SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
AMERICAN HOUSEHOLD, INC.
(Name of Issuer)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
N/A
(CUSIP Number)
George C. Ullrich
c/o Wachovia Bank, N.A.
One Wachovia Center
301 South College Street, DC-5
Charlotte, North Carolina 28288-0537
704-374-6161
With a copy to:
Peter J. Gordon, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 18, 2002
------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. | |
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other
parties to whom copies are to be sent.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
Page 1 of 20 Pages
CUSIP No.: N/A
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Entities Only)
Wachovia Bank, N.A.
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER
OF A GROUP (See Instructions) (a) | |
(b) | x |
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS (See Instructions)
OO
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS
2 (d) or 2 (e) | |
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Wachovia Bank, N.A. is a national banking association
------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 9,237,875
SHARES ------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY EACH None
REPORTING ------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
9,237,875
------------------------------------------------
10. SHARED DISPOSITIVE POWER
None
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
9,237,875
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) | |
------------------------------------------------------------------------------
Page 2 of 20 Pages
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.12%1 (1)
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (See Instructions)
CO, BK
------------------------------------------------------------------------------
(1) Based on a total of 31,724,796 shares of Common Stock to be issued on the
Effective Date (as defined below) pursuant to the Issuer's Plan (as
defined below).
Page 3 of 20 Pages
CUSIP No.: N/A
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Entities Only)
Wachovia Corporation
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER
OF A GROUP (See Instructions) (a) | |
(b) | x |
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS (See Instructions)
OO
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS
2 (d) or 2 (e) | |
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
North Carolina
------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 9,237,875
SHARES ------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY EACH None
REPORTING ------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
9,237,875
------------------------------------------------
10. SHARED DISPOSITIVE POWER
None
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,237,875
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) | |
------------------------------------------------------------------------------
Page 4 of 20 Pages
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.12% (2)
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (See Instructions)
CO
------------------------------------------------------------------------------
(2) Based on a total of 31,724,796 shares of Common Stock to be issued on the
Effective Date (as defined below) pursuant to the Issuer's Plan (as
defined below).
Page 5 of 20 Pages
This Statement on Schedule 13D relates to Common Stock, par value $.01
per share ("Common Stock"), of American Household, Inc. (the "Issuer"). This
Statement is being filed to report that, pursuant to a Third Amended Plan of
Reorganization (as defined herein and as more fully described in Item 6
below), the Reporting Persons (as defined herein) acquired beneficial
ownership of the shares of Common Stock reported herein (the "Shares") in
connection with the discharge of the Reporting Persons' Secured Bank Claims
(as defined in the Plan) that were guaranteed by the Issuer and certain other
subsidiaries of the Issuer that were debtors and debtors in possession in
Chapter 11 cases under the Bankruptcy Code.
Item 1. Security and Issuer.
This Schedule 13D relates to the Shares. The address of the principal
executive offices of the Issuer is American Household, Inc., 2381 Executive
Center Drive, Boca Raton, FL 33431.
Item 2. Identity and Background.
This statement is being filed on behalf of:
(i) Wachovia National Bank, N.A., a National Association ("Wachovia");
and
(ii) Wachovia Corporation, a North Carolina corporation ("WC"), in its
capacity as the parent company of Wachovia (together with Wachovia,
the "Reporting Persons").
This Schedule 13D realtes to shares held by Wachovia.
The address and principal place of business of the Reporting Persons are
One Wachovia Center, Charlotte, North Carolina 28288. Wachovia is engaged
principally in the business of banking. WC is a bank holding company that is
principally engaged in the business of banking through its subsidiaries.
Certain information regarding the Reporting Persons' directors and
executive officers is set forth in Annex A hereto, which is incorporated by
reference herein. All of the individuals listed in Annex A are citizens of the
United States.
During the last five years, neither the Reporting Persons or any of the
individuals listed in Annex A has been convicted in criminal proceeding
(excluding traffic violations or similar misdemeanors), or has been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which any of them was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting
Page 6 of 20 Pages
or mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The information set forth in Item 6 is hereby incorporated by reference
into this Item 3.
Pursuant to the Plan, the Reporting Persons acquired beneficial ownership
of the Shares in satisfaction and discharge of claims with respect to the
Senior Bank Claims beneficially owned by the Reporting Persons arising under
or in connection with the Bank Credit Agreement (as defined in the Plan). The
Bank Credit Agreement was funded in part through the Reporting Persons'
working capital.
Item 4. Purpose of Transaction.
The Shares held by Wachovia were acquired as described in Item 3 and Item
6. The information set forth in Item 3 and Item 6 hereof is hereby
incorporated by reference into this Item 4. Wachovia currently holds the
Shares for investment purposes. Except as otherwise disclosed herein, none of
the Reporting Persons currently has any agreements, beneficially or otherwise,
which would be related to or would result in any of the matters described in
Items 4(a)-(j) of Schedule 13D; however, as part of the ongoing evaluation of
this investment and investment alternatives, each Reporting Person may
consider such matters and, subject to applicable law, may formulate a plan
with respect to such matters, and, from time to time, each Reporting Person
may hold discussions with or make formal proposals to management or the Board
of Directors of the Issuer, other shareholders of the Issuer or other third
parties regarding such matters.
George C. Ullrich, a Senior Vice President of Wachovia, serves on the
Board of Directors of the Issuer. As a director of the Issuer, he may have
influence over the corporate activities of the Issuer, including activities
which may relate to items described in subparagraphs (a) through (j) of Item 4
of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
The information set forth in Item 6 hereof is hereby incorporated by
reference into this Item 5.
The filing of this Schedule 13D shall not be construed as an admission
that any Reporting Person or any of their respective members, officers,
employees, affiliates or partners, as applicable, are, for the purposes of
Section 13(d) or Section 13(g) of the Securities Exchange Act of 1934, the
beneficial owners of any securities covered by this Schedule 13D. In addition,
the filing of this Schedule 13D shall not be construed as an admission that
the Reporting Persons are the beneficial owners of any securities covered
Page 7 of 20 Pages
by this Schedule 13D for any purposes other than Section 13(d) or Section
13(g) of the Securities Act of 1934.
(a) Wachovia beneficially owns 9,237,875 shares of Common Stock
(approximately 29.12% of the total number of shares of Common Stock
outstanding as of the Effective Date).
WC, in its capacity as the parent company of Wachovia, may be deemed to
be the beneficial owner of 9,237,875 shares of Common Stock
(approximately 29.12% of the total number of shares of Common Stock
outstanding as of the Effective Date).
(b) WC, in its capacity as the parent company of Wachovia, has discretionary
authority and control over all of the assets of Wachovia, including the
power to vote and dispose of the Issuer's Shares. Therefore, WC may be
deemed to have sole power to direct the voting and disposition of
9,237,875 shares of Common Stock.
(c) Except as set forth in Item 6 below, the Reporting Persons have not
effected or caused to be effected any transactions with respect to the
Shares in the 60 days prior to the date hereof.
(d) The Reporting Persons are not aware of any other person with the right to
receive the power to direct the receipt of dividends from, or the
proceeds of the sale of, any of the Shares beneficially owned by them.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
On November 27, 2002, the United States Bankruptcy Court for the Southern
District of New York entered an order confirming the Third Amended Plan of
Reorganization for Sunbeam Corporation (the "Plan") and the separate Third
Amended Plan of Reorganization for certain subsidiaries of Sunbeam
Corporation, each dated as of November 25, 2002 (a copy of the Plan is
attached hereto as Exhibit A and incorporated herein by reference thereto in
response to this Item 6). Pursuant to the Plan, on December 18, 2002, the
effective date of the Plan (the "Effective Date"), the Issuer distributed
shares of Common Stock to holders of the Senior Bank Claims, in partial
satisfaction and discharge of claims with respect to the Senior Bank Claims.
