-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GOt0iRIT+Tax0SxJDFQkANP7KHJ4GHnWsm+H7UfgU1sAkACFKGMAa06EVEMjqvGT cleqS/9jsAJ3mE3E5AN2TQ== 0000897069-98-000579.txt : 19981124 0000897069-98-000579.hdr.sgml : 19981124 ACCESSION NUMBER: 0000897069-98-000579 CONFORMED SUBMISSION TYPE: SC 13E3/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19981123 GROUP MEMBERS: C2 INC GROUP MEMBERS: SHELDON B. LUBAR SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CHRISTIANA COMPANIES INC CENTRAL INDEX KEY: 0000020104 STANDARD INDUSTRIAL CLASSIFICATION: PUBLIC WAREHOUSING & STORAGE [4220] IRS NUMBER: 951928079 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13E3/A SEC ACT: SEC FILE NUMBER: 005-20705 FILM NUMBER: 98756682 BUSINESS ADDRESS: STREET 1: 777 E WISCONSIN AVE STE 3380 CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 4142919000 FORMER COMPANY: FORMER CONFORMED NAME: CHRISTIANA OIL COMPANIES DATE OF NAME CHANGE: 19711004 FORMER COMPANY: FORMER CONFORMED NAME: CHRISTIANA OIL CORP DATE OF NAME CHANGE: 19710420 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: C2 INC CENTRAL INDEX KEY: 0001052102 STANDARD INDUSTRIAL CLASSIFICATION: PUBLIC WAREHOUSING & STORAGE [4220] IRS NUMBER: 391915787 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3/A BUSINESS ADDRESS: STREET 1: 700 NORTH WATER STREET 2: STE 1200 CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 4142919000 MAIL ADDRESS: STREET 1: 700 NORTH WATER STREET 2: SUITE 1200 CITY: MILWAUKEE STATE: WI ZIP: 53202 SC 13E3/A 1 FORM 13E3/A As filed with the Securities and Exchange Commission on November 23, 1998 ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 4 to SCHEDULE 13E-3 Rule 13e-3 Transaction Statement (Pursuant to Section 13(e) of the Securities Exchange Act of 1934) CHRISTIANA COMPANIES, INC. (Name of the Issuer) C2, INC. SHELDON B. LUBAR (Name of Person(s) Filing Statement) COMMON SHARES $1.00 PAR VALUE (Title of Class of Securities) 170819106 (CUSIP Number of Class of Securities) -------------------- William T. Donovan Chairman C2, Inc. 700 North Water Street, Suite 1200 Milwaukee, Wisconsin 53202 (414) 291-9000 Facsimile: (414) 291-9061 -------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) Copies to: Marc J. Marotta Foley & Lardner 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 (414) 271-2400 -------------------- This statement is filed in connection with (check the appropriate box): A. |X| The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. B. |X| The filing of a registration statement under the Securities Act of 1933. C. [ ] A tender offer. D. [ ] None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [ ] CALCULATION OF REGISTRATION FEE ================================================================================ Transaction Valuation Amount of Filing Fee $85,193,623(1) $17,036(1) ================================================================================ (1) Determined pursuant to Rule 0-11(b)(2) of the Securities Exchange Act of 1934. Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or Schedule and the date of its filing Amount Previously Paid: $38,240 Form or Registration No.: Form S-4 Reg. No. 333-65663 Filing Party: Weatherford, Inc. and Christiana Companies, Inc. Date Filed: February 19, 1998 INTRODUCTION This Schedule 13E-3 relates to the proposed merger (the "Merger") of Christiana Acquisition, Inc. a Wisconsin corporation ("Sub") and wholly-owned subsidiary of Weatherford International, Inc. (formerly known as EVI Weatherford, Inc.), a Delaware corporation ("Weatherford") with and into Christiana Companies, Inc., a Wisconsin corporation (the "Company"). Under the terms of the Merger, the Christiana shareholders will be entitled to receive shares of Weatherford Common Stock and cash in exchange for their shares of Christiana Common Stock. The number of shares of Weatherford Common Stock that will be issued to the Christiana shareholders will be equal to the number of shares of Weatherford Common Stock held by Christiana at the time of the Merger divided by the number of outstanding shares of Christiana Common Stock. The amount of cash that will be payable to the Christiana shareholders in the Merger will be equal to the amount of cash held by Christiana in excess of its accrued unpaid taxes, the value of certain tax benefits and fixed liabilities at the time of the Merger divided by the number of outstanding shares of Christiana Common Stock at the time of the Merger. As part of the Merger, the Company will sell two-thirds of its interest in Total Logistic Control, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company ("Logistic") to C2, Inc., a newly-formed Wisconsin corporation currently controlled by Sheldon B. Lubar ("C2") for $10.67 million (the "Logistic Sale"). Consummation of the Merger (including the Logistic Sale) is subject to a number of conditions, including approval by the shareholders of Weatherford and the Company. Pursuant to a separate prospectus being provided to Company shareholders, C2 is offering each Company shareholder the ability to purchase one share of C2 common stock ("C2 Stock") for $4.00 per share for each share of Christiana held immediately prior to the Merger, with the objective of raising $20.8 million, $10.67 million of which will be utilized to fund the acquisition of the two-thirds ownership in Logistic by C2. Christiana shareholders may purchase additional shares of C2 subject to availability. The information required to be disclosed to the Company's shareholders by Schedule 13E-3 is contained in the Form S-4 Registration Statement of Weatherford International, Inc. filed on November 23 , 1998 (Reg. No. 333-65663), which includes, as a part thereof, the Joint Proxy Statement for Weatherford and the Company and a Prospectus relating to the Weatherford Shares (the "Form S-4"). The following is a cross-reference sheet showing the location in the Form S-4 of the information required by Schedule 13E-3. 1 CROSS-REFERENCE SHEET Unless otherwise specified, all references are To sections of the Form S-4 or to Schedule 13E-3 Exhibits Item Number and Caption to this statement which are incorporated by reference Item 1. Issuer and Class of Security Subject to the Transaction. (a).......................... COVER PAGE TO JOINT PROXY STATEMENT PROSPECTUS; WHERE YOU CAN FIND MORE INFORMATION; SUMMARY. (b).......................... GENERAL INFORMATION ABOUT THE MEETINGS - Record Date and Outstanding Shares. (c)-(d)...................... SUMMARY - Price Range of Common Stock; PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY. (e).......................... SUMMARY - Related Party Transactions; COVER PAGE TO JOINT PROXY STATEMENT/PROSPECTUS; DESCRIPTION OF C2 - General. (f).......................... Since the commencement of the Company's second full fiscal year preceding the date of this Schedule (i) the Company has not purchased any of its own securities and (ii) Sheldon B. Lubar purchased 2,500 shares of Company Common Stock on September 9, 1996 for $21.350 per share and 2,000 shares of Company Common Stock on September 19, 1996 for $22.250 per share. Sheldon B. Lubar is the sole shareholder of C2. Mr.Lubar acquired his 25 shares of C2 on December 11, 1997 for $4.00 per share. 2 Unless otherwise specified, all references are To sections of the Form S-4 or to Schedule 13E-3 Exhibits Item Number and Caption to this statement which are incorporated by reference Item 2. Identity and Background. (a)-(d); (g)................. DESCRIPTION OF C2 - General--Management; STOCK OWNERSHIP AND CERTAIN BENEFICIAL OWNERS - Christiana. Sheldon B. Lubar is a United States citizen. The business addresses for the directors and executive officers of C2 (which includes Mr. Lubar) are as follows: William T. Donovan - Director and Chairman 700 North Water Street Suite 1200 Milwaukee, Wisconsin 53202 David J. Lubar - Director and President 700 North Water Street Suite 1200 Milwaukee, Wisconsin 53202 David E. Beckwith - Secretary 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202-5367 Nicholas F. Brady - Director Darby Advisors, Inc. 1133 Connecticut Avenue, N.W. Suite 200 Washington, D.C. 20036 Albert O. Nicholas - Director Nicholas Company, Inc. 700 North Water Street Milwaukee, Wisconsin 53202 Sheldon B. Lubar - Director 700 North Water Street Milwaukee, Wisconsin 53202 The addresses for the material occupations, positions, offices or employments for each of the directors and executive officers of C2 (which 3 Unless otherwise specified, all references are To sections of the Form S-4 or to Schedule 13E-3 Exhibits Item Number and Caption to this statement which are incorporated by reference includes Mr. Lubar) during the last five years, which occupations, positions, offices or employments are described more fully under DESCRIPTION OF C2 - Management are as follows: William T. Donovan C2, Inc. Christiana Companies, Inc. Lubar & Co. (Prior to December, 1997, 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202) (December, 1997 - Present, 700 North Water Street Milwaukee, Wisconsin 53202) David J. Lubar C2, Inc. Lubar & Co. (Prior to December, 1997, 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202) (December, 1997 - Present, 700 North Water Street Milwaukee, Wisconsin 53202) Oyvind Solvang C2, Inc. 700 North Water Street Suite 1200 Milwaukee, Wisconsin 53202 Cleary Gull Reiland & McDevitt, Inc. 100 East Wisconsin Avenue Milwaukee, Wisconsin 53202 Scinticor, Incorporated 9051 West Heather Avenue Milwaukee, WI 53224 4 Unless otherwise specified, all references are To sections of the Form S-4 or to Schedule 13E-3 Exhibits Item Number and Caption to this statement which are incorporated by reference Applied Power, Inc. 13000 West Silver Spring Drive Butler, Wisconsin 53007 David E. Beckwith Foley & Lardner 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202-5367 Nicholas F. Brady Darby Advisors, Inc. 1133 Connecticut Avenue, N.W. Suite 200 Washington, D.C. 20036 Sheldon B. Lubar Lubar & Co. Christiana Companies, Inc. (Prior to December, 1997, 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202) (December, 1997 - Present, 700 North Water Street Milwaukee, Wisconsin 53202) Albert O. Nicholas Nicholas Company, Inc. 700 North Water Street Milwaukee, Wisconsin 53202 (e)-(f)...................... During the last five years, neither C2 nor any person controlling C2, nor, to the best knowledge of C2, any of the directors or executive officers of C2 including, without limitation, Sheldon B. Lubar, has (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding has been or is subject to a judgment, decree or final order enjoining future violations of, 5 Unless otherwise specified, all references are To sections of the Form S-4 or to Schedule 13E-3 Exhibits