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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _____
Commission File Number: 333-53603-01
GPC CAPITAL CORP. II
(Exact name of registrant as specified in its charter)
Delaware 23-2952404
(State or other (I.R.S. Employer Identification No.)
jurisdiction of
incorporation or
organization)
2401 Pleasant Valley Road
York, Pennsylvania
(Address of principal executive offices)
17402
(zip code)
(717) 849-8500
(Registrant's telephone number, including area code)
Securities Registered pursuant to Section 12(b) of the Act: None
Securities Registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X]
No [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
As of the date hereof, 1,000 shares of the registrant's common stock, par
value $.01 per share, are outstanding.
There is no established public trading market for the registrant's common
stock, par value $.01 per share. The aggregate market value of the
voting securities held by non-affiliates of the registrant as of February 28,
2001 was $-0-. As of February 28, 2001, all of the outstanding
common stock, par value $.01 per share, of the registrant was owned by
Graham Packaging Holdings Company, a Pennsylvania limited partnership.
See Item 12, "Security Ownership of Certain Beneficial Owners and
Management."
_______________
DOCUMENTS INCORPORATED BY REFERENCE
None.
GPC CAPITAL CORP. II
INDEX
Page
Number
PART I ................................................................ 4
Item 1. Business ........................................... 4
Item 2. Properties ......................................... 6
Item 3. Legal Proceedings .................................. 6
Item 4. Submission of Matters to a Vote of Security
Holders ............................................ 6
PART II ............................................................... 7
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters ........................ 7
Item 6. Selected Financial Data ............................ 7
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations....... 8
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk ........................................ 9
Item 8. Financial Statements and Supplementary Data......... 10
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.............. 18
PART III .............................................................. 19
Item 10. Directors and Executive Officers of the
Registrant ......................................... 19
Item 11. Executive Compensation ............................. 20
Item 12. Security Ownership of Certain Beneficial
Owners and Management .............................. 20
Item 13. Certain Relationships and Related
Transactions ....................................... 20
PART IV ............................................................... 22
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K ................................ 22
3
PART I
Item 1. Business
Unless the context otherwise requires, all references herein to
the "Company," with respect to periods prior to the recapitalization
described below (the "Recapitalization"), refer to the business
historically conducted by Graham Packaging Holdings Company ("Holdings")
(which served as the operating entity for the business prior to the
Recapitalization) and one of its predecessors (Graham Container
Corporation), together with Holdings' subsidiaries and certain
affiliates, and, with respect to periods subsequent to the
Recapitalization, refer to Holdings and its subsidiaries. Since the
Recapitalization, Graham Packaging Company (the "Operating Company") has
been a wholly owned subsidiary of Holdings. GPC Capital Corp. II is a
wholly owned subsidiary of Holdings. All references to the
"Recapitalization" herein shall mean the collective reference to the
recapitalization of Holdings and related transactions as described under
"The Recapitalization" below, including the initial borrowings under the
Senior Credit Agreement (as defined below), the Senior Discount Offering
(as defined below) and the related uses of proceeds. References to
"Continuing Graham Entities" herein refer to Graham Packaging Corporation
("Graham GP Corp."), Graham Family Growth Partnership or affiliates
thereof or other entities controlled by Donald C. Graham and his family,
and references to "Graham Entities" refer to the Continuing Graham
Entities, Graham Engineering Corporation ("Graham Engineering") and the
other partners of Holdings (consisting of Donald C. Graham and certain
entities controlled by Mr. Graham and his family). All references to
"Management" herein shall mean the management of the Company at the time
in question, unless the context indicates otherwise. In addition, unless
otherwise indicated, all sources for all industry data and statistics
contained herein are estimates contained in or derived from internal or
industry sources believed by the Company to be reliable.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical facts
included in this Report on Form 10-K, including, without limitation,
statements regarding the Company's future financial position, economic
performance and results of operations, business strategy, budgets,
projected costs and plans and objectives of management for future
operations, are forward-looking statements. In addition, forward-looking
statements generally can be identified by the use of forward-looking
terminology such as "may", "will", "expect", "intend", "estimate",
"anticipate", "believe", or "continue" or the negative thereof or
variations thereon or similar terminology. Although the Company believes
4
that the expectations reflected in such forward-looking statements are
reasonable, the Company can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual
results to differ materially from the Company's expectations ("cautionary
statements") include, without limitation, those discussed in "Business"
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations". All subsequent written and oral forward-looking
statements attributable to the Company, or persons acting on its behalf,
are expressly qualified in their entirety by the cautionary statements.
