Tender-Offer Solicitation/Recommendation Statement — Schedule 14D-9
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D9 Tender-Offer Solicitation/Recommendation Statement 33 168K
2: EX-1 Agreement & Plan of Merger & Reorganization 54 219K
3: EX-2 Press Release Issued by the Co. & Parent 2 10K
4: EX-3 Letter Agreement Dated 6/16/97 20 73K
5: EX-4 Memorandum of Agreement Dated 6/16/97 30 92K
6: EX-5 Option Agreement Dated as of 6/16/97 8 32K
7: EX-6 Incentive Option Agreement - Dated 6/16/97 11 35K
8: EX-7 Non-Competition Agreement - Dated 6/16/97 9 32K
9: EX-8 Qualification & Listing of Shares Agreement 6 21K
10: EX-9 Stockholder Letter Dated 6/23/97 1 8K
11: EX-10 Opinion of Crowell, Weedon & Co. 2 16K
SC 14D9 — Tender-Offer Solicitation/Recommendation Statement
Document Table of Contents
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d) (4) OF THE SECURITIES EXCHANGE ACT OF 1934
SEDA SPECIALTY PACKAGING CORP.
(NAME OF SUBJECT COMPANY)
SEDA SPECIALTY PACKAGING CORP.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, $0.001 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
81517R106
(CUSIP NUMBER OF CLASS OF SECURITIES)
---------------
SHAHROKH "SHAWN" SEDAGHAT
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
SEDA SPECIALTY PACKAGING CORP.
2501 WEST ROSECRANS BOULEVARD
LOS ANGELES, CA 90059-3510
(310) 635-4444
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICE AND COMMUNICATIONS ON BEHALF OF PERSON(S) FILING STATEMENT)
---------------
COPIES TO:
[Enlarge/Download Table]
BRIAN HOFFMANN PAUL T. TOSETTI LEIB ORLANSKI
MCDERMOTT, WILL & EMERY MICHAEL W. STURROCK FRESHMAN, MARANTZ, ORLANSKI,
50 ROCKEFELLER PLAZA LATHAM & WATKINS COOPER & KLEIN
NEW YORK, NEW YORK 10020-1605 633 WEST FIFTH STREET, SUITE 4000 9100 WILSHIRE BOULEVARD
(212) 547-5400 LOS ANGELES, CALIFORNIA 90071-2007 BEVERLY HILLS, CALIFORNIA 90212-3480
(213) 485-1234 (310) 273-1870
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ITEM 1. SECURITY AND SUBJECT COMPANY
The name of the subject company is SEDA Specialty Packaging Corp., a
Delaware corporation (the "Company"), and the address of the principal
executive offices of the Company is 2501 West Rosecrans Boulevard, Los
Angeles, California 90059-3510. The title of the class of equity securities to
which this statement relates is the Common Stock of the Company, $0.001 par
value per share (the "Shares").
ITEM 2. TENDER OFFER OF THE BIDDER
This statement relates to the cash tender offer (the "Offer") disclosed in a
Tender Offer Statement on Schedule 14D-1, dated June 23, 1997 (the "Schedule
14D-1"), of Seawolf Acquisition Corporation ("Purchaser"), a Delaware
corporation and an indirect wholly owned subsidiary of CCL Industries Inc., a
Canadian corporation ("Parent"), to purchase all of the outstanding Shares at
a price of $29.00 per Share, net to the seller in cash without interest (the
"Offer Price"), subject to certain conditions set forth therein. The Offer is
being made by Purchaser pursuant to the Agreement and Plan of Merger and
Reorganization, dated as of June 16, 1997 (the "Merger Agreement"), among the
Company, Parent and Purchaser, a copy of which is filed as Exhibit 1 hereto
and incorporated herein by reference. Subject to certain terms and conditions
of the Merger Agreement, Purchaser will be merged with and into the Company
(the "Merger") as soon as practicable after the expiration of the Offer with
the Company as the corporation surviving the Merger (the "Surviving
Corporation"). The Schedule 14D-1 states that the address of the principal
executive offices of Parent and Purchaser is 105 Gordon Baker Road,
Willowdale, Ontario, Canada M2H 3P8. A copy of the press release issued by the
Company and Parent on June 17, 1997, is filed as Exhibit 2 hereto and
incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND
(a) The name and business address of the Company, which is the entity filing
this statement, are set forth in Item 1 above.
(b) Except as described or referred to below, there exists on the date
hereof no material contract, agreement, arrangement or understanding and no
actual or potential conflict of interest between the Company or its affiliates
and (i) the Company's executive officers, directors or affiliates or (ii) the
executive officers, directors or affiliates of Parent or Purchaser.
ARRANGEMENTS WITH DIRECTORS, EXECUTIVE OFFICERS, OR AFFILIATES OF THE COMPANY
Certain contracts, agreements, arrangements and understandings between the
Company and certain of its directors, executive officers and affiliates,
including a description of the Company's employment and severance arrangements
with its executive officers, are described in the Company's Information
Statement in sections entitled "BOARD OF DIRECTORS--Directors Compensation"
and "CERTAIN RELATIONSHIPS, TRANSACTIONS AND ARRANGEMENTS" and "EXECUTIVE
OFFICER COMPENSATION." The Information Statement is attached hereto as Annex A
and incorporated herein by reference.
In connection with the transactions contemplated by the Merger, the
following agreements were entered into: the Merger Agreement; the Letter
Agreement, dated June 16, 1997, by and among Parent, Purchaser and the persons
listed on Schedule A thereto (the "Tender Agreement"); the Memorandum of
Agreement, dated June 16, 1997, by and among Shahrokh Sedaghat (the
"Executive"), Parent and the Company (the "Sedaghat Employment Agreement");
the Option Agreement dated as of June 16, 1997, by and between the Executive
and Parent (the "Rollover Option Agreement") and the Incentive Option
Agreement, dated as of June 16, 1997, by and between the Executive and Parent
(the "Incentive Option Agreement" and, together with the Rollover Option
Agreement, the "Option Agreements"); the Non-Competition Agreement, dated June
16, 1997, by and between Shapour Sedaghat and the Company (the "Non-
Competition Agreement"); and the Qualification and Listing of Shares
Agreement, dated June 16, 1997, between Parent and the Executive (the
"Qualification and Listing of Shares Agreement") (collectively, the
"Agreements").
A summary of each of the Agreements follows. These summaries are qualified
in their entirety by reference to the complete text of the Agreements, which
are filed and incorporated herein by reference.
1
MERGER AGREEMENT
The Offer is being made pursuant to the Merger Agreement, which is filed as
Exhibit 1 hereto. The Merger Agreement provides that without the prior written
consent of the Company, Purchaser will not (and Parent will not cause
Purchaser to): (i) decrease the Offer Price, or change the form of
consideration therefor, or decrease the number of Shares sought pursuant to
the Offer; (ii) change the conditions set forth in Annex A to the Merger
Agreement (the "Conditions"); (iii) impose additional conditions to the Offer;
(iv) waive the condition that there shall be validly tendered, and not
withdrawn prior to the time the Offer expires, a number of Shares which,
together with all Shares owned by Parent, Purchaser and their respective
Affiliates (as defined in Section 10.9 of the Merger Agreement) constitutes a
majority of the Shares outstanding on a fully diluted basis on the date of
purchase; (v) amend any term of the Offer in any manner adverse to holders of
Shares; or (vi) extend the expiration date of the Offer (the "Expiration
Date"); provided, however, that the Expiration Date may be extended from time
to time at the sole discretion of Purchaser: (x) in order to comply with any
provision of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR Act"), and the rules and regulations thereunder, or to otherwise comply
with law, for the minimum period of time reasonably necessary to so comply;
and (y) if any of the Conditions are not satisfied, for the minimum period of
time reasonably necessary to satisfy the Conditions, but in either case, the
Expiration Date will not be extended beyond September 2, 1997.
The Merger Agreement provides that, if Purchaser purchases the Shares
pursuant to the Offer, Purchaser will be merged with and into the Company as
soon as practicable after the satisfaction or waiver of certain conditions.
The Merger will be effective upon the filing of a certificate of merger with
the Secretary of State of Delaware pursuant to the General Corporation Law of
the State of Delaware (the "DGCL") (the "Effective Time"). At the Effective
Time, each Share issued and outstanding immediately prior to the Effective
Time, other than: (i) Shares owned by Purchaser or any Affiliate of Purchaser;
(ii) the 517,713 Shares (the "Remaining Shares") held by the Executive which
will be acquired by Purchaser pursuant to an option (the "Stockholder
Option"), if the Stockholder Option has not been exercised; (iii) Shares held
in the treasury of the Company; and (iv) Shares held by stockholders who have
perfected appraisal rights pursuant to the DGCL, will, by virtue of the
Merger, and without any action on the part of the holder thereof, be converted
into the right to receive, without interest, an amount in cash equal to $29
per Share, or such greater amount which may be paid pursuant to the Offer as
it may be amended (the "Merger Consideration"). All such Shares, by virtue of
the Merger and without any action on the part of the holders thereof, will no
longer be outstanding, will be cancelled and retired and will cease to exist,
and each holder of a certificate representing any such Shares will thereafter
cease to have any rights with respect to such Shares, except the right to
receive the Merger Consideration in cash for such Shares upon the surrender of
such certificates.
At the Effective Time, each Remaining Share held by the Executive
immediately prior to the Effective Time will, by virtue of the Merger and
without any action on the part of the Executive be converted into:
(i) 0.0001931572126 shares of Class A participating exchangeable common stock
of the Surviving Corporation ("Participating Exchangeable Stock"), aggregating
100 shares of Participating Exchangeable Stock for all Remaining Shares,
having the rights and preferences as described in Exhibit 5.1(b)(i) to the
Merger Agreement; and (ii) the right to receive, on the following terms, (x)
if, and only if, EBITDA (as defined in Exhibit 5.1(c) to the Merger Agreement)
of the Surviving Corporation for the fiscal year ended December 31, 1997, is
at least $20,000,000, $3.051882993; and (y) if, and only if, EBITDA of the
Surviving Corporation for the fiscal year ended December 31, 1998, is at least
equal to the greater of $24,000,000 or 120% of the EBITDA of the Surviving
Corporation for the fiscal year ended December 31, 1997, $3.051882993; and (z)
if, and only if, the Executive was not entitled to receive the payment
described in subclause (x) above, and the aggregate EBITDA of the Surviving
Corporation for the two fiscal years ended December 31, 1998, is at least
$44,000,000, $3.051882993; provided, however, that in no event will the
Executive be entitled to receive more than $6.103765986 per Remaining Share
pursuant to subclauses (x), (y), and (z) (the "Top Up Amount" and, together
with the Participating Exchangeable Stock, the "Shareholder Merger
Consideration"). All such Remaining Shares, by virtue of the Merger and
without any action on the part of the Executive, will no longer be
outstanding, will be cancelled and retired and will cease to exist, and the
Executive will thereafter cease to have any rights with respect to such
Remaining Shares, except the right to receive the Shareholder Merger
2
Consideration for such Remaining Shares upon the surrender of certificates
representing any Remaining Shares in accordance with Section 5.2 of the Merger
Agreement. Amounts payable pursuant to clause (ii) above will bear simple
interest from the date of the Merger Agreement to the date of payment at the
rate per annum equal to the rate per annum quoted or published by Harris Trust
and Savings Bank as its prime rate, as the same varies from time to time. The
rate of interest applicable to amounts payable pursuant to clause (ii) will
vary with each change in such prime rate.