Item Number and Caption to this statement which are incorporated by reference or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. Item 3. Past Contacts, Transactions or Negotiations. (a)-(b)...................... BACKGROUND OF THE TRANSACTION; CHRISTIANA'S REASONS FOR THE TRANSACTION; RELATED PARTY TRANSACTIONS; THE MERGER; INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION; DESCRIPTION OF CHRISTIANA - Certain Relationships and Related Transactions; STOCK OWNERSHIP AND CERTAIN BENEFICIAL OWNERS. Item 4. Terms of the Transaction (a).......................... SUMMARY; GENERAL INFORMATION ABOUT THE MEETINGS; BACKGROUND OF THE TRANSACTION; CHRISTIANA'S REASONS FOR THE TRANSACTION; RELATED PARTY TRANSACTIONS; THE MERGER; MATERIAL FEDERAL INCOME TAX CONSIDERATIONS. (b).......................... RELATED PARTY TRANSACTIONS; THE MERGER; INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION. Item 5. Plans or Proposals of the Issuer or Affiliate. (a)-(b);(e).................. WEATHERFORD'S REASONS FOR THE TRANSACTION; THE MERGER; ORGANIZATION OF WEATHERFORD AND CHRISTIANA AND LOGISTIC BEFORE AND 6 Unless otherwise specified, all references are To sections of the Form S-4 or to Schedule 13E-3 Exhibits Item Number and Caption to this statement which are incorporated by reference AFTER THE TRANSACTION; ANCILLARY TRANSACTIONS. (c).......................... THE MERGER - Terms of the Merger - General Description of the Merger - Management Following Merger. (d).......................... THE MERGER - General Description of the Merger. (f)-(g)..................... The Merger will result in Christiana Common Stock becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act and the suspension of Christiana's obligation to file reports pursuant to Section 15(d) of the Exchange Act. Item 6. Sources and Amount of Funds or Other Consideration. (a).......................... SUMMARY - The Merger; THE MERGER - Terms of the Merger; RELATED PARTY TRANSACTIONS. (b).......................... SUMMARY; OPINIONS OF FINANCIAL ADVISORS. DESCRIPTION OF C2 -- General; CHRISTIANA'S REASONS FOR THE TRANSACTIONS. (c)-(d)...................... DESCRIPTION OF C2 -- Description of Logistic Credit Agreement. Item 7. Purpose(s), Alternatives, Reasons and Effects. (a).......................... CHRISTIANA'S REASONS FOR THE TRANSACTION. (b).......................... BACKGROUND OF THE TRANSACTION. 7 (c).......................... BACKGROUND OF THE TRANSACTION; CHRISTIANA'S REASONS FOR THE TRANSACTION. (d).......................... SUMMARY - The Merger; ANCILLARY TRANSACTIONS; THE MERGER; DESCRIPTION OF C2 - Description of Logistic Credit Agreement. Item 8. Fairness of the Transaction. (a)-(b)...................... BACKGROUND OF THE TRANSACTION; CHRISTIANA'S REASONS FOR THE TRANSACTION. Both Mr. Lubar and C2 believe the entire Transaction (including the Merger and the Logistic Sale) are fair to unaffiliated shareholders of the Company. (c).......................... GENERAL INFORMATION ABOUT THE MEETINGS. (d).......................... BACKGROUND OF THE TRANSACTION (e).......................... BACKGROUND OF THE TRANSACTION (f).......................... Not applicable. 8 Unless otherwise specified, all references are To sections of the Form S-4 or to Schedule 13E-3 Exhibits Item Number and Caption to this statement which are incorporated by reference Item 9. Reports, opinions, Appraisals and Certain Negotiations. (a)-(c)...................... OPINIONS OF FINANCIAL ADVISORS; BACKGROUND OF THE TRANSACTION; The opinions of Prudential Securities Incorporated and American Appraisal Associates, Inc. will be made available for inspection and copying at the principal executive offices of the Company during regular business hours by any interested equity security holder of Christiana or his or her representative which has been so designated in writing. Item 10. Interest in Securities of the Issuer. (a).......................... STOCK OWNERSHIP AND CERTAIN BENEFICIAL OWNERS. (b).......................... Not applicable Item 11. Contracts, Arrangements or Understandings with Respect to the Issuer's Securities. THE MERGER; GENERAL INFORMATION ABOUT THE MEETING; SUMMARY - RELATED PARTY TRANSACTIONS - C2 Offering. Item 12. Present Intention and Recommendation of Certain Persons with Regard to the Transaction. (a).......................... GENERAL INFORMATION ABOUT THE MEETINGS. (b).......................... BACKGROUND OF THE TRANSACTION; CHRISTIANA'S REASONS FOR THE TRANSACTION. 9 Unless otherwise specified, all references are To sections of the Form S-4 or to Schedule 13E-3 Exhibits Item Number and Caption to this statement which are incorporated by reference Item 13. Other Provisions of the Transaction. (a).......................... THE MERGER (b)-(c)...................... Not applicable Item 14. Financial Information. (a).......................... CHRISTIANA'S CONSOLIDATED FINANCIAL STATEMENTS; CHRISTIANA CONSOLIDATED FINANCIAL STATEMENTS; The Company's ratio of earnings to fixed charges for its fiscal years ended June 30, 1996, June 30, 1997 and June 30, 1998 was 1.10x, 1.84x and 1.46x, respectively. The Company's book value per share on June 30, 1997 and on June 30, 1998 was $14.03 and $26.46, respectively. (b).......................... Not applicable. Item 15. Persons and Assets Employed, Retained or Utilized. (a).......................... DESCRIPTION OF C2 - Management. (b).......................... Not applicable. Item 16. Additional Information Not applicable. Item 17. Material to be Filed as Exhibits. (a)(1)....................... Credit Agreement, by and among Logistic, Firstar Bank of Milwaukee, N.A., individually and as agent, and the lenders that are a part thereto.* (a)(2) ...................... First Amendment to Credit Agreement and Escrow Release Agreement, dated as of November 2, 1998, by and among Logistic, Firstar Bank Milwaukee, N.A., individually and as agent and the lenders that are a party thereto (a)(3) ...................... Second Amendment to Credit Agreement, dated as of November 17, 1998, by and among Logistic, Firstar Bank Milwaukee, N.A., individually and as agent, and the lenders that are a party thereto. (b)(1)....................... Prudential Securities Opinion (incorporated by reference to Appendix E to Form S-4 (Reg. No. 333-65663)). 10 Unless otherwise specified, all references are To sections of the Form S-4 or to Schedule 13E-3 Exhibits Item Number and Caption to this statement which are incorporated by reference (b)(2) American Appraisal Opinion (incorporated by reference to Annex F to Form S-4 (Reg. No. 333-65663)). (b)(3) ...................... Report of Prudential Securities Incoporated dated October 12, 1998 (c)(1)....................... Amended and Restated Agreement and Plan of Merger, dated as of October 14, 1998, by and among Weatherford, Sub, the Company and C2 (incorporated by reference to Appendix A of Form S-4 (Reg. No. 333-65663)). (c)(2)....................... Purchase Agreement, dated December 12, 1997, by and among Weatherford, Logistic, the Company and C2 (incorporated by reference to Appendix B to Form S-4 (Reg. No. 333-65663)). (c)(3)....................... First Amended and Restated Operating Agreement, by and among C2 and Christiana (incorporated by reference to Appendix C to Form S-4 (Reg. No. 333-65663)). (d)(1)....................... Form S-4 filed October 14, 1998 (of which the Joint Proxy Statement Prospectus of the Company and Weatherford is a part (Reg. No. 333-65663)). (e).......................... Dissenters' rights provisions of the Wisconsin Business Corporation Law (incorporated by reference to Appendix H of Form S-4 (Reg. No. 333-65663)). (f).......................... Not applicable - --------------------------- * Previously Filed. ITEM 1 ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION. (a) The name of the issuer is CHRISTIANA COMPANIES, INC., a Wisconsin corporation (the "Company"). The address of its principal executive offices is 700 North Water Street, Suite 1200, Milwaukee, Wisconsin 53202. (b) The class of equity securities to which this Schedule 13E-3 relates is the Common Stock, par value $1.00 per share, of the Company. The amount of such class outstanding as of October 11 16, 1998 is 5,149,330. The approximate number of holders of record of such class as of October 16, 1998 is 920. (c) and (d) Reference is hereby made to the information set forth in the sections entitled "SUMMARY - Price Range of Common Stock" and "PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY" of the Form S-4, which is incorporated herein by reference. (e) Reference is hereby made to the Cover Page of the Joint Proxy Statement/Prospectus and in the information set forth in the sections entitled "SUMMARY - Related Party Transactions" and "DESCRIPTION OF C2 -General" of the Form S-4, which is incorporated herein by reference. (f) Since the commencement of the Company's second full fiscal year preceding the date of this Schedule (i) the Company has not purchased any of its own securities and (ii) Sheldon B. Lubar purchased 2,500 shares of Company Common Stock on September 9, 1996 for $21.350 per share and 2,000 shares of Company Common Stock on September 19, 1996 for $22.250 per share. Sheldon B. Lubar is the sole shareholder of C2. Mr. Lubar acquired his 25 shares of C2 on December 11, 1997 for $4.00 per share. ITEM 2 IDENTITY AND BACKGROUND. (a)-(d) and (g) This Schedule 13E-3 is being filed by C2 and Sheldon B. Lubar. Reference is hereby made to the information set forth in the sections entitled "DESCRIPTION OF C2 - General" and "DESCRIPTION OF C2 Management" and the sections entitled "STOCK OWNERSHIP AND CERTAIN BENEFICIAL OWNERS-Christiana" in the Form S-4, both of which are incorporated herein by reference. Sheldon B. Lubar is a United States citizen. The business addresses for the directors and executive officers of C2 (which includes Mr. Lubar) are as follows: William T. Donovan - Director and Chairman 700 North Water Street Suite 1200 Milwaukee, Wisconsin 53202 David J. Lubar - Director and President 700 North Water Street Suite 1200 Milwaukee, Wisconsin 53202 David E. Beckwith - Secretary 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202-5367 Nicholas F. Brady - Director Darby Advisors, Inc. 1133 Connecticut Avenue, N.W. Suite 200 Washington, D.C. 20036 12 Albert O. Nicholas - Director Nicholas Company, Inc. 700 North Water Street Milwaukee, Wisconsin 53202 Sheldon B. Lubar - Director 700 North Water Street Milwaukee, Wisconsin 53202 The addresses for the material occupations, positions, offices or employments for each of the directors and executive officers of C2 (which includes Mr. Lubar) during the last five years, which occupations, positions, offices or employments