GPC Capital Corp. II ("CapCo II") was incorporated in Delaware
in January, 1998. CapCo II is a wholly owned subsidiary of Holdings,
which was formed in 1989. CapCo II's sole purpose is to act as co-
obligor with Holdings of the Senior Discount Notes (as defined below
under "The Recapitalization"), and as co-guarantor with Holdings under
the Senior Credit Agreement (as defined below under "The
Recapitalization"). CapCo II has only nominal assets, does not conduct
any operations and did not receive any of the proceeds of the offering of
the Senior Discount Notes. Accordingly, investors in the Senior Discount
Notes must look solely to the cash flow and assets of Holdings for
payment of the Senior Discount Notes.
The principal executive offices of CapCo II are located at 2401
Pleasant Valley Road, York, Pennsylvania 17402, Telephone (717) 849-8500.
The Recapitalization
The recapitalization (the "Recapitalization") of Holdings was
consummated on February 2, 1998 pursuant to an Agreement and Plan of
Recapitalization, Redemption and Purchase, dated as of December 18, 1997
(the "Recapitalization Agreement"), by and among (i) Holdings, (ii) the
Graham Entities, and (iii) BMP/Graham Holdings Corporation, a Delaware
corporation ("Investor LP") formed by Blackstone Capital Partners III
Merchant Banking Fund L.P., and BCP/Graham Holdings L.L.C., a Delaware
limited liability company and a wholly owned subsidiary of Investor LP
("Investor GP").
On February 2, 1998, as part of the Recapitalization, Holdings
and CapCo II (together with Holdings, the "Holdings Issuers"),
consummated an offering (the "Senior Discount Offering") pursuant to Rule
144A under the Securities Act of $169,000,000 aggregate principal amount
at maturity of their 10 3/4% Senior Discount Notes Due 2009, Series A
(the "Senior Discount Old Notes").
In connection with the Recapitalization, the Holdings Issuers
entered into a Registration Rights Agreement with the Initial Purchasers
of the Senior Discount Old Notes, pursuant to which the Holdings Issuers
agreed to exchange the Senior Discount Old Notes for Notes having the
same terms but registered under the Securities Act and not containing the
5
restrictions on transfer that are applicable to the Senior Discount Old
Notes.
Pursuant to the related Registration Rights Agreement, on
September 8, 1998, the Holdings Issuers consummated an exchange offer
(the "Senior Discount Exchange Offer"), pursuant to which the Holdings
Issuers issued $169,000,000 aggregate principal amount at maturity of
their 10 3/4% Senior Discount Notes Due 2009, Series B (the "Senior
Discount Exchange Notes"), which were registered under the Securities
Act, in exchange for an equal principal amount at maturity of Senior
Discount Old Notes (the Senior Discount Old Notes and the Senior Discount
Exchange Notes being herein called the "Senior Discount Notes").
The Recapitalization also included the initial borrowing by the
Operating Company of $403.5 million in connection with a senior credit
facility (the "Senior Credit Agreement") by and among the Operating
Company, Holdings and a syndicate of lenders.
CapCo II is co-obligor with Holdings of the Senior Discount
Notes and co-guarantor with Holdings under the Senior Credit Agreement.
Employees
As of December 31, 2000, CapCo II had no employees.
Environmental Matters
There are no material environmental matters which relate to
compliance by CapCo II with Federal, State and local environmental
provisions.
