plus: Change in Working Capital (0.7) (1.8) (0.6) (0.6) (0.6) Less: Capital Expenditures 7.5 6.1 6.2 6.3 6.4 - ---------------------------------------------------------------------------------------------------------- FREE CASH FLOW 4.3 5.6 7.7 8.5 9.2 EBITDA (2006) 21.0 EBITDA Multiple 6.0X - ------------------------------------------------------------------------------------------------------------------------- TERMINAL VALUE 126.2 Total Free Cash Flow 4.3 5.6 7.7 8.5 9.2 126.2 Weighted Average Cost of Capital 10.0% PRESENT VALUE OF FCF 4.0 4.7 5.9 5.9 5.9 80.2 =========================================================================================================================

IMPLIED PRICE PER SHARE: TOTAL ENTERPRISE VALUE $106.7 Less: Net Debt 30.9 - ------------------------------------------------------- EQUITY VALUE 75.7 FD Shares Outstanding 5.5 IMPLIED PRICE PER SHARE $13.66 Premium to Stock Price as of 05/28/02 7.7% - -------------------------------------------------------

SENSITIVITY ANALYSIS: 5.0X 5.5X 6.0X 6.5X 7.0X ----------------------------------------- 9.0% 11.91 13.17 14.43 15.69 16.95 9.5% 11.58 12.81 14.04 15.27 16.51 10.0% 11.25 12.46 13.66 14.87 16.07 10.5% 10.93 12.11 13.29 14.47 15.65 11.0% 10.62 11.77 12.93 14.08 15.24 -----------------------------------------
LANE, BERRY & CO. INTERNATIONAL 49 DISCOUNTED CASH FLOW DOWNSIDE CASE ANALYSIS (USD in Millions)
YEAR ENDING DECEMBER 31, ------------------------------------------------- TERMINAL 2002 2003 2004 2005 2006 VALUE - --------------------------------------------------------------------------------------------------------------------------- REVENUE 88.0 89.3 90.8 92.5 94.3 Growth % NA 1.4% 1.7% 1.9% 2.0% EBITDA 15.8 16.0 16.3 16.6 16.8 Margin % 17.9% 18.0% 18.0% 18.0% 17.9% EBIT 10.0 10.2 10.3 10.5 10.6 Margin % 11.4% 11.4% 11.4% 11.3% 11.2% FREE CASH FLOW ANALYSIS: EBIT*(1-Tax Rate) 6.7 6.8 6.9 7.0 7.1 Plus: Depreciation & Amortization 5.8 5.9 6.0 6.1 6.3 Plus: Change in Working Capital (0.7) (1.4) (0.3) (0.4) (0.4) Less: Capital Expenditures 7.5 4.7 4.8 4.8 5.0 - ---------------------------------------------------------------------------------------------------------------- FREE CASH FLOW 4.3 6.5 7.8 8.0 8.0 EBITDA (2006) 16.8 EBITDA Multiple 6.0X - --------------------------------------------------------------------------------------------------------------------------- TERMINAL VALUE 101.0 Total Free Cash Flow 4.3 6.5 7.8 8.0 8.0 101.0 Weighted Average Cost of Capital 10.0% PRESENT VALUE OF FCF 4.0 5.5 6.0 5.6 5.1 64.2 ===========================================================================================================================

IMPLIED PRICE PER SHARE: TOTAL ENTERPRISE VALUE $ 90.5 Less: Net Debt 30.9 - --------------------------------------------------------- EQUITY VALUE 59.6 FD Shares Outstanding 5.5 IMPLIED PRICE PER SHARE $10.74 - --------------------------------------------------------- Premium to Stock Price as of 05/28/02 (15.3%) =========================================================