are described more fully under "DESCRIPTION OF C2 Management" are as follows: William T. Donovan C2, Inc. Christiana Companies, Inc. Lubar & Co. (Prior to December, 1997, 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202) (December, 1997 - Present, 700 North Water Street Milwaukee, Wisconsin 53202) David J. Lubar C2, Inc. Lubar & Co. (Prior to December, 1997, 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202) (December, 1997 - Present, 700 North Water Street Milwaukee, Wisconsin 53202) Oyvind Solvang C2, Inc. 700 North Water Street Suite 1200 Milwaukee, Wisconsin 53202 Cleary Gull Reiland & McDevitt, Inc. 100 East Wisconsin Avenue Milwaukee, Wisconsin 53202 Scinticor, Incorporated 9051 West Heather Avenue Milwaukee, WI 53224 13 Nicholas F. Brady Darby Advisors, Inc. 1133 Connecticut Avenue, N.W. Suite 200 Washington, D.C. 20036 Albert O. Nicholas Nicholas Company, Inc. 700 North Water Street Milwaukee, Wisconsin 53202 David E. Beckwith Foley & Lardner 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202-5367 Sheldon B. Lubar Lubar & Co. Christiana Companies, Inc. (Prior to December, 1997, 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202) (December, 1997 - Present, 700 North Water Street Milwaukee, Wisconsin 53202) (e) and (f) None of the persons or entities with respect to whom information is required by this item was, during the last five years, convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was 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 further violations of, or prohibiting activities, subject to, federal or state securities laws or finding of any violation of such laws. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS. (a) and (b) Reference is hereby made to the information set forth in the sections entitled "BACKGROUND OF THE TRANSACTION," "CHRISTIANA'S REASONS FOR THE TRANSACTION," "RELATED PARTY TRANSACTIONS," "THE MERGER," "INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION," DESCRIPTION OF CHRISTIANA - Certain Relationships and Related Transactions," and "STOCK OWNERSHIP AND CERTAIN BENEFICIAL OWNERS" of the Form S-4, which is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION. (a) Reference is hereby made to the information set forth in the sections entitled "SUMMARY," "WHERE YOU CAN FIND MORE INFORMATION," "BACKGROUND OF THE TRANSACTION," "CHRISTIANA's REASONS FOR THE TRANSACTION." "ANCILLARY TRANSACTIONS," "THE MERGER," and "MATERIAL FEDERAL INCOME TAX CONSIDERATIONS" of the Form S-4, which is incorporated herein by reference. 14 (b) Reference is hereby made to the information set forth in the sections entitled "RELATED PARTY TRANSACTIONS," "THE MERGER," and "INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION" of the Form S-4, which is incorporated herein by reference. ITEM 5. PLANS OF PROPOSALS OF THE ISSUER OR AFFILIATE. Other than as set forth herein or in the Form S-4, neither the Company, any affiliate of the Company, C2 nor Mr. Lubar have any plan or proposal regarding activities or transactions which are to occur after the Transaction which relate to or result in: (i) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company, C2 or any of their subsidiaries; (ii) A sale or transfer of a material amount of assets of the Company, C2 or any of their subsidiaries; (iii) Any change in the present board of directors or management of the Company or C2 including, but not limited to, any plan or proposal to change the number or term of directors, to fill any existing vacancy on the board or to change any material term of the employment contract of any executive officer; (iv) Any material change in the present dividend rate or policy or indebtedness or capitalization of the Company or C2; (v) Any other material change in the Company's or C2's corporate structure or business; (vi) A class of equity securities of the Company or C2 becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (vii) The suspension of the Company's or C2's obligation to file reports pursuant to Section 15(d) of the Securities Exchange Act of 1934. (a), (b) and (e) Reference is hereby made to the information set forth in the sections entitled "WEATHERFORD'S REASONS FOR THE TRANSACTION," "THE MERGER," "ORGANIZATION OF WEATHERFORD AND CHRISTIANA BEFORE AND AFTER THE TRANSACTION," and "RELATED PARTY TRANSACTIONS" in the Form S-4, which is incorporated herein by reference. Except as set forth in the Form S-4, neither C2 nor Sheldon B. Lubar have any present plans or proposals which would relate to, or would result in, any transaction, change or other occurrence with respect to the Company or any class of its equity securities. (c) Reference is hereby made to the information set forth in the sections entitled "THE MERGER - Terms of the Merger - General Description of the Merger - Management Following Merger" of the Form S-4 which is incorporated herein by reference. (d) Reference is hereby made to the information set forth in the section entitled "THE MERGER - General Description of the Merger of the Form S-4" which is incorporated herein by reference. 15 (f) and (g) The Merger will result in Company Common Stock becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act and the suspension of Company's obligations to file reports pursuant to Section 15(d) of the Exchange Act. ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION. (a) Reference is hereby made to the information set forth in the sections entitled "SUMMARY - The Merger," "THE MERGER - Terms of the Merger," and "RELATED PARTY TRANSACTIONS" of the Form S-4, which is incorporated herein by reference. (b) Reference is hereby made to the sections entitled "OPINIONS OF FINANCIAL ADVISORS" "DESCRIPTION OF C2 - General" and "CHRISTIANA'S REASONS FOR THE TRANSACTION" of the Form S-4, which is incorporated herein by reference. (c)-(d) Reference is hereby made to the section entitled "DESCRIPTION OF C2 - Description of Logistic Credit Agreement" in the Form S-4, which is incorporated herein by reference. ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS. (a) Reference is hereby made to the information set forth in the section entitled "CHRISTIANA'S REASONS FOR THE MERGER" of Form S-4, which is incorporated herein by reference. (b) Reference is hereby made to the section entitled "BACKGROUND OF THE TRANSACTION" of the Form S-4, which is incorporated herein by reference. (c) Reference is hereby made to the sections entitled "BACKGROUND OF THE TRANSACTION" and "CHRISTIANA'S REASONS FOR THE TRANSACTION" of the Form S-4, which is incorporated herein by reference. (d) Reference is hereby made to the information set forth in the sections entitled "SUMMARY - The Merger," "RELATED PARTY TRANSACTIONS", "THE MERGER" and "DESCRIPTION OF C2 - Description of Logistic Credit Agreement" of the Form S-4, which is incorporated herein by reference. ITEM 8. FAIRNESS OF THE TRANSACTION. (a)-(b) Reference is hereby made to the information set forth in the sections entitled "BACKGROUND OF THE TRANSACTION" and "CHRISTIANA'S REASONS FOR THE TRANSACTION" of the Form S-4, which is incorporated herein by reference. (c) Reference is hereby made to the information set forth in the section entitled "GENERAL INFORMATION ABOUT THE MEETINGS" of the Form S-4, which is incorporated herein by reference. (d)-(e) Reference is hereby made to the section entitled "BACKGROUND OF THE TRANSACTION" of the Form S-4, which is incorporated herein by reference. (f) No such offer has been received. 16 ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS. (a)-(c) Reference is hereby made to the information set forth in the sections entitled "OPINIONS OF FINANCIAL ADVISORS" and "BACKGROUND OF THE TRANSACTION" of the Form S-4, which is incorporated herein by reference. The opinions of Prudential Securities Incorporated and American Appraisal Associates, Inc. will be made available for inspection and copying at the principal executive offices of the Company during regular business hours by any interested equity security holder of Christiana or his or her representative which has been so designated in writing. ITEM 10. INTEREST IN SECURITIES OF THE ISSUER. (a) and (b) Reference is hereby made to the information set forth in the section entitled "STOCK OWNERSHIP AND CERTAIN BENEFICIAL OWNERS" of the Form S-4, which is incorporated herein by reference. ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S SECURITIES. Reference is hereby made to the information set forth in the sections entitled "THE MERGER", "GENERAL INFORMATION ABOUT THE MEETINGS", "DESCRIPTION OF C2 - General"; "SUMMARY - RELATED PARTY TRANSACTIONS - C2 Offering" of the Form S-4, which is incorporated herein by reference. ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO THE TRANSACTION. (a) Reference is hereby made to the information set forth in the section entitled "GENERAL INFORMATION ABOUT THE MEETINGS" of the Form S-4, which is incorporated herein by reference. (b) Reference is hereby made to the information set forth in the sections entitled "BACKGROUND OF THE TRANSACTION" and "CHRISTIANA'S REASONS FOR THE TRANSACTION" of the Form S-4, which is incorporated herein by reference. ITEM 13. OTHER PROVISIONS OF THE TRANSACTION. (a) Reference is hereby made to the information set forth in the section entitled "THE MERGER" of the Form S-4, which is incorporated herein by reference. (b) None. (c) Not applicable. ITEM 14. FINANCIAL INFORMATION. (a) Reference is hereby made to the information set forth in the sections entitled "CHRISTIANA'S CONSOLIDATED FINANCIAL STATEMENTS" and "CHRISTIANA CONSOLIDATED FINANCIAL STATEMENTS" to the Form S-4, which is incorporated herein by reference. The Company's ratio of earnings to fixed charges for its fiscal years ended June 30, 1996, 17 June 30, 1997 and June 30, 1998 was 1.10x, 1.84x and 1.46x, respectively. The Company's book value per share on June 30, 1997 and on June 30, 1998 was $14.03 and $26.46, respectively. (b) The information requested herein is not material since, following the Merger, the Company will be a wholly-owned subsidiary of Weatherford with no operations. In addition, the Merger will result in shares of Company Common Stock being automatically converted into the consideration described above in this Schedule 13E-3 under the heading "Introduction." ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED. (a) Reference is hereby made to the section entitled "DESCRIPTION OF C2 - - Management" of the Form S-4, which is incorporated by reference herein. (b) Not applicable. ITEM 16. ADDITIONAL INFORMATION. Reference is hereby made to the entire text of the Form S-4, which are incorporated herein by reference. ITEM 17. MATERIAL TO BE FILED AS EXHIBITS. (a)(1)-- Form of Credit Agreement, by and among Logistic, Firstar Bank of Milwaukee, N.A. individually and as agent, and the lenders that are a party thereto.