Intellectual Property
CapCo II does not own any property which is considered
intellectual property.
Item 2. Properties
CapCo II does not own or lease any properties.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during
the fourth quarter of 2000.
6
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
All of CapCo II's common stock, par value $.01 per share
("common stock"), is owned by Holdings, 2401 Pleasant Valley Road, York,
Pennsylvania 17402. There is no established public trading market for
CapCo II's common stock.
In the first quarter of 1998, CapCo II issued 1,000 shares of
common stock to Holdings in a transaction exempt from registration under
the Securities Act pursuant to Section 4(2) of the Securities Act.
As indicated under Item 1, "Business -- The Recapitalization",
upon the Closing of the Recapitalization on February 2, 1998, the
Holdings Issuers consummated an offering pursuant to Rule 144A under the
Securities Act of $169,000,000 aggregate principal amount at maturity of
their Senior Discount Old Notes. Pursuant to the Purchase Agreement
dated January 23, 1998 (the "Purchase Agreement"), the Initial
Purchasers, DB Alex. Brown LLC (formerly BT Alex. Brown Incorporated),
Bankers Trust International PLC, Lazard Freres & Co. LLC and Salomon
Brothers Inc, purchased the Senior Discount Old Notes at a price of
57.173% of the principal amount, for a discount of 2.361% from the
initial offering price of 59.534% or a total discount of $3,990,090.
Pursuant to the Purchase Agreement, the Holdings Issuers also reimbursed
the Initial Purchasers for certain expenses. Pursuant to the Senior
Discount Exchange Offer, on September 8, 1998, the Holdings Issuers
issued $169,000,000 aggregate principal amount at maturity of their
Senior Discount Exchange Notes in exchange for an equal principal amount
of Senior Discount Old Notes.
No dividends were paid to the holder of CapCo II's common stock
in 2000.
Under the Senior Credit Agreement, the Operating Company is
subject to restrictions on the payment of dividends and other
distributions to Holdings, as described in Item 8, "Management's
Discussion and Analysis of Financial Condition and Results of Operations
- -- Liquidity and Capital Resources."
Item 6. Selected Financial Data
None.
7
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
None.
Liquidity and Capital Resources
On February 2, 1998, Holdings and CapCo II, as co-obligor,
issued $100.6 million of Senior Discount Old Notes ($169 million
aggregate principal amount at maturity).
On September 8, 1998, Holdings and Capco II consummated the
Senior Discount Exchange Offer for all of their outstanding Senior
Discount Old Notes, and issued in exchange therefor their Senior Discount
Exchange Notes, which have the same terms as the Senior Discount Old
Notes, except that the Senior Discount Exchange Notes are registered
under the Securities Act and do not include the restrictions on transfer
applicable to the Senior Discount Old Notes.
The Senior Discount Notes mature on January 15, 2009, with
interest payable at 10.75%. Cash interest on the Senior Discount Notes
does not accrue until January 15, 2003.
The Operating Company's Senior Credit Agreement currently
consists of four term loans to the Operating Company with initial term
loan commitments totaling $570 million and two revolving loan facilities
to the Operating Company totaling $255 million. Unused availability
under the revolving credit facilities at December 31, 2000 is $128
million, $78 million of which is under the revolving credit facility and
$50 million of which is under the growth capital revolving credit
facility. The obligations of the Operating Company under the Senior
Credit Agreement are guaranteed by Holdings and certain other
subsidiaries of Holdings. The term loans are payable in quarterly
installments through January 31, 2007, and require payments of $20.0
million in 2001, $25.0 million in 2002, $27.5 million in 2003, $93.0
million in 2004 and $64.9 million in 2005. The Operating Company expects
to fund scheduled dept repayments from cash from operations and unused
lines of credit. The revolving loan facilities expire on January 31,
2004.
The Senior Credit Agreement contains certain affirmative and
negative covenants as to the operations and financial condition of the
Operating Company, as well as certain restrictions on the payment of
dividends and other distributions to Holdings. Substantially all
domestic tangible and intangible assets of the Operating Company are
pledged as collateral pursuant to the terms of the Senior Credit
Agreement.
