EXHIBIT 99.1
ROCK-TENN COMPANY
1993 EMPLOYEE STOCK PURCHASE PLAN
INDEX TO FINANCIAL STATEMENTS
PAGE
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Report of Independent Auditors................................ 2
Statements of Financial Condition as of September 30, 2002 and
2001........................................................ 3
Statements of Changes in Plan Equity for the three years ended
September 30, 2002.......................................... 4
Notes to Financial Statements................................. 5
REPORT OF INDEPENDENT AUDITORS
Compensation and Options Committee of the Board of Directors
Rock-Tenn Company
We have audited the accompanying statements of financial condition of the
Rock-Tenn Company 1993 Employee Stock Purchase Plan as of September 30, 2002 and
2001 and the related statements of changes in plan equity for each of the three
years in the period ended September 30, 2002. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Rock-Tenn Company 1993
Employee Stock Purchase Plan at September 30, 2002 and 2001 and the changes in
Plan equity for each of the three years in the period ended September 30, 2002,
in conformity with accounting principles generally accepted in the United
States.
ERNST & YOUNG LLP
Atlanta, Georgia
November 12, 2002
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ROCK-TENN COMPANY
1993 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30,
----------------------------
2002 2001
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Assets:
Receivable from Rock-Tenn Company (Notes 1 and 2)................... $ 631,569 $ 388,183
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Liabilities and equity:
Obligations to purchase Rock-Tenn Company common stock
(Notes 1 and 2)..................................................... 631,569 388,183
Plan equity......................................................... - -
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Total liabilities and equity............................................. $ 631,569 $ 388,183
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See notes to financial statements
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ROCK-TENN COMPANY
1993 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN PLAN EQUITY
YEARS ENDED SEPTEMBER 30,
--------------------------------------------------------------
2002 2001 2000
--------------------- -------------------- -------------------
Participant contributions ............................ $ 3,052,043 $ 2,398,240 $ 3,225,378
Purchases of Rock-Tenn Company common stock (Note 1).. (2,951,695) (2,388,286) (3,096,657)
Amounts refunded to Plan participants................. (100,348) (9,954) (128,721)
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Plan equity at end of year............................ $ - $ - $ -
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See notes to financial statements
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ROCK-TENN COMPANY
1993 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- DESCRIPTION OF THE PLAN:
In 1993, the Board of Directors of Rock-Tenn Company (the "Company")
adopted the Rock-Tenn Company 1993 Employee Stock Purchase Plan (the "Plan").
The Plan was effective beginning on January 1, 1994. On October 23, 1997, the
Company's Board of Directors voted to amend and restate the Plan, thereby
increasing the number of shares reserved for purchase under the Plan to
1,320,000. The amended and restated Rock-Tenn Company 1993 Employee Stock
Purchase Plan was approved by Rock-Tenn Company shareholders on January 22,
1998. Effective November 1, 2002, Amendment Number One to the Plan further
increased the number of shares reserved for purchase under the Plan to
2,320,000.
The Plan permits eligible employees to make regular, systematic purchases
of the Company's Class A common stock directly from the Company through payroll
deductions. Substantially all regular, full-time employees of the Company and
its subsidiaries are eligible to participate in the Plan upon completion of at
least two years of employment as defined by the Plan. Voluntary employee
contributions are deducted from participants' compensation each pay period and
are held for the participants' accounts. All funds held by the Company under the
Plan are included in the general assets of the Company.
On the first day of each of the four purchase periods (November 1, February
1, May 1 and August 1), participants in the Plan are granted an option to
purchase shares of the Company's Class A common stock. On the last day of each
purchase period (January 31, April 30, July 31 and October 31), the Company uses
participant contributions, net of refunds, to purchase shares of the Company's
Class A common stock for the participant. Contributions that exceed the plan
provisions or the Internal Revenue Code limits are refunded to participants. The
purchase price per share to the participant is equal to 85% of the market value,
as defined, of the Company's Class A common stock on the first or last day of
the purchase period, whichever amount is lower. For the purchase periods ending
October 31, 2001, January 31, 2002, April 30, 2002 and July 31, 2002, there was
a total of 244,244 shares of the Company's Class A common stock purchased for
participants under the Plan. For the purchase periods ending October 31, 2000,
January 31, 2001, April 30, 2001 and July 31, 2001 there was a total of 293,554
shares of the Company's Class A common stock purchased for participants under
the Plan. For the purchase periods ending October 31, 1999, January 31, 2000,
April 30, 2000 and July 31, 2000, there was a total of 313,503 shares of the
Company's Class A common stock purchased for participants under the Plan. Stock
certificates for all shares of the Company's Class A common stock purchased
under the Plan are issued to participants at the end of each purchase period.
Any participant may terminate contributions and withdraw from the Plan at
any time. Even though there are no current intentions to do so, the Board of
Directors can terminate the Plan at any time. Stock purchase transactions in
process at the time of such termination cannot be modified or canceled without
the written consent of the participants.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires Plan management to
make estimates and assumptions that affect the reported amounts of Plan assets
and liabilities and disclosure of any contingent assets and liabilities at the
date of the financial statements and the reported amounts
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of changes in Plan equity during the reporting period. Actual results may differ
from those estimates and the differences could be material.
Plan Administration
The Plan is administered by the Compensation and Options Committee of the
Company's Board of Directors, which consists of four outside directors.
Plan Expenses
Administrative expenses of the Plan are paid by the Company.
NOTE 3 -- FEDERAL INCOME TAXES:
The Plan qualifies as an Employee Stock Purchase Plan under Section 423 of
the Internal Revenue Code of 1986. Issuance of shares under this Plan are not
intended to result in taxable income to participants in the Plan based on
provisions in Section 423 of the Internal Revenue Code.
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