As a result, the Reporting Persons acquired beneficial ownership of 9,237,875
shares of Common Stock.
Page 8 of 20 Pages
Wachovia is a party to a Securityholders' Agreement, dated as of the
Effective Date, among Wachovia, certain other securityholders named therein
and the Issuer, which contains provisions regarding (i) certain
securityholders' rights to designate members of the Board of Directors of the
Issuer; (ii) certain rights and obligations with respect to securityholders'
voting of Shares and (iii) certain restrictions on the ability to transfer
Shares. A copy of the Securityholders' Agreement is attached hereto as Exhibit
B and incorporated herein by reference thereto in response to this Item 6.
Wachovia is also a party to a Registration Rights Agreement, dated as of
the Effective Date, which provides Wachovia and certain other holders of
Registrable Common Stock (as defined in the Registration Rights Agreement)
with certain registration rights. A copy of the Registration Rights Agreement
is attached hereto as Exhibit C and incorporated herein by reference thereto
in response to this Item 6.
The foregoing description of the Plan does not purport to be complete and
is qualified in its entirety by the terms of the Plan, which is incorporated
herein by this reference.
Except as described above and elsewhere in this Schedule 13D, as of the
date hereof there are no other contracts, arrangements, understandings or
relationships (legal or otherwise) among the parties named in Item 2 hereto
and between such persons and any person with respect to any of the securities
of the Issuer beneficially owned by Wachovia.
Item 7. Material to be Filed as Exhibits.
The Exhibit Index is incorporated herein by this reference.
Page 9 of 20 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information in this statement is true, complete and correct.
Date: December 30, 2002
WACHOVIA BANK, N.A.
By: /s/ George C. Ullrich
----------------------------------
Name: George C. Ullrich
Title: Senior Vice President
WACHOVIA CORPORATION
By: /s/ George C. Ullrich
----------------------------------
Name: George C. Ullrich
Title: Senior Vice President
Page 10 of 20 Pages
ANNEX A
CERTAIN INFORMATION REGARDING THE DIRECTORS AND
EXECUTIVE OFFICERS OF THE REPORTING PERSONS
The following table sets forth the name, residence or business address,
present occupation or employment of each director and executive officer of the
Reporting Persons, along with the name, principal business and address of any
corporation or other organization in which such employment is conducted:
OCCUPATION OR EMPLOYMENT
BUSINESS (B) OR NAME OF EMPLOYER, BUSINESS OF
RESIDENCE (R) EMPLOYER, ADDRESS OF
NAME ADDRESS EMPLOYER
---- -------------------- -----------------------------
DIRECTORS OF WACHOVIA BANK, N.A.
L.M. Baker, Jr. Wachovia Corporation Wachovia Corporation
One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Benjamin P. Jenkins, III Wachovia Corporation Wachovia Corporation
One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Stanhope A. Kelly Wachovia Corporation Wachovia Corporation
One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
G. Kennedy Thompson Wachovia Corporation Wachovia Corporation
One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Mark C. Treanor Wachovia Corporation Wachovia Corporation
One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Page 11 of 20 Pages
OCCUPATION OR EMPLOYMENT
BUSINESS (B) OR NAME OF EMPLOYER, BUSINESS OF
RESIDENCE (R) EMPLOYER, ADDRESS OF
NAME ADDRESS EMPLOYER
---- -------------------- -----------------------------
Thomas J. Wurtz Wachovia Corporation Wachovia Corporation
One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
EXECUTIVE OFFICERS OF WACHOVIA BANK, N.A. (NOT OTHERWISE LISTED ABOVE)
L.M. Baker, Jr. Wachovia Corporation Wachovia Corporation
Chairman One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Robert A. Burton Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
James C. Cherry Wachovia Corporation Wachovia Corporation
President- VA/MD/Washington D.C. One Wachovia Center One Wachovia Center
Region 301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Reginald E. Davis Wachovia Corporation Wachovia Corporation
President-NY/NJ/CT Region One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Paul R. Eber Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Paul L. Fischer Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Herbert R. Hamlet Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Page 12 of 20 Pages
Robert W. Helms Wachovia Corporation Wachovia Corporation
President-FL Region One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
C. Royce Hough Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Page 13 of 20 Pages
Benjamin P. Jenkins, III Wachovia Corporation Wachovia Corporation
Senior Executive Vice President One Wachovia Center One Wachovia Center
& President of General Bank & 301 South College St. 301 South College St.
Assistant Secretary Charlotte, NC 28288 Charlotte, NC 28288
Don R. Johnson Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Robert P. Kelly Wachovia Corporation Wachovia Corporation
CFO & Senior Executive Vice One Wachovia Center One Wachovia Center
President 301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Haddon S. Mackie, Jr. Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Donald M. Macleod Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
James McKenna Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Donald A. McMullen, Jr. Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Robert L. Reid Wachovia Corporation Wachovia Corporation
President-PA/DE Region One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Linda C. Siegel Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Wilbert B. Spence, Jr. Wachovia Corporation Wachovia Corporation
President-Carolinas Region One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Page 14 of 20 Pages
D. Gary Thompson Wachovia Corporation Wachovia Corporation
President-GA Region One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
G. Kennedy Thompson Wachovia Corporation Wachovia Corporation
President & CEO One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Mark C. Treanor Wachovia Corporation Wachovia Corporation
General Counsel & Secretary & One Wachovia Center One Wachovia Center
Senior Executive Vice President 301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Debra M. Warren Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Thomas J. Wurtz Wachovia Corporation Wachovia Corporation
Senior Vice President, One Wachovia Center One Wachovia Center
Treasurer & Commercial 301 South College St. 301 South College St.
Banking Officer Charlotte, NC 28288 Charlotte, NC 28288
DIRECTORS OF WACHOVIA CORPORATION
John D. Baker, II President and CEO President and CEO
Florida Rock Industries, Inc. Florida Rock Industries, Inc.
P.O. Box 4667 P.O. Box 4667
Jacksonville, FL 32201 Jacksonville, FL 32201
F. Duane Ackerman Chairman, President CEO Chairman, President CEO
BellSouth Corporation BellSouth Corporation
1155 Peachtree Street, N.E. 1155 Peachtree Street, N.E.
Suite 2000 Suite 2000
Atlanta, GA 30309-3610 Atlanta, GA 30309-3610
L.M. Baker, Jr. Wachovia Corporation Wachovia Corporation
One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
James S. Balloun Chairman, President, and CEO Chairman, President, and CEO
Acuity Brands Acuity Brands
1170 Peachtree Street, N.E. Suite 2400 1170 Peachtree Street, N.E. Suite 2400
Atlanta, GA 30309 Atlanta, GA 30309
Page 15 of 20 Pages
Robert J. Brown Chairman & CEO Chairman & CEO
B&C Associates, Inc. B&C Associates, Inc.
P.O. Box 2636 P.O. Box 2636
High Point, NC 27261-2636 High Point, NC 27261-2636
Peter C. Browning Chairman, NuCor Corporation Chairman, NuCor Corporation
2038 Providence Road 2038 Providence Road
Charlotte, NC 28211 Charlotte, NC 28211
John T. Casteen President President
University of Virginia University of Virginia
P.O. Box 400224 P.O. Box 400224
Charlottesville, VA 22904-4224 Charlottesville, VA 22904-4224
William H. Goodwin, Jr. Chairman, CCA Industries, Inc. Chairman, CCA Industries, Inc.