Under the Senior Credit Agreement, the Operating Company is
subject to restrictions on the payment of dividends or other
distributions to Holdings; provided that, subject to certain limitations,
the Operating Company may pay dividends or other distributions to
Holdings:
8
- in respect of overhead, tax liabilities, legal,
accounting and other professional fees and expenses;
- to fund purchases and redemptions of equity interests of
Holdings or Investor LP held by then present or former
officers or employees of Holdings, the Operating Company
or their Subsidiaries (as defined) or by any employee
stock ownership plan upon such person's death,
disability, retirement or termination of employment or
other circumstances with certain annual dollar
limitations; and
- to finance, starting on July 15, 2003, the payment of
cash interest payments on the Senior Discount Notes.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
9
Item 8. Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
Page
Number
Statement re omission of independent auditors' report . . . . . . 8
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 9
Balance Sheets at December 31, 2000 and 1999. . . . . . . 9
Statements of Operations for the years ended
December 31, 2000 and 1999. . . . . . . . . . . . . . . 10
Statements of Shareholders' Equity for the years
ended December 31, 2000 and 1999 . . . . . . . . . . . 11
Statements of Cash Flows for the years ended
December 31, 2000 and 1999. . . . . . . . . . . . . . . 12
Notes to Financial Statements . . . . . . . . . . . . . . 13
10
Report of independent auditors omitted pursuant to Rule 3-11 of
Regulation S-X.
11
GPC CAPITAL CORP. II
BALANCE SHEETS
December 31,
2000 1999
Total assets --- ---
Total liabilities --- ---
Total shareholders' equity --- ---
See accompanying notes
12
GPC CAPITAL CORP. II
STATEMENTS OF OPERATIONS
Year Ended December 31,
2000 1999
Net sales --- ---
Operating income --- ---
Interest expense, net --- ---
Net income --- ---
See accompanying notes
13
GPC CAPITAL CORP. II
STATEMENTS OF SHAREHOLDERS' EQUITY
Balance at February 2, 1998 ---
Balance at December 31, 1998 ---
Balance at December 31, 1999 ---
Balance at December 31, 2000 ---
See accompanying notes
14
GPC CAPITAL CORP. II
STATEMENTS OF CASH FLOWS
Year Ended December 31,
2000 1999
Operating activities --- ---
Investing activities --- ---
Financing activities --- ---
See accompanying notes
15
GPC CAPITAL CORP. II
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
1. Basis of Presentation
GPC Capital Corp. II, is a wholly owned subsidiary of Graham
Packaging Holdings Company, a Pennsylvania limited partnership formerly
known as Graham Packaging Company ("Holdings"). The sole purpose of GPC
Capital Corp. II is to act as co-obligor with Holdings of the Senior
Discount Notes and as co-guarantor with Holdings under the Senior Credit
Agreement and Amendments (as defined herein). GPC Capital Corp. II has
only nominal assets and does not conduct any independent operations.
2. Debt Arrangements
On February 2, 1998, Holdings and GPC Capital Corp. II, as co-
obligor, issued $100.6 million gross proceeds of Senior Discount Notes
Due 2009 ($169 million aggregate principal amount at maturity). The
Senior Discount Notes mature on January 15, 2009, with interest payable
at 10.75%. Cash interest on the Senior Discount Notes does not accrue
until January 15, 2003.
On February 2, 1998, Graham Packaging Company, a Delaware
limited partnership formerly known as Graham Packaging Holdings I, L.P.
