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EXHIBIT 99.1
ROCK-TENN COMPANY
1993 EMPLOYEE STOCK PURCHASE PLAN
INDEX TO FINANCIAL STATEMENTS
Report of Independent Auditors 1
Statements of Financial Condition as of September 30, 2003 and 2002 2
Statements of Changes in Plan Equity for the three years ended
September 30, 2003 3
Notes to Financial Statements 4
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, 2003 and
2002 and the related statements of changes in plan equity for each of the three
years in the period ended September 30, 2003. 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, 2003 and 2002 and the changes in
plan equity for each of the three years in the period ended September 30, 2003,
in conformity with accounting principles generally accepted in the United
States.
Atlanta, Georgia
November 17, 2003
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ROCK-TENN COMPANY
1993 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30,
2003 2002
------------------
Assets:
Receivable from Rock-Tenn Company -
(Notes 1 and 2) $588,078 $631,569
Liabilities and equity:
Obligations to purchase Rock-Tenn Company
common stock - (Notes 1 and 2) $588,078 $631,569
Plan equity -- --
-------- --------
Total liabilities and equity $588,078 $631,569
======== ========
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,
2003 2002 2001
----------------------------------------
Participant contributions $ 3,408,835 $ 3,052,043 $ 2,398,240
Purchases of Rock-Tenn Company
common stock - Note 1 (3,375,380) (2,951,695) (2,388,286)
Amounts refunded to Plan participants (33,455) (100,348) (9,954)
----------- ----------- -----------
Plan equity at end of year $ -- $ -- $ --
=========== =========== ===========
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. Effective November 1, 2000, Amendment
Number One 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, 2002, January 31, 2003, April 30, 2003 and July 31, 2003, there was
a total of 310,976 shares of the Company's Class A common stock purchased for
participants under the Plan. 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. 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.
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ROCK-TENN COMPANY
1993 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
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 generally accepted
accounting principles generally accepted in the United States requires Plan
management to make estimates 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 of changes in Plan equity
during the reporting period. Actual results will 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 three 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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