SENSITIVITY ANALYSIS: 5.0X 5.5X 6.0X 6.5X 7.0X -------------------------------------------------- 9.0% 9.36 10.37 11.38 12.39 13.40 9.5% 9.08 10.07 11.06 12.04 13.03 10.0% 8.81 9.77 10.74 11.71 12.67 10.5% 8.54 9.49 10.43 11.38 12.32 11.0% 8.28 9.21 10.13 11.06 11.98 --------------------------------------------------
LANE, BERRY & CO. INTERNATIONAL 50 LBO OVERVIEW METHODOLOGY - To determine the potential price a financial buyer could pay assuming certain benchmarks of financial leverage and required returns BENCHMARK SELECTION - LBCI identified the following key benchmarks in performing its analysis: -- Maximum pro forma Senior Debt / 2001A EBITDA of 3.25x -- Maximum pro forma Total Debt / 2001A EBITDA of 4.25x -- Minimum equity returns of approximately 17% to the subordinated debt holders -- Minimum equity returns to the sponsor of approximately 25% LANE, BERRY & CO. INTERNATIONAL 51 LBO BASE CASE ANALYSIS
SOURCES & USES OF FUNDS - -------------------------------------------------------------------------------- CUM. MULT. SOURCES AMT. % TOTAL 2002E EBITDA USES AMT. - ------- ----- ------- ------------ --------------------- ----- Senior Debt $51.3 76.5% 3.3x Equity Purchase Price $56.7 Senior Sub. Notes 15.8 23.5% 4.3x Refinance Debt 36.7 - ------------------------------------ Subtotal $67.1 100.0% 4.3x Financing Fees 2.5 Sponsor Equity 28.8 42.9% 6.1x - ------------------------------------ ---------------------------- TOTAL SOURCES $95.9 142.9% 6.1x TOTAL USES $95.9 - --------------------------------------------------------------------------------

SUMMARY CREDIT AND LEVERAGE STATISTICS - -------------------------------------------------------------------------------- PROJECTED FISCAL YEARS ENDING DECEMBER 31, PRO FORMA ------------------------------------------ 12/31/02E 2003 2004 2005 2006 - -------------------------------------------------------------------------------- Bank Debt / EBITDA 3.3x 2.9x 2.5x 2.1x 1.7x Total Debt / EBITDA 4.3 3.8 3.4 2.9 2.5 Net Debt / EBITDA 3.9 3.5 3.0 2.6 2.2 EBITDA / Interest Expense 3.7 3.9 4.3 4.8 5.4 EBITDA-CapEx / Int Expense 2.0 2.5 2.8 3.2 3.7 - --------------------------------------------------------------------------------

TRANSACTION SUMMARY - ------------------------------------------------------------ Current Stock Price $12.68 Purchase Price per Share $10.20 Buyout Premium (19.6%) Shares Outstanding 5.5 - ------------------------------------------------------------ Equity Value $ 56.6 Plus: Existing Debt $ 30.9 Less: Existing Cash $ 5.8 - ------------------------------------------------------------ Total Enterprise Value $ 81.7 TEV AS A MULTIPLE OF: - --------------------- 2001A EBITDA 5.0x 2002E EBITDA 5.2x - ------------------------------------------------------------

OWNERSHIP TABLE - -------------------------------------------------------------------------------- PF DILUTED VALUE IN OWNER. WARRANTS OWNER. 2006 IRR ---------------------------------------------------- Sponsor Group 100.0% 0.0% 93.5% 70.3 25.0% Senior Sub Notes (11%) 0.0% 6.5% 6.5% 22.4 17.0% - -------------------------------------------------------------------------------- TOTAL 100.0% 6.5% 100.0% $92.7 ================================================================================