(the "Operating Company") refinanced the majority of its existing credit
facilities in connection with the Recapitalization and entered into a
senior Credit Agreement (the "Senior Credit Agreement") with a consortium
of banks. The Senior Credit Agreement was amended on August 13, 1998 to
provide for an additional Term Loan Borrowing of an additional $175
million and on March 30, 2000 as described below (the "Amendments"). The
Senior Credit Agreement and the Amendments consist of four term loans to
the Operating Company with initial term loan commitments totaling $570
million and two revolving loan facilities to the Operating Company
totaling $255 million. The obligations of the Operating Company under
the Senior Credit Agreement and Amendments are guaranteed by Holdings and
certain other subsidiaries of Holdings. The term loans are payable in
quarterly installments through January 31, 2007, and require payments of
$20.0 million in 2001, $25.0 million in 2002, $27.5 million in 2003,
$93.0 million in 2004, $64.9 million in 2005, $242.7 million in 2006 and
$74.0 million in 2007. The revolving loan facilities expire on January
31, 2004. Interest is payable at (a) the "Alternate Base Rate" (the
higher of the Prime Rate or the Federal Funds Rate plus 0.50%) plus a
margin ranging from 0% to 2.25%; or (b) the "Eurocurrency Rate" (the
applicable interest rate offered to banks in the London interbank
eurocurrency market) plus a margin ranging from 0.625% to 3.25%. A
commitment fee ranging from 0.20% to 0.50% is due on the unused portion
of the revolving loan commitment. As part of the Amendments to the Senior
Credit Agreement, if certain events of default were to occur, or if the
Company's Net Leverage Ratio were above 5.15:1.0 at September 30, 2000,
16
Blackstone agreed to make an equity contribution to the Company through
the administrative agent of up to $50 million. An equity contribution of
$50 million was made by the Company's owners to the Company on September
29, 2000, satisfying Blackstone's obligation under the Amendments. The
Company's Net Leverage Ratio being above 5.15:1.0 at September 30, 2000
was not an event of default under the Senior Credit Agreement and
Amendments. The March 30, 2000 Amendment also changes the terms under
which the Company can access $100 million of Growth Capital Revolving
Loans from a dollar for dollar equity match to a capital call with
various test dates based on certain leverage tests for quarters ending on
or after June 30, 2001. The March 30, 2000 Amendment provides for up to an
additional $50 million equity contribution by Blackstone; allows the proceeds
of the equity contribution (if required) to be applied to Revolving Credit
Loans; and changes certain covenants, principally to increase the amount
of permitted capital expenditures in 2000 and subsequent years. Pursuant
to the terms of the Capital Call Agreement, an additional equity
contribution of $50 million was made by the Company's owners to the Company on
March 29, 2001, satisfying Blackstone's final obligation under the Capital
Call Agreement dated as of August 13, 1999, as amended on March 29, 2000.
This equity contribution was made in advance and in satisfaction of any
capital call tests for quarters ending on or after June 30, 2001. The
Company used the proceeds of the Capital Calls to reduce its outstanding
Revolving Credit Loans. In addition, the Senior Credit Agreement and
Amendments contain certain affirmative and negative covenants as to the
operations and financial condition of the Company, as well as certain
restrictions on the payment of dividends and other distributions to Holdings.
On December 31, 2000 the Company was in compliance with all covenants.
On September 8, 1998, Holdings and GPC Capital Corp. II
consummated an exchange offer for all of their outstanding Senior
Discount Notes Due 2009 which had been issued on February 2, 1998 (the
"Old Notes"), and issued in exchange therefor their Senior Discount Notes
Due 2009, Series B (the "Exchange Notes"), which have the same terms as
the Old Notes, except that the Exchange Notes are registered under the
Securities Act of 1933 and do not include the restrictions on transfer
applicable to the Old Notes.