One James Center One James Center
901 East Cary Street, Suite 1500 901 East Cary Street, Suite 1500
Richmond, VA 23219 (VIA UPS) Richmond, VA 23219 (VIA UPS)
Robert A. Ingram President & COO, Pharmaceutical Operations President & COO, Pharmaceutical Operations
GlaxoSmithKline GlaxoSmithKline
Five Moore Drive Five Moore Drive
P.O. Box 13398 P.O. Box 13398
Research Triangle Park, NC 27709 Research Triangle Park, NC 27709
Mackey J. McDonald Chairman, President & CEO Chairman, President & CEO
VF Corporation VF Corporation
P.O. Box 21488 P.O. Box 21488
Greensboro, NC 27420-1488 Greensboro, NC 27420-1488
Joseph Neubauer Chairman and CEO Chairman and CEO
ARAMARK Corporation ARAMARK Corporation
ARAMARK Tower, 1101 Market Street ARAMARK Tower, 1101 Market Street
Philadelphia, PA 19107 Philadelphia, PA 19107
Lloyd U. Noland, III Chairman, President and CEO Chairman, President and CEO
Noland Company Noland Company
80 29th Street 80 29th Street
Newport News, VA 23607 Newport News, VA 23607
Ruth G. Shaw Executive Vice President Executive Vice President
& Chief Administrative Officer & Chief Administrative Officer
Duke Energy Corporation Duke Energy Corporation
EC3XG EC3XG
P.O. BOX 1006 P.O. BOX 1006
Page 16 of 20 Pages
Charlotte, NC 28201-1006 Charlotte, NC 28201-1006
Lanty L. Smith Chairman Chairman
Soles Brower Smith & Co. Soles Brower Smith & Co.
First Union Tower First Union Tower
300 North Greene Street - Ste. 925 300 North Greene Street - Ste. 925
Greensboro, NC 27401-2167 Greensboro, NC 27401-2167
G. Kennedy Thompson President & CEO President & CEO
Wachovia Corporation Wachovia Corporation
301 S. College Street 301 S. College Street
Suite 4000 Suite 4000
Charlotte, NC 28288-0005 Charlotte, NC 28288-0005
John C. Whitaker, Jr. Chairman and Chief Executive Officer Chairman and Chief Executive Officer
Inmar Enterprises, Inc. Inmar Enterprises, Inc.
2601 Pilgrim Court 2601 Pilgrim Court
Winston-Salem, NC 27106 Winston-Salem, NC 27106
Dona Davis Young President and Chief Operating Officer President and Chief Operating Officer
The Phoenix Companies, Inc. The Phoenix Companies, Inc.
One American Row One American Row
Hartford, CT 06102 Hartford, CT 06102
EXECUTIVE OFFICERS OF WACHOVIA CORPORATION (NOT OTHERWISE LISTED ABOVE)
L.M. Baker, Jr. Wachovia Corporation Wachovia Corporation
Chairman One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
David M. Carroll Wachovia Corporation Wachovia Corporation
Senior Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
James C. Cherry Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Stephen E. Cummings Wachovia Corporation Wachovia Corporation
Co-Head, Corporate & One Wachovia Center One Wachovia Center
Investment Banking, Wachovia 301 South College St. 301 South College St.
Securities, Senior Executive Charlotte, NC 28288 Charlotte, NC 28288
Vice President
Page 17 of 20 Pages
Jean E. Davis Wachovia Corporation Wachovia Corporation
Senior Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Malcolm E. Everett, III Wachovia Corporation Wachovia Corporation
Senior Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Paul G. George Wachovia Corporation Wachovia Corporation
Senior Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
W. Barnes Hauptfuhrer Wachovia Corporation Wachovia Corporation
Co-Head, Corporate & One Wachovia Center One Wachovia Center
Investment Banking, 301 South College St. 301 South College St.
Wachovia Securities, Senior Charlotte, NC 28288 Charlotte, NC 28288
Executive Vice President
Robert G. Hoak Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Benjamin P. Jenkins, III Wachovia Corporation Wachovia Corporation
Senior Executive Vice President One Wachovia Center One Wachovia Center
& President of General Bank 301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Page 18 of 20 Pages
Robert P. Kelly Wachovia Corporation Wachovia Corporation
CFO & Senior Executive Vice One Wachovia Center One Wachovia Center
President 301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Stanhope A. Kelly Wachovia Corporation Wachovia Corporation
Senior Executive Vice President One Wachovia Center One Wachovia Center
& President of Wealth 301 South College St. 301 South College St.
Management Charlotte, NC 28288 Charlotte, NC 28288
Robert S. Kniejski Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
William B. Langley Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
J. Walter Mc Dowell, III Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Donald A. McMullen, Jr. Wachovia Corporation Wachovia Corporation
Senior Executive Vice President One Wachovia Center One Wachovia Center
& President of Capital 301 South College St. 301 South College St.
Management Charlotte, NC 28288 Charlotte, NC 28288
Frank D. Robb Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
G. Kennedy Thompson Wachovia Corporation Wachovia Corporation
President, CEO One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Mark C. Treanor Wachovia Corporation Wachovia Corporation
General Counsel & Secretary & One Wachovia Center One Wachovia Center
Senior Executive Vice President 301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Donald K. Truslow Wachovia Corporation Wachovia Corporation
Senior Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Page 19 of 20 Pages
Beverly B. Wells Wachovia Corporation Wachovia Corporation
Executive Vice President One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Thomas J. Wurtz Wachovia Corporation Wachovia Corporation
Treasurer One Wachovia Center One Wachovia Center
301 South College St. 301 South College St.
Charlotte, NC 28288 Charlotte, NC 28288
Page 20 of 20 Pages
Exhibit Index
A. Third Amended Joint Plan of Reorganization of Sunbeam Corporation Under
Chapter 11 of the Bankruptcy Code dated as of November 25, 2002 (the
"Plan")
B. Securityholders' Agreement
C. Registration Rights Agreement
D. A written agreement relating to the filing of the joint acquisition
statement as required by Rule 13d-1(k)(1) under the Securities Exchange
Act of 1934, as amended
EXHIBIT A
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------x
:
In re : Chapter 11 Case No.
