Linerboard Antitrust Litigation

Plaintiffs allege that defendants and others conspired beginning in 1993 to fix, raise, stabilize and maintain prices for corrugated containers and corrugated sheets throughout the United States. Plaintiffs allege, among other things, that defendants restricted the output of linerboard—the key component in the production of corrugated containers and corrugated sheets—in order to support increases in the price of linerboard with the objective of increasing the price of corrugated containers and corrugated sheets. Plaintiffs further allege that as a result of the conspiracy, they and class members have been injured by paying more for corrugated containers and corrugated sheets than they would have paid in the absence of the illegal conduct, and seek recovery of treble damages, together with reimbursement of costs and an award of attorneys' fees. Defendants deny plaintiffs' allegations, deny liability and deny that any plaintiff or class member is entitled to damages.

Class Counsel for both Classes have negotiated a proposed settlement (the "Proposed Settlement") with two of the defendants, Temple-Inland Inc. and Gaylord Container Corp. (the "Settling Defendants"). Class Counsel believe that the Proposed Settlement will provide substantial benefits to the Classes, and is fair, reasonable and adequate. The Settling Defendants deny the allegations in the Complaints and believe they have good defenses thereto but have entered into the proposed settlements to avoid further expense, inconvenience and the distraction of burdensome and protracted litigation.

The terms of the Proposed Settlement, which will become effective only if finally approved by the Court and upon certain conditions, are set forth in the Settlement Agreement, dated April 11, 2003, which has been filed with the Court. The following is only a summary of the terms of the Proposed Settlement. The complete terms are set forth in the Settlement Agreement.

The Proposed Settlement provides for the payment by the Settling Defendants of $8 million (the "Settlement Fund") and for certain cooperation in the litigation. It provides for a release in favor of the Settling Defendants of claims based on any causes of action or conduct asserted in the lawsuit. The settlement fund may be reduced based upon the percentage of sales by the Settling Defendants made to any class members who opt-out of the class.

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