* (a)(2)-- First Amendment to Credit Agreement and Escrow Release Agreement, dated as of November 2, 1998, by and among Logistic, Firstar Bank Milwaukee, N.A., individually and as agent and the lenders that are a party thereto (a)(3)-- Second Amendment to Credit Agreement, dated as of November 17, 1998, by and among Logistic, Firstar Bank Milwaukee, N.A., individually and as agent, and the lenders that are a party thereto. (b)(1)-- Prudential Securities Opinion (incorporated by reference to Appendix E to Form S-4 (Reg. No. 333-65663)). (b)(2)-- American Appraisal Opinion (incorporated by reference to Annex G to Form S-4 (Reg. No. 333-65663)). (b)(3)-- Report of Prudential Secutites Incorporated, dated October 12, 1998. (c)(1)-- Amended and Restated Agreement and Plan of Merger, dated as of October 14, 1998, by and among Weatherford, Sub, the Company and C2 (incorporated by reference to Appendix A of Form S-4 (Reg. No. 333-65663)). (c)(2)-- Purchase Agreement, dated December 12, 1997, by and among Weatherford, Logistic, the Company and C2 (incorporated by reference to Appendix B to Form S-4 (Reg. No. 333-65663)). (c)(3)-- First Amended and Restated Operating Agreement,l by and among C2 and Christiana (incorporated by reference to Appendix C to Form S-4 (Reg. No. 333-65663)). (d)(1)-- Form S-4 filed October 14, 1998 (of which the Joint Proxy Statement Prospectus of the Company and Weatherford is a part (Reg. No. 333-65663)). (e)-- Dissenters' rights provisions of the Wisconsin Business Corporation Law (incorporated by reference to Appendix H of Form S-4 (Reg. No. 333-65663)). (f)-- Not applicable - ----------------------------- * Previously Filed. 18 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: November 23, 1998 C2, INC. By: /s/ William T. Donovan William T. Donovan Chairman By: /s/ Sheldon B. Lubar Sheldon B. Lubar 19 EXHIBIT INDEX Sequentially Numbered Exhibit Number and Description Page (a)(1) -- Form of Credit Agreement, by and among Logistic, Firstar Bank of Milwaukee, N.A. individually and as agent, and the lenders that are a party thereto.* (a)(2)-- First Amendment to Credit Agreement and Escrow Release Agreement, dated as of November 2, 1998, by and among Logistic, Firstar Bank Milwaukee, N.A., individually and as agent and the lenders that are a party thereto (a)(3)-- Second Amendment to Credit Agreement, dated as of November 17, 1998, by and among Logistic, Firstar Bank Milwaukee, N.A., individually and as agent, and the lenders that are a party thereto. (b)(1) -- Prudential Securities Opinion (incorporated by reference to Appendix F to Form S-4 (Reg. No. 333-65663)). (b)(2) -- American Appraisal Opinion (incorporated by reference to Annex G to Form S-4 (Reg. No. 333-65663)). (b)(3) -- Report of Prudential Securities Incorporated, dated October 12, 1998 (c)(1) -- Amended and Restated Agreement and Plan of Merger, dated as of October 14, 1998, by and among Weatherford, Sub, the Company and C2 (incorporated by reference to Appendix A of Form S-4 (Reg. No. 333-65663)). (c)(2) -- Purchase Agreement, dated December 12, 1997, by and among Weatherford, Logistic, the Company and C2 (incorporated by reference to Appendix B to Form S-4 (Reg. No. 333-65663)). (c)(3) -- First Amended and Restated Operating Agreement by and among C2 and Christiana (incorporated by reference to Appendix D to Form S-4 (Reg. No. 333-65663)). (d)(1) -- Form S-4 filed October 14, 1998 (of which the Joint Proxy Statement Prospectus of the Company and Weatherford is a part (Reg. No. 333-65663)). (e) -- Dissenters' rights provisions of the Wisconsin Business Corporation Law (incorporated by reference to Appendix H of Form S-4 (Reg. No. 333-65663)). (f) -- Not applicable - ------------------------ * Previously Filed. 20 EX-99 2 1ST AMENDMENT TO CREDIT AGREEMENT EXHIBIT (a)(2) FIRST AMENDMENT TO CREDIT AGREEMENT and ESCROW RELEASE AGREEMENT THIS FIRST AMENDMENT TO CREDIT AGREEMENT and ESCROW RELEASE AGREEMENT, dated as of November 1, 1998 (the "First Amendment"), is by and among TOTAL LOGISTIC CONTROL, LLC, a Delaware limited liability company (the "Borrower"), the several lenders identified on the signature pages hereto and such other lenders as may from time to time become a party hereto (the "Lenders"), and FIRSTAR BANK MILWAUKEE, N.A., as agent for the Lenders (in such capacity, the "Agent"). W I T N E S S E T H WHEREAS, the Borrower, the Lenders and the Agent are parties to that certain Credit Agreement by and among the Borrower, certain Subsidiaries of the Borrower from time to tome parties thereto, the Lenders and the Agent pursuant to which the Lenders have agreed to provide a $70,000,000 reducing revolving credit facility to the Borrower on the terms and conditions set forth therein (as amended by this First Amendment, the "Credit Agreement"); WHEREAS, the Borrower has advised the Lenders and the Agent that the Merger Transactions and the Divestiture have been restructured and postponed; WHEREAS, the Borrower, the Lenders and the Agent wish to permit consummation of the restructured and postponed Merger Transactions and Divestiture; WHEREAS, the Borrower, the Lenders, the Agent and Quarles & Brady LLP (the "Escrow Agent") are parties to that certain Escrow Agreement dated as of August 14, 1998 (the "Escrow Agreement"); WHEREAS, the Borrower, the Lenders, and the Agent wish to direct the Escrow Agent to release the Loan Documents (as defined in the Escrow Agreement) from escrow as hereinafter set forth; NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agreed as follows: 1 . Definitions. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. 2. Amendment of Credit Agreement. The Credit Agreement is amended as follows: 2.1 Section 1.1. Section 1.l of the Credit Agreement is amended as follows: (a) The definition of EVI is deleted in its entirety and replaced by the following new definition: "EVI" means Weatherford International, Inc., a Delaware corporation. (b) The definition of Permitted CST Distribution is deleted in its entirety and replaced by the following new definition: "Permitted CST Distribution" means one or more distributions paid by the Borrower to CST on or before January 31, 1999 in respect of CST's ownership interest in the Borrower in an aggregate amount not to exceed $20,000,000 for the purposes of consummating the Merger Transactions and the Divestiture, provided that no Default or Event of Default exists as of the date of any such distribution or would result as a consequence of any such distribution. 2.2 Section 7.14. Section 7.l4 of the Credit Agreement is amended by deleting the phrase "October 31, 1998" therein and substituting the phrase "January 31, 1999" in lieu thereof. 2.3 Section 8.12. Section 8.12 of the Credit Agreement is amended by deleting the phase "October 31, 1998" therein and substituting the phrase "January 31, 1999" in lieu thereof. 2.4 Section 5.1(c). Schedule 5.1(c) of the Credit Agreement is deleted in its entirety and replaced by new Schedule 5.1(c) in the form attached hereto. 3. Escrow Agreement. The Escrow Agent is authorized and directed to take the following actions pursuant to Section 2(b)(I) of the Escrow Agreement: 3.1 Closing Date. The Escrow Agent is authorized and directed to insert "November 2, 1998" as the Closing Date on each of the Loan Documents to the extent necessary to effect the consummation of the financing transactions contemplated by the Credit Agreement. 3.2 Escrow Release. Upon insertion of the Closing Date in the Loan Documents as set forth herein, the Escrow Agent is authorized and directed to release promptly the Loan Documents (together with appropriate execution versions and copies thereof) to the Borrower, the Lenders and the Agent. -2- 4. Conditions Precedent. This First Amendment shall become effective on the date that the Agent shall have received this First Amendment, duly executed by the Borrower and the Lenders. 5. Representations and Warranties. To induce the lenders to enter into this First Amendment, the Borrower hereby represents and warrants to the Agent and to each Lender that as of the date hereof, after giving effect to this First Amendment: (a) the representations and warranties contained in the Credit Agreement are true and correct; (b) no Default or Event of Default has occurred and is continuing; and (c) each of the conditions set forth in Sections 5.1 and 5.2 of the Credit Agreement has been fully satisfied; and (d) the Borrower had delivered to the Agent a pro forma balance sheet dated as of September 30, 1998 which reflects compliance with the Consolidated Tangible Net Worth requirement set forth in Section 5.1(d) of the Credit Agreement. 6. Full Force and Effect. Except as provided herein, all of the terms and conditions set forth in the Credit Agreement, and all additional documents entered into in connection with the Credit Agreement, shall remain unchanged and shall continue in full force and effect as originally set forth, and each of the foregoing is hereby ratified and confirmed in all respects. 7. Binding Effect. This First Amendment shall be binding upon the parties hereto and their respective successors and assigned. 8. Entire Agreement. This First Agreement constitutes the entire agreement among the Borrower, the Lenders and the Agent with respect to the subject matter hereof. 9. Counterparts. This First Agreement may be executed in several counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same First Agreement. 10. Governing Law. This First Agreement shall be construed and interpreted according to the internal laws of the State of Wisconsin without giving effect to its conflict of laws provisions. -3- IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this First Agreement to be duly executed and delivered as of the date first above written. BORROWER: TOTAL LOGISTIC CONTROL, LLC By: Title: LENDERS: FIRSTAR BANK MILWAUKEE, N.A., In its capacity as Agent and as a Lenders By: Title: BANK ONE, WISCONSIN as a Lender By: Title: HARRIS TRUST AND SAVINGS BANK as a Lenders By: Title: EX-99 3 2ND AMENDMENT TO CREDIT AGREEMENT EXHIBIT (a)(3) SECOND AMENDMENT TO CREDIT AGREEMENT THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of November 17, 1998 (the "Second Amendment"), is by and among TOTAL LOGISTIC CONTROL, LLC, a Delaware limited liability company (the "Borrower"), the several lenders identified on the signature pages hereto and such other lenders as may from time to time become a party hereto (the "Lenders"), and FIRSTAR BANK MILWAUKEE, N.A., as agent for the Lenders (in such capacity, the "Agent"). W I T N E S S E T H : WHEREAS, the Borrower, the Lenders and the Agent are parties to that certain Credit Agreement dated as of November 2, 1998 by and among the Borrower, certain Subsidiaries of the Borrower from time to time parties thereto, the Lenders and the Agent (as amended by the First Amendment dated as of November 2, 1998 and this Second Amendment, the "Credit Agreement"); WHEREAS, the Borrower, the Lenders and the Agent wish to amend the Credit Agreement as set forth herein; NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Definitions. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. 2. Amendment of Credit Agreement. The Credit Agreement is amended as follows: 2.1 Section 1.1. The definition of Revolving Termination Date in Section 1.1 of the Credit Agreement is amended by deleting the phrase "July 31, 2003" therein and substituting the phrase "November 2, 2003" in lieu thereof. 2.2 Section 6.18. Section 6.18 of the Credit Agreement is amended by deleting the phrase "July 31, 2003" therein and substituting the phrase "November 2, 2003" in lieu thereof. 2.3 Schedule 2.1(a). Schedule 2.1(a) of the Credit Agreement is deleted in its entirety and replaced by new Schedule 2.1(a) in the form attached hereto. 3. Conditions Precedent. This Second Amendment shall become effective on the date that the Agent shall have received this Second Amendment, duly executed by the Borrower and the Lenders. 4. Representations and Warranties. To induce the Lenders to enter into this Second Amendment, the Borrower hereby represents and warrants to the Agent and to each Lender that as of the date hereof, after giving effect to this Second Amendment: (a) the representations and warranties contained in the Credit Agreement are true and correct; and (b) no Default or Event of Default has occurred and is continuing. 5. Full Force and Effect. Except as provided herein, all of the terms and conditions set forth in the Credit Agreement, and all additional documents entered into in connection with the Credit Agreement, shall remain unchanged and shall continue in full force and effect as originally set forth, and each of the foregoing is hereby ratified and confirmed in all respects. 6. Binding Effect. This Second Amendment shall be binding upon the parties hereto and their respective successors and assigns. 7. Entire Agreement. This Second Amendment constitutes the entire agreement among the Borrower, the Lenders and the Agent with respect to the subject matter hereof. 8. Counterparts. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same Second Agreement. 9. Governing Law. This Second Amendment shall be construed and interpreted according to the internal laws of the State of Wisconsin without giving effect to its conflict of laws provisions. -2- IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Second Amendment to be duly executed and delivered as of the date first above written. BORROWER: TOTAL LOGISTIC CONTROL, LLC By: Title: LENDERS: FIRSTAR BANK MILWAUKEE, N.A., In its capacity as Agent and as a Lender By: Title: BANK ONE, WISCONSIN As a Lender By: Title: HARRIS TRUST AND SAVINGS BANK, As a Lender By: Title: -3- SCHEDULE 2.1(a) REVOLVING COMMITMENTS
Revolving Commitment Revolving Commitment Amount Percentage Firstar Bank Milwaukee, N.A. Closing Date through November 2, 1999 $30,000,000 0.4285714285714% November 3, 1999 through November 2, 2000 29,464,286 0.4285714285714% November 3, 2000 through November 2, 2001 27,578,571 0.4285714285714% November 3, 2001 through November 2, 2002 25,435,714 0.4285714285714% November 3, 2002 through November 2, 2003 22,864,286 Bank One, Wisconsin Closing Date through November 2, 1999 $20,000,000 0.2857142857143% November 3, 1999 through November 2, 2000 19,642,857 0.2857142857143% November 3, 2000 through November 2, 2001 18,385,714 0.2857142857143% November 3, 2001 through November 2, 2002 16,957,143 0.2857142857143% November 3, 2002 through November 2, 2003 15,242,857 0.2857142857143% Harris Trust and Savings Bank Closing Date through November 2, 1999 $20,000,000 0.2857142857143% November 3, 1999 through November 2, 2000 19,642,857 0.2857142857143% November 3, 2000 through November 2, 2001 18,385,714 0.2857142857143% November 3, 2001 through November 2, 2002 16,957,143 0.2857142857143% November 3, 2002 through November 2, 2003 15,242,857 0.2857142857143% LOC COMMITMENTS LOC Commitment LOC Commitment Amount Percentage Firstar Bank Milwaukee, N.A. Closing Date through November 2, 2003 $1,500,000 0.4285714285714% Bank One, Wisconsin Closing Date through November 2, 2003 $1,000,000 0.2857142857143% Harris Trust and Savings Bank Closing Date through November 2, 2003 $1,000,000 0.2857142857143%
EX-99 4 PRESENTAION TO BOARD OF DIRECTORS HIGHLY CONFIDENTIAL PROJECT BUDDHA PRESENTATION TO THE BOARD OF DIRECTORS October 12, 1998 TABLE OF CONTENTS ________________________________________________________________________________ SECTION TITLE I. Transaction Overview A. Parties to the Transaction B. Transaction Summary C. Recent Events D. Rationale II. Company Overviews A. CST/TLC Overview B. Weatherford Overview III. Valuation of TLC A. Comparable Transactions B. Alternative Transaction C. Transaction Consideration Analysis IV. Historical Market Value Analysis V. Liquidity Analysis Appendix A. Comparable Transactions B. Shareholder Profile C. Price/Volume Graphs I. TRANSACTION OVERVIEW A. PARTIES TO THE TRANSACTION TRANSACTION OVERVIEW ________________________________________________________________________________ PARTIES TO THE TRANSACTION CST: CST ("CST" or the "Company"), through its wholly-owned subsidiary TLC, provides public refrigerated and non-refrigerated warehousing, transportation and logistic services primarily to the food producing and manufacturing industries. At October 6, 1998, CST owned 3,897,462 shares of Weatherford, representing a 4.0% ownership position in Weatherford./(1)/ WEATHERFORD: Weatherford ("Weatherford") is an international manufacturer and supplier of oilfield equipment. Weatherford has a diversified presence in the exploration, production, and transmission sectors of the oil and gas industry through its role as service provider and equipment manufacturer. The Company operates in three industry segments: oilfield services, oilfield products and gas compression. _______________ (1) Source: CST management TRANSACTION OVERVIEW ________________________________________________________________________________ PARTIES TO THE TRANSACTION TLC: TLC ("TLC") is a wholly-owned subsidiary of CST that provides full service public and contract warehousing and logistic services for all ranges of refrigerated and ambient temperatures. TLC's transportation and distribution services include full service truckload, less-than-truckload and pooled consolidation in both temperature controlled and dry freight equipment. LUBAR INC.: Lubar Inc. ("Lubar") is a Venture Capital firm owned by Mr. Lubar, William T. Donovan and Mr. Lubar, Jr. - all of whom are current Board members of CST. Lubar has formed C-2, Inc. for the purpose of acquiring two-thirds of the equity of TLC. C-2, INC.: C-2, Inc. ("C-2") is a wholly-owned special purpose subsidiary of Lubar, Inc. C-2 will be the vehicle by which the existing public shareholders of CST will own an interest in TLC if they so elect. MR. LUBAR: Mr. Lubar is the Chairman and Chief Executive Officer of CST. He currently controls approximately 52%/(1)/ of the outstanding shares of CST. In addition, he is a principal of Lubar Inc. and he serves as a director of Weatherford. _______________ (1) Source: Proxy dated July 13, 1998. B. TRANSACTION SUMMARY TRANSACTION OVERVIEW ________________________________________________________________________________ TRANSACTION SUMMARY TRANSACTION SUMMARY: In the proposed transaction (the "Transaction"), CST will cause TLC to increase borrowings from the bank group and upstream $23.4 million in cash to CST ($20 million as a dividend and $3.4 million as repayment of intercompany debt). CST will then purchase $10.0 million of Weatherford shares in the open market to be distributed to CST Shareholders (the "Mandatory Purchase"). Under certain conditions, CST may be obligated to purchase an additional $5.0 million of Weatherford shares to be distributed to CST Shareholders (the "Contingent Purchase"). CST will then sell two-thirds of the interest in TLC to C-2 for $10,666,667. CST will then merge with and into a wholly-owned subsidiary of Weatherford in a transaction qualifying as a reorganization under Section 368(a)(1)(A) of the Internal Revenue Code. CONSIDERATION: Each issued and outstanding share of CST common stock (the "CST Common Stock") will be converted into the right to receive approximately .76 shares of Weatherford plus $4.09 in Cash/(1)/ and the pro rata number of additional Weatherford Shares distributed in the Mandatory Purchase or (Cont'd) _______________ (1) The Cash is equal to the sum of (i) $20 million to be received in connection with a Dividend payable to CST by TLC, (ii) $10.7 million to be paid to CST in connection with the sale of two-thirds of the interest in TLC to C-2, Inc., (iii) $3.3 million to be received by CST in connection with the repayment of intercompany debt and (iv) all other cash of CST at the time of closing less the sum of (i) an amount of cash necessary to pay any CST liabilities and Transaction expenses less the Mandatory Purchase. See "Transaction Consideration Analysis" p. 36. TRANSACTION OVERVIEW ________________________________________________________________________________ TRANSACTION SUMMARY CONSIDERATION CONT'D: approximately .76 shares of Weatherford plus $3.12 Cash/(1)/ and the pro rata number of additional Weatherford Shares distributed in the Mandatory Purchase and the Contingent Purchase. CONTINGENT PURCHASE CIRCUMSTANCE: If at the time of closing, the price per share of Weatherford Stock is between $19.00 and $14.00, CST is required to exercise such portion of the Contingent Purchase necessary to allow the Merger to be treated as a "tax free" reorganization under the Internal Revenue Code. The minimum price under which the transaction will close is $14.00. ORIGINAL AGREEMENT: In the Original Agreement, $10.0 million was to be left in CST according to the terms of the merger, and net of liabilities which might arise, $10.0 million was payable to CST shareholders five years after the Transaction closed. In the current agreement, the $10.0 million will instead fund the Mandatory Purchase. In the Original Agreement, there was no Mandatory or Contingent Purchase. _______________ (1) The Cash is equal to the sum of (i) $20 million to be received in connection with a Dividend payable to CST by TLC, (ii) $10.7 million to be paid to CST in connection with the sale of two-thirds of the interest in TLC to C-2, Inc., (iii) $3.3 million to be received by CST in connection with