:
SUNBEAM CORPORATION, : 01-40291 (AJG)
:
:
:
:
Debtor. :
:
--------------------------------------------x
DEBTOR'S THIRD AMENDED PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
---------------------------------------
WEIL, GOTSHAL & MANGES LLP
Attorneys for the Debtor
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
Dated: New York, New York
November 25, 2002
TABLE OF CONTENTS
Page
Article I DEFINITIONS AND CONSTRUCTION OF TERMS.......................1
1.1 Administrative Expense Claim................................1
1.2 Adversary Proceeding........................................1
1.3 Affiliate...................................................1
1.4 Allowed.....................................................2
1.5 Assumed Corporate Indemnities...............................2
1.6 Assumed Indemnification Claims..............................2
1.7 Ballot......................................................2
1.8 Bank Credit Agreement.......................................2
1.9 Banks.......................................................2
1.10 Bankruptcy Code.............................................2
1.11 Bankruptcy Court............................................2
1.12 Bankruptcy Rules............................................3
1.13 Benefit Plans...............................................3
1.14 Business Day................................................3
1.15 Cash........................................................3
1.16 Causes of Action............................................3
1.17 Chapter 11 Case.............................................3
1.18 Claim.......................................................3
1.19 Class.......................................................3
1.20 Collateral..................................................3
1.21 Commencement Date...........................................3
1.22 Committee...................................................3
i
TABLE OF CONTENTS
(continued)
Page
1.23 Confirmation Date...........................................3
1.24 Confirmation Hearing........................................3
1.25 Confirmation Order..........................................4
1.26 Debtor......................................................4
1.27 Debtor in Possession........................................4
1.28 Derivative Securities Litigation Claims.....................4
1.29 Disbursing Agent............................................4
1.30 Disclosure Statement........................................4
1.31 Disputed....................................................4
1.32 Disputed Claim Amount.......................................4
1.33 Effective Date..............................................4
1.34 Employee Options............................................4
1.35 Entity......................................................4
1.36 Equity Interest.............................................5
1.37 Equity Holder Securities Claims.............................5
1.38 ERISA.......................................................5
1.39 Final Order.................................................5
1.40 GECC........................................................5
1.41 General Unsecured Claim.....................................6
1.42 Indenture Trustee...........................................6
1.43 Lien........................................................6
1.44 Management Equity Plans.....................................6
1.45 Management Investment Securities............................6
ii
TABLE OF CONTENTS
(continued)
Page
1.46 Management Stockholders.....................................6
1.47 Morgan Stanley..............................................6
1.48 New Secured Term Notes......................................6
1.49 New Secured Term Notes Documents............................6
1.50 Other Priority Claim........................................6
1.51 Other Secured Claim.........................................6
1.52 PBGC........................................................6
1.53 Pension Plans...............................................6
1.54 Person......................................................7
1.55 Plan........................................................7
1.56 Plan Supplement.............................................7
1.57 Post-Petition Banks.........................................7
1.58 Post-Petition Bank Credit Agreement.........................7
1.59 Priority Tax Claim..........................................7
1.60 Pro Rata Share..............................................7
1.61 Record Date.................................................7
1.62 Registration Rights Agreement...............................7
1.63 Releasees...................................................7
1.64 Reorganized Subsidiaries....................................8
1.65 Reorganized Sunbeam.........................................8
1.66 Reorganized Sunbeam By-laws.................................8
1.67 Reorganized Sunbeam Certificate of Incorporation............8
1.68 Reorganized Sunbeam Common Stock............................8
iii
TABLE OF CONTENTS
(continued)
Page
1.69 Schedules...................................................8
1.70 Secured Bank Claims.........................................8
1.71 Secured Claim...............................................8
1.72 Securityholders Agreement...................................9
1.73 Subordinated Note Claims....................................9
1.74 Subordinated Noteholder Securities Claims...................9
1.75 Subordinated Notes..........................................9
1.76 Subordinated Notes Indenture................................9
1.77 Subsidiaries Plan...........................................9
1.78 Subsidiary Debtors.........................................10
1.79 Sunbeam Affiliate Claim....................................10
1.80 Sunbeam Affiliates.........................................10
1.81 Sunbeam Group..............................................10
1.82 Working Capital Facility...................................10
1.83 Working Capital Facility Documents.........................11
Article II TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND
PRIORITY TAX CLAIMS........................................11
2.1 Administrative Expense Claims..............................11
2.2 Professional Compensation and Reimbursement Claims.........11
2.3 Priority Tax Claims........................................12
Article III CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS..................12
Article IV TREATMENT OF CLAIMS AND EQUITY INTERESTS........................13
4.1 CLASS 1 - OTHER PRIORITY CLAIMS............................13
iv
TABLE OF CONTENTS
(continued)
Page
(a) Impairment and Voting............................13
(b) Distributions....................................13
4.2 CLASS 2 - OTHER SECURED CLAIMS.............................13
(a) Impairment and Voting............................13
(b) Distributions/Reinstatement of Claims............13
4.3 CLASS 3 - SECURED BANK CLAIMS..............................14
(a) Allowance........................................14
(b) Impairment and Voting............................14
(c) Distributions....................................14
4.4 CLASS 4 - GENERAL UNSECURED CLAIMS.........................14
(a) Impairment and Voting............................14
(b) Distributions....................................14
4.5 CLASS 5 - SUBORDINATED NOTE CLAIMS.........................14
(a) Allowance........................................14
(b) Impairment and Voting............................14
(c) Distributions....................................14
4.6 CLASS 6 - SUBORDINATED NOTEHOLDER SECURITIES CLAIMS........15
(a) Impairment and Voting............................15
(b) Distributions....................................15
4.7 CLASS 7 - SUNBEAM AFFILIATE CLAIMS.........................15
(a) Impairment and Voting............................15
(b) Distributions....................................15
4.8 CLASS 8 - EQUITY INTERESTS.................................15
v
TABLE OF CONTENTS
(continued)
Page
(a) Impairment and Voting............................15
(b) Distributions....................................15
4.9 CLASS 9 - EQUITY HOLDER SECURITIES CLAIMS..................15
(a) Impairment and Voting............................15
(b) Distributions....................................15
Article V PROVISIONS REGARDING VOTING AND DISTRIBUTIONS UNDER THE
PLAN AND TREATMENT, OF DISPUTED, CONTINGENT AND UNLIQUIDATED
ADMINISTRATIVE EXPENSE CLAIMS AND CLAIMS...................16
5.1 Voting of Claims...........................................16
5.2 Enforcement of Subordination of Securities Claims..........16
5.3 Elimination of Vacant Classes..............................16
5.4 Nonconsensual Confirmation.................................16
5.5 Method of Distributions Under the Plan.....................16
(a) Disbursing Agent.................................16
(b) Delivery of Distributions........................16
(c) Distributions of Cash............................17
(d) Distributions on Account of Subordinated Note
Claims...........................................17
(e) Surrender of Subordinated Notes..................17
(f) Timing of Distributions..........................17
(g) Hart-Scott-Rodino Compliance.....................17
(h) Minimum Distributions............................17
(i) Fractional Shares................................17
(j) [Reserved].......................................17
vi
TABLE OF CONTENTS
(continued)
Page
(k) Unclaimed Distributions..........................17
(l) Distributions to Holders (Other than
Subordinated Note Claims) as of the
Record Date......................................18
(m) Distributions to Holders of Subordinated Note
Claims as of the Record Date.....................18
5.6 Objections to and Resolution of Administrative Expense
Claims and Claims........................................18
5.7 Cancellation of Existing Securities and Agreements.........18
5.8 Registration of New Common Stock...........................18
5.9 Securityholders Agreement..................................19
Article VI EXECUTORY CONTRACTS AND UNEXPIRED LEASES........................19
6.1 Assumption or Rejection of Executory Contracts and
Unexpired Leases...........................................19
(a) Executory Contracts and Unexpired
Leases..........................................19
(b) Schedules of Rejected Executory Contracts and
Unexpired Leases; Inclusiveness.................19
(c) Insurance Policies..............................19
(d) Approval of Assumption, Assumption and Assignment
or Rejection of Executory Contracts and Unexpired
Leases..........................................20
(e) Cure of Defaults................................20
(f) Bar Date for Filing Proofs of Claim Relating
to Executory Contracts and Unexpired Leases
Rejected Pursuant to the Plan...................20
(g) Assumed Indemnification Obligations.............20
(h) Compensation and Benefit Programs...............20
6.2 Retiree Benefits...........................................21
Article VII IMPLEMENTATION OF THE PLAN.....................................21
7.1 General....................................................21
vii
TABLE OF CONTENTS
(continued)
Page
7.2 Retention of Derivative Securities Litigation Claims.......21
7.3 Directors and Officers of Reorganized Sunbeam..............21
(a) Board of Directors...............................21
(b) Officers.........................................21
7.4 By-laws and Certificates of Incorporation..................21
7.5 Issuance of New Securities.................................22
7.6 Management Equity Plans....................................22
Article VIII EFFECT OF CONFIRMATION OF PLAN................................22
8.1 Term of Bankruptcy Injunction or Stays.....................22
8.2 Revesting of Assets........................................22
8.3 Claims Extinguished........................................23
8.4 Discharge of Debtor........................................23
8.5 Injunction.................................................23
8.6 Continuation of Pension Plans..............................23
Article IX CONFIRMATION AND EFFECTIVENESS OF THE PLAN......................23
9.1 Conditions Precedent to Confirmation.......................23
9.2 Conditions Precedent to Effectiveness......................24
9.3 Effect of Failure of Conditions............................25
9.4 Waiver of Conditions.......................................25
Article X RETENTION OF JURISDICTION........................................25
10.1 Retention of Jurisdiction..................................25
Article XI MISCELLANEOUS PROVISIONS........................................26
11.1 Effectuating Documents and Further Transactions............26
viii
TABLE OF CONTENTS
(continued)
Page
11.2 Corporate Action...........................................26
11.3 Exemption from Transfer Taxes..............................27
11.4 Limited Releases of Releasees..............................27
11.5 Limited Release by Releasees...............................27
11.6 Exculpation................................................27
11.7 Termination of Committee...................................28
11.8 Post-Effective Date Fees and Expenses......................28
11.9 Payment of Statutory Fees..................................28
11.10 Amendment or Modification of the Plan....................28
11.11 Severability.............................................29
11.12 Revocation or Withdrawal of the Plan.....................29
11.13 Binding Effect...........................................29
11.14 Notices..................................................29
11.15 Governing Law............................................30
11.16 Withholding and Reporting Requirements...................30
11.17 Plan Supplement..........................................30
11.18 Sections 1125 and 1126 of the Bankruptcy Code............30
11.19 Allocation of Plan Distributions.........................31
11.20 Headings.................................................31
11.21 Exhibits/Schedules.......................................31
11.22 Filing of Additional Documents...........................31
11.23 Change of Name...........................................31
ix
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------------------x
:
In re : Chapter 11 Case No.
