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EXHIBIT 99
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, 1997 and 1996 2
Statements of Changes in Plan Equity for the three years ended
September 30, 1997 3
Notes to Financial Statements 4
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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, 1997 and
1996 and the related statements of changes in plan equity for each of the three
years in the period ended September 30, 1997. 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 generally accepted auditing
standards. 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, 1997 and 1996 and the changes in
Plan equity for each of the three years in the period ended September 30, 1997,
in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Atlanta, Georgia
November 13, 1997
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ROCK-TENN COMPANY
1993 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
September 30,
1997 1996
----------------------
Plan assets:
Receivable from Rock-Tenn Company
Notes 1 and 2 $510,348 $380,701
======== ========
Plan liabilities and equity:
Obligations to purchase Rock-Tenn Company
common stock - Notes 1 and 2 $510,348 $380,701
Plan equity -- --
-------- --------
Total plan liabilities and equity $510,348 $380,701
======== ========
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,
1997 1996 1995
---------------------------------------
(Restated)
Participant contributions $2,834,682 $2,107,505 $1,579,387
Purchases of Rock-Tenn Company
common stock - Note 1 2,789,931 2,106,192 1,566,735
Amounts refunded to plan participants 44,751 1,313 12,652
---------- ---------- ----------
Plan equity at end of year $ -- $ -- $ --
========== ========== ==========
See notes to financial statements
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ROCK-TENN COMPANY
1993 EMPLOYEES 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, however, the first purchase period
commenced on November 1, 1994. Under the Plan, there were 600,000 shares of the
Company's Class A common stock reserved for purchase. In October 1996, the
Company's Board of Directors increased the number of shares reserved for
purchase under the Plan to 660,000 shares, as a result of a 10% stock dividend
declared on October 24, 1996 and paid on November 4, 1996.
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 the
funds accumulated in each participant's account in the Plan to purchase shares
of the Company's Class A common stock for the participant. The purchase price
per share to the participant is equal to 85% of the fair 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, 1996, January 31, 1997, April 30, 1997 and July 31, 1997 there was a
total of 195,627 shares of the Company's Class A common stock purchased for
participants under the Plan. For the purchase periods ending October 31, 1995,
January 31, 1996, April 30, 1996 and July 31, 1996, there was a total of 147,366
shares of the Company's Class A common stock purchased for participants under
the Plan. For the purchase periods ending January 31, 1995, April 30, 1995 and
July 31, 1995, there was a total of 86,059 shares of the Company's Class A
common stock purchased for participants under the Plan. A stock certificate
representing any shares of the Company's Class A common stock purchased under
the Plan shall be held for, or at the participant's direction and expense,
delivered to the participant.
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. Outstanding options at the time of
termination cannot be modified or cancelled without the written consent of the
participants.
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NOTE 2 - SIGNIFICANT ACCOUNT POLICIES:
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of
accounting. Asset valuations are stated at cost which approximates fair value.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles 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 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.
Restatement of 1996 Balances
The Plan has restated its 1996 financial statements as a result of an
overstatement of approximately $335,000 of the amounts shown as participant
contributions and purchases of Rock-Tenn Company common stock as of September
30, 1996. There is no net effect on plan equity or participant accounts.
NOTE 3 - FEDERAL INCOME TAXES:
The Plan qualifies as an Employee Stock Purchase Plan under Section 423 of the
Internal Revenue Code of 1986. Transfers of shares under this Plan are not
intended to result in taxable income to employees under the Plan based on
provisions in Section 423 of the Internal Revenue Code.
NOTE 4 - SUBSEQUENT EVENTS
On October 23, 1997, the Company's Board of Directors voted to increase the
number of shares reserved for purchase under the Plan to 1,320,000. The increase
is subject to shareholder approval.
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