[▇▇▇▇▇▇▇ CONTAINER CORPORATION LOGO]
▇▇▇▇▇▇▇ CONTAINER CORPORATION
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
January 22, 2002
Dear ▇▇▇▇▇▇▇ Container Corporation Stockholder:
I am pleased to inform you that on January 21, 2002, ▇▇▇▇▇▇▇ Container
Corporation ("▇▇▇▇▇▇▇") entered into a new Agreement and Plan of Merger (the
"Merger Agreement") with Temple-Inland Inc. ("Temple-Inland") and Temple-Inland
Acquisition Corporation, an indirect wholly-owned subsidiary of Temple-Inland
("Purchaser").
Pursuant to the Merger Agreement, Purchaser is today commencing a tender
offer (the "Offer") to purchase all outstanding shares of Class A Common Stock,
par value $.0001 per share, of ▇▇▇▇▇▇▇, including the associated rights to
purchase preferred stock (the "Shares"), at a price of $1.17 per Share. The
$1.17 per Share price represents a premium of approximately 24% to our closing
stock price on January 16, 2002, the last full trading day before the Board of
Directors approved the Merger Agreement.
Purchaser previously launched on September 28, 2001 a tender offer (the
"Original Offer") to purchase all outstanding Shares at a price of $1.80 per
Share pursuant to an Agreement and Plan of Merger, dated as September 27, 2001
(the "Original Merger Agreement"), among ▇▇▇▇▇▇▇, Temple-Inland and Purchaser.
The Original Offer was, and this Offer is, conditioned upon, among other things,
the tender of 90% in aggregate principal amount of each series of ▇▇▇▇▇▇▇'▇
notes. On December 3, 2001, Purchaser reduced its Original Offer price from
$1.80 to $1.25 per Share pursuant to an Amendment No. 1 to the Original Merger
Agreement to provide part of the funding for additional consideration to be
offered in the concurrent tender offers for ▇▇▇▇▇▇▇'▇ notes in order to induce
more holders of the notes to tender their notes. However, on January 8, 2002,
Temple-Inland terminated the Original Merger Agreement after allowing the
Original Offer to expire because a sufficient amount of ▇▇▇▇▇▇▇'▇ notes had not
been tendered.
The further reduction of the Offer price to $1.17 provides part of the
funding for a further increase in the consideration to be offered in the
concurrent tender offers for ▇▇▇▇▇▇▇'▇ notes. ▇▇▇▇▇▇▇ believes that the greater
consideration to be offered to the holders of ▇▇▇▇▇▇▇'▇ notes should induce a
sufficient amount of notes to be tendered to satisfy Purchaser's minimum note
condition to the Offer. In addition, certain current and former senior
executives of ▇▇▇▇▇▇▇ have again agreed to a reduction in the benefits that they
would be entitled to receive under their employment or severance arrangements or
pursuant to Gaylord's Supplemental Executive Retirement Plan in order to provide
further funding for the noteholders. These reductions, which average
approximately 43% of the amounts these executives would be entitled to receive,
total approximately $17.0 million. Parent will also provide approximately $44.1
million of additional funding above the amount it agreed to provide in the
Original Offer in order to further increase the total consideration to be
offered to the noteholders. This includes approximately $6.0 million of
additional funding above the amount it agreed to provide in the revised Original
Offer.
The Merger Agreement provides that if the Offer is completed, the Purchaser
will merge with and into ▇▇▇▇▇▇▇ (the "Merger"). In the Merger, each Share not
acquired by Purchaser in the Offer will be converted into the right to receive
the same consideration paid pursuant to the Offer.
THE INDEPENDENT SPECIAL COMMITTEE OF YOUR BOARD OF DIRECTORS HAS
UNANIMOUSLY (1) DETERMINED THAT IT WOULD BE IN THE BEST INTERESTS OF ▇▇▇▇▇▇▇ AND
EACH OF ITS CONSTITUENCIES TO COMPLETE A TRANSACTION WITH PURCHASER AND THAT THE
ALLOCATION OF THE CONSIDERATION UNDER THE OFFER IS FAIR AND OFFERS A REASONABLE
ALLOCATION OF CONSIDERATION THAT COULD BE ACCEPTED BY ▇▇▇▇▇▇▇'▇ CONSTITUENCIES
AND RESULT IN A TRANSACTION THAT COULD SATISFY THE CONDITIONS OF THE OFFER AND
(2) RECOMMENDED, BASED UPON A PROPOSED MERGER AGREEMENT WITH A $1.17 OFFER
PRICE, THAT THE ▇▇▇▇▇▇▇ BOARD OF DIRECTORS APPROVE AND ADOPT THE MERGER
AGREEMENT AND THE MERGER. BASED UPON THE RECOMMENDATION OF THE INDEPENDENT
SPECIAL COMMITTEE, AMONG OTHER FACTORS, YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY
APPROVED AND ADOPTED THE MERGER AGREEMENT, DETERMINED THAT THE $1.17 OFFER AND
THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, ▇▇▇▇▇▇▇ AND ITS
STOCKHOLDERS AND RECOMMENDED THAT THE ▇▇▇▇▇▇▇ STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES.
In arriving at their recommendations, the Independent Special Committee and
the Board of Directors gave careful consideration to a number of factors which
are described in the enclosed Schedule 14D-9, which is being filed with the
Securities and Exchange Commission (the "SEC"). The Independent Special
Committee considered, among other things, the advice of its independent legal
and financial advisors. The Board of Directors considered, among other things,
the recommendation of the Independent Special Committee and the separate
opinions of Deutsche Banc ▇▇▇▇. ▇▇▇▇▇ Inc. and Rothschild Inc. to the Board of
Directors (the "Opinions"). Subject to the assumptions made, matters considered
and limitations on the review undertaken set forth in the Opinions, the Opinions
conclude that as of the date thereof the $1.17 in cash per Share to be received
by the stockholders of ▇▇▇▇▇▇▇ in the Offer and the Merger is fair, from a
financial point of view, to such stockholders. The full text of each Opinion is
attached to the enclosed Schedule 14D-9 and we urge you to read them carefully
and in their entirety.
Additional information about the transaction is contained in the enclosed
Schedule 14D-9, which we urge you to read carefully. Accompanying this letter,
in addition to the Schedule 14D-9, is the Purchaser's Offer to Purchase, dated
January 22, 2002, and related materials, including a Letter of Transmittal to be
used for tendering your Shares. These documents set forth the terms and
conditions of the Offer and provide instructions on how to tender your Shares.
On behalf of ▇▇▇▇▇▇▇, I urge you to read the enclosed material and consider this
information carefully and I would like to personally thank you again for your
time as a stockholder of ▇▇▇▇▇▇▇.
Sincerely,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