RETURNS TO SPONSOR EQUITY - -------------------------------------------------------------------------------- PURCHASE PRICE -------------------------------------------------------- $9.70 $9.95 $10.20 $10.45 $10.70 $10.95 - -------------------------------------------------------------------------------- 5.0 18.8% 17.3% 15.8% 14.5% 13.2% 12.0% 2006 5.5 23.8% 22.2% 20.7% 19.3% 17.9% 16.7% EBITDA 6.0 28.2% 26.6% 25.0% 23.5% 22.2% 20.8% EXIT 6.5 32.2% 30.5% 28.9% 27.4% 26.0% 24.6% MULTIPLE 7.0 35.9% 34.2% 32.5% 31.0% 29.5% 28.1% - --------------------------------------------------------------------------------
LANE, BERRY & CO. INTERNATIONAL 52 LBO UPSIDE CASE ANALYSIS
SOURCES & USES OF FUNDS - -------------------------------------------------------------------------------- CUM. MULT. SOURCES AMT. % TOTAL 2002E EBITDA USES AMT. - -------------------------------------------------------------------------------- Senior Debt $ 51.3 76.5% 3.3x Equity Purchase Price $ 60.9 Senior Sub. Notes 15.8 23.5% 4.3x Refinance Debt 36.7 - ----------------------------------- Subtotal $ 67.1 100.0% 4.3x Financing Fees 2.5 Sponsor Equity 33.0 49.1% 6.3x - ----------------------------------- ----------------------------- TOTAL SOURCES $100.1 149.1% 6.3x TOTAL USES $100.1 - --------------------------------------------------------------------------------

SUMMARY CREDIT AND LEVERAGE STATISTICS - -------------------------------------------------------------------------------- PROJECTED FISCAL YEARS ENDING DECEMBER 31, PRO FORMA ------------------------------------------ 12/31/02E 2003 2004 2005 2006 - -------------------------------------------------------------------------------- Bank Debt / EBITDA 3.3x 2.8x 2.4x 1.9x 1.5x Total Debt / EBITDA 4.3 3.7 3.2 2.7 2.2 Net Debt / EBITDA 3.9 3.4 2.9 2.4 1.9 EBITDA / Interest Expense 3.7 4.0 4.5 5.1 5.9 EBITDA-CapEx / Int Expense 2.0 2.6 3.0 3.5 4.1 - --------------------------------------------------------------------------------

TRANSACTION SUMMARY - ------------------------------------------------------------- Current Stock Price $12.68 Purchase Price per Share $10.95 Buyout Premium (13.6%) Shares Outstanding 5.5 - ------------------------------------------------------------- Equity Value $ 60.7 Plus: Existing Debt $ 30.9 Less: Existing Cash $ 5.8 - ------------------------------------------------------------- Total Enterprise Value $ 85.9 TEV AS A MULTIPLE OF: 2001A EBITDA 5.2x 2002E EBITDA 5.4x - -------------------------------------------------------------

OWNERSHIP TABLE - -------------------------------------------------------------------------------- PF DILUTED VALUE IN OWNER. WARRANTS OWNER. 2006 IRR ---------------------------------------------------- Sponsor Group 100.0% 0.0% 94.3% 80.4 25.0% Senior Sub Notes (11%) 0.0% 5.8% 5.8% 22.4 17.1% - -------------------------------------------------------------------------------- TOTAL 100.0% 5.8% 100.0% $102.8 - --------------------------------------------------------------------------------

RETURNS TO SPONSOR EQUITY - -------------------------------------------------------------------------------- PURCHASE PRICE --------------------------------------------------------- $10.45 $10.70 $10.95 $11.20 $11.45 $11.70 - -------------------------------------------------------------------------------- 5.0 19.0% 17.7% 16.4% 15.2% 14.1% 13.0% 2006 5.5 23.6% 22.2% 20.9% 19.7% 18.5% 17.4% EBITDA 6.0 27.7% 26.3% 25.0% 23.7% 22.5% 21.3% EXIT 6.5 31.5% 30.0% 28.6% 27.3% 26.1% 24.9% MULTIPLE 7.0 35.0% 33.5% 32.0% 30.7% 29.4% 28.2% - --------------------------------------------------------------------------------
LANE, BERRY & CO. INTERNATIONAL 53 LBO DOWNSIDE CASE ANALYSIS
SOURCES & USES OF FUNDS - -------------------------------------------------------------------------------- CUM. MULT. SOURCES AMT. % TOTAL 2002E EBITDA USES AMT. - ------- ----- ------- ------------ --------------------- ----- Senior Debt $51.3 76.5% 3.3x Equity Purchase Price $49.2 Senior Sub. Notes 15.8 23.5% 4.3x Refinance Debt 36.7 - --------------------------------- Subtotal $67.1 100.0% 4.3x Financing Fees 2.5 Sponsor Equity 21.3 31.7% 5.6x - --------------------------------- ------------------------------- TOTAL SOURCES $88.4 131.7% 5.6x TOTAL USES $88.4 - --------------------------------------------------------------------------------