:
SUNBEAM CORPORATION, : 01-40291 (AJG)
:
:
:
:
Debtor. :
:
----------------------------------------------------x
DEBTOR'S THIRD AMENDED PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
---------------------------------------
Sunbeam Corporation proposes the following plan of reorganization under
section 1121(a) of title 11 of the United States Code:
Article I
DEFINITIONS AND CONSTRUCTION OF TERMS
-------------------------------------
Definitions. As used herein, the following terms have the respective
meanings specified below:
1.1 Administrative Expense Claim means any right to payment constituting
a cost or expense of administration of the Chapter 11 Case under sections
503(b) and 507(a)(1) of the Bankruptcy Code, including, without limitation,
any actual and necessary costs and expenses of preserving the estate of the
Debtor, any actual and necessary costs and expenses of operating the business
of the Debtor, any indebtedness or obligations incurred or assumed by the
Debtor in Possession in connection with the conduct of its business,
including, without limitation, for the acquisition or lease of property or an
interest in property or the rendition of services, all compensation and
reimbursement of expenses to the extent Allowed by the Bankruptcy Court under
section 330 or 503 of the Bankruptcy Code and any fees or charges assessed
against the estate of the Debtor under section 1930 of chapter 123 of title 28
of the United States Code.
1.2 Adversary Proceeding means the adversary proceeding commenced in the
Chapter 11 Case by the Committee on July 31, 2001, styled Official Committee
of Unsecured Creditors of Sunbeam Corporation v. Morgan Stanley & Co., Inc.,
et al., Adv. Pro. 01-02886 (AJG).
1.3 Affiliate means, as to (i) any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person and (ii) as to any of the Banks, any Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Bank, or its parent or related entity that participated in
the issuance of the Subordinated Notes or the extensions of credit pursuant to
the Bank Credit Agreement. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, either to (a) vote 20% or more
of the securities having ordinary voting power for the
election of directors (or persons performing similar functions) of such Person
or (b) direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
1.4 Allowed means, with reference to any Claim, (a) any Claim against the
Debtor which has been listed by the Debtor in its Schedules, as such Schedules
may be amended by the Debtor from time to time in accordance with Bankruptcy
Rule 1009, as liquidated in amount and not disputed or contingent and for
which no contrary proof of claim has been filed, (b) any Claim allowed
hereunder, (c) any Claim which is not Disputed, (d) any Claim that is
compromised, settled or otherwise resolved pursuant to a Final Order of the
Bankruptcy Court or under the Plan, or (e) any Claim which, if Disputed, has
been Allowed by Final Order; provided, however, that Claims allowed solely for
the purpose of voting to accept or reject the Plan pursuant to an order of the
Bankruptcy Court shall not be considered "Allowed Claims" hereunder. Unless
otherwise specified herein or by order of the Bankruptcy Court, "Allowed
Administrative Expense Claim" or "Allowed Claim" shall not, for any purpose
under the Plan, include interest on such Administrative Expense Claim or Claim
from and after the Commencement Date.
1.5 Assumed Corporate Indemnities mean any obligation of the Debtor to
defend, indemnify, reimburse or limit the liability of its present and any
former officers, directors and/or employees who were officers, directors
and/or employees, respectively, on or after the Commencement Date, solely in
their capacity as officers, directors and/or employees, against any claims or
obligations pursuant to the Debtor's certificate of incorporation or by-laws,
applicable state law or specific agreement, or any combination of the
foregoing.
1.6 Assumed Indemnification Claims mean all Claims, if any, as to which
the claimant asserts rights based only upon the Assumed Corporate Indemnities.
1.7 Ballot means the form distributed to each holder of an impaired Claim
on which is to be indicated acceptance or rejection of the Plan.
1.8 Bank Credit Agreement means that certain Credit Agreement, dated as
of March 30, 1998, among Sunbeam Corporation, certain Sunbeam Affiliates and
the Banks, and any and all of the documents, instruments and agreements
relating thereto, including, without limitation, all guarantees and security
documents, instruments and agreements executed and delivered in connection
with the such Credit Agreement, as the same may have been amended,
supplemented, modified, extended, replaced, refinanced, renewed or restated as
of the Commencement Date.
1.9 Banks means, Wachovia Bank, National Association (f/k/a First Union
National Bank), as agent and lender, and Bank of America, N.A. and Morgan
Stanley Senior Funding, Inc., as lenders under the Bank Credit Agreement.
1.10 Bankruptcy Code means title 11 of the United States Code, as amended
from time to time, as applicable to the Chapter 11 Case.
1.11 Bankruptcy Court means the United States Bankruptcy Court for the
Southern District of New York having jurisdiction over the Chapter 11 Case
and, to the extent of any reference under section 157 of title 28 of the
United States Code, the unit of such District Court under section 151 of title
28 of the United States Code.
2
1.12 Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure as
promulgated by the United States Supreme Court under section 2075 of title 28
of the United States Code, and any Local Rules of the Bankruptcy Court.
1.13 Benefit Plans means all savings, retirement, healthcare, severance,
performance-based cash incentive, retention, employee welfare benefit, life
insurance, disability and similar plans and agreements. A schedule, in form
reasonably acceptable to the Banks, listing the Benefit Plans shall be
provided to the Banks no later than 10 days prior to the hearing on approval
of the Disclosure Statement.
1.14 Business Day means any day other than a Saturday, Sunday or any
other day on which commercial banks in New York, New York are required or
authorized to close by law or executive order.