17
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
18
PART III
Item 10. Directors and Executive Officers of the Registrant
The directors and executive officers of CapCo II are as follows:
Name Age Position
Philip R. Yates 53 President, Treasurer and Assistant Secretary
and a Director
John E. Hamilton 42 Vice President, Secretary and Assistant
Treasurer and a Director
Chinh E. Chu 34 Vice President and a Director
David A. Stonehill 32 Vice President and a Director
Philip R. Yates has served as Chief Executive Officer of the
Operating Company and GPC Opco GP LLC ("Opco GP"), the general partner of
the Operating Company, since February 8, 2000. Prior to February 8, 2000,
Mr. Yates served as President and Chief Executive Officer of the
Operating Company and Opco GP since the Recapitalization. Since the
Recapitalization, Mr. Yates has also served as President and Chief
Executive Officer of various subsidiaries of the Operating Company or
their general partner, as President, Treasurer and Assistant Secretary of
CapCo II and GPC Capital Corp I ("CapCo I"), and as a member of the
Boards of Directors of CapCo I and CapCo II. From April 1995 to the
Recapitalization, Mr. Yates served as President and Chief Operating
Officer of the Company. From 1994 to 1995, Mr. Yates served as President
of the Company. Prior to 1994, Mr. Yates served in various management
positions with the Company.
John E. Hamilton has served as Chief Financial Officer or Senior
Vice President, Finance and Administration or Vice President, Finance and
Administration of the Operating Company since the Recapitalization. Since
January 21, 1999, Mr. Hamilton has served as Chief Financial Officer of
the Operating Company, Opco GP and Holdings, and has served as Treasurer
and Secretary of Opco GP and of various subsidiaries of the Operating
Company or their general partner since the Recapitalization. Since the
Recapitalization, Mr. Hamilton has served as Vice President, Secretary
and Assistant Treasurer of CapCo I and CapCo II, and as a member of the
Boards of Directors of CapCo I and CapCo II. Subsequent to the
Recapitalization and until January 21, 1999, Mr. Hamilton served as Vice
President, Finance and Administration of Opco GP and Holdings. From
November 1992 to the Recapitalization, Mr. Hamilton served as Vice
President, Finance and Administration, North America of the Company.
Prior to 1992, Mr. Hamilton served in various management positions with
the Company.
19
Chinh E. Chu has been a Senior Managing Director of The
Blackstone Group L.P. since January 1, 2000. Prior to January 1, 2000,
Mr. Chu served as Managing Director of The Blackstone Group L.P., which
he joined in 1990. Since the Recapitalization, Mr. Chu has served as Vice
President, Secretary and Assistant Treasurer of Investor LP and Investor
GP, as a Vice President of CapCo I and CapCo II and as a member of the
Boards of Directors of Investor LP, CapCo I and CapCo II. Prior to
joining Blackstone, Mr. Chu was a member of the Mergers and Acquisitions
Group of Salomon Brothers Inc from 1988 to 1990. He currently serves on
the Boards of Directors of Prime Succession Inc., Roses, Inc. and Haynes
International, Inc.
David A. Stonehill has been a Principal of The Blackstone Group
L.P. since May 2000. Mr. Stonehill was a Senior Vice President at
Chartwell Investments Inc where he worked from September 1996 to May
2000. Mr. Stonehill has served as Vice President, Assistant Secretary
and Assistant Treasurer of Investor LP and Investor GP, as a Vice
President of CapCo I and CapCo II and as a member of the Boards of
Directors of Investor LP, CapCo I and CapCo II since July 2000.
Except as described above, there are no arrangements or
understandings between any director or executive officer and any other
person pursuant to which such person was elected or appointed as a
director or executive officer of CapCo II.
Item 11. Executive Compensation
Compensation of Directors
The members of the Board of Directors of CapCo II are not
compensated for their services except that each is reimbursed for his
reasonable expenses in performing his duties as such.
Item 12. Security Ownership of Certain Beneficial Owners and Management
CapCo II has outstanding 1,000 shares of common stock, all of
which are owned by Holdings, 2401 Pleasant Valley Road, York,
Pennsylvania 17402.
Item 13. Certain Relationships and Related Transactions
An affiliate of DB Alex. Brown LLC and Bankers Trust
International PLC, two of the Initial Purchasers of the Old Notes,
acquired approximately a 4.8% equity interest in Investor LP. Deutsche
Bank AG (formerly Bankers Trust Company), an affiliate of DB Alex. Brown
LLC and Bankers Trust International PLC, acted as administrative agent
and provided a portion of the financing under the Senior Credit Agreement
entered into in connection with the Recapitalization, for which it
received customary commitment and other fees and compensation.