The Participating Exchangeable Stock will rank pari passu with the common
stock of Purchaser with respect to the payment of dividends and, unless the
holder of such shares elects to receive the Liquidation Amount (as defined
below), the distribution of property or assets in the event of liquidation,
dissolution or winding up of Purchaser, whether voluntary or involuntary, or
any other distribution of the property or assets of Purchaser among its
stockholders for the purpose of winding up its affairs. Except (a) as required
by applicable law, (b) for certain mergers, consolidations or similar
transactions in which Purchaser does not survive and (c) for additions,
changes, modifications or removals affecting the rights, privileges,
restrictions and conditions attaching to the Participating Exchangeable Stock,
the Participating Exchangeable Stock is not entitled to vote on matters
submitted to the stockholders. After (i) the third anniversary of the issuance
of the Participating Exchangeable Stock, or (ii) the termination of the
Executive's employment under certain circumstances, the Executive's death, or
a Change of Control (as defined in Exhibit 3.1 to the Merger Agreement), a
holder of Participating Exchangeable Stock will be entitled to require
Purchaser to redeem the Participating Exchangeable Stock registered in the
name of such holder for an amount per share equal to (A) the U.S. Dollar
equivalent of the current market price of the Specified Number (as defined
below) of the Class B non-voting shares of Parent (the "Class B Shares") for
each share of Participating Exchangeable Stock, plus (B) an additional amount
equivalent to the amount by which declared and unpaid dividends on one share
of Participating Exchangeable Stock exceed the declared and unpaid dividends
on the Specified Number of the Class B Shares (collectively, the "Redemption
Price"). The portion of the Redemption Price described in clause (A) shall be
paid by delivering to such holder the Specified Number of the Class B Shares
for each share of Participating Exchangeable Stock redeemed. A holder of each
share of Participating Exchangeable Stock is entitled to receive on each
dividend payment date of Parent an amount in cash, stock or other property
equivalent to the dividend paid on the Specified Number of Class B Shares. The
Specified Number is 10,000 shares, subject to certain anti-dilution
adjustments. The Liquidation Amount is equal to the then current Redemption
Price.
At the Effective Time, each Share issued and outstanding immediately prior
to the Effective Time and: (i) owned by Purchaser or any Affiliate of
Purchaser; and (ii) each Share issued and held in the Company's treasury
immediately prior to the Effective Time, by virtue of the Merger and without
any action on the part of the holders thereof, will no longer be outstanding,
will be cancelled and retired without payment of any consideration therefor
and will cease to exist and each holder of a certificate representing any such
Shares will thereafter cease to have any rights with respect to such Shares.
Each share of capital stock of Purchaser issued and outstanding immediately
prior to the Effective Time will be converted into one share of capital stock
of the Surviving Corporation with rights, obligations and preferences
identical to the rights, obligations and preferences of such capital stock of
Purchaser immediately prior to the Effective Time.
Shares that are outstanding immediately prior to the Effective Time and
which are held by stockholders who have not voted in favor of the Merger or
consented thereto in writing and who have demanded properly in writing
appraisal for such Shares in accordance with Section 262 of the DGCL
(collectively, the "Dissenting Shares") will not be converted into or
represent the right to receive the Merger Consideration. Such stockholders
instead will be entitled to receive payment of the appraised value of such
Shares held by them in accordance with the provisions of such Section 262,
except that all Dissenting Shares held by stockholders who have failed to
perfect or who effectively have withdrawn or lost their rights to appraisal of
such Shares under such Section 262 will thereupon be deemed to have been
converted into and to have become exchangeable, as of the Effective Time, for
the right to receive, without any interest thereon, the Merger Consideration
upon surrender in the manner provided in Section 5.2 of the Merger Agreement
of the certificate or certificates that, immediately prior to the Effective
Time, evidenced such Shares.
3
At and after the Effective Time, each of the outstanding and unexercised
warrants to purchase 150,000 Shares in the aggregate issued in connection with
the Company's initial public offering (the "Warrants") will continue to be
outstanding and, upon payment of the exercise price then in effect with
respect to such Warrant, the holder of such Warrant will be entitled to
receive upon exercise of such Warrant the amount of cash (without interest)
which such holder would have been entitled to receive upon exercise had such
Warrant been exercised immediately prior to the Effective Time.
The directors of Purchaser and the officers of the Company, at the Effective
Time, will be the directors and officers, respectively, of the Surviving
Corporation from and after the Effective Time, until their successors have
been duly elected or appointed and qualified, or until their earlier death,
resignation, or removal in accordance with the Certificate of Incorporation
and By-Laws of the Surviving Corporation.
In the Merger Agreement, the Company has agreed, if required following
consummation of the Offer, to take all action necessary in accordance with
applicable law and its Certificate of Incorporation and By-Laws to convene a
meeting of holders of Shares as promptly as practicable to consider and vote
upon the approval of the Merger Agreement and the Merger, unless the Company's
Board of Directors, following the receipt of advice of counsel, in the
exercise of its fiduciary obligations under applicable law, has withdrawn its
recommendation to the holders of Shares to accept the Offer and to approve the
Merger. Subject to such fiduciary requirements under applicable law, the Board
of Directors of the Company agreed to recommend such approval and the Company
agreed to use its reasonable best efforts to solicit such approval. At any
such meeting, all the Shares then owned by Purchaser or its Affiliates will be
voted in favor of the Merger Agreement and the Merger. If permitted by the
DGCL and the Company's Certificate of Incorporation, in the event that
Purchaser shall beneficially own at least ninety percent (90%) of the
outstanding shares of each class of capital stock of the Company, the Company,
Purchaser and Parent agree to take all necessary and appropriate action to
cause the Merger to become effective as soon as practicable after the
consummation of the Offer.
Pursuant to the Merger Agreement, the Company has agreed that, except as
otherwise provided on the Disclosure Schedule to the Merger Agreement or as
contemplated by the Merger Agreement, prior to the Effective Time (a) it will
conduct its operations and the operation of its subsidiaries only in the
ordinary and usual course of business, and, to the extent consistent
therewith, each of the Company and its subsidiaries will use its reasonable
best efforts to preserve its business organization intact and maintain its
existing relations with customers, suppliers, licensees, employees and other
business associates; (b) it will not (i) sell or pledge, or agree to sell or
pledge, any stock owned by it or any of its subsidiaries; (ii) amend its
Certificate of Incorporation or By-Laws; (iii) split, combine, or reclassify
outstanding Shares; (iv) declare, set aside, or pay any dividend payable in
cash, stock, or property with respect to the Shares; or (v) adopt a plan of
liquidation; (c) neither it nor any of its subsidiaries will (i) issue, sell,
pledge, dispose of, or encumber any shares of, or securities convertible or
exchangeable for, or options, warrants, calls, commitments, or rights of any
kind, to acquire any shares of capital stock of any class of the Company or
its subsidiaries other than, in the case of the Company, Shares issuable
pursuant to (x) Company Options (as hereinafter defined) outstanding on the
date of the Merger Agreement; or (y) the exercise of the Warrants;
(ii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber
any material assets other than in the ordinary and usual course of business;
(iii) acquire directly or indirectly by redemption, or otherwise, any shares
of the capital stock of the Company or the Warrants; (d) neither it nor any of
its subsidiaries will (i) unless otherwise ordered by any governmental or
regulatory authorities of Canada or any province or other governmental
subdivision thereof, the United States, the several states or any other
jurisdiction (foreign or domestic) of competent authority, provided that, in
the case of any such order, the Company will consult with Parent and Purchaser
regarding the appeal of or compliance with such order, establish, adopt, enter
into, make any new grants or awards under, or amend any collective bargaining
agreement, and, except in the ordinary and usual course of business and
consistent with past practice, any bonus, profit-sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust fund, policy or arrangement for the benefit of any directors, officers
or employees (except as specifically described in Section 7.6 to the Merger
Agreement or Schedule 7.1(d) thereto), or (ii)(x) grant any increase in the
compensation payable, or to become payable, by the Company or any of its
subsidiaries to any of its directors, executive officers, or key employees; or
(y) subject to
4
Section 7.6 of the Merger Agreement, enter into or amend any employment
agreement with or, except in accordance with existing written policy of the
Company, grant any severance or termination pay to, any officer, director or
employee of the Company or any of its subsidiaries; (e) neither it nor any of
its subsidiaries will settle or compromise any material claims or litigation
or, except in the ordinary and usual course of business, modify, amend or
terminate any of its material contracts or waive, release or assign any
material rights or claims; (f) except as set forth on Schedule 7.1(f) to the
Merger Agreement, neither it nor any of its subsidiaries will incur any
indebtedness for money borrowed, or issue or sell any debt securities, or
assume, guarantee, endorse, or otherwise as an accommodation become responsible
for the obligations of any other individual or entity, or make any loans or
advances, other than in the ordinary and usual course of business, provided
that the aggregate value of such indebtedness, debt securities, or other
obligations, contingent or otherwise, will not exceed $750,000; (g) neither it,
nor any of its subsidiaries will acquire (by merger, consolidation, or
acquisition of stock or assets) any corporation, partnership, or other business
organization or division thereof (other than an entity which is already a
wholly owned subsidiary of the Company), or make any investment either by
purchase of stock or securities, contributions to capital (other than to wholly
owned subsidiaries), material property transfer or purchase of any material
property or assets, in any other individual or entity (other than an entity
which is already a wholly owned subsidiary of the Company); (h) neither it nor
any of its subsidiaries will, except in the ordinary and usual course of
business and consistent with past practice, make any tax elections, or settle,
or compromise any income tax liability or, except as required by law or
applicable accounting standards, change any accounting policies or procedures;
(i) neither it nor any of its subsidiaries will make any payment, direct or
indirect, of any material liability of the Company before the same comes due in
accordance with its terms; (j) neither it nor any of its subsidiaries will, in
the event any existing insurance coverage shall be terminated or lapse to the
extent available at reasonable cost, fail to procure substantially similar
substitute insurance policies with financially sound and reputable insurance
companies in at least such amounts and against such risks as are currently
covered by such policies; (k) except as set forth on Schedule 7.1(k) to the
Merger Agreement, neither it nor any of its subsidiaries will incur any capital
expenditures other than in the ordinary and usual course of business and
consistent with past practice and not in an amount in excess of $500,000; (l)
neither it nor any of its subsidiaries will take, or commit to take, any action
that would make any representation or warranty of the Company under the Merger
Agreement inaccurate in any material respect at, or as of, any time prior to,
the termination or expiration of the Offer, unless such inaccuracy results from
any action or inaction permitted or required by the Merger Agreement or the
Tender Agreement; and (m) neither it nor any of its subsidiaries will enter
into an agreement to do any of the foregoing.
The Company has agreed in the Merger Agreement that neither it, nor any of
its subsidiaries, nor any of their respective officers and directors will, and
the Company will cause its employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by
the Company or any of its subsidiaries) not to, initiate or solicit, directly
or indirectly, any inquiries or the making of any proposal with respect to a
merger, consolidation, recapitalization, or similar transaction involving, or
any purchase of all or any significant portion of the assets of, or any equity
interest in, the Company or any of its subsidiaries (an "Acquisition Proposal")
or, except to the extent required, following the receipt of the advice of
counsel, under applicable law for the discharge by the Board of Directors of
its fiduciary duties, engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person
relating to an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal. Pursuant to the Merger
Agreement, the Company immediately ceased and caused to be terminated any
activities, discussions or negotiations with any third parties conducted prior
to the execution of the Merger Agreement with respect to any of the foregoing.
The Company has agreed in the Merger Agreement to notify Purchaser immediately
if any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, the Company. Pursuant to the Merger Agreement, the
Company has requested each person who has executed a confidentiality agreement
in connection with its consideration of acquiring the Company to return or
destroy all confidential information heretofore furnished to such person by or
on behalf of the Company.
The Merger Agreement provides that, promptly upon Purchaser obtaining,
through acceptance for payment and payment by Purchaser for the Shares,
pursuant to the Offer or otherwise (with the consent of the Company),
5
actual ownership of at least a majority of the issued and outstanding Shares
on a fully diluted basis, Purchaser will be entitled to designate at least
such number of directors to the Board of Directors of the Company as will give
Purchaser a majority of the directors on the Board of Directors of the
Company, and the Company will, at such time, promptly cause Purchaser's
designees to be so elected. Purchaser expects to designate for this purpose,
among others, persons named in Schedule I to the Schedule 14D-9. In connection
therewith, the Company will mail to the stockholders of the Company the
information required pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 thereunder, unless such information has previously been provided to such
stockholders in the Schedule 14D-1. Purchaser will promptly furnish to the
Company any information in its possession requested by the Company in
connection therewith. In the event that Purchaser's designees are appointed or
elected to the Board of Directors of the Company, until the Effective Time,
the Board of Directors of the Company will have at least two directors who are
directors on the date of the Merger Agreement (the "Continuing Directors").