the repayment of intercompany debt and (iv) all other cash of CST at the time of closing less the sum of (i) an amount of cash necessary to pay any CST liabilities and Transaction expenses less the Mandatory Purchase less the Contingent Purchase. See "Transaction Consideration Analyst" p. 36. TRANSACTION OVERVIEW ________________________________________________________________________________ TRANSACTION SUMMARY STOCK/CASH ELECTION: Each CST shareholder will be given the opportunity to participate in the two-thirds sale of TLC to C-2 via an election to purchase C-2 stock. With respect to the Cash portion of the Consideration, each CST shareholder will be required to make an election (assuming the Contingent Purchase is not exercised) to receive either (i) cash or (ii) cash and C-2 stock prior to the effective date of the Transaction. PUT OPTION: Weatherford will receive from C-2 a put option to sell its one- third ownership position in TLC to C-2 for $7.1 million five years from the effective date of the Transaction. TAX CONSEQUENCES: Weatherford must hold TLC for a minimum of five years after the Transaction (except in accordance with the Participation Rights) in order to meet the continued business interest requirement pursuant to Section 368 (a) of the Internal Revenue Code of 1986, as amended. The Weatherford shares will be received tax-free by the CST Shareholders, while all proceeds of any cash distribution to CST Shareholders would be subject to capital gains tax to the extent the cash and the value of the Weatherford shares received by the CST shareholders exceed the shareholders' basis in CST. PARTICIPATION RIGHTS: In the event that C-2 proposes a sale of its interest in TLC to an unrelated third party, Weatherford will have the right to participate in that sale (i.e. Weatherford has the right to sell its interest in TLC at the same time.) TRANSACTION OVERVIEW ________________________________________________________________________________ TRANSACTION SUMMARY +------------------+ /| CST Shareholders |\ / +------------------+ \ / | \ / | \ 3,897,462 Weatherford C-2 Purchase / | \ Shares+Net Cash balance Option / | \ of CST+Mandatory / | \ Purchase+Contingent / | \ Purchase (if / $10.7MM+ | \ exercised). / Indemnity+ | \ +------------------+ 5-Yr. Put +-----------------+ \ +----------------+ | |----------------| |\ \ | | | C-2, INC. | 2/3 Equity of | CST | \ \| WEATHERFORD | | | TLC | | \ | | | |----------------| | \ +----------------+ +------------------+ +-----------------+ \ | | | | | \ | | | | | \ | | | | | \ | Mandatory (and | | | | Merged \Into | Contingent Purchase) | | | | \ | +-------------------------+ | | | \ | | | | | +--------------+ +------------------+ | | | | CST | | | | | | | ACQUISITION | | WEATHERFORD | | | | +--------------+ | OPEN MARKET |----------------------+ | | +------------------+ $10.0 million of | | The merger conveys CST's WFT Shares (and | | remaining assets which are contingent $5.0 | | 3,897,482 Weatherford million of WFT | | Shares + Mandatory Purchase Shares) | | and if exercised Contingent | | Purchase+ Net Cash balance | | of CST+ 1/3 Equity of TLC | | + Indemnity + 5-Yr. Put to $3.3. mil. debt repayment + | ---+---- Sell 1/3 of TLC to C-2 $20 mil. cash dividend ------ | | | | +------------------+ +--------------------+ | | | | | TLC | | 3,897,462 | | (wholly-owned | | Weatherford Common | | CST sub.) | | Shares | | | | (100% owned by CST)| +------------------+ +--------------------+ C. RECENT EVENTS TRANSACTION OVERVIEW ________________________________________________________________________________ RECENT EVENTS - - On August 17, 1998 at a special meeting of CST's shareholders, the merger between CST and Weatherford pursuant to an agreement dated December 12, 1997 was approved. The Merger was not consummated because the decrease in the price of Weatherford stock from $46.38 on December 12, 1997 (the last trading date prior to a public announcement of the Merger) to below $30.00 prevented the Merger from being treated as a "tax free" reorganization under the Internal Revenue Code thereby leaving unsatisfied a material condition to the closing of the merger. - - On May 27, 1998, a merger between EVI Inc. and Weatherford Enterra Inc. was completed. The combined entity, Weatherford International, Inc., trades on the New York Stock Exchange under the symbol "WFT." EVI Inc. completed its buyout of Weatherford Enterra Inc. for $2.77 billion. The transaction was accounted for as a pooling of interests, whereby Weatherford Enterra Inc.'s stockholders received 0.95 shares of newly issued shares of Weatherford International, Inc. common stock for each Weatherford Enterra common share. TRANSACTION OVERVIEW ________________________________________________________________________________ LTM STOCK PRICE CHART FOR WEATHERFORD AND CST [Graphic Omitted] Graph depicting last twelve months stock price for Weatherford and CST Daily from October 7, 1997 to October 6, 1998 expressed as percent with Weatherford 100 = 66.125 and CST 100 = 46.375. Source: IDD Information Services/Trade line TRANSACTION OVERVIEW ________________________________________________________________________________ LTM STOCK PRICE CHART FOR WEATHERFORD AND CST [Graphic Omitted] Chart depicting last twelve months Stock Price for Weatherford and CST Daily from October 7, 1997 to October 6, 1998 expressed in dollars Source: IDD Information Services/Tradeline D. RATIONALE TRANSACTION OVERVIEW ________________________________________________________________________________ RATIONALE CST Shareholders will receive consideration, which represents a 12.3% premium/(1)/ on a per share basis to CST shareholders' current per share market value. CST Shareholders will receive Weatherford Common Stock in exchange for CST Common Stock on a tax-free basis. The Transaction eliminates $20.8 million/(2)/ in capital gains tax which would be realized at the CST corporate level in a liquidation. The Transaction significantly enhances liquidity for current CST Shareholders. The Transaction allows for meaningful realization of value in CST's TLC subsidiary. The Transaction allows current shareholders of CST to have a direct investment in Weatherford Common Stock. The Transaction allows current shareholders of CST to participate in the TLC business on the same terms as management. ______________ (1) See "Transaction Consideration Analysis," pg. 35. (2) Assumes a Weatherford share price of $18.75 (as of 10/7/98). See "Tax Liability Comparison," pg. 33. II. COMPANY OVERVIEWS A. CST/TLC OVERVIEW COMPANY OVERVIEWS ________________________________________________________________________________ CST/TLC OVERVIEW CST, headquartered in Milwaukee, Wisconsin, is primarily engaged in providing public refrigerated and non-refrigerated warehousing and logistic services. CST's principal businesses/assets include 3,897,462 shares of Weatherford Common Stock and TLC. TLC provides full service public and contract warehousing, as well as logistic services in all ranges of refrigerated and ambient temperatures. TLC also provides a full range of international freight management services, fully computerized inventory management, repackaging and just-in-time production supply services. TLC's customers are primarily national, regional and local firms engaged in food processing, consumer product manufacturing, wholesale distribution and retailing. TLC's refrigerated distribution centers are located in Rochelle, Illinois; Beaver Dam, Wisconsin; Wauwatosa, Wisconsin; Holland, Michigan; and Kalamazoo, Michigan. COMPANY OVERVIEWS ________________________________________________________________________________ CST/TLC OVERVIEW In addition to the refrigerated distribution centers described above, TLC operates a national network of owned and leased dry distribution centers (non-refrigerated) which comprise approximately 900,000 square feet of storage capacity. TLC's dry distribution centers are located in Zeeland and Kalamazoo, Michigan; Munster, Indiana; South Brunswick, New Jersey; and Bayamon, Puerto Rico. Competition in integrated logistic services is both on a national and local basis with a predominant emphasis on transportation services. At present, there are no direct competitors that provide the same type of warehousing and transportation services as TLC. Each of TLC's individual business segments, however, is highly fragmented with many local, regional and national competitors (especially those in the transportation and dry warehousing industries). TLC's competitive edge is its ability to provide fully integrated logistic services designed for its customers' distribution needs and the utilization of its network of strategically-located refrigerated and dry distribution centers. COMPANY OVERVIEWS ________________________________________________________________________________ CST/TLC OVERVIEW (In thousands, except per share data) CST CONSOLIDATED ---------------- MARKET VALUE DATA: RECENT PRICE (AS OF 10/7/98): $18.00 52 WEEK HIGH: $ 46.56 LOW: $ 17.38 SHARES OUTSTANDING/(2)/: 5,149 EQUITY MARKET VALUE: $ 92,688 NET DEBT (AT 6/30/98): 24,825 -------- UNLEVERAGED MARKET VALUE: $117,513 ======== HISTORICAL OPERATING DATA: YEARS ENDED JUNE 30, -------------------------------------------------- 1995/(1)/ 1996 1997 1998 ---- ---- ---- ---- Revenue $126,881 $77,170 $84,208 $90,179 EBITDA 18,531 11,380 11,734 12,436 Net Income 5,062 3,603/(3)/ 6,663/(3)/ 6,007/(3)/ ______________ (1) Data includes operating results of Prideco, which was merged into Weatherford in June 1995. Prideco contributed approximately $55.2 million and $47.1 million in revenues and cost of goods sold in fiscal 1995, respectively. (2) Fully-diluted calculated using the treasury stock method. (3) Includes results of Weatherford accounted for under the equity method. COMPANY OVERVIEWS ________________________________________________________________________________ CST/TLC OVERVIEW (In thousands) TLC STAND-ALONE HISTORICAL OPERATING DATA/(1)/
FISCAL YEAR ENDED JUNE 30, ---------------------------------------------------------- 1993 1994 1995 1996 1997 1998 ------- -------- -------- -------- -------- -------- WAREHOUSING AND LOGISTIC REVENUE $15,190 $42,355 $71,030 $77,884 $84,208 $90,179 COSTS & EXPENSES: WAREHOUSING AND LOGISTICS EXPENSE 4,942 29,877 51,449 59,998 64,786 70,052 SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 3,721 3,581 6,136 5,849 6,409 6,659 ------- -------- -------- -------- -------- -------- OPERATING INCOME 6,527 8,897 13,445 12,037 13,013 13,469 OTHER EXPENSE: INTEREST EXPENSE, NET 2,176 2,763 3,137 2,936 2,976 2,614 DEPRECIATION 3,134 4,126 5,730 6,188 6,540 6,394 LOSS ON DISPOSAL OF ASSETS - - - - 1,036 325 OTHER EXPENSES 241 387 291 302 753 154 ------- -------- -------- -------- -------- -------- PRE-TAX INCOME 976 1,621 4,287 2,611 1,707 3,981 PROVISION FOR INCOME TAXES 391 627 1,724 1,075 695 1,589 ------- -------- -------- -------- -------- -------- NET INCOME $585 $994 $2,563 $1,536 $1,011 $2,393 ======= ======== ======== ======== ======== ======== EBIT $3,152 $4,384 $7,424 $5,547 $5,719 $6,920 EBIT Margin 21% 10% 10% 7% 7% 8% EBITDA $6,286 $8,511 $13,154 $11,734 $12,260 $13,315 EBITDA Margin 41% 20% 19% 15% 15% 15%