1.15 Cash means legal tender of the United States of America.
1.16 Causes of Action means, without limitation, any and all actions,
causes of action, liabilities, obligations, rights, suits, damages, judgments,
claims and demands whatsoever, whether known or unknown, existing or hereafter
arising, in law, equity or otherwise, based in whole or in part upon any act
or omission or other event occurring prior to the Commencement Date or during
the course of the Chapter 11 Case, including through the Effective Date.
1.17 Chapter 11 Case means the case under chapter 11 of the Bankruptcy
Code commenced by the Debtor in the Bankruptcy Court.
1.18 Claim has the meaning set forth in section 101 of the Bankruptcy
Code.
1.19 Class means a category of holders of Claims or Equity Interests as
set forth in Article III of the Plan.
1.20 Collateral means any property or interest in property of the estate
of the Debtor subject to a Lien to secure the payment or performance of a
Claim, which Lien is not subject to avoidance or otherwise invalid under the
Bankruptcy Code or applicable state law.
1.21 Commencement Date means February 6, 2001, the date on which the
Debtor commenced the Chapter 11 Case.
1.22 Committee means the statutory committee of unsecured creditors
appointed in the Chapter 11 Case pursuant to section 1102 of the Bankruptcy
Code.
1.23 Confirmation Date means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order on the docket.
1.24 Confirmation Hearing means the hearing held by the Bankruptcy Court
to consider confirmation of the Plan pursuant to section 1129 of the
Bankruptcy Code, as such hearing may be adjourned or continued from time to
time.
3
1.25 Confirmation Order means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
1.26 Debtor means Sunbeam Corporation.
1.27 Debtor in Possession means the Debtor in its capacity as debtor in
possession in the Chapter 11 Case pursuant to sections 1101, 1107(a) and 1108
of the Bankruptcy Code.
1.28 Derivative Securities Litigation Claims means the Claims or Causes
of Action set forth in Exhibit A to the Plan and any and all other Claims or
Causes of Action derivative of or from the Debtor.
1.29 Disbursing Agent means any Entity in its capacity as a disbursing
agent under Section 5.5(a) hereof.
1.30 Disclosure Statement means the disclosure statement relating to the
Plan, including, without limitation, all exhibits and schedules thereto, as
approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy
Code.
1.31 Disputed means, with reference to any Claim, any Claim proof of
which was timely and properly filed, and in such case or in the case of an
Administrative Expense Claim, any Administrative Expense Claim or Claim which
is disputed under the Plan or as to which the Debtor has interposed a timely
objection and/or request for estimation in accordance with section 502(c) of
the Bankruptcy Code and Bankruptcy Rule 3018, which objection and/or request
for estimation has not been withdrawn or determined by a Final Order, and any
Claim proof of which was required to be filed by order of the Bankruptcy Court
but as to which a proof of claim was not timely or properly filed. A Claim
that is Disputed by the Debtor as to its amount only, shall be deemed Allowed
in the amount the Debtor admits owing, if any, and Disputed as to the excess.
1.32 Disputed Claim Amount means the amount set forth in the proof of
claim relating to a Disputed Claim or, if an amount is estimated in respect of
a Disputed Claim in accordance with section 502(c) of the Bankruptcy Code and
Bankruptcy Rule 3018, the amount so estimated pursuant to an order of the
Bankruptcy Court.
1.33 Effective Date means the first Business Day on which the conditions
specified in Section 9.2 of the Plan have been satisfied or waived.
1.34 Employee Options means the stock options and equivalent incentive
awards issued by Reorganized Sunbeam and the Reorganized Subsidiaries pursuant
to the Management Equity Plans, which in the case of stock options and
equivalent incentive awards issued by Reorganized Sunbeam shall be subject to
the Securityholders Agreement and upon exercise the Registration Rights
Agreement.
1.35 Entity shall have the meaning set forth in section 101(15) of the
Bankruptcy Code.
4
1.36 Equity Interest means any share of common stock or other instrument
evidencing an ownership interest in the Debtor, whether or not transferable,
and any option, warrant or right, contractual or otherwise, to acquire any
such interest.
1.37 Equity Holder Securities Claims means any and all Claims and Causes
of Action of any kind whatsoever, known or unknown, asserted or which might
have been, or might in the future be, asserted in a direct or other capacity
against the Debtor arising out of, relating to or in connection with: (i) the
purchase, ownership, sale or other decision or action made or taken, or
declined, or failed or refused to be made or taken, or otherwise foregone,
concerning or relating to the Equity Interests; (ii) the facts, transactions,
events, occurrences, acts, representations, disclosures, statements, omissions
or failures to act which were alleged or could have been alleged in the
pending litigation asserted against the Debtor, whether asserted individually
or on behalf of a class of plaintiffs, which generally arise from allegations
of alleged acts or omissions of the Debtor or any other Persons or Entities
prior to the Commencement Date with respect to or concerning the Equity
Interests, or the purchase, sale or ownership thereof, including, without
limitation, the litigation or causes of action set forth in Exhibit B to the
Plan; (iii) accounting irregularities or errors, if any, or alleged accounting
irregularities or errors relating to the Sunbeam Group; (iv) the historical or
projected financial condition or results of the Sunbeam Group; (v) state law
appraisal rights sought or requested in connection with or relating in any
manner to the Sunbeam Group; (vi) any restatements of the Debtor's or any
member of the Sunbeam Group's financial statements or results of operations;
(vii) any other Claims and Causes of Action arising out of, relating to, or in
connection with the Equity Interests that would be subject to and subordinated
under section 510(b) of the Bankruptcy Code; and (viii) indemnification,
reimbursement or contribution Claims with respect to any of the foregoing;
provided, however, that, notwithstanding the foregoing, Equity Holder
Securities Claims shall not include Assumed Indemnification Claims and
Derivative Securities Litigation Claims.
1.38 ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.39 Final Order means an order of the Bankruptcy Court or any other
court of competent jurisdiction as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending or as to which any right to appeal, petition
for certiorari, reargue, or rehear shall have been waived in writing in form
and substance satisfactory to the Debtor or, on and after the Effective Date,
Reorganized Sunbeam, or, in the event that an appeal, writ of certiorari, or
reargument or rehearing thereof has been sought, such order of the Bankruptcy
Court or other court of competent jurisdiction shall have been determined by
the highest court to which such order was appealed, or certiorari, reargument
or rehearing shall have been denied and the time to take any further appeal,
petition for certiorari or move for reargument or rehearing shall have
expired; provided, however, that the possibility that a motion under Rule 59
or Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule
under the Bankruptcy Rules or applicable state court rules of civil procedure,
may be filed with respect to such order shall not cause such order not to be a
Final Order.
1.40 GECC means General Electric Capital Corporation and its Affiliates.
5
1.41 General Unsecured Claim means any Claim other than a Secured Claim,
Administrative Expense Claim, Priority Tax Claim, Other Priority Claim,
Subordinated Note Claim, Derivative Securities Litigation Claim, Affiliate
Claim, Subordinated Noteholder Securities Claim and Equity Holder Securities
Claim.
1.42 Indenture Trustee means The Bank of New York, as indenture trustee
under the Subordinated Notes Indenture, and any successor indenture trustee
that may be appointed.
1.43 Lien has the meaning set forth in section 101 of the Bankruptcy
Code.
1.44 Management Equity Plans means the stock option or equivalent
incentive award plans to be established by Reorganized Sunbeam and separate
stock option or equivalent incentive award plans for certain employees of the
Reorganized Subsidiaries on the Effective Date, which shall be in
substantially the form contained in the Plan Supplement.