Moreover, in such event, if the number of Continuing Directors is reduced
below two for any reason whatsoever, any remaining Continuing Directors will
be entitled to designate persons to fill such vacancies who will be deemed to
be Continuing Directors for purposes of the Merger Agreement, or, if no
Continuing Directors then remain, the other directors will designate two
persons to fill such vacancies who will not be either officers or directors of
Purchaser or any of its designees, or stockholders or Affiliates of Purchaser,
and such persons shall be deemed to be Continuing Directors for purposes of
the Merger Agreement. The Company's efforts will, if necessary, include the
adoption by the Board of Directors of any resolutions or any amendment to the
Company's By-Laws needed to cause Purchaser's designees to be so elected,
including increasing the number of directors. The directors designated by
Purchaser will, subject to their fiduciary duty to the Company and its
stockholders, cause the Company to fulfill its obligations pursuant to the
Merger Agreement.
Except as may hereafter be agreed upon with the holders of the 802,000
Shares issuable upon exercise of outstanding options to purchase Shares
("Company Options") granted to directors, officers, employees and consultants
of the Company pursuant to the Company's 1993 Incentive and Nonstatutory Stock
Option Plan, as amended, and subject to the next succeeding paragraph, prior
to the Effective Time, the Company will take such actions as may be necessary
such that at the Effective Time each Company Option which was outstanding on
the Expiration Date and not subsequently exercised, whether or not then
exercisable, will be cancelled and only entitle the holder thereof, upon
surrender thereof (to the extent then outstanding), to receive from the
Company, prior to the Effective Time (or such later time as may be provided in
agreements entered into prior to the Effective Time), an amount in cash equal
to the difference between the Merger Consideration and the exercise price per
Share of such Company Option, multiplied by the number of Shares subject to
such Company Option.
The Company will take such actions as may be necessary such that at the
Effective Time, the 545,000 Company Options granted to the Executive will be
cancelled and entitle the Executive to: (i) options (the "Rollover Options")
to acquire 545,000 Class B Shares at an exercise price (expressed in Canadian
currency) equal to the simple average of the daily high and low board lot
trading prices for the Class B Shares on the Toronto Stock Exchange ("TSE")
for the 10 day trading period commencing June 10, 1997 and ending June 23,
1997 (the "10 Day Average") less Cdn. $10.35 per share; and (ii) receive from
Parent or Purchaser in immediately available funds U.S. $5,491,997; provided
that if the 10 Day Average is less than Cdn. $10.35, then the Executive will
immediately receive from Parent or Purchaser an amount in immediately
available funds equal to the product of (A) the difference of Cdn. $10.35 and
the 10 Day Average and (B) 545,000. Such Rollover Options shall be
substantially in the form of Exhibit 7.6(a) to the Merger Agreement.
Parent has agreed in the Merger Agreement that, on or prior to the
termination of the Offer, it will enter into employment agreements with each
of the employees listed on Schedule I to the Merger Agreement (the "Employment
Agreements") providing for: (i) the employment of each such employee by the
Company and the Surviving Corporation for a three year term with positions and
duties and compensation and benefits at least as favorable, and with
termination provisions no more favorable, to each such employee as such
employee is currently receiving from the Company as of the date of the Merger
Agreement; and (ii) the grant of stock options under and in conformity with
Parent's Employee Stock Option Plan, in the amount and for the exercise price
set forth in such Schedule I; provided that Parent will not be in breach of
such covenant with respect to any such employee, if such employee will not
execute his Employment Agreement.
6
Parent will cause the Surviving Corporation to honor the arrangements
(including without limitation the indemnity and payment arrangements) with
Crowell, Weedon & Co. ("CWC") and F.M. Roberts & Company, Inc. ("FMRC")
referred to in Section 6.1(i) of the Merger Agreement and such other
consulting and advisory fees as have been or may be incurred in compliance
with such Section in connection with the transactions contemplated by the
Merger Agreement.
Parent and Purchaser also agreed that all rights to indemnification by the
Company existing as of the date of the Merger Agreement in favor of each
present and former director, officer, or employee (and their respective heirs
and assigns) of the Company, or any of its subsidiaries (the "Indemnified
Parties") as provided in its Certificate of Incorporation or By-Laws or
pursuant to other agreements in effect on the date of the Merger Agreement
will survive the Merger and will continue in full force and effect for a
period of at least six (6) years from the Effective Time. To the extent the
provision described in the foregoing sentence does not serve to indemnify and
hold harmless an Indemnified Party, after the purchase of the Shares pursuant
to the Offer, Parent and Purchaser will cause the Company to, and after the
Effective Time, Parent and the Surviving Corporation will, indemnify and hold
harmless, to the fullest extent permitted under applicable law, the
Indemnified Party, against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities, and
amounts paid in settlement in connection with any claim, action, suit,
proceeding, or investigation, whether civil, criminal, administrative, or
investigative, arising out of, or pertaining to, such individuals' services
prior to the Effective Time, as directors, officers, employees, or agents of
the Company or any of its subsidiaries, or as trustees or fiduciaries of any
plan for the benefit of employees of the Company (including, without
limitation, the transactions contemplated by the Merger Agreement or the
Tender Agreement) for a period of six (6) years after the Effective Time,
provided that, in the event any claim or claims are asserted or made within
such six-year period, all rights to indemnification in respect of any such
claim or claims shall continue until final disposition of any and all such
claims. The Surviving Corporation will maintain the Company's existing
officers' and directors' liability insurance, or cause the Surviving
Corporation to receive similar coverage to the Company's existing officers and
directors' liability insurance pursuant to Parent's officers' and directors'
liability insurance ("D&O Insurance"), for a period of three (3) years after
the Effective Time; provided, however, if the existing D&O Insurance expires,
is terminated or cancelled during such three-year period, the Surviving
Corporation will use commercially reasonable efforts to obtain D&O Insurance
with comparable coverage; provided, further, that in no event will the
Surviving Corporation be required to maintain the D&O Insurance with
comparable coverage, if the cost of such D&O Insurance is more than one
hundred twenty-five percent (125%) of the cost of such D&O Insurance in the
prior year, but in such case, the Surviving Corporation will purchase as much
coverage as possible for such amount.
The Merger Agreement contains various representations and warranties of the
parties thereto. These include, among others, representations and warranties
by the Company as to its organization and good standing, its capitalization,
the authorization of the Merger Agreement, the accuracy of the Company's
financial statements and filings with the Commission, and the absence of
certain changes in the financial condition or the business of the Company.
The respective obligations of Parent and Purchaser, on the one hand, and the
Company, on the other hand, to consummate the Merger are subject to the
following conditions: (i) if applicable, the Merger Agreement has been duly
approved by the holders of a majority of the Shares in accordance with
applicable law and the Certificate of Incorporation and By-Laws of the
Company; (ii) Purchaser, or any Affiliate of Purchaser, has purchased Shares
pursuant to the Offer, provided that this condition will be deemed satisfied
if Purchaser fails to purchase Shares tendered pursuant to the Offer in
violation of the terms of the Merger Agreement; (iii) any waiting period
applicable to the consummation of the Merger under the HSR Act has expired or
terminated, and all filings required to be made prior to the Effective Time
with, and all consents, approvals, permits and authorizations required to be
obtained prior to the Effective Time from governmental and regulatory
authorities in connection with the execution and delivery of the Merger
Agreement and the consummation of the transactions contemplated by the Merger
Agreement have been made, or obtained (as the case may be), other than those
the failure to make or obtain of which would not render the Merger illegal;
and (iv) no Canadian or
7
United States or state court or governmental or regulatory authority of
competent jurisdiction has enacted, issued, promulgated, enforced or entered
any statute, rule, regulation, judgment, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by the Merger Agreement.
The Merger Agreement is subject to termination at any time prior to the
Effective Time according to the following provisions: (i) by the mutual
consent of Purchaser and the Company; or (ii) by Purchaser or the Company if,
without the fault of the terminating party, the Merger has not been
consummated prior to March 31, 1998, or if, after the Offer is consummated, a
stockholder meeting is held to consider the Merger, and the Merger is not
approved by holders of at least a majority of the Shares; or (iii) if there
has been a material breach of any representation, warranty, covenant, or
agreement on the part of the other party set forth in the Merger Agreement
which breach has not been cured within ten (10) days following receipt by the
breaching party of notice of such breach, or if any permanent injunction or
other order of a court or other competent jurisdiction preventing the
consummation of the Merger has become final and non-appealable.
The Merger Agreement may be terminated, and the Merger may be abandoned at
any time prior to the Effective Time, before or after the approval by holders
of Shares, by action of the Board of Directors of Purchaser, if the Offer has
been terminated because of the failure of any of the Conditions.
The Merger Agreement may be terminated, and the Merger may be abandoned at
any time prior to the Effective Time, before or after the approval by holders
of Shares, by action of the Board of Directors of the Company, if: (i)
Purchaser has failed to commence the Offer within the time required in Section
1.1 of the Merger Agreement, or the Offer has expired without any Shares being
purchased by Purchaser within the time required in such Section; or (ii) the
Board of Directors of the Company receives a written offer which was not
solicited after the date of the Merger Agreement with respect to an
Acquisition Proposal, and the Board of Directors of the Company determines
that such transaction is more favorable to the Company and its stockholders
than the Offer, as may be amended, and the transactions contemplated by the
Merger Agreement, and that approval, acceptance or recommendation of such
other proposal is required by fiduciary obligations of the Company's Board of
Directors under applicable law; provided, however, that the Company will not
terminate the Merger Agreement pursuant to this sentence without providing
Purchaser at least five (5) days' notice.
In the event of termination of the Merger Agreement and abandonment of the
Merger pursuant to the termination provisions thereof, no party thereto (or
any of its directors, officers or stockholders) will have any liability or
further obligation to any other party to the Merger Agreement, except as
provided in the following paragraph or in Section 10.2 of the Merger
Agreement.
If, at any time following the entrance into the Merger Agreement: (i) any
person, entity or "group" (as that term is used in Section 13(d)(3) of the
Exchange Act), other than Shapour and Parvindokht Sedaghat ("Mr. & Mrs.
Sedaghat"), the Sedaghat Charitable Remainder Unitrust (the "Sedaghat Trust")
and the Executive (collectively, the "Principal Stockholders") and their
respective Affiliates, has become the beneficial owner of 20% or more of the
Shares or the Board of Directors has publicly withdrawn or adversely modified
its recommendation of acceptance of the Offer, other than as a result of
Purchaser's or Parent's material breach of the Merger Agreement, and has
recommended to the stockholders another offer or has resolved to do so; (ii)
the Company terminates the Merger Agreement pursuant to Section 9.4(ii)
thereof (relating to Acquisition Proposals); or (iii) Purchaser has terminated
the Offer as a result of the Company's failure to comply, in any material
respect, with any of its material covenants under the Merger Agreement after
notice to the Company and the expiration of five (5) days without such breach
being cured, then the Company will promptly, but in no event later than two
(2) days after the first of such events occurs (the "Payment Date"), pay to
Purchaser a fee of $7,200,000, provided that such fee will not be paid if: (x)
either Parent or Purchaser has breached its material obligations under the
Merger Agreement, or if any of Parent's or Purchaser's representations and
warranties in the Merger Agreement were incorrect in any material respect when
made, or have since ceased to be true and correct in any material respect; or
(y) Purchaser has not terminated the Offer.
8
TENDER AGREEMENT
Pursuant to the Tender Agreement, which is filed as Exhibit 3 hereto, each
of Mr. & Mrs. Sedaghat, both individually and as co-trustees under the
Sedaghat Trust, and the Executive (collectively, the "Principal Stockholders")
irrevocably agreed to validly tender or cause to be validly tendered pursuant
to the Offer, within ten (10) business days after the Offer has been made in
accordance with the terms hereof, and not withdraw, all Shares beneficially
owned or controlled by such Principal Stockholder less, in the case of the
Executive, the Remaining Shares, and less the 545,000 Shares that would be
issuable upon exercise of Company Options held by the Executive. Thereafter,
each Principal Stockholder has agreed not to withdraw such Shares from the
Offer under any circumstances, notwithstanding any statutory or other rights
of withdrawal such Principal Stockholder may otherwise have, unless: (a)
Purchaser fails or is legally unable to accept for payment and pay for the
Shares in accordance with the terms of the Offer; (b) the Tender Agreement is
terminated in accordance with its terms; or (c) Purchaser amends or modifies
the Offer in any manner adverse to the stockholders of the Company (other than
changes or amendments to the Offer not in violation of the Merger Agreement or
other than to waive any condition to the Offer, if such a waiver is permitted
by the Merger Agreement).
