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As discussed previously under "--Background of the Energy Industries Sale
Proposal", the Board of Directors determined that the Energy Industries Sale
Proposal was expedient and fair to, and in the best interests of, the Company
and its stockholders. In making this determination, the following factors were
considered and evaluated:
(i) The Board's consideration that the focus of the Company's business
strategy had shifted from the energy business toward the food processing
business. The Board therefore elected to begin the exit of the energy
business through the sale of Energy Industries and the other energy related
operations discussed under "--Background of the Energy Industries Sale
Proposal";
(ii) The Board's review of presentations from, and discussions of the
terms and conditions of the Energy Industries Sale Proposal with, senior
executive officers of the Company and Energy Industries;
(iii) The Board's consideration of, among other things, information with
respect to the financial condition, results of operations and business of
the Company and Energy Industries, on both a historical and a prospective
basis;
(iv) The fact that six other formal offers to purchase Energy Industries
were received by the Company and that those offers were inferior to the
Weatherford Enterra offer with respect to price and other material terms;
and
(v) The Board's consideration of Schroder Wertheim's oral opinion, which
was to be subsequently confirmed in writing, as to the fairness to the
Company from a financial point of view, of the consideration to be received
by the Company pursuant to the Weatherford Enterra offer. In connection
with its evaluation of this factor, the Board was aware of the fact that
Schroder Wertheim did not assume any responsibility for independently
verifying the information that it reviewed in connection with the rendering
of its opinion and that Schroder Wertheim assumed the accuracy and
completeness of all information made available or obtained by it. However,
the Board believed that reliance by Schroder Wertheim was reasonable and
was consistent with the Company's management's understanding of such
information which related to the Company and Energy Industries, based on
management's historical familiarity and day-to-day utilization of such
information.
The Board did not assign relative weights to the factors discussed above.
In light of the Company's overall strategic plan of exiting the energy
services business, the Board did not consider other alternatives to the sale of
Energy Industries such as its continuing operation, growth of Energy Industries
through potential acquisitions, or strategic alliances or joint ventures of
Energy Industries with other third parties.
The Energy Industries Sale is a major step in the Company's transition from
an energy company to a food services company. The Company intends to use the
net proceeds from the Energy Industries Sale for general corporate purposes,
which may include repayment of debt, and for future acquisitions or joint
ventures which are expected to be in the food services industry. While the
Company is actively seeking acquisitions and joint venture opportunities, there
can be no assurances that the Company will succeed in identifying or
consummating any such opportunities or that acquisitions or joint ventures, if
consummated, will be successful. The Company does not have any current plans or
proposals to use the proceeds of the Energy Industries Sale for specific
acquisitions or joint ventures. Other than the seeking of such proposed
acquisitions and joint ventures and the Company's consideration of possible
future transactions involving Envirodyne as described under "Background of the
Energy Industries Sale Proposal--General", the Company currently has no plans
or developments to advance its internal or external expansion in the food
services industry. In addition, while the Company currently intends to focus on
the food service industry, the Company may effect acquisitions in other
industries if the Board determines that it is in the interests of the Company
and stockholders to do so. While the Board of Directors believes that the
consummation of the Energy Industry Sales Proposal is expedient and fair to,
and in the best interests of, the Company and its stockholders, there can be no
assurance that the Energy Industries Sale, or the Company's entry into the food
services business, will result in an improvement in the Company's results of
operations or financial condition.
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