20
The Operating Company's Senior Credit Agreement currently
consists of four term loans to the Operating Company with initial term
loan commitments totaling $570 million and two revolving loan facilities
to the Operating Company totaling $255 million. Unused availability
under the revolving credit facilities at December 31, 2000 is $128
million, $78 million of which is under the revolving credit facility and
$50 million of which is under the growth capital revolving credit
facility. The obligations of the Operating Company under the Senior
Credit Agreement are guaranteed by Holdings and certain other
subsidiaries of Holdings. The term loans are payable in quarterly
installments through January 31, 2007, and require payments of $20.0
million in 2001, $25.0 million in 2002, $27.5 million in 2003, $93.0
million in 2004 and $64.9 million in 2005. The Operating Company expects
to fund scheduled dept repayments from cash from operations and unused
lines of credit. The revolving loan facilities expire on January 31,
2004.
The Senior Credit Agreement contains certain affirmative and
negative covenants as to the operations and financial condition of the
Operating Company, as well as certain restrictions on the payment of
dividends and other distributions to Holdings. Substantially all
domestic tangible and intangible assets of the Operating Company are
pledged as collateral pursuant to the terms of the Senior Credit
Agreement.
Pursuant to the Purchase Agreement dated January 23, 1998, the
Initial Purchasers, DB Alex. Brown LLC, Bankers Trust International PLC,
Lazard Freres & Co. LLC and Salomon Brothers Inc, purchased the Senior
Discount Old Notes at a price of 57.173% of the principal amount, for a
discount of 2.361% from the initial offering price of 59.534% or a total
discount of $3,990,090. Pursuant to the Purchase Agreement, the Holdings
Issuers also reimbursed the Initial Purchasers for certain expenses.
21
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K
(a) The following Financial Statement Schedules and Reports are
included herein:
None.
All other schedules are not submitted because they are not
applicable or not required or because the required information is
included in the financial statements or the notes thereto.
(b) The following exhibits are filed herewith or incorporated
herein by reference:
Exhibit
Number Description of Exhibit
2.1 -- Agreement and Plan of Recapitalization, Redemption and Purchase
dated as of December 18, 1997, as amended as of January 29, 1998,
by and among Graham Packaging Holdings Company, BCP/Graham
Holdings L.L.C., BMP/Graham Holdings Corporation and the other
parties named therein (incorporated herein by reference to
Exhibit 2.1 to the Registration Statement on Form S-4 (File No.
333-53603-01)).
2.2 -- Purchase Agreement dated January 23, 1998 among Graham Packaging
Holdings Company, Graham Packaging Company, GPC Capital Corp. I,
GPC Capital Corp. II, BT Alex. Brown Incorporated, Bankers Trust
International PLC, Lazard Freres & Co. L.L.C. and Salomon
Brothers Inc (incorporated herein by reference to Exhibit 2.2 to
the Registration Statement on Form S-4 (File No. 333-53603-01)).
3.1 -- Certificate of Incorporation of GPC Capital Corp. II
(incorporated herein by reference to Exhibit 3.7 to the
Registration Statement on Form S-4 (File No. 333-53603-01)).
3.2 -- By-Laws of GPC Capital Corp. II (incorporated herein by reference
to Exhibit 3.8 to the Registration Statement on Form S-4 (File
No. 333-53603-01)).
22
4.1 -- Indenture dated as of February 2, 1998 among Graham Packaging
Holdings Company and GPC Capital Corp. II and The Bank of New
York, as Trustee, relating to the Senior Discount Notes Due 2009
of Graham Packaging Holdings Company and GPC Capital Corp. II
(incorporated herein by reference to Exhibit 4.7 to the
Registration Statement on Form S-4 (File No. 333-53603-01)).
4.2 -- Form of 10 3/4% Senior Discount Note Due 2009, Series A (included
in Exhibit 4.1) (incorporated herein by reference to Exhibit 4.8
to the Registration Statement on Form S-4 (File No. 333-53603-
01)).