1.45 Management Investment Securities means the shares of Reorganized
Sunbeam Common Stock to be issued on the Effective Date in consideration for
an investment of $3,000,000 to be made by Mr. Jerry W. Levin and up to
$2,000,000 in the aggregate to be made by one or more employees of Reorganized
Sunbeam and the restricted shares of Reorganized Sunbeam Common Stock to be
granted to Mr. Levin in connection therewith.
1.46 Management Stockholders means the participants in the Management
Equity Plans.
1.47 Morgan Stanley means Morgan Stanley & Co., Incorporated and its
Affiliates.
1.48 New Secured Term Notes means the secured term notes authorized and
to be issued by Reorganized Sunbeam in the principal amount of $100,000,000 on
the Effective Date, pursuant to the Plan, on the terms and subject to the
conditions set forth in Exhibit C to the Plan.
1.49 New Secured Term Notes Documents means that certain indenture, by
and among Reorganized Sunbeam, as issuer, the Reorganized Subsidiaries, as
guarantors, an indenture trustee reasonably satisfactory to the Debtor and the
Banks, and the Banks, as lenders, and the related collateral documents,
pursuant to which the New Secured Term Notes will be issued and secured, which
documents will be in substantially the forms contained in the Plan Supplement.
1.50 Other Priority Claim means any Claim, other than an Administrative
Expense Claim or a Priority Tax Claim, entitled to priority in right of
payment under section 507(a) of the Bankruptcy Code.
1.51 Other Secured Claim means any Secured Claim, other than Secured Bank
Claims and Affiliate Claims that are Secured Claims.
1.52 PBGC shall mean the Pension Benefit Guaranty Corporation, a United
States government corporation that administers the defined benefit pension
plan termination insurance program under Title IV of ERISA.
1.53 Pension Plans shall mean the following defined benefit pension plans
of the Debtor covered by Title IV of ERISA: Pension Plan for Hourly Employees
of Sunbeam-Oster Company,
6
Inc. at the Portland, Tennessee Plant; Pension Plan for Hourly Employees of
Sunbeam-Oster Company, Inc. at the Nacogdoches, Texas, Waynesboro, Georgia and
Linton, Indiana Plants; and Pension Plan for Employees of Sunbeam-Oster
Company, Inc.
1.54 Person shall have the meaning set forth in section 101(41) of the
Bankruptcy Code.
1.55 Plan means this chapter 11 plan of reorganization, including,
without limitation, the Plan Supplement and all exhibits, supplements,
appendices and schedules hereto, either in its present form or as the same may
be altered, amended or modified from time to time.
1.56 Plan Supplement means the forms of documents specified in Section
11.17 of the Plan.
1.57 Post-Petition Banks means, collectively, the agents and lenders that
are from time to time parties to the Post-Petition Bank Credit Agreement.
1.58 Post-Petition Bank Credit Agreement means that certain Revolving
Credit and Guarantee Agreement, dated as of February 6, 2001, among Sunbeam
Corporation, the subsidiaries of Sunbeam Corporation parties thereto, and the
agents and lenders from time to time parties thereto, and any and all of the
documents, instruments and agreements relating thereto, including, without
limitation, all guarantees and security documents, instruments and agreements
executed and delivered in connection with the Post-Petition Credit Agreement,
as the same may have been amended, restated, supplemented or otherwise
modified from time to time.
1.59 Priority Tax Claim means any Claim of a governmental unit of the
kind specified in sections 502(i) and 507(a)(8) of the Bankruptcy Code.
1.60 Pro Rata Share means a proportionate share, so that the ratio of the
consideration distributed on account of an Allowed Claim in a Class to the
amount of such Allowed Claim is the same as the ratio of the amount of the
consideration distributed on account of all Allowed Claims in such Class to
the amount of all Allowed Claims in such Class.
1.61 Record Date means November 25, 2002.
1.62 Registration Rights Agreement means the registration rights
agreement governing the Reorganized Sunbeam Common Stock, the Management
Investment Securities, and any shares of Reorganized Sunbeam Common Stock
issued upon exercise of the Employee Options, which agreement shall be in
substantially the form contained in the Plan Supplement. A summary of certain
of the material terms of the Registration Rights Agreement is included in the
Disclosure Statement.
1.63 Releasees means all present and former officers and directors of the
Debtor who were directors and/or officers, respectively, on or after the
Commencement Date, and any other Persons who serve or served as members of
management of the Debtor on or after the Commencement Date, all present and
former members of the Committee, all present and former Banks and
Post-Petition Banks (and their respective Affiliates and known loan
participants), Morgan Stanley, all present and former officers and directors
and other Persons who serve or
7
served as members of the management of any present or former member of the
Committee or of any present or former Bank or Post-Petition Bank (and their
respective Affiliates and known loan participants), Morgan Stanley, and all
post-Commencement Date advisors, consultants or professionals of or to the
Debtor, the Committee, the members of the Committee, the Banks and the
Post-Petition Banks (and their respective Affiliates and known loan
participants) and Morgan Stanley.
1.64 Reorganized Subsidiaries means all of the direct and indirect
domestic subsidiaries of the Debtor that are debtors-in-possession in
separately administered chapter 11 cases, on and after the effective date of
the Subsidiaries Plan.
1.65 Reorganized Sunbeam means Sunbeam Corporation on and after the
Effective Date.
1.66 Reorganized Sunbeam By-laws means the amended and restated By-laws
of Reorganized Sunbeam, which shall be in substantially the form contained in
the Plan Supplement.
1.67 Reorganized Sunbeam Certificate of Incorporation means the amended
and restated Certificate of Incorporation of Reorganized Sunbeam, which shall
be in substantially the form contained in the Plan Supplement.
1.68 Reorganized Sunbeam Common Stock means the number of shares of
common stock of Reorganized Sunbeam authorized and to be issued pursuant to
the Plan, which number shall be disclosed on or prior to the Confirmation
Hearing. The Reorganized Sunbeam Common Stock shall have a par value of $.01
per share, shall be subject to the Securityholders Agreement and the
Registration Rights Agreement and shall have rights with respect to dividends,
liquidation, voting and other matters as are provided for by applicable law or
in the Reorganized Sunbeam Certificate of Incorporation, the Reorganized
Sunbeam By-laws, the Securityholders Agreement and the Registration Rights
Agreement.
1.69 Schedules means the schedule of assets and liabilities, the list of
holders of Equity Interests and the statement of financial affairs filed by
the Debtor under section 521 of the Bankruptcy Code and Bankruptcy Rule 1007,
and all amendments and modifications thereto through and including the date by
which objections to Claims must be filed with the Bankruptcy Court pursuant to
Section 5.6 of the Plan.
1.70 Secured Bank Claims means all Claims of the Banks against the Debtor
arising under or in connection with the Bank Credit Agreement, including,
without limitation, any Claims of the Banks that are converted to postpetition
administrative expense claims pursuant to any order of the Bankruptcy Court
approving the provision of adequate protection to holders of Secured Bank
Claims.
1.71 Secured Claim means any Claim, to the extent reflected in the
Schedules or a proof of claim as a Secured Claim, which is secured by a Lien
on Collateral to the extent of the value of such Collateral, as determined in
accordance with section 506(a) of the Bankruptcy Code, or, in the event that
such Claim is subject to a permissible setoff under section 553 of the
Bankruptcy Code, to the extent of such permissible setoff, including, without
limitation, Secured Bank Claims, Other Secured Claims and Affiliate Claims
that are Secured Claims.
8
1.72 Securityholders Agreement means the securityholders agreement
governing the Reorganized Sunbeam Common Stock, the Management Investment
Securities, any shares of Reorganized Sunbeam Common Stock issued upon the
exercise of the Employee Options and such other equity interests as are agreed
to by the Debtor and the Banks, which agreement shall be in substantially the
form contained in the Plan Supplement. A summary of certain of the material
terms of the Securityholders Agreement is included in the Disclosure
Statement.