Subject to the terms and conditions of the Tender Agreement, and subject to
the exercise by Purchaser of the Stockholder Option, the Executive has
irrevocably agreed, during the term of the Tender Agreement, to vote or cause
to be voted all of the Remaining Shares at any annual, special or other
meeting of the holders of Shares and at any adjournment or adjournments
thereof or pursuant to any written consent or other instrument in writing in
favor of the Merger without amendment to the terms thereof except for
amendments to the terms of the Merger or the Merger Agreement which are not in
violation of the terms of the Merger Agreement.
Upon completion of the Merger, and assuming that the Stockholder Option has
not been exercised, the Executive will be paid the Shareholder Merger
Consideration.
Pursuant to the Tender Agreement, the Executive has granted to Purchaser the
Stockholder Option to acquire all, but not less than all, of the Remaining
Shares for the Shareholder Merger Consideration (except the Participating
Exchangeable Stock would be issued by Purchaser). The Stockholder Option is
irrevocable by the Executive during the term of the Tender Agreement and may,
subject to applicable law and the terms of the Tender Agreement, be exercised
at any time by Purchaser during the term of the Tender Agreement, provided
that all of the terms and conditions precedent to the Merger have been
satisfied or waived by Purchaser to the extent such waiver is permitted under
the Merger Agreement other than the requirement for stockholder approval of
the Merger and the requirement that Shares be purchased pursuant to the Offer.
The Tender Agreement contains, among other representations and warranties, a
representation and warranty by each Principal Stockholder as to its beneficial
ownership of Shares. The Tender Agreement contains a representation and
warranty that (a) Mr. and Mrs. Sedaghat, as joint tenants, are the beneficial
owners of 1,685,967 Shares (excluding Shares held of record by the Sedaghat
Trust); (b) the Sedaghat Trust is the beneficial owner of 500,000 Shares; and
(c) the Executive is the beneficial owner of 1,053,333 Shares, and 545,000
Company Options to purchase Shares.
Each Principal Stockholder has agreed that: (a) subject, in the case of the
Executive, to any fiduciary duties he may have as a director or officer of the
Company, such Principal Stockholder will not, directly or indirectly, provide
any information concerning the Company to, solicit, initiate, invite, assist,
facilitate, promote or encourage proposals or offers from, or entertain or
enter into discussions or negotiations with, any other person relating to the
Shares, or any other securities of the Company, any amalgamation, merger, or
other form of business combination involving the Company or any of its
subsidiaries, any sale, lease, exchange or transfer of all or a substantial
portion of the assets of the Company or any of its subsidiaries, or any take-
over bid, reorganization, recapitalization, liquidation or winding-up of or
other business combination or other transaction involving the Company or any
of its subsidiaries with any person other than Parent, Purchaser, or any of
their affiliates (each, a "Proposed Transaction"); (b) subject, in the case of
the Executive, to any fiduciary duties he may have as a director or officer of
the Company, such Principal Stockholder will not enter into any agreement,
9
discussions or negotiations with any person, other than Parent, Purchaser, or
any of their affiliates with respect to a Proposed Transaction or potential
Proposed Transaction; (c) subject, in the case of the Executive, to any
fiduciary duties he may have as a director or officer of the Company, such
Principal Stockholder will not furnish or cause to be furnished any non-public
information concerning the business, results of operations, assets,
liabilities, prospects, financial condition or affairs of the Company or any
of its subsidiaries to any person, other than Parent and its representatives,
other than as disclosed prior to the date hereof; (d) subject, in the case of
the Executive, to any fiduciary duties he may have as a director or officer of
the Company, such Principal Stockholder will exercise the voting rights
attaching to Shares owned or controlled by it or him to oppose the occurrence
of any of the following events to the extent a vote by the shareholders of the
Company is required: (i) any change in the Certificate of Incorporation or By-
laws of the Company or any subsidiary thereof or in the authorized or
outstanding capital stock of the Company or any subsidiary thereof; (ii) the
grant of any option, warrant or security convertible into capital stock of the
Company or any subsidiary thereof; (iii) the distribution, sale, pledge or
transfer of all or a substantial part of the business or property of the
Company or any subsidiary thereof; (iv) the merger, consolidation or
reorganization of the Company or any subsidiary thereof or any other material
change in the corporate structure of the Company or any subsidiary thereof,
other than the Merger; and (v) any other material change in the business or
affairs of the Company or any subsidiary thereof; (e) subject, in the case of
the Executive, to any fiduciary duties he may have as a director or officer of
the Company, such Principal Stockholder will exercise the voting rights
attached to Shares owned or controlled by it or him to oppose any proposed
action by the Company, its shareholders or others, and will not take any
action, the result of which could be reasonably expected to prevent or delay
Purchaser from completing the transactions contemplated by the Tender
Agreement, including the Offer and the Merger; (f) such Principal Stockholder
will not grant proxies or enter into any voting trust or, except for any
agreements necessary to the release of the lien described in Schedule B to the
Tender Agreement, enter into any other agreement or arrangement with respect
to any of the Shares other than the Tender Agreement; such Principal
Stockholder will not acquire or sell, assign, transfer, encumber or otherwise
dispose of any Shares or enter into any contract, agreement or understanding
with respect to the direct or indirect acquisition or sale, assignment,
transfer, encumbrance or other disposition of any Shares, except pursuant to
the terms of the Tender Agreement and the Merger Agreement; and prior to the
consummation of the Merger, the Executive will not exercise any options to
acquire Shares; (g) the Executive will take all such actions as are necessary
to terminate all outstanding agreements, options, warrants or rights to
purchase or acquire or agreements relating to any of the Shares and the
Remaining Shares (other than the Tender Agreement and the Merger Agreement)
and to discharge all liens, charges, claims, encumbrances, pledges and
security interests with respect to the Shares and the Remaining Shares prior
to receipt of payment therefor; (h) such Principal Stockholder will cooperate
with Purchaser and Parent in making all requisite regulatory filings in
connection with the Offer and, in the case of the Executive, the Merger;
(i) the Executive will not exercise, and, pursuant to the Tender Agreement,
irrevocably waives, any dissent and appraisal rights accruing to the Shares
under the DGCL; and (j) such Principal Stockholder will not take, or commit to
take, any action that would cause or make any of the representations and
warranties of such Principal Stockholder contained in the Tender Agreement
inaccurate in any material respect at, or as of any time prior to, the
completion of the Offer, or in the Executive's case, the completion of the
Merger, except such actions as may be contemplated by the Tender Agreement or
the Merger Agreement.
Subject, in the case of the Executive, to any fiduciary duties he may have
as a director or officer of the Company, the Principal Stockholders will
promptly notify Parent of any such discussions or negotiations or of any
proposal in respect of a Proposed Transaction of which they become aware.
The Tender Agreement will terminate on the first to occur of: (a) 11:59 p.m.
Pacific Daylight Time, on June 23, 1997, if Purchaser has not made the Offer
at or prior to such time; (b) the termination of the Merger Agreement in
accordance with its terms; and (c) the Effective Time.
If, at any time after the execution and delivery of the Tender Agreement,
any event occurs, and, as a result thereof, Purchaser is entitled to the fee
described in Section 9.6 of the Merger Agreement and any Principal Stockholder
within 18 months thereafter sells, transfers or assigns any of its or his
Shares to, or agrees to any of
10
the foregoing during such 18 month period (provided any such agreement is
consummated within 3 months after the end of such 18 month period) with, any
person in an Alternative Transaction (as defined below), then such Principal
Stockholder will pay to Purchaser a fee for each Share which is subject to
such Alternative Transaction equal to the amount by which the aggregate
consideration per Share payable under such Alternative Transaction exceeds
$29.00. The term "Alternative Transaction" means the occurrence of any of the
following events: (i) the Company or any subsidiary of the Company whose
assets constitute twenty percent (20%) or more of the Company's consolidated
assets is acquired by merger or otherwise by any person or group, other than
Parent, Purchaser, or any affiliate thereof (a "Third Party"); (ii) the
Company or any subsidiary of the Company enters into an agreement with a Third
Party which contemplates the acquisition of twenty percent (20%) or more of
the total assets of the Company and its subsidiaries, taken as a whole; (iii)
the Company enters into a merger or other agreement with a Third Party which
contemplates the acquisition of more than twenty percent (20%) of the Shares;
or (iv) a Third Party acquires more than ten percent (10%) of the Shares from
the Principal Stockholders.
If an Alternative Transaction includes cash and non-cash consideration, with
the cash component equalling or exceeding $29 per Share, the fee payable to
Purchaser will be all of the non-cash consideration in such Alternative
Transaction and the excess over $29, if any, of the cash component in such
Alternative Transaction. If the Alternative Transaction includes cash and non-
cash consideration, with the cash component in such Alternative Transaction
being less than $29, the fee payable to Purchaser will be that portion of each
component of non-cash consideration in such Alternative Transaction that
equals the Excess Percentage. The "Excess Percentage" will be a fraction, the
numerator of which is (a) the fair-market value of the non-cash consideration
in such Alternative Transaction (as determined in accordance with the
following sentence), plus the cash component in the Alternative Transaction,
less $29; and the denominator of which is (b) the fair-market value of the
non-cash consideration in such Alternative Transaction (as determined in
accordance with the following sentence). The fair market value of the non-cash
consideration in such Alternative Transaction will be determined by the mutual
agreement of Purchaser and the Principal Stockholders participating in such
Alternative Transaction within three days of the consummation of such
Alternative Transaction, or if such agreement is not reached, the fair market
value of the non-cash consideration in such Alternative Transaction will be
determined by an investment banking firm of national reputation agreed to in
good faith by the Principal Stockholders participating in such Alternative
Transaction and Purchaser. The fees and expenses of such investment banking
firm will be split evenly among the Principal Stockholders participating in
such Alternative Transaction, on the one hand, and Purchaser, on the other
hand.
ANCILLARY AGREEMENTS
Sedaghat Employment Agreement. The Company has entered into the Sedaghat
Employment Agreement, filed as Exhibit 4 hereto, with the Executive for a
three-year term commencing on the day the Offer is consummated. Pursuant to
the Sedaghat Employment Agreement, the Executive will serve as President of
the Company and will carry out such duties and functions as are vested in him
by the Company's By-laws and its Board of Directors. The Executive will be
entitled to an annual salary of $250,000 plus a retention and non-competition
bonus of $600,000 payable in installments of $200,000 per year on each of
December 31, 1997, 1998 and 1999. The Executive will also be entitled to a
performance bonus of 100% of his salary based on achieving a target of 20%
EBITDA growth over the prior year. For EBITDA growth over 20%, a bonus of 10%
of salary will be paid for each 1% of excess growth. Such bonus will be
adjusted so that, if EBITDA growth is between 15% and 20%, the bonus is 50% of
salary plus 10% of salary for each 1% above 15%. The Executive will also be
granted options (the "Incentive Options") to acquire 500,000 Class B Shares at
a price equal to the 10 Day Average, which options will vest in 100,000 share
increments if EBITDA growth is 20% over the prior year. If EBITDA growth is
less than 20%, the 100,000 options for that year will be forfeited.
If the Company elects to terminate the Sedaghat Employment Agreement without
cause, or the Executive dies, is disabled, or terminates his employment for
good reason, the salary and benefits payable thereunder are
11
paid out over the remaining term, the retention bonus and non-competition
payment is paid in a lump sum and the performance bonus and the Incentive
Options are paid for the year of termination.
The Executive is also subject to a non-competition covenant and non-
solicitation obligations for one year after termination of employment with an
option of the Company to extend the covenant and such obligations for an
additional year upon the payment of $500,000.