_______________ (1) Source: CST Management COMPANY OVERVIEWS ________________________________________________________________________________ CST/TLC OVERVIEW (In thousands) TLC STAND-ALONE PROJECTED OPERATING DATA/(1)/
FISCAL YEAR ENDED JUNE 30, ---------------------------------------------------------- ACTUAL BUDGET 1998 1998 1999 2000 2001 2002 ------- -------- -------- -------- -------- -------- WAREHOUSING AND LOGISTIC REVENUE $90,179 $97,356 $106,713 $112,638 $118,223 $124,323 COSTS & EXPENSES: WAREHOUSING AND LOGISTICS EXPENSE 70,052 75,262 83,043 87,675 92,219 97,178 SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 6,659 7,268 6,670 6,695 7,002 7,338 ------- -------- -------- -------- -------- -------- OPERATING INCOME 13,469 14,826 17,000 18,268 19,002 19,807 OTHER EXPENSE: INTEREST EXPENSE, NET/(2)/ 2,614 4,617 4,490 3,950 3,368 2,695 DEPRECIATION 6,394 7,615 7,449 7,171 6,968 6,785 LOSS ON DISPOSAL OF ASSETS 325 - - - - - OTHER EXPENSE 154 338 1,500 1,000 1,000 1,000 ------- -------- -------- -------- -------- -------- PRE-TAX INCOME 3,981 2,256 3,561 6,147 7,666 9,327 PROVISION FOR INCOME TAXES 1,589 857 1,353 2,336 2,913 3,544 ------- -------- -------- -------- -------- -------- NET INCOME $2,393 $1,399 $2,208 $3,811 $4,753 $5,783 ======= ======== ======== ======== ======== ======== EBIT $6,920 $6,873 $8,051 $10,097 $11,034 $12,022 EBIT Margin 8% 7% 8% 9% 9% 10% EBITDA $13,315 $14,488 $15,500 $17,268 $18,002 $18,807 EBITDA Margin 15% 15% 15% 15% 15% 15%
_______________ (1) Source: CST Management (2) Actual 1998 interest is lower than the Budget because the borrowing which was anticipated in the Budget did not occur. B. WEATHERFORD OVERVIEW COMPANY OVERVIEWS ________________________________________________________________________________ WEATHERFORD OVERVIEW Weatherford has a solid manufacturing base and comprehensive product line including drill pipe and premium casing and tubing, completion, and artificial lift equipment. The Company has a diversified international presence in the exploration, production, and transmission sectors of the oil and gas industry through its role as service provider and equipment manufacturer. The Company operates in three industry segments: oilfield services, oilfield products and gas compression. The Company's products are used in the exploration and production of oil and natural gas and it is currently the largest manufacturer and supplier of drill pipe in the world, the largest manufacturer of premium tubulars in North America and among the largest manufacturers of rod lift equipment in the world. Income from continuing operations for fiscal 1997 was $196.8 million, or $2.01 per share, from revenues of $1,969.1 million, as compared to income from continuing operations for fiscal 1996 of $92.2 million, or $1.01 per share, from revenues of $1,467.3 million. COMPANY OVERVIEWS ________________________________________________________________________________ WEATHERFORD OVERVIEW (In thousands, except for per share data) WEATHERFORD ----------- MARKET VALUE DATA RECENT PRICE (AS OF 10/7/98) $ 18.75 52 WEEK HIGH: $ 73.00 LOW: $ 15.00 SHARES OUTSTANDING/(1)/: 97,568 EQUITY MARKET VALUE: $1,829,394 NET DEBT (AT 6/30/98) 803,731 ------------- UNLEVERAGED MARKET VALUE: $2,633,125 ============= HISTORICAL OPERATING DATA:
SIX MONTHS ENDED YEARS ENDED DECEMBER 31, JUNE 30, ------------------------------------------ ------------------------- 1995 1996 1997 1997 1998 ------------ ---------- ---------- --------- ------------ Revenue $1,125,803 $1,467,270 $1,969,089 $980,252 $1,104,293 EBITDA/(2)/ 208,705 291,729 480,455 211,408 299,439 Net Income/(3)/ 46,405/(4)/ 92,161 196,773 83,644 120,652/(5)/
_______________ (1) Fully-diluted calculated using the treasury stock method. (2) EBITDA is calculated by taking the restated combined operating income for Weatherford and adding historical depreciation and amortization for both EVI and Weatherford Enterra. (3) Excludes all extraordinary items. (4) Excludes merger costs and other charges of $88,182 tax effected at 38%. (5) Excludes merger costs and other charges of $120,000, tax effected at 38%. III. VALUATION OF TLC A. COMPARABLE TRANSACTIONS VALUATION OF TLC ________________________________________________________________________________ COMPARABLE TRANSACTIONS (Dollars in thousands)
VALUATION MULTIPLES IMPLIED UNLEVERED MARKET VALUE TLC LTM ----------------------------------------- - ------------------------------------------------------ STATISTIC/(1)/ HIGH LOW MEAN MEDIAN HIGH LOW MEAN MEDIAN -------------- ------- ------- -------- ---------- ----------- ---------- ----------- - ----------- REVENUES $ 90,179.2 2.4X 1.7X 2.0X 1.9X $ 215,284.0 $149,768.5 $ 177,495.9 $ 167.435.4 EBIT 7,074.2 17.1 11.0 13.2 11.4 121,170.4 78,007.7 93,366.9 80,922.8 EBITDA 13,468.5 9.9 6.8 8.1 7.7 133,188.5 91,585.9 109,591.3 103,999.4 ----------- ---------- ----------- - ----------- Mean: $ 156,547.6 $106,454.0 $ 126,818.1 $ 117,452.5 ----------- ---------- ----------- - -----------
_______________ (1) Source: CST management VALUATION OF TLC ________________________________________________________________________________ COMPARABLE TRANSACTIONS - IMPLIED VALUATION GRAPHICS OMITTED Chart depicting Comparable Transactions - Implied Valuation VALUATION OF TLC ________________________________________________________________________________ COMPARABLE TRANSACTIONS - IMPLIED VALUATION GRAPHICS OMITTED Chart depicting Comparable Transactions - Implied valuation (All of the implied transaction prices were decreased by the amount that the Morgan Stanley REIT Index decreased for the effective dates of the Comparable Transactions to 10/8/98) C. ALTERNATIVE TRANSACTION ALTERNATIVE TRANSACTION ________________________________________________________________________________ TAX LIABILITY COMPARISON (Dollars in thousands except per share data) An alternative to the proposed Transaction is the outright sale by CST of its position in Weatherford Common Stock for cash. While this alternative is recognized as a method in which CST shareholders would be able to monetize the current value of their ownership in Weatherford, significant capital gains taxes would be incurred at the CST corporate level and significant ordinary income tax would be incurred at the shareholder level. In the proposed Transaction, the corporate tax liability would be eliminated, and the tax at the shareholder level would be deferred until the individual shareholder liquidated his holding in Weatherford. CURRENT CAPITAL GAINS TAX LIABILITY COMPARISON:
Alternative Alternative Proposed Transaction Transaction Transaction ------------ ----------- - ----------- Current Shares Owned By CST 3,897 3,897 3,897 Current Price/Share of Weatherford x$14.00/(1)/ x$18.75/(2)/ x$18.75 ------------ ----------- - ----------- Current Market Value of Weatherford Investment $54,564 $73,077 $73,077 Total CST Tax Basis in Weatherford Investment/(3)/ $18,973 $18,973 $18,973 ------------ ----------- - ----------- Weatherford Shares Liquidated (Yes/No) Yes Yes No Current Taxable Gain to CST $35,592 $54,105 $0 % Assumed Capital Gains Tax Rate x38.5% x38.5% x38.5% ------------ ----------- - ----------- Current Corporate Capital Gains Tax Liability $13,703 $20,830 $0
_______________ (1) Represents the lowest stock price at which the Transaction may close. (2) As of 10/7/97. (3) Source: CST management. D. TRANSACTION CONSIDERATION ANALYSIS VALUATION OF TLC ________________________________________________________________________________ TRANSACTION CONSIDERATION ANALYSIS (Dollars in thousands, except per share data)
TOTAL CONSIDERATION PER CST SHARE: MANDATORY PURCHASE ONLY CONTINGENT PURCHASE - ------------------------------------------------------------------ --------------------------------- - --------------------------- Value of Weatherford Shares Held by CST: $14.19 $14.19 Value of Cash $4.09 $3.12 Value of $10 Million Mandatory Purchase (assuming no $1.94 $1.94 change in 10/7/98 market value) Value of $5 million Contingent Purchase (assuming no - $0.97 change in 10/7/98 market value) --------------------------------- - --------------------------- TOTAL Value/Share $20.22 $20.22 % PREMIUM TO CST MARKET VALUE 12.3% 12.3% - ------------------------------------------------------------------ --------------------------------- - --------------------------- CURRENT CST SHARE PRICE/(1)/ $18.00 $18.00 - ------------------------------------------------------------------ --------------------------------- - --------------------------- VALUE OF CONSIDERATION VALUE OF CONSIDERATION RECEIVED PER CST RECEIVED PER CST SHARE SHARE --------------------------------- - --------------------------- I. STOCK CONSIDERATION: Weatherford Shares Held by CST 3,897 3,897 CST Shares Outstanding: 5,149 5,149 Weatherford Shares Received per CST Share: 0.76 0.76 Current Weatherford Share Price/(1)/ x$18.75 x$18.75 --------------------------------- - --------------------------- $14.19 $14.19 II. CASH CONSIDERATION: Aggregate Cash Distribution/(2)/ $21,042 $16,042 Cash Distribution per CST Share: $4.09 $3.12