1.73 Subordinated Note Claims means all Claims arising under or in
connection with the Subordinated Notes Indenture; provided, however, that
Subordinated Noteholder Securities Claims shall not be Subordinated Note
Claims.
1.74 Subordinated Noteholder Securities Claims means any and all Claims
and Causes of Action of any kind whatsoever, known or unknown, asserted or
which might have been, or might in the future be, asserted in a direct or
other capacity against the Debtor or the Subsidiary Debtors arising out of,
relating to or in connection with: (i) the purchase, ownership, sale or other
decision or action made or taken, or declined, or failed or refused to be made
or taken, or otherwise foregone, concerning or relating to the Subordinated
Notes; (ii) the facts, transactions, events, occurrences, acts,
representations, disclosures, statements, omissions or failures to act which
were alleged or could have been alleged in the pending litigation asserted
against the Debtor, whether asserted individually or on behalf of a class of
plaintiffs, which generally arise from allegations of alleged acts or
omissions of the Debtor or any other Persons or Entities prior to the
Commencement Date with respect to or concerning the Subordinated Notes, or the
purchase, sale or ownership thereof, including, without limitation, the
litigation or causes of action set forth on Exhibit E to the Plan; (iii)
accounting irregularities or errors, if any, or alleged accounting
irregularities or errors relating to the Debtor or the Sunbeam Group; (iv) the
historical or projected financial condition or results of the Sunbeam Group;
(v) any restatements of the Debtor's or any member of the Sunbeam Group's
financial statements or results of operations; (vi) any other Claims and
Causes of Action arising out of, relating to, or in connection with the
Subordinated Notes that would be subject to and subordinated under section
510(b) of the Bankruptcy Code; and (vii) indemnification, reimbursement or
contribution Claims against the Debtor with respect to any of the foregoing;
provided, however, that, notwithstanding the foregoing, Subordinated
Noteholder Securities Claims shall not include Assumed Indemnification Claims
and Derivative Securities Litigation Claims.
1.75 Subordinated Notes means all notes issued and outstanding under the
Subordinated Notes Indenture as of the Commencement Date.
1.76 Subordinated Notes Indenture means the trust indenture, dated as of
March 25, 1998, between Sunbeam, as issuer of the Subordinated Notes, and the
Indenture Trustee, and all of the documents and instruments relating thereto,
as amended, supplemented, modified or restated as of the Commencement Date.
1.77 Subsidiaries Plan means the joint chapter 11 plan of reorganization
proposed by certain domestic Sunbeam Affiliates in their separately (but
jointly) administered chapter 11 cases pending in the Bankruptcy Court.
9
1.78 Subsidiary Debtors means all of the direct and indirect domestic
subsidiaries of the Debtor that are debtors-in-possession in separately
administered Chapter 11 cases, styled AI Realty Marketing of New York, et al.,
Case Nos. 01-40252 through 01-40290 (AJG).
1.79 Sunbeam Affiliate Claim means any Claim, whether secured or
unsecured, of a Sunbeam Affiliate.
1.80 Sunbeam Affiliates means, collectively, AI Realty Marketing of New
York, Inc.; Beacon Exports, Inc.; BRK Brands, Inc.; CC Outlet, Inc.; CMO,
Inc.; Coleman Argentina, Inc.; Coleman International Holdings, LLC; Coleman
Powermate, Inc.; Coleman Puerto Rico, Inc.; Coleman Venture Capital, Inc.;
Coleman Worldwide Corp.; DDG I, Inc.; Family Gard, Inc.; First Alert, Inc.;
General Archery Industries, Inc.; GHI I, Inc.; JGK, Inc.; Kaimona, Inc.;
Kansas Acquisition Corp.; L.A. Services, Inc.; Laser Acquisition Corp.; Nippon
Coleman, Inc.; Packs & Travel Corporation; Pearson Holdings, Inc.; PH III,
Inc.; River View Corporation of Barling, Inc.; SI II, Inc.; Sierra Corporation
of Fort Smith, Inc.; Sunbeam Americas Holdings, Ltd.; Sunbeam Health & Safety
Company; Sunbeam Latin America, LLC; Sunbeam Products, Inc.; Sunbeam Services,
Inc.; Survival Gear, Inc.; Thalia Products Inc.; The Coleman Company, Inc.;
THL-FA IP Corp; Vero Dunes Venturer, Inc.; Woodcraft Equipment Company;
Application Des Gaz, S.A.S. (France); Australian Coleman, Inc.; Bafiges S.A.S.
(France); BRK Brands Europe Limited (England and Wales); Camping Gaz CS Spol
S.R.O. (Czech Republic); Camping Gaz GmbH (Austria); Camping Gaz Great
Britain, L.T.D. (Great Britain); Camping do Brasil (Brazil); Camping Gaz
International Deutschland GmbH (Germany); Camping Gaz Hellas (Greece); Camping
Gaz International Portugal, L.T.D. (Portugal); Camping Gaz Italie S.r.L.
(Italy); Camping Gaz Poland (Poland); Camping Gaz Senegal (Senegal); Camping
Gaz Suisse A.G. (Switzerland); CC Gaz Hungary (C. Gax Kft.); Coleman Argentina
S.A. (Argentina); Coleman Asset Diversification, Inc.; Coleman Asia Limited
(Hong Kong); Coleman Benelux B.V. (Netherlands); Coleman Brands Pty Limited
(Australia); Coleman Brands Pty Ltd.; Coleman do Brasil Ltda. (Brazil);
Coleman Country Ltd.; Coleman Deutschland GmbH (Germany); Coleman Europe BVBA
(Belgium); Coleman International SARL (LLC) (Switzerland); Coleman Japan Co.,
Ltd. (Japan); Coleman Latin America, LLC; Coleman Life Styles KK (Japan);
Coleman Mexico S.A. de C.V. (Mexico); Coleman Powermate International, Inc.;
Coleman SVB S.r.L (Italy); Coleman Taymar Limited (England and Wales); Coleman
UK Holdings Limited (England and Wales); Coleman UK PLC (England and Wales);
Electronica BRK de Mexico S.A. de C.V. (Mexico); Epigas International Limited;
Oster de Venezuela, S.A. (Venezuela); Productos Coleman, S.A. (Spain); RRR
Funding LLC; Servicios Sunbeam-Coleman De Mexico, S.S. de C.V.; SI China
Ventures, Ltd. (Hong Kong); Sunbeam Asset Diversification, Inc.; Sunbeam
Corporation (Canada) Limited (Ontario); Sunbeam Corporation Europe SARL
(France); Sunbeam Europe S.A.S.; Sunbeam Holdings S.A. de C.V. (Mexico);
Sunbeam International (Asia), Ltd.; Sunbeam Mexicana S.A. de C.V. (Mexico);
Sunbeam Oster de Acuna S.A. de C.V. (Mexico); Sunbeam Oster de Matarmoros S.A.
de C.V. (Mexico); Sunbeam Oster International (FSC), Inc. (Barbados); and
Taymar Gas Limited.
1.81 Sunbeam Group means, collectively, Sunbeam Corporation and the
Sunbeam Affiliates.
1.82 Working Capital Facility means one or more term loans, a revolving
credit facility and/or securitization facility to be established on the
Effective Date, with availability of
10
approximately $380,000,000 in the aggregate, secured by a first lien on
substantially all of the assets of Reorganized Sunbeam and its domestic
subsidiaries (with exceptions to be agreed upon), the terms