Option Agreements. The Option Agreements are effective upon the consummation
of the Offer. Under the Rollover Option Agreement, which is filed as Exhibit 5
hereto, the Executive is entitled to receive Rollover Options to acquire
545,000 Class B Shares at an exercise price equal to the 10 Day Average less
Cdn. $10.35 per share; provided, however, that, upon exercise of such options,
Parent will pay to the Executive an amount in cash equal to the number of
Rollover Options in respect of which the Rollover Options are to be exercised
multiplied by the amount by which the Rollover Option exercise price (less
Cdn. $10.35) exceeds Cdn. $6.0225. The Rollover Options are exercisable at any
time until June 16, 2003 and are fully vested. Under the Incentive Option
Agreement, filed as Exhibit 6 hereto, the Executive is entitled to receive
Incentive Options to acquire 500,000 Class B Shares at an exercise price equal
to the 10 Day Average. The Incentive Options will vest in 100,000 share
increments if EBITDA growth is 20% over the prior year. If EBITDA growth is
less than 20%, the Incentive Options for that year will be forfeited.
Non-Competition Agreement. Pursuant to the Non-Competition Agreement, filed
as Exhibit 7 hereto, Shapour Sedaghat has agreed not to compete with the
Company for a two-year period and has agreed to be bound by certain
confidentiality obligations.
Qualification and Listing of Shares Agreement. Pursuant to the Qualification
and Listing of Shares Agreement, which is filed as Exhibit 8 hereto, Parent
has agreed, among other things, to cause at its own expense any Class B Shares
issuable to the Executive in connection with the Participating Exchangeable
Stock or upon any exercise by the Executive of the Incentive Options or the
Rollover Options to be unconditionally listed upon the TSE and issued to him
in such a manner that such shares are not subject to, among other things, any
restrictions on resale by him in the Province of Ontario, Canada, and to
indemnify him for any loss suffered by him for its failure to do so.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) Recommendation. The Board at a special meeting held on June 16, 1997,
unanimously determined that the Offer and the Merger are fair to, and in the
best interests of, the Company and its stockholders, and approved the Offer,
the Merger Agreement and the Merger, and recommended that holders of Shares of
the Company accept the Offer and tender their shares pursuant to the Offer. A
copy of the Company's letter to stockholders dated June 23, 1997, is filed
hereto as Exhibit 9 and incorporated herein by reference.
(b) Background; Reasons for the Board's Conclusions.
Background. Early in 1996, in response to its recognition that the market
price of the Shares did not adequately reflect the Company's operating
performance, growth potential and intrinsic value, the Board of Directors
determined that it should take action to consider the Company's available
strategic alternatives to realize its full value in the public market.
Accordingly, a review of the business and financial condition of the Company
was initiated and the Company retained FMRC, an investment banking firm, to
assist in the process. Pursuant to an engagement letter entered into in
January 1996, FMRC advised and assisted the Company in developing and refining
a comprehensive strategic plan, introduced and participated in several
meetings with securities analysts and institutional investors, evaluated
potential strategic acquisitions, attended and participated in various board
meetings and strategic planning sessions and provided other general financial
consulting services to the Company.
In conducting its review for the purpose of making recommendations to the
Board, FMRC held discussions with Company management, reviewed the Company's
operating statements, analyzed the results of the
12
Company's operations in comparison with its competitors, evaluated potential
acquisition targets of the Company and the Company's ability to effect such
acquisitions and made preliminary contact with potential strategic investors
and targets. Strategic alternatives reviewed and analyzed by FMRC included
continuing the business as an independent company, issuing additional equity
securities of the Company, selling the Company or the formation of a joint
venture between the Company and another party. This summary of the FMRC
analysis does not purport to be a complete description of the work undertaken
by FMRC on behalf of the Company.
As a result of this review, the Board of Directors concluded that the
Company's interests would be best served by pursuing strategic acquisitions
and/or a sale of the Company. To that end, the Company entered into a second
engagement letter with FMRC in December 1996 to retain FMRC specifically to
investigate, evaluate and advise the Company about potential strategic
acquisitions and the possibility of a sale of the Company. The January and
December 1996 engagement letters, as amended, are referred to herein as the
"FMRC Engagement Letters."
Upon the advice and assistance of FMRC, the Company pursued contacts with a
number of parties, including Parent, regarding a potential strategic
transaction. No formal offers were received from parties other than Parent,
and attempts to negotiate an acquisition with parties other than Parent ceased
as of June 16, 1997 when Parent and the Company entered into the Merger
Agreement. The background to the Company's discussions with Parent follows (to
the extent any of the following information described events to which neither
the Company nor its advisors were a party, it is based on information provided
by Parent).
In mid-summer of 1996, the Senior Vice-President of Corporate Development of
Parent, Larry A. Eddy, contacted the Executive and arranged to meet with the
Executive in Los Angeles to discuss the Company's direction and objectives. It
was determined at that meeting that the Company and Parent had similar
strategic objectives and that further discussions would be appropriate.
On January 29, 1997, Wayne McLeod, the President and Chief Executive Officer
of Parent, Mr. Eddy and Rami Younes, President of the Container Division of
Parent, met with the Executive and Mr. Fredric M. Roberts of FMRC to initiate
discussions concerning possible transactions involving Parent's and the
Company's tube manufacturing operations. Although no definitive agreement was
reached at that time, following those discussions, Parent decided to pursue a
possible transaction with the Company. On March 5, 1997, Parent entered into a
confidentiality agreement with the Company and, as a result, the Company
provided Parent with copies of its publicly available information and certain
other financial and corporate information concerning the Company.
On March 18, 1997, Mr. Eddy and Mr. Edward Witz, a representative of
Parent's financial advisor, met in Chicago with Mr. Roberts to continue
discussions concerning a possible transaction involving Parent and the
Company. Although productive, no firm proposals resulted from this meeting. On
March 26, 1997, Mr. McLeod met with the Executive in Los Angeles to further
pursue a possible transaction and to discuss a variety of alternatives but no
firm decisions were reached in this regard. On April 7, 1997, Mr. McLeod
invited the Executive to Toronto to meet certain members of Parent's board of
directors and certain of Parent's senior management to become further
acquainted. On April 10, 1997, Mr. McLeod and the Executive met in
Philadelphia to further discuss a possible transaction.
On April 30, 1997 discussions continued in Los Angeles among Mr. McLeod, Mr.
John Herrmann, another representative of Parent's financial advisor, the
Executive and Mr. Roberts with respect to a proposed acquisition of the
Company by Parent. Further discussions took place on May 7, 1997 in New York
at a meeting between the Executive, Edward Csaszar, Vice President of Sales
and Marketing of the Company, Mr. McLeod and Mr. Eddy. At this meeting, to
assist Parent in considering an acquisition, certain additional financial data
concerning the Company were disclosed. The meeting did not, however, result in
any agreement with respect to an acquisition or any other transaction between
the Company and Parent.
A further meeting was held on May 26, 1997 in Los Angeles between the
Executive, Mr. Roberts, Mr. McLeod and Mr. Albert Gnat, who is a member of the
board of directors of Parent and a senior partner of
13
Lang Michener, counsel to Parent. At this meeting, the framework of a
transaction involving the acquisition of the Company by Parent was outlined
(including price and terms), with such potential transaction being subject to
the entering into of legally binding definitive agreements and board of
directors approval of Parent and the Company. Over the ensuing days numerous
telephone discussions occurred involving Mr. McLeod, Mr. Gnat, the Executive
and Mr. Roberts and a meeting was held between Mr. Gnat, the Executive and Mr.
Roberts elaborating, clarifying and refining the terms of a possible
transaction.
Commencing in early June, Parent commenced a limited due diligence
examination of the Company and also commenced preparation of documentation
with respect to the transaction. On June 3, the Executive met with additional
members of Parent's management and its board. On June 6, 1997, Parent
delivered the first draft of the definitive documents to the Company.
Negotiations, due diligence and document preparation continued between June 8
and June 16.
During the week of June 9, the full Board of Directors of the Company
convened two special meetings, and the independent directors of the Company
convened one special meeting, to consider Parent's proposal as well as various
other strategic and financial alternatives. Representatives of the Company's
legal and financial advisors, including FMRC, attended these meetings. During
that time, the Company also engaged CWC to render a fairness opinion relating
to the potential acquisition of the Company by Parent. On June 16, 1997, the
full Board of Directors of the Company held a special meeting and unanimously
approved the Offer and the Merger. The transaction was publicly announced on
the morning of June 17, 1997 and on June 23, 1997, Purchaser commenced the
Offer.
Reasons for the Board's Conclusions. In reaching the determination described
in paragraph (a) above, the Board considered a number of factors, including,
without limitation, the following:
(i) The financial condition, results of operations, business and
strategic objectives of the Company, as well as the risks involved in
achieving those objectives;
(ii) A review of the possible alternatives to the Offer and the Merger
including the possibilities of continuing to operate the Company as an
independent entity, entering into one or more strategic joint ventures, a
sale or partial sale of the Company through a merger or by other means,
various financing alternatives involving the possible sale of the Company's
equity; and, in respect of each alternative, the range of possible benefits
to the Company's stockholders of such alternative and the timing and the
likelihood of actually accomplishing such alternative;
(iii) An oral report from FMRC, financial advisor to the Company,
regarding the likelihood of other potential offers for the Company on terms
more favorable to the stockholders of the Company than the Offer and the
results of its efforts on behalf of the Company seeking indications of
interest in other possible alternatives;
(iv) The financial and valuation analyses presented orally to the Board
by FMRC, including market prices and financial data relating to other
companies engaged in businesses considered comparable to the Company and
the prices and premiums paid in recent selected acquisitions of companies
engaged in businesses considered comparable to those of the Company;
(v) The relationship of the Offer price to historical market prices of
the Shares and to the Company's book value and liquidation value per Share;
(vi) The written opinion of CWC that, based on certain assumptions and
subject to certain limitations, the consideration to be received by the
Company's public stockholders in the Offer and Merger is fair from a
financial point of view to such holders. A copy of the written opinion of
CWC, which set forth the assumptions made, matters considered and basis of
its review, is filed as Exhibit 10 hereto and incorporated herein by
reference.
(vii) The terms and conditions of the Merger Agreement and related
agreements;
14
(viii) The likelihood that the proposed acquisition would be consummated,
including the experience, reputation and financial condition of Parent and
the risks to the Company if the acquisition were not consummated;
(ix) The fact that the holders of over 60% of the Shares were prepared to
endorse the Merger Agreement and the transactions contemplated thereby;
(x) The fact that the Offer and the Merger are not subject to a condition
that Parent have available financing; and
(xi) The availability of dissenters' rights in the Merger under
applicable law.
In view of the wide variety of factors considered in connection with its
evaluation of the Offer and the Merger, the Board did not find it practicable
to, and did not, quantify or otherwise attempt to assign relative weights to
the specific factors considered in reaching its respective determinations.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The Company engaged FMRC, pursuant to the FMRC Engagement Letters, to assist
the Board in evaluating strategic alternatives, financing sources and other
potential transactions. For such services, the Company agreed to pay FMRC an
advisory fee of $200,000 per annum and to grant FMRC 15,000 Company Options,
and if the transaction contemplated by the Merger Agreement is consummated, a
total fee of approximately $5.3 million, against which any advisory fee
previously paid will be credited. In addition to the foregoing compensation,
the Company has agreed to reimburse FMRC for its reasonable out-of-pocket
expenses and to indemnify FMRC against certain liabilities arising out of or
in connection with its engagement, including liabilities under federal
securities laws.
The Company has also engaged CWC to render a fairness opinion in connection
with the Offer and the Merger. The Company agreed to pay CWC a fee of $110,000
upon delivery of such opinion letter. In addition to the foregoing
compensation, the Company also agreed to reimburse CWC for its reasonable out-
of-pocket expenses not to exceed $10,000 and to indemnify CWC against certain
liabilities arising out of or in connection with its engagement, including
liabilities under federal securities laws.
Neither the Company nor any person acting on its behalf has employed,
retained or compensated any other person to make solicitations or
recommendations to stockholders on its behalf concerning the Offer or the
Merger.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES
(a) Except for the transfer of 500,000 Shares by Mr. & Mrs. Sedaghat to the
Sedaghat Trust in June 1997, no transactions in the Shares have been effected
during the past 60 days by the Company or, to the Company's knowledge, by any
executive officer, director, affiliate or subsidiary of the Company.
