American Filtrona Corporation
3951 Westerre Parkway, Suite 300
Richmond, Virginia 23233
804-346-2400
July 1, 1997
Mrs. Frances B. Bunzl Mr. Wallace Stettinius
3649 Peachtree Road, Apt. 105 Post Office Box 27367
Atlanta, Georgia 30319 Richmond, Virginia 23261
Bennett L. Kight, Esquire Mr. William A. Forrest, Jr.
c/o Sutherland, Asbill & Brennan, L.L.P. Post Office Box 27367
999 Peachtree Street, N.W. Richmond, Virginia 23261
Atlanta, Georgia 30309
WBT Holdings LLC
Mr. Rudolph H. Bunzl 999 Peachtree Street, N.E.
5540 Falmouth Street, Suite 305 Suite 2300
Richmond, Virginia 23230 Atlanta, Georgia 30309-3996
Attention: Bennett L. Kight, Esquire
Dear Mrs. Bunzl and Gentlemen:
This letter constitutes the agreement between American Filtrona
Corporation, a Virginia corporation (the "Company"), and each of the undersigned
(the "Shareholders") regarding shares of common stock, par value $1.00, of the
Company (the "Shares") beneficially owned by the Shareholders. The Company is
contemplating entering into a letter of intent (the "Letter of Intent") in the
form attached hereto as Exhibit A, pursuant to which the Company would be merged
or otherwise combined with an affiliate ("Newco") of Bunzl plc, an English
public limited company ("Bunzl"), on the terms described in the Letter of
Intent.
In consideration of the Company's expenditure of efforts and incurrence
of expenses, the parties agree as follows:
1. Each of the Shareholders hereby agrees that if:
(a) an acquisition transaction incorporating the terms of paragraphs
1, 2, 3 and 8(e)(f) and (h) of the Letter of Intent and providing for
the actions described on Exhibit B attached hereto (subject to the
limitations and exceptions set forth therein) (the "Transaction") is
approved by the Board of Directors of the Company upon recommendation
of the Special Committee of the Board of Directors; and
Mrs. Frances B. Bunzl
Bennett L. Kight, Esquire
Mr. Rudolph H. Bunzl
Mr. Wallace Stettinius
Mr. William A. Forrest
WBT Holdings LLC
July 1, 1997
Page Two
(b) the Company has received an opinion of Goldman Sachs & Co. that
the consideration to be received by the Company's shareholders in the
Transaction other than a Shareholder who participates in the actions
described in Exhibit B is fair to such shareholders, then
(i) each of the Shareholders shall have granted a proxy as provided
in paragraph 8(h) of the Letter of Intent, or, if he or she has
not done so with the approval of Bunzl, then such Shareholder
shall vote all Shares as to which he or she has voting power in
favor of the Transaction if the Transaction involves the vote of
the Company's shareholders; and
(ii) each of the Shareholders shall tender or submit for exchange all
Shares as to which he or she has dispositive power if the
Transaction involves a tender or exchange offer.
2. Until the consummation of the Transaction, each of the Shareholders
hereby agrees that:
(a) if the voting or dispositive power with respect to any Shares is
subsequently acquired by a Shareholder, such Shares will become
subject to the terms of this Agreement; and
(b) without the prior approval of Bunzl, he or she will not sell,
assign, pledge or otherwise transfer any of his or her Shares or any
interest therein to any person except to the extent necessary to
effect the transaction described in Exhibit B attached hereto;
provided that Shares that are transferred either with such approval
by Bunzl or as described on such Exhibit B shall remain subject to
the terms of this Agreement.
3. If (i) the Company and Newco have not entered into a definitive
agreement with respect to the Transaction by September 30, 1997, (ii) such
definitive agreement is terminated in accordance with its terms, or (iii) the
Company releases any of the Shareholders from his or her obligations under this
Agreement (with any transfer made in compliance with paragraph 2(b) above not
being deemed such a release), then this Agreement shall expire and all further
obligations of the parties hereto shall terminate.
Mrs. Frances B. Bunzl
Bennett L. Kight, Esquire
Mr. Rudolph H. Bunzl
Mr. Wallace Stettinius
Mr. William A. Forrest
WBT Holdings LLC
July 1, 1997
Page Three
4. Each of the Shareholders represents that he or she, as to shares held
individually or as a trustee, has all requisite power or authority to enter into
this Agreement in the respective capacities in which he or she owns or controls
Shares, and the covenants of the Shareholders set forth herein are valid and
enforceable against him or her, respectively, in the respective capacities in
which he or she owns or controls Shares. The representations, agreements and
covenants of the Shareholders set forth herein are also intended for the benefit
of Newco and Bunzl, and Newco and Bunzl shall have the right to enforce such
agreements and covenants to the maximum extent permitted by law.
5. Each of the parties hereto acknowledges and agrees that in the event
of any breach of this Agreement, each non-breaching party would be irreparably
and immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that the parties hereto (a) will waive, in any action for
specific performance, the defense of adequacy of a remedy at law and (b) shall
be entitled, in addition to any other remedy to which they may be entitled at
law or in equity, to compel specific performance of this Agreement in any action
instituted in a court of competent jurisdiction.
Please acknowledge your agreement with the foregoing by executing all
copies of this Agreement as marked. Please retain a copy for your records and
return all other copies to the Company in the enclosed envelope.
Sincerely,
AMERICAN FILTRONA CORPORATION
By: /s/ John L. Morgan
------------------
John L. Morgan
Chairman
ACKNOWLEDGED AND AGREED:
/s/ Frances B. Bunzl
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Frances B. Bunzl
/s/ Bennett L. Kight
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Bennett L. Kight
/s/ Rudolph H. Bunzl
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Rudolph H. Bunzl
/s/ Wallace Stettinius
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Wallace Stettinius
/s/ William A. Forrest, Jr.
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William A. Forrest, Jr.
WBT HOLDINGS LLC
/s/ Bennett L. Kight
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By: Bennett L. Kight
Title: President