SUMMARY CREDIT AND LEVERAGE STATISTICS - -------------------------------------------------------------------------------- PROJECTED FISCAL YEARS ENDING DECEMBER 31, PRO FORMA ------------------------------------------ 12/31/02E 2003 2004 2005 2006 - -------------------------------------------------------------------------------- Bank Debt / EBITDA 3.3x 3.0x 2.6x 2.3x 2.1x Total Debt / EBITDA 4.3 4.0 3.6 3.3 3.0 Net Debt / EBITDA 3.9 3.6 3.3 3.0 2.7 EBITDA / Interest Expense 3.7 3.8 4.0 4.3 4.6 EBITDA-CapEx / Int Expense 2.0 2.7 2.8 3.1 3.2 - --------------------------------------------------------------------------------
TRANSACTION SUMMARY - ----------------------------------------------------------- Current Stock Price $12.68 Purchase Price per Share $ 8.85 Buyout Premium (30.2%) Shares Outstanding 5.5 - ----------------------------------------------------------- Equity Value $ 49.1 Plus: Existing Debt $ 30.9 Less: Existing Cash $ 5.8 - ----------------------------------------------------------- Total Enterprise Value $ 74.2 TEV AS A MULTIPLE OF: 2001A EBITDA 4.5x 2002E EBITDA 4.7x - -----------------------------------------------------------

OWNERSHIP TABLE - -------------------------------------------------------------------------------- PF DILUTED VALUE IN OWNER. WARRANTS OWNER. 2006 IRR -------------------------------------------------- Sponsor Group 100.0% 0.0% 91.5% 51.6 24.8% Senior Sub Notes (11%) 0.0% 8.5% 8.5% 22.3 16.9% - -------------------------------------------------------------------------------- TOTAL 100.0% 8.5% 100.0% $73.9 ================================================================================

RETURNS TO SPONSOR EQUITY - -------------------------------------------------------------------------------- PURCHASE PRICE ------------------------------------------------------- $8.35 $8.60 $8.85 $9.10 $9.35 $9.60 - -------------------------------------------------------------------------------- 5.0 18.2% 16.1% 14.2% 12.4% 10.7% 9.2% 2006 5.5 24.1% 21.9% 19.8% 17.9% 16.2% 14.6% EBITDA 6.0 29.2% 26.9% 24.8% 22.8% 21.0% 19.3% EXIT 6.5 33.8% 31.4% 29.2% 27.1% 25.3% 23.5% MULTIPLE 7.0 37.9% 35.4% 33.2% 31.1% 29.2% 27.4% - --------------------------------------------------------------------------------
LANE, BERRY & CO. INTERNATIONAL 54 ~~-----END PRIVACY-ENHANCED MESSAGE-----~~


Sylvan Inc. 333 Main Street, P.O. Box 249 Saxonburg, PA 16056-0249 Telephone: (724) 352-7520 Attn: Fred Y. Bennitt		Snyder Associated Companies, Inc. P.O. Box 1022, One Glade Park East Kittanning, PA 16201 Telephone: (724) 548-8101 Attn: Mark A. Snyder		SAC Holding Co. P.O. Box 1022, One Glade Park East Kittanning, PA 16201 Telephone: (724) 548-8101 Attn: Mark A. Snyder		Dennis C. Zensen c/o Sylvan Inc. 333 Main Street, P.O. Box 249 Saxonburg, PA 16056-0249 Telephone: (724) 352-7520