(b) Except as described in Item 3, to the best of the Company's knowledge,
all of its executive officers, directors, affiliates or subsidiaries currently
intend to tender all Shares which are held of record or beneficially owned by
such persons pursuant to the Offer, other than Shares, if any, held by such
persons which, if tendered, could cause such person to incur liability under
the provisions of Section 16(b) of the Securities Exchange Act of 1934, as
amended.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) Prior to entering into the Merger Agreement, the Company had preliminary
contacts with other entities that had expressed interest in the Company. Upon
execution of the Merger Agreement, the Company ceased contacts with such other
entities. No discussions are underway or are being undertaken by the Company
in response to the Offer that relate to or would result in (1) an
extraordinary transaction, such as a merger or reorganization, involving the
Company or any of its subsidiaries; (2) a purchase, sale or transfer of a
material
15
amount of assets by the Company or any of its subsidiaries; (3) a tender offer
for or other acquisition of securities by or of the Company; or (4) any
material change in the present capitalization or dividend policy of the
Company.
(b) There is no transaction, board resolution, agreement in principle or
signed contract in response to the tender offer other than as disclosed in
Item 3(b) and Item 4(a) of this statement, that relates to or would result in
(1) an extraordinary transaction, such as a merger or reorganization,
involving the Company or any of its subsidiaries; (2) a purchase, sale or
transfer of a material amount of assets by the Company or any of its
subsidiaries; (3) a tender offer for or other acquisition of securities by or
of the Company; or (4) any material change in the present capitalization of
dividend policy of the Company.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
The Information Statement attached as Annex A hereto is being furnished in
connection with the possible designation by Purchaser, pursuant to the Merger
Agreement, of certain persons to be appointed to the Company's Board of
Directors other than at a meeting of the Company's stockholders.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
[Download Table]
Exhibit 1. Agreement and Plan of Merger and Reorganization, dated June 16,
1997, by and among Seawolf Acquisition Corporation, CCL Industries
Inc. and SEDA Specialty Packaging Corp.
Exhibit 2. Press Release issued by the Company and Parent on June 17, 1997.
Exhibit 3. Letter Agreement, dated June 16, 1997, by and among CCL Industries
Inc., Seawolf Acquisition Corporation and the persons listed on
Schedule A thereto.
Exhibit 4. Memorandum of Agreement, dated June 16, 1997, by and among
Shahrokh Sedaghat, CCL Industries Inc. and SEDA Specialty
Packaging Corp.
Exhibit 5. Option Agreement, dated as of June 16, 1997, by and between
Shahrokh Sedaghat and CCL Industries Inc.
Exhibit 6. Incentive Option Agreement, dated as of June 16, 1997, by and
between Shahrokh Sedaghat and CCL Industries Inc.
Exhibit 7. Non-Competition Agreement, dated June 16, 1997, by and between
Shapour Sedaghat and SEDA Specialty Packaging Corp.
Exhibit 8. Qualification and Listing of Shares Agreement, dated June 16,
1997, between CCL Industries Inc. and Shahrokh Sedaghat.
Exhibit 9. Copy of Letter to Stockholders, dated June 23, 1997.*
Exhibit 10. Opinion of Crowell, Weedon & Co. dated June 16, 1997.*
--------
* Included in materials being distributed to stockholders of the Company.
16
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: June 23, 1997 SEDA Specialty Packaging Corp.
By: /s/ Shahrokh Sedaghat
----------------------------------
Shahrokh Sedaghat
Chairman, President and
Chief Executive Officer
17
ANNEX A
[LOGO OF SEDA SPECIALTY PACKAGING]
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on or about June 23, 1997, as
part of the Company's Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") to the holders of record at the close of business on
June 16, 1997 of the Shares (the "Record Date"). Capitalized terms used and
not otherwise defined herein shall have the meaning ascribed to them in the
Schedule 14D-9. You are receiving this Information Statement in connection
with the possible election of persons designated by Parent to a majority of
the seats on the Board of Directors of the Company (the "Board"). The Merger
Agreement requires the Company, after purchase by Purchaser pursuant to the
Offer of such number of shares that satisfies the Minimum Condition, to use
its reasonable best efforts to cause Parent's designees (the "Designees") to
be elected to a majority of the seats on the Company's Board. This Information
Statement is required by Section 14(f) of the Securities Exchange Act of 1934
(the "Exchange Act") and Rule 14f-1 thereunder. You are urged to read this
Information Statement carefully. However, you are not required to take any
action.
Pursuant to the Merger Agreement, on June 23, 1997, Parent commenced the
Offer. The Offer is scheduled to expire on July 21, 1997.
The information contained in this Information Statement (including
information listed in Schedule I attached hereto) concerning Parent, Purchaser
and Designees has been furnished to the Company by Parent and Purchaser, and
the Company assumes no responsibility for the accuracy or completeness of such
information.
The Company Stock, $0.001 par value per share ("Common Stock"), is the only
class of voting securities of the Company outstanding. Each share of Common
Stock has one vote. As of the Record Date, there were 5,264,874 shares of
Common Stock outstanding.
BOARD OF DIRECTORS
GENERAL
The Board currently consists of five members. Members of the Board are
elected to serve one-year terms and each director holds office until his
successor is elected and qualified or until his earlier death, resignation or
removal.
BUYER DESIGNEES
Pursuant to the Merger Agreement, promptly upon the acquisition by Purchaser
pursuant to the Offer of such number of Shares that satisfies the Minimum
Condition and from time to time thereafter, Parent is entitled
to have its Designees hold a majority of the seats on the Company's Board.
Upon the purchase of such number of Shares pursuant to the Offer, the Company
will use its reasonable best efforts to cause the Designees to be elected or
appointed to the Board.
Parent has informed the Company that it will choose the Designees from the
directors and executive officers listed in Schedule I attached hereto. Parent
has informed the Company that each of the directors and executive officers
listed in Schedule I has consented to act as a director, if so designated. The
business address of Parent and Purchaser is 105 Gordon Baker Road, Willowdale,
Ontario, Canada M2H 3P8.
It is expected that the Designees may assume office at any time following
the purchase by Purchaser pursuant to the Offer of such number of Shares that
satisfies the Minimum Condition, which purchase cannot be earlier than July
21, 1997, and that upon assuming office, the Designees will thereafter
constitute at least a majority of the Board.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The names, ages and principal occupation for the past five years and
directorships of the Company's directors and executive officers are as
follows:
Directors
SHAHROKH "SHAWN" SEDAGHAT, age 31, was elected President of the Company in
November 1992 and Chairman of the Board and Chief Executive Officer of the
Company in February 1995. From March 1985 to November 1992, Mr. Sedaghat held
various positions with the Company including machine operator, assembly
supervisor, molding supervisor, quality control manager and general manager.
RONALD W. JOHNSON, age 49, has been Vice President of Finance and Chief
Financial Officer of the Company since November 1992. From July 1983 until
joining the Company, he was employed by McDonnell Douglas Information Systems
Company in various executive positions with various subsidiaries and divisions
of such company, including Vice President of Finance and Administration of
McDonnell Douglas Computer Systems Company, Vice President of Financial
Planning and Analysis of McDonnell Douglas Information Systems Group and Vice
President of Finance and Chief Financial Officer of Microdata Corporation.
From 1978 to 1983 he was Corporate Controller and Chief Accounting Officer of
Electronic Memories and Magnetics Corporation, and from 1972 to 1978 he was
employed by Price Waterhouse. Mr. Johnson is a Certified Public Accountant.
DANN V. ANGELOFF, age 61, became a director of the Company in September
1993. Since 1976 Mr. Angeloff has been the President of The Angeloff Company,
a corporate financial advisory firm. Mr. Angeloff serves on the Board of
Directors of Compensation Resource Group, Eagle Lifestyle Nutrition, Inc.,
Leslie's Poolmart, Nicholas/Applegate Growth Equity Fund, Nicholas/Applegate
Investment Trust, Public Storage, Inc., Ready Pac Produce, Inc., and Royce
Medical Company. Mr. Angeloff is a former Trustee of the University of
Southern California and is a University Counselor to the President of the
University of Southern California.
ROBERT H. KING, age 75, became a director of the Company in February 1995.
Mr. King has served as President of Consumer Marketing International, Inc., a
consumer product marketing company, since 1984. From 1978 to 1984, he served
as Chairman, President, Chief Executive Officer and Chief Operating Officer of
World Book, Inc. a publisher of reference books. From 1968 - 1978, he served
as President to Time-Life Libraries, Inc., a publishing subsidiary of Time-
Life, Inc.
ALFRED E. OSBORNE, JR., Ph.D., age 51, became a director of the Company in
November 1993. He currently serves as Associate Professor of Business
Economics and the Director of the Harold Price Center for Entrepreneurial
Studies in the Anderson Graduate School of Management at U.C.L.A., where he
has held several management and teaching positions since 1972. Dr. Osborne
currently serves on the Board of Directors of Greyhound Lines, Inc.,
Nordstrom, Inc., The Times Mirror Company and United States Filter
Corporation. He has authored numerous articles, reports and other publications
with respect to capital market issues confronting small and growing
enterprises and is a member of the Council of Economic Advisors for
California.
A-2
Executive Officers
DENNIS CAMARA, age 41, has been Vice President of Operations, Injection
Molding since May 1993. Prior to that, he was Plant Manager of the Closure
Division from May 1991 to May 1993. Prior to joining the Company, Mr. Camara
was employed by Witco Corporations (Plastics) from 1989 to 1991 as Production
Manager where he directed activities of the manufacturing department. From
1986 to 1989 he was employed by Newport Plastics, Inc. as a plant manager.
From 1976 to 1986, Mr. Camara was employed by JSN Industries as a Vice
President of Manufacturing.
EDWARD F. CSASZAR, age 45, became Vice President of Sales and Marketing of
the Company in August 1993. Mr. Csaszar has served as President of General Kap
Corporation, a company involved in the development and licensing of
proprietary closures, since February 1986. From June 1988 to August 1993, he
was the owner of Co-Pak Group, a manufacturer's representative for plastics
manufacturers to the packaging industry.
EDWARD S. DOMBROSKI, age 53, has been Vice President and General Manager
since October of 1994. From April 1993 to October 1994, he was the Company's
Vice President of Quality and Graphic Arts. He joined the Company in March
1992 as a manufacturing manager. Prior to joining the Company he was employed
by Peerless Tube Co. since 1970 where he worked as a plant manager until 1992
when he became Director of Manufacturing.
ANDREAS ISELI, age 38, has been Vice President of Operations, Tube Division
since March 1993. Prior to that time, Mr. Iseli was the Company's Plant
Manager, Tube Division from February 1990 to March 1993. Prior to joining the
Company, Mr. Iseli was employed by Asia, Switzerland, a packaging machinery
manufacturer, as Assistant Department Manager in Engineering from July 1987 to
February 1990.
DANIEL E. WIENEKE, age 48, has been the President of the Company's American
Safety Closure subsidiary since August 1995. Before joining SEDA, Mr. Wieneke
served as Vice President of Operations for E.T. Brown Drug Company, Inc. He
was previously a Vice President of Hayward Laboratories, a drug manufacturer.
Prior to those positions, he served in senior management positions with
Nestle-Lemur Company, Contract Packaging Corporation and Shield Packaging
Company, where he was National Sales Manager.
There are no family relationships between any of the directors and executive
officers of the Company.
The Board of Directors held four meetings during 1996. Each director
attended at least 75% of the aggregate of all meetings held by the Board in
1996 during his tenure as a director.
COMMITTEES AND BOARD MEETINGS
The Compensation Committee of the Board of Directors reviews and approves
the Company's compensation programs. See "Compensation Committee Report." Dann
V. Angeloff, Chairman, and Alfred E. Osborne, Jr. are the current members of
the Company's Compensation Committee which was formed in September 1993. The
Compensation Committee held two meetings during 1996 and each member attended
the meetings.
The Audit Committee of the Board of Directors consists of Messrs. Osborne,
Chairman, and Angeloff. It met two times in 1996 and each member attended the
meetings. The Board of Directors presently has no Nominating Committee.