_______________ (1) Price as of 10/7/98. (2) Aggregate Cash Distribution to CST shareholders at time of closing is net of taxes and anticipated expenses. See "Transaction Consideration Analysis," pg. 39. Actual cash receipt by CST shareholders is reduced in the event that the shareholder elects to purchase shares in C-2. See "Stock/Cash Election," pg. 10. VALUATION OF TLC ________________________________________________________________________________ TRANSACTION CONSIDERATION ANALYSIS (in thousands) CASH SOURCES & USES - TRANSACTION CASH FLOW TO CST SHAREHOLDERS Cash Sources: CST Cash and Accrued Interest (at 9/30/98) $5,882 Dividend from TLC 20,000 Intercompany Note Repayment 3,330 2/3 TLC Equity Purchase Proceeds 10,667 ------ TOTAL Cash Sources $39,879 ====== Cash Uses: Taxes Due/(1)/ 5,702 Options Cash Out* 1,693 Transaction Expenses/(2)/ 1,302 CST Operating Cash Flow 140 Total Cash Cost Uses 8,837 TOTAL Net Cash to CST Shareholders $31,042 Less: Weatherford Share Purchase (10,000) ------- TOTAL Cash Distribution $21,042 (1) Net Tax Calculation: - ----------------------- Tax cost/(benefit) of 6/30/98 results $ 452 Tax on gain 5,751 Taxes paid year to date (501) -------- Net Tax Due 5,702 (2) Assumed outstanding transaction expenses are as follow: - ----------------------------------------------------------- Fairness Opinion/PSI $ 300 Lease Termination Penalty 327 Legal Expenses (est.) 185 Arthur Andersen Opinion (est.) 50 Weatherford-Related Expense 158 Solvency Opinion Expense 31 All Other Expense (est.) 251 -------- $ 1,302 _______________ * Contractual obligation based on employee contracts. VALUATION OF TLC ________________________________________________________________________________ TRANSACTION CONSIDERATION ANALYSIS (in thousands) ASSUMED TLC UNLEVERED PURCHASE PRICE CALCULATION TLC LTM EBITDA $ 13,469 Equity Purchase Price of TLC (100%) $ 16,000 Net Debt on 6/30/98 Balance Sheet 32,823 New Debt, net of Intercompany Note Repayment/(1)/ 20,000 ------ $ 52,823 Assumed Unlevered PP of TLC $ 68,823 ====== Assumed Unlevered PP/EBITDA Multiple 5.1x _______________ (1) New debt assumed immediately prior to proposed Transaction, $20 million and $3 million of which will be used to pay CST shareholders a cash dividend and repay an intercompany note, respectively. IV. HISTORICAL MARKET VALUE ANALYSIS HISTORICAL MARKET VALUE ANALYSIS ________________________________________________________________________________ IMPLIED MARKET VALUE CONTRIBUTION OF WFT TO CST GRAPHICS OMITTED Chart depicting Implied Market Value Contribution of WFT to CST for period 10/8/97 to 10/7/98. HISTORICAL MARKET VALUE ANALYSIS ________________________________________________________________________________ IMPLIED MARKET VALUE CONTRIBUTION OF WFT TO CST/(1)/ Equity Market Value ------------------------------------------- Per Share Total (thousands) CST $18.00 $92,688/(2)/ ATTRIBUTABLE TO WEATHERFORD INVESTMENT/(1)/ 14.19 73,077/(2)/ IMPLIED NON-WEATHERFORD MARKET VALUE $3.81 $19,611 ================= ===================== _______________ (1) Based on a Weatherford stock price of $18.75, as of 10/7/98 market close. (2) Assumes diluted CST shares outstanding. HISTORICAL MARKET VALUE ANALYSIS ________________________________________________________________________________ LTM STOCK APPRECIATION/(DEPRECIATION) GRAPHICS OMITTED Chart depicting Latest Twelve Months Appreciation/(Depreciation) for CST and WFT Share Price for period 10/8/97 to 10/7/98. V. LIQUIDITY ANALYSIS LIQUIDITY ANALYSIS ________________________________________________________________________________ LTM TRADING VOLUME GRAPHICS OMITTED Chart depicting Latest Twelve Months Trading Volume for CST and WFT Stock for period 10/8/97 to 10/7/98. APPENDIX A. COMPARABLE TRANSACTIONS APPENDIX - --------------------------------------------------------------------------------------------------------- COMPARABLE TRANSACTIONS/(1)/ (Dollars in thousands)
TARGET SHARES OUT. DATE: OFFER TERMS UPP ANNOUNCED ATTITUDE PP ACQUIRER DESCRIPTION OF TARGET EFFECTIVE STATUS PRICE/SHARE - -------------------------------------- ------------------------- ------------ ------------ ------------- Americold Corp./(2)/ Provider of public 9/29/97 Cash NA refrigerated warehouse 11/3/97 Friendly $ 564,508 JV-Vornado Realty Trust, space Completed $ 111,000 Crescent Real Estate Equities Co. NA - -------------------------------------- ------------------------- ------------ ------------ ------------- URS Logistics Inc./(2)/ Provider or refrigeration 9/29/97 Cash NA and frozen goods Friendly $ 356,494 JV-Vornado Realty Trust, transportation services 11/3/97 Completed $ 178,000 Crescent Real Estate Equities Co. NA - -------------------------------------- ------------------------- ------------ ------------ ------------- Christian Salvesen Inc./(3)/ Provider of refrigerated Cash NA storage services 4/25/97 Friendly $ 122,400 CS Integrated LLC 4/25/97 Completed $ 122,400 (Security Capital Industrial Trust) NA - -------------------------------------- ------------------------- ------------ ------------ -------------
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TARGET LTM VALUATION MULTIPLES -------------------------------------------------- REVENUE EBIT EBITDA ACQUIRER UPP/REV UPP/EBIT UPP/EBITDA - -------------------------------------- --------------- ---------------- ------------------ Americold Corp./(2)/ $ 304,039 $ 49,349 $ 73,107 1.9 x 11.4 x 7.7 x JV-Vornado Realty Trust, Crescent Real Estate Equities Co. - -------------------------------------- --------------- ---------------- ------------------ URS Logistics Inc./(2)/ $ 149,330 $ 20,813 $ 36,050 2.4 x 17.1 x 9.9 x JV-Vornado Realty Trust, Crescent Real Estate Equities Co. - -------------------------------------- --------------- ---------------- ------------------ Christian Salvesen Inc./(3)/ $ 73,700 $ 11,100 $ 18,000 1.7 x 11.0 x 6.8 x CS Integrated LLC (Security Capital Industrial Trust)
LEGEND LTM = Latest Twelve Months PP = Purchase Price UPP = Unlevered Purchase Price TBV = Tangible Book Value NA = Not Applicable NM = Not Meaningful SUMMARY STATISTICS High 2.4 x 17.1 x 9.9 x Low 1.7 11.0 6.8 Mean 2.0 13.2 8.1 Median 1.9 11.4 7.7 _______________ (1) Financial data excludes the results of discontinued operations, extraordinary gains and one-time charges. Fully-diluted shares outstanding calculated using the treasury stock method. (2) Debt figure included in UPP was calculated using financial statements found in the Vornado Realty Trust 8-K, dated September 22, 1997. (3) Christian Salvesen annual revenues, EBIT, and EBITDA figures provided by CST management. B. SHAREHOLDER PROFILE APPENDIX - ------------------------------------------------------------------------------------------------------ SHAREHOLDER PROFILE (In thousands)
CST EXISTING OWNERSHIP WEATHERFORD EXISTING OWNERSHIP -------------------------------- - --------------------------------- SHARES $ OWNERSHIP SHARES % OWNERSHIP ---------------- --------------- ---------------- - ---------------- INSTITUTIONAL HOLDERS/(1)/ Dimensional Fund Advisors Inc. 290 5.6% - - Vanguard Group, Inc. 42 0.8% - - Barclays Bank PLC 37 0.7% - - Other Institutions 92 1.8% - - ---------------- --------------- ---------------- - ---------------- CST TOTAL INSTITUTIONAL INVESTORS 461 9.0% - - CST INSIDERS/(2)/ Sheldon B. Lubar 969 18.8% - - Albert O. Nicholas 311 6.0% - - Nicholas F. Brady 200 3.9% - - William T. Donovan 168 3.3% - - David J. Lubar 427 8.3% - - Gary R. Sarner 61 1.2% - - Other Lubar Family Members 1,322 25.7% - - Other Directors and Officers 45 0.9% - - ---------------- --------------- ---------------- - ---------------- TOTAL CST DIRECTORS, OFFICERS AND INSIDERS 3,502 68.0% - - OTHER SHAREHOLDERS 1,186 23.0% - - ---------------- --------------- ---------------- - ---------------- TOTAL SHARES AND OPTIONS OUTSTANDING 5,149 100.0% - - ================ =============== ================ ================ INSTITUTIONAL HOLDERS/(1)/ FMR Corporation - - 4,772 4.8% Fund Asset Management - - 4,415 4.5% Lehman Brothers Holdings Inc. - - 3,599 3.6% Franklin Resources, Inc. - - 2,897 2.9% Massachusetts Financial Services - - 2,802 2.8% Travelers Group Inc. - - 2,695 2.7% Sound Shore Management, Inc. - - 2,169 2.2% AIM Management Group Inc. - - 2,015 2.0% PaineWebber Group, Incorporated - - 1,671 1.7% Other Institutions - - 40,992 41.6% ---------------- --------------- ---------------- - ---------------- WEATHERFORD TOTAL INSTITUTIONAL INVESTORS - - 68,027 69.0% - ----------------------------------------------------------------------------------------------------------------------- CST - - 3,897 4.0% - ----------------------------------------------------------------------------------------------------------------------- WEATHERFORD INSIDERS/(3)/ - - 5,632 5.7% William E. Macaulay - - 830 0.8% Bernard J. Duroc-Danner - - 200 0.2% Other Directors and Officers - - 1,102 1.1% ---------------- --------------- ---------------- - ---------------- TOTAL WEATHERFORD INSIDERS - - 7,765 7.9% OTHER SHAREHOLDERS - - 22,863 23.2% ---------------- --------------- ---------------- - ---------------- TOTAL SHARES AND OPTIONS OUTSTANDING - - 89,656 100.0% ================ =============== ================ ================
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PRO FORMA COMBINED EVI -------------------------------- SHARES % OWNERSHIP ---------------- --------------- INSTITUTIONAL HOLDERS/(1)/ Dimensional Fund Advisors Inc. 219 0.2% Vanguard Group, Inc. 32 0.0% Barclays Bank PLC 28 0.0% Other Institutions 70 0.1% ---------------- --------------- CST TOTAL INSTITUTIONAL INVESTORS 349 0.3% CST INSIDERS/(2)/ Sheldon B. Lubar 733 0.7% Albert O. Nicholas 235 0.2% Nicholas F. Brady 151 0.1% William T. Donovan 127 0.1% David J. Lubar 323 0.3% Gary R. Sarner 46 0.0% Other Lubar Family Members 1,001 Other Directors and Officers 34 0.0% ---------------- --------------- TOTAL CST DIRECTORS, OFFICERS AND INSIDERS 2,651 1.6% OTHER SHAREHOLDERS 898 0.9% ---------------- --------------- TOTAL SHARES AND OPTIONS OUTSTANDING 3,897 3.8% ================ =============== INSTITUTIONAL HOLDERS/(1)/ FMR Corporation 4,772 4.7% Fund Asset Management 4,415 4.3% Lehman Brothers Holdings Inc. 3,599 3.5% Franklin Resources, Inc. 2,897 2.8% Massachusetts Financial Services 2,802 2.7% Travelers Group Inc. 2,695 2.6% Sound Shore Management, Inc. 2,169 2.1% AIM Management Group Inc. 2,015 2.0% PaineWebber Group, Incorporated 1,671 1.6% Other Institutions 40,992 40.0% ---------------- --------------- WEATHERFORD TOTAL INSTITUTIONAL INVESTORS 68,027 66.3% - ---------------------------------------------------- ---------------- --------------- CST - - - ---------------------------------------------------- ---------------- --------------- WEATHERFORD INSIDERS/(3)/ 5,632 5.5% William E. Macaulay 830 0.8% Bernard J. Duroc-Danner 200 0.2% Other Directors and Officers 1,102 1.1% ---------------- --------------- TOTAL WEATHERFORD INSIDERS 7,765 7.6% OTHER SHAREHOLDERS 22,863 22.3% ---------------- --------------- TOTAL SHARES AND OPTIONS OUTSTANDING 102,553 100.0% ================ ===============
_______________ (1) Institutional ownership from Vickers on October 7, 1998. (2) CST Insider ownership from Proxy Statement dated July 13, 1998. (3) Lubar family members include 3 of Sheldon Lubar's daughters. (4) EVI Insider ownership from Proxy Statement dated July 13, 1998. C. PRICE/VOLUME GRAPHS APPENDIX ________________________________________________________________________________ CST LTM PRICE/VOLUME GRAPH [Graphic Omitted] Chart depicting CST LTM Price/Volume graph showing daily price for the period October 7, 1997 to October 6, 1998. APPENDIX ________________________________________________________________________________ WEATHERFORD LTM PRICE/VOLUME GRAPH [Graphic Omitted] Chart depicting Weatherford LTM Price/Volume graph showing daily prices for the period October 7, 1997 to October 6, 1998. -----END PRIVACY-ENHANCED MESSAGE-----