Reed Smith LLP 435 Sixth Avenue Pittsburgh, PA 15219 Telephone: (412) 288-3131 Attn: David L. DeNinno		Cohen & Grigsby P.C. 11 Stanwix Street, 15th Floor Pittsburgh, PA 15222 Telephone: (412) 297-1319 Attn: Daniel L. Wessels


Transaction valuation* $68,876,850		Amount of filing fee $5,572.14


(f)		Prior Stock Purchases. The information set forth under the caption “Common Stock Purchase Information” of the Proxy Statement is incorporated by reference.


(e)		Agreements Involving the Subject Company’s Securities. The information set forth under the captions “Voting Agreement with Wynnefield Group”; “Stock Purchase Agreement Among Steel Partners, Merger Sub and Snyder”; “Special Factors — Interests of Certain Persons in the Merger”; and “Certain Agreements and Understandings Related to Merger Sub and the Surviving Corporation” of the Proxy Statement is incorporated by reference.


(a)		Securities Ownership. The information set forth under the captions “Security Ownership of Certain Beneficial Owners”; “Security Ownership of Management”; “Security Ownership of the Snyder Entities and Their Controlling Persons”; and “Information Concerning Snyder, Merger Sub and Their Controlling Persons” of the Proxy Statement is incorporated by reference.

(b)		Securities Transactions. The information set forth under the caption “Common Stock Purchase Information” of the Proxy Statement is incorporated by reference.


(d)		Intent to Tender or Vote in a Going-Private Transaction. The information set forth under the captions “Summary Term Sheet — Vote Required”; “Voting



		Agreement with Wynnefield Group”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger”; “Information Concerning Snyder, Merger Sub and Their Controlling Persons”; and “Information Concerning Dennis C. Zensen” of the Proxy Statement is incorporated by reference.

(e)		Recommendations of Others. The information set forth under the captions “Special Factors — Background of the Merger”; “Special Factors — Purpose and Reasons for the Merger; Fairness of the Merger” and “Interests of Certain Persons in the Merger” of the Proxy Statement is incorporated by reference.


(a)		Financial Information. The information set forth under the caption “Information About Sylvan” of the Proxy Statement and the financial statements and accompanying notes beginning on Page F-1 of the Proxy Statement are incorporated by reference.

(b)		Pro Forma Information. No pro forma information to the proposed merger is provided because the filing persons do not believe such information is material to the stockholders in evaluating the proposed merger since (i) the proposed merger consideration is all cash, (ii) there are no conditions to financing, and (iii) if the proposed merger is completed, the common stock of Sylvan will cease to be publicly traded.


(a)		Solicitations or Recommendations. The information set forth under the captions “Information Concerning the Special Meeting — Proxy Solicitation” and “Special Factors — Fees and Expenses” of the Proxy Statement is incorporated by reference.



(f)		The information set forth in the Preliminary Proxy Statement, incorporated by reference to the Proxy Statement, which is filed herewith as Exhibit (a)(3)(A), under the caption “No Dissenters’ or Appraisal Rights.”



		Sylvan Inc.

		By: /s/ Dennis C. Zensen
		Name:		Dennis C. Zensen
		Title:		Chairman, President and CEO


		Snyder Associated Companies, Inc.

		By: /s/ Elmer A. Snyder
		Name:		Elmer A. Snyder
		Title:		President


		SAC Holding Co.

		By: /s/ Elmer A. Snyder
		Name:		Elmer A. Snyder
		Title:		President

		/s/ Dennis C. Zensen
		Dennis C. Zensen