DIRECTORS COMPENSATION
For 1996, outside directors were entitled to: (i) an annual payment of
$10,000, payable in equal quarterly installments of $2,500, (ii) $750 per
meeting of the Board of Directors or any committee thereof that is attended in
person, (iii) $500 per attended telephonic Board meeting, and (iv) $750 per
Committee meeting for serving as a Committee Chairman. These amounts were pro
rated for the time served by the outside directors. In 1997, the directors'
compensation was increased by 20%.
A-3
In addition, each outside Board member was granted stock options exercisable
for 15,000 shares at a per share price equal to the market price of the
Company's Common Stock on the date such person became a member of the Board,
vesting at the rate of 25% a year. For each year after the first year of Board
membership, an outside director may be granted additional options at the then-
market price on the date of grant. The Company may change this policy in the
future. In October 1994, the Company issued each of Dann V. Angeloff and
Alfred E. Osborne, Jr., stock options for 5,000 shares at a per share exercise
price of $12.50. In February 1995, the Company issued each of Dann V.
Angeloff, Alfred E. Osborne, Jr. and Robert H. King stock options for 15,000
shares at a per share exercise price of $11.1875.
A-4
STOCK OWNERSHIP INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the Record Date by (i) each
person known by the Company to own beneficially 5% or more of the Common
Stock, (ii) each current director of the Company, (iii) each executive officer
listed in the Summary Compensation Table under "Executive Compensation" below
and (iv) all current directors and executive officers as a group. The
percentage of ownership in the following chart is based on 5,264,874 shares of
the Common Stock outstanding as of the Record Date and does not give effect to
any shares that may be issued upon exercise of outstanding stock options:
[Download Table]
SHARES
BENEFICIALLY PERCENT
NAME AND ADDRESS(1) OWNED(2) OF CLASS
------------------- ------------ --------
Shapour and Pamela Sedaghat, as joint tenants and co-
trustees(3)............................................. 2,185,967 41.5
Shawn Sedaghat(4)........................................ 1,598,333 30.4
Edward F. Csaszar(5)..................................... 35,750 *
Edward S. Dombroski(6)................................... 21,000 *
Andreas Iseli(7)......................................... 26,750 *
Ronald W. Johnson(6)..................................... 30,000 *
Daniel E. Wieneke(6)..................................... 1,125 *
Dann V. Angeloff(8)...................................... 35,000 *
Alfred E. Osborne, Jr.(8)................................ 36,000 *
Robert H. King(6)........................................ 11,250 *
All Directors and Executive Officers as a Group (10
persons)(9)............................................. 1,826,258 34.7
Fidelity Capital Appreciation Fund(10)................... 327,000 6.2
82 Devonshire Street
Boston, MA 02109
Verissimo Research and Management, Inc.(10).............. 282,700 5.4
775 Baywood Drive
Petaluma, CA 94954
--------
*Less than one percent.
(1) Each of such persons may be reached through the Company at 2501 West
Rosecrans Boulevard, Los Angeles, California 90059-3510 unless otherwise
stated.
(2) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by such
person, subject to applicable community property laws.
(3) Includes 500,000 shares beneficially owned by the Sedaghat Charitable
Remainder Unitrust for which Shapour and Pamela serve as co-trustees.
(4) Includes 545,000 shares issuable pursuant to stock options exercisable
within 60 days of the Record Date Excludes 10,800 shares beneficially owned
by Shawn Sedaghat's wife, which Mr. Sedaghat disclaims.
(5) Includes 27,750 shares issuable pursuant to stock options exercisable
within 60 days of the Record Date.
(6) Represents shares issuable pursuant to stock options exercisable within 60
days of the Record Date.
(7) Includes 21,750 shares issuable pursuant to stock options issuable within
60 days of Record Date.
(8) Includes 30,000 shares issuable pursuant to stock options exercisable
within 60 days of the Record Date.
(9) Includes 734,375 shares issuable pursuant to stock options exercisable
within 60 days of the Record Date.
(10) Based on publicly available information.
A-5
CERTAIN RELATIONSHIPS, TRANSACTIONS AND ARRANGEMENTS
Pacific Atlantic Brokerage, Inc. ("Pacific Atlantic"), a corporation
majority owned by Shawn Sedaghat, provides freight forwarding services to the
Company. The cost of the services provided by Pacific Atlantic to the Company
in 1996, and charged to operations was $1,243,000. The Company's Audit
Committee periodically reviews the freight forwarding services and terms under
which those services are provided to the Company by Pacific Atlantic. To the
extent that such freight forwarding services are not competitive in terms of
price and otherwise with those that could be obtained from independent
sources, the Committee would consider modifying the relationship accordingly
or associating with another freight forwarding company. As of December 31,
1996, in the aggregate, the Company owed $90,000 to Pacific Atlantic. The
Company believes that the terms of the transactions referenced in this section
were on terms as favorable to the Company as would have been received in
transactions negotiated at arms-length.
A-6
EXECUTIVE OFFICER COMPENSATION
The following table sets forth certain summary information regarding
compensation paid by the Company for services rendered during the fiscal years
ended December 31, 1996, 1995 and 1994 to the Company's Chief Executive
Officer and its most highly paid executive officers other than the Chief
Executive Officer whose compensation exceeded $100,000 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
[Enlarge/Download Table]
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------- ---------------------
RESTRICTED SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL STOCK UNDERLYING
POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS OPTION($)
------------------ ---- --------- -------- --------------- ---------- ----------
Shawn Sedaghat.......... 1996 345,427 345,000 15,336(1) -- --
Chairman, President and 1995 300,150(2) 125,000 17,796(1) -- 250,000
Chief Executive Officer 1994 193,167 60,000 11,550(1) -- 60,000
Edward F. Csaszar....... 1996 207,150 -- 10,275(1) -- --
Vice President of Sales 1995 174,821 -- 10,256(1) -- 15,000
and Marketing 1994 150,123 5,000 9,600(1) -- 2,000
Edward S. Dombroski..... 1996 100,200 25,000 5,153(1) -- --
Vice President and 1995 98,153 25,000 6,155(1) -- 15,000
General Manager 1994 86,634 5,000 5,152(1) -- 5,000
Andreas Iseli........... 1996 142,300 -- 7,338(1) -- --
Vice President 1995 92,049 -- 7,509(1) -- 15,000
Operations, 1994 68,769 -- 6,534(1) -- 4,000
Tube Division
Ronald W. Johnson....... 1996 105,200 50,000 8,319(1) -- --
Vice President of 1995 100,259 40,000 7,093(1) -- 15,000
Finance, Chief 1994 100,415 30,000 1,200(1) -- 5,000
Financial Officer and
Secretary
Daniel E. Wieneke....... 1996 227,019 10,000 10,800(1) -- 500
President of American 1995 71,388(3) -- 4,000(1) -- 2,000
Safety Closure Corp. 1994 -- -- -- -- --
--------
(1) Primarily represents automobile expenses or allowances paid by the
Company.
(2) Shawn Sedaghat was elected Chairman of the Board and Chief Executive
Officer effective February 28, 1995.
(3) Mr. Wieneke joined the Company in August 1995.
STOCK OPTION PLAN
A total of 1,000,000 shares of the Company's Common Stock have been reserved
for issuance under the Company's 1993 Incentive Stock Option Plan and
Nonstatutory Stock Option Plan, as amended (the "Option Plan"), which expires
by its own terms in 2003. A total of 807,000 options were outstanding at
December 31, 1996, 775,000 of which had been granted to executive officers and
directors of the Company. The total options outstanding at December 31, 1996
are exercisable at the following prices:
[Download Table]
PRICE SHARES PRICE SHARES
-------- ------- ------ -------
$10.00 237,000 $12.31 180,000
11.1875 125,000 12.50 36,000
11.96 70,000 13.75 60,000
12.00 83,500 14.00 15,000
19.50 500
A-7
The Option Plan provides for the grant of "incentive stock options" within
the meaning of Section 442 of the Internal Revenue Code of 1986, as amended,
and nonqualified stock options to employees, officers, directors and
consultants of the Company. Incentive stock options may be granted only to
employees. The Option Plan is administered by a committee appointed by the
Board, which determines the terms of options granted, including the exercise
price, the number of shares subject to the option, and the option's
exercisability.
The exercise price of all options granted under the Option Plan must be at
least equal to the fair market value of such shares on the date of grant. The
maximum term of options granted under the Option Plan is ten years. With
respect to any participant who owns stock representing more than 10% of the
voting rights of the Company's outstanding capital stock, the exercise price
of any option must be at least equal to 110% of the fair market value on the
date of grant.
EMPLOYMENT AGREEMENTS
None of the Named Executive Officers has an employment contract except for
Mr. Wieneke. Effective August 1995, Mr. Wieneke entered into a two year
employment contract. Under his contract, he receives a salary of $225,000 per
year subject to cost of living increases and bonuses of 5% of the net income
of American Safety Closure Corp.
The following stock options were granted by the Company to the Named
Executive Officers during the fiscal year ended December 31, 1996:
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1996
INDIVIDUAL GRANTS
[Enlarge/Download Table]
NUMBER OF PERCENT OF POTENTIAL REALIZABLE
SECURITIES TOTAL OPTIONS EXERCISE VALUE AT ASSUMED
UNDERLYING GRANTED TO OR ANNUAL RATES OF STOCK
OPTIONS EMPLOYEES BASE EXPIRATION PRICE APPRECIATION FOR
NAME GRANTED IN FISCAL YEAR PRICE ($/SH) DATE OPTION TERM(1)
---- ---------- -------------- ------------ --------------- -----------------------
5% ($) 10% ($)
----------- -----------
Shawn Sedaghat.......... -- -- -- -- -- --
Edward F. Csaszar....... -- -- -- -- -- --
Edward S. Dombroski..... -- -- -- -- -- --
Andreas Iseli........... -- -- -- -- -- --
Ronald W. Johnson....... -- -- -- -- -- --
Daniel E. Wieneke....... 500 100% $19.50 October 2, 2001 $2,695 $ 5,950
--------
(1) The dollar amounts under these columns are the result of calculations at
the 5% and 10% annual rates of stock appreciation prescribed by the
Securities and Exchange Commission and are not intended to forecast
possible future appreciation, if any, of the Company's stock price. No
gain to the optionees is possible without an increase in the price of the
Company's stock, which will benefit all stockholders commensurately.
A-8
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
[Enlarge/Download Table]
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED DECEMBER 31, 1996 DECEMBER 31, 1996
ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED($) EXERCISABLE/ UNEXERCISABLE(1) EXERCISABLE/ UNEXERCISABLE(2)
---- -------- ----------- ----------------------------- -----------------------------
Shawn Sedaghat.......... -0- -- 545,000/0 $ 2,764,500/$0
Edward F. Csaszar....... -0- -- 24,000/8,000 $113,344/$41,844
Edward S. Dombroski..... -0- -- 17,250/8,750 $ 81,844/$44,844
Andreas Iseli........... -0- -- 18,000/8,500 $ 85,594/$43,844
Ronald W. Johnson....... -0- -- 26,250/8,750 $122,344/$44,844
Daniel E. Wieneke....... -0- -- 1,125/1,375 $ 6,500/$6,500
--------
(1) For a description of the terms of such options, see "Option Plan."
(2) Based on a price per share of $16.50, which was the price of a share of
Common Stock as quoted on the Nasdaq National Market at the close of
business on December 31, 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Compensation Committee (the "Committee") was formed by the Board of
Directors in 1993 to set and administer the policies governing the Company's
compensation programs, including stock option plans. The Committee receives
and evaluates information regarding compensation practices for comparable
business in similar industries, and considers this information in determining
base salaries, bonuses and stock-based compensation. The Committee is
authorized to engage or employ such outside professional consultants or other
services as in its discretion may be required to fulfill its responsibilities.
The Committee also discusses and considers executive compensation matters and
makes decisions thereon.
The Company's compensation policies are structured to link the compensation
to the Chief Executive Officer, the Named Executive Officers and other
executives of the Company with corporate performance. Through the
establishment of compensation programs, the Company has attempted to align the
financial interests of its executives with the results of the Company's
performance, which is designed to put the Company in a competitive position
regarding executive compensation and to ensure corporate performance, which
will then enhance stockholder value.
The Company's executive compensation philosophy is to set base salaries in
accordance with those of comparable business, and then to provide performance-
based variable compensation, such as bonuses, as determined by the
Compensation Committee according to factors such as the Company's earnings as
well as value received by stockholders. This philosophy allows total
compensation to fluctuate from year to year. As a result, the Named Executive
Officers' actual compensation levels in any particular year may be above or
below those of the Company's competitors, depending upon the evaluation of the
compensation factors described above by the Compensation Committee.
COMPENSATION COMMITTEE REPORT
For fiscal 1996 the base salary amounts and bonuses for the Named Executive
Officers was determined by conducting an informal survey of salaries and
bonuses of comparable companies, taking into account performance of the other
companies as compared to the Company and the individual accomplishments of the
Named Executive Officers and their role in achieving the financial results
attained by the Company for the year.
To the extent readily determinable and as one of the factors in its
consideration of compensation matters, the Committee considers the anticipated
tax treatment to the Company and to the executives of various compensation.
Some types of compensation and their deductibility depend upon the timing of
an executive's
A-9
vesting or exercise of previously granted rights. Further interpretations of
and changes in the tax laws also affect the deductibility of compensation. To
the extent reasonably practicable and to the extent it is within the
Committee's control, the Committee intends to limit executive compensation in
ordinary circumstances to that deductible under Section 162(m) of the Internal
Revenue Code of 1986, as amended. In doing so, the Committee may utilize
alternatives (such as deferring compensation) for qualifying executive
compensation for deductibility and may rely on grandfathering provisions with
respect to existing contractual commitments.
The Committee believes that its overall executive compensation program has
been successful in providing competitive compensation appropriate to attract
and retain highly qualified executives and also to encourage increased
performance from the executive group which should create added stockholder
value.
COMPENSATION COMMITTEE
Dann V. Angeloff--Chairman
Alfred E. Osborne, Jr.
A-10
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
TOTAL RETURN TO STOCKHOLDERS
REINVESTED DIVIDENDS
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG SEDA SPECIALTY, S&P 500 INDEX AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
[Download Table]
Measurement Period SEDA S&P
(Fiscal Year Covered) SPECIALTY 500 INDEX PEER GROUP
--------------------- ---------- --------- ----------
Measurement Pt- 10/26/93 $100 $100 $100
FYE 12/93 $152 $101 $ 99
FYE 12/94 $ 84 $119 $102
FYE 12/95 $ 88 $127 $141
FYE 12/96 $188 $123 $173
Set forth above is a performance graph comparing the cumulative total
stockholder returns on the Company's Common Stock, the S&P 500 Stock Index and
an index average of the Company's peer group, composed of comparable publicly
traded companies in the plastics packaging business, as selected by the
Company. Such peer group includes: Aptargroup, Inc., Kerr Group, Inc., Liqui-
Box Corp., Sealright Co., Inc., Sun Coast Industries, Inc. and Tuscarora, Inc.
The performance graph covers the period commencing October 26, 1993 (the
effective date of the Company's initial public offering) and ended December
31, 1996, and assumes $100 invested on October 26, 1993 in the Company's
Common Stock, S&P 500 Stock Index and the stock index of the peer group.
A-11
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND PURCHASER
As of the date of this Information Statement, Parent has not determined who
will be Designees. However, such Designees will be selected from the following
list of directors and executive officers of Parent and Purchaser upon the
purchase by Purchaser pursuant to the Offer of such number of shares that
satisfies the Minimum Condition. The information contained herein concerning
Parent and Purchaser and their respective directors and executive officers has
been furnished by Parent and Purchaser. The Company assumes no responsibility
for the accuracy or completeness of such information.
1. Parent. The name, business address, present principal occupation or
employment and five-year employment history of each director and executive
officer of Parent and certain other information is set forth below. Unless
otherwise indicated below, the address of each director and executive officer
is 105 Gordon Baker Road, Willowdale, Ontario, Canada, M2H 3P8. Unless
otherwise indicated, each occupation set forth opposite such director's or
executive officer's name refers to employment with Parent. Except as noted,
none of the persons listed below owns any Shares or has engaged in any
transactions with respect to Shares during the past 60 days. During the last
five years, neither Parent nor any director or executive officer of Parent
indicated has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) nor was such person a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction, and
as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
Unless otherwise indicated, all directors and executive officers listed below
are citizens of Canada.
[Download Table]
NAME (AGE) EMPLOYMENT HISTORY
---------- ------------------
Gordon S. Lang(72) Chairman of the Board of Parent. Director since April
30, 1957. Also Member of Executive Committee, Human
Resources Committee and Nominating and Governance
Committee.
Wayne M.E. McLeod(57) President and Chief Executive Officer of Parent since
1990. Director since May 26, 1982. Also Chairman of
Executive Committee.
Senior Vice President, Corporate Development of Parent
Larry A. Eddy(54) since March 1, 1988.
Meldon H. Snider(56) Senior Vice President, Finance and Administration of
Parent since February 1983.
Janis M. Wade(46) Senior Vice President, Human Resources and Corporate
Communications of Parent since December 1995;
previously Vice President, Human Resources of Parent
for more than 5 years.
Robert C. Broad(63) Vice President of Parent since 1989; President of CCL
Label, a division of Parent, since January 1994;
previously Vice President, Investor Relations of
Parent.
Christopher Denney(52) Vice President of Parent and President of Kolmar
Laboratories, a division of Parent, since August 1994;
President of Kolmar Laboratories from January to
August 1994; Chief Executive of CCL Custom
Manufacturing United Kingdom, a division of Parent, to
December 1993; previously Operations Director of CCL
Custom Manufacturing United Kingdom until December
1992.
L. George Inman(42) Vice President of Parent and Senior Vice President,
Finance and Administration of CCL Custom
Manufacturing, a division of Parent, since December
1992; previously Vice President of Parent and Vice
President, Finance and Administration, CCL Consumer
Products Group of Parent.
Steven W. Lancaster(48) Vice President and Treasurer of Parent since 1991.
A-12
[Download Table]
NAME (AGE) EMPLOYMENT HISTORY
---------- ------------------
Donald G. Lang(42) Vice President of Parent and President, CCL Custom
Manufacturing, a division of Parent since January 1993;
previously President, Aerosol Division, CCL Custom
Manufacturing, a division of Parent.
Stuart W. Lang(46) President of CCL Label Canada, a division of Parent
since October 1991. Director of Parent since May 23,
1991. Also Chairman of Nominating and Governance
Committee.
Mary T. Roy(40) Vice President, Environmental and Regulatory Services
of Parent since January 1995; previously Director of
Environmental and Regulatory Services of Parent.
Ronald N. Terin(49) Vice President of Parent and Vice President, Finance of
CCL Label since November 1995; previously Vice
President & Corporate Controller of Parent and Vice
President, Finance of CCL Label since June 1994;
previously Vice President & Corporate Controller of
Parent.
Rami E. Younes(46) Vice President of Parent and President and Chief
Executive Officer of CCL Container Manufacturing, a
division of Parent, since November 1993; previously
President and Chief Executive Officer, CCL Container
Manufacturing division.
Assistant Secretary and General Counsel of Parent since
Bohdan I. Sirota(46) May 1990.
Dermot G. Coughlan(61) Chairman and Chief Executive Officer of Derlan
Industries Limited (North American industrial
corporation serving aerospace and industrial technology
markets) since 1984. Director of Parent since May 23,
1991. Also Chairman of Human Resources Committee.
Arnold Englander(59) Partner, Lang Michener (Barristers & Solicitors) since
1974. Director of Parent since April 22, 1978. Also
Member of Audit Committee. The address of Mr. Englander
is Lang Michener, BCE Place, Suite 2500, 181 Bay
Street, Toronto, Ontario, Canada M5J 2T7.
Albert Gnat, Q.C.(58) Partner, Lang Michener (Barristers & Solicitors) since
1974. Director of Parent since March 14, 1973, and
Secretary. Also Member of Executive Committee. The
address of Mr. Gnat is Lang Michener, BCE Place, Suite
2500, 181 Bay Street, Toronto, Ontario, Canada M5J 2T7.
Jon K. Grant(62) Chairman of Canada Lands Company Limited (Crown
corporation administering sale of federal lands).
Director of Parent since December 8, 1994. Prior to
that, Chairman of the Quaker Oats Company of Canada
Limited, July 1993 to June 30, 1994. Prior to that,
Chairman and Chief Executive Officer of the Quaker Oats
Company of Canada Limited. Also Chairman of the
Environment and Health & Safety Committee and Member of
Nominating and Governance Committee.
Edward G. Johnston(69) Corporate Director since July, 1993. Director of Parent
and Vice Chairman since March 21, 1972. Also Member of
Nominating and Governance Committee, Human Resources
Committee and Environment and Health & Safety
Committee.
David R. Pepall(73) Corporate Director since 1986; President of PPG Canada
Inc. from 1980 to 1986, at which time he retired.
Director of Parent since February 27, 1980. Also Member
of Audit Committee and Human Resources Committee.
Lawrence G. Tapp(59) Dean of the Richard Ivey School of Business, University
of Western Ontario since July 1995. Executive in
Residence, Faculty of Management, University of Toronto
since 1992. Director of Parent since December 8, 1994.
Also Chairman of the Audit Committee and Member of
Human Resources Committee. Mr. Tapp owns 1,000 Shares
that were purchased more than 60 days prior to the
execution of the Merger Agreement.
A-13
2. Purchaser. The name, business address, present principal occupation or
employment and five-year employment history of each director and executive
officer of Purchaser and certain other information is set forth below. Unless
otherwise indicated below, the address of each director and executive officer
is 105 Gordon Baker Road, Willowdale, Ontario, Canada, M2H 3P8. Unless
otherwise indicated, each occupation set forth opposite such director's or
executive officer's name refers to employment with Purchaser. None of the
persons listed below owns any Shares or has engaged in any transactions with
respect to Shares during the past 60 days. During the last five years, neither
Purchaser nor any director or executive officer of Purchaser indicated has
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) nor was such person a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction, and as a result of
such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal
or state securities laws or finding any violation of such laws. Unless
otherwise indicated, all directors and executive officers listed below are
citizens of Canada.
[Download Table]
NAME AND TITLE EMPLOYMENT HISTORY
-------------- ------------------
Wayne M.E. McLeod See part (1) above.
Director and President
Larry A. Eddy See part (1) above.
Vice President
Meldon H. Snider See part (1) above.
Vice President
Steven W. Lancaster See part (1) above.
Treasurer
Geofrey Myers(46) Partner, Lang Michener (Barristers and Solicitors)
Secretary since 1984. The address of Mr. Myers is Lang Michener,
BCE Place, Suite 2500, 181 Bay Street, Toronto,
Ontario, Canada M5J 2T7.
A-14
[Download Table]
EXHIBIT
NO. EXHIBIT INDEX
------- -------------
Exhibit 1. Agreement and Plan of Merger and Reorganization, dated June 16,
1997, by and among Seawolf Acquisition Corporation, CCL Industries
Inc. and SEDA Specialty Packaging Corp.
Exhibit 2. Press Release issued by the Company and Parent on June 17, 1997.
Exhibit 3. Letter Agreement, dated June 16, 1997, by and among CCL Industries
Inc., Seawolf Acquisition Corporation and the persons listed on
Schedule A thereto.
Exhibit 4. Memorandum of Agreement, dated June 16, 1997, by and among
Shahrokh Sedaghat, CCL Industries Inc. and SEDA Specialty
Packaging Corp.
Exhibit 5. Option Agreement, dated as of June 16, 1997, by and between
Shahrokh Sedaghat and CCL Industries Inc.
Exhibit 6. Incentive Option Agreement, dated as of June 16, 1997, by and
between Shahrokh Sedaghat and CCL Industries Inc.
Exhibit 7. Non-Competition Agreement, dated June 16, 1997, by and between
Shapour Sedaghat and SEDA Specialty Packaging Corp.
Exhibit 8. Qualification and Listing of Shares Agreement, dated June 16,
1997, between CCL Industries Inc. and Shahrokh Sedaghat.
Exhibit 9. Copy of Letter to Stockholders, dated June 23, 1997.*
Exhibit 10. Opinion of Crowell, Weedon & Co. dated June 16, 1997.*
------------
* Included in materials being distributed to stockholders of the Company.
Dates Referenced Herein and Documents Incorporated by Reference
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