4.3 -- Form of 10 3/4% Senior Discount Note Due 2009, Series B (included
in Exhibit 4.1) (incorporated herein by reference to Exhibit 4.9
to the Registration Statement on Form S-4 (File No. 333-53603-
01)).
4.4 -- Registration Rights Agreement dated as of February 2, 1998 among
Graham Packaging Holdings Company, GPC Capital Corp. II, BT Alex.
Brown Incorporated, Bankers Trust International PLC, Lazard
Freres & Co. L.L.C. and Salomon Brothers Inc. relating to the
Senior Discount Notes Due 2009 of Graham Packaging Holdings
Company and GPC Capital Corp. II (incorporated herein by
reference to Exhibit 4.10 to the Registration Statement on Form
S-4 (File No. 333-53603-01)).
10.1 -- Credit Agreement dated as of February 2, 1998 among Graham
Packaging Holdings Company, Graham Packaging Company, GPC Capital
Corp. I, the lending institutions identified in the Credit
Agreement and the agents identified in the Credit Agreement
(incorporated herein by reference to Exhibit 10.1 to the
Registration Statement on Form S-4 (File No. 333-53603-01)).
10.2 -- First Amendment to Credit Agreement dated as of August 13, 1998
(incorporated herein by reference to Exhibit 10.2 to the Annual
Report on Form 10-K for the fiscal year ended December 31, 1998
(File No. 333-53603-01)).
10.3 -- Second Amendment to Credit Agreement dated as of March 29, 2000
(incorporated herein by reference to Exhibit 10.3 to the
Quarterly Report on Form 10-Q for the quarter ended April 2, 2000
(File No. 333-53603-01)).
24 -- Power of Attorney -- Page 27 of Form 10-K.
99.1 -- Form of Senior Discount Letter of Transmittal (incorporated
herein by reference to Exhibit 99.5 to the Registration Statement
on Form S-4 (File No. 333-53603-01)).
23
99.2 -- Form of Senior Discount Notice of Guaranteed Delivery
(incorporated herein by reference to Exhibit 99.6 to the
Registration Statement on Form S-4 (File No. 333-53603-01)).
(c) Reports on Form 8-K
No Reports on Form 8-K were required to be filed during the
quarter ended December 31, 2000.
24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.
Dated: March 30, 2001
GPC CAPITAL CORP. II
(Registrant)
By: /s/ John E. Hamilton
Name: John E. Hamilton
Title: Vice President
(chief accounting officer and duly
authorized officer)
25
POWER OF ATTORNEY
We, the undersigned officers and directors of GPC Capital Corp.
II, do hereby constitute and appoint Philip R. Yates and John E.
Hamilton, or either of them, our true and lawful attorneys and agents, to
sign for us, or any of us, in our names in the capacities indicated
below, any and all amendments to this report, and to cause the same to be
filed with the Securities and Exchange Commission, granting to said
attorneys, and each of them, full power and authority to do and perform
any act and thing necessary or appropriate to be done in the premises, as
fully to all intents and purposes as the undersigned could do if
personally present, and we do hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed on the 23rd day of March, 2001 by the
following persons on behalf of the registrant and in the capacities
indicated, with respect to GPC Capital Corp. II:
Signature Title
/s/ Philip R. Yates President, Treasurer and Assistant Secretary
Philip R. Yates And Director (Principal Executive Officer)
/s/ John E. Hamilton Vice President, Secretary and Assistant
John E. Hamilton Treasurer and Director (Principal Financial
Officer and Principal Accounting Officer)
/s/ Chinh E. Chu Director
Chinh E. Chu
/s/ David A. Stonehill Director
David A. Stonehill
26
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
No annual report to security holders covering the registrant's
last fiscal year has been sent to security holders. No proxy statement,
form of proxy or other proxy soliciting material has been sent to more
than 10 of the registrant's security holders with respect to any annual
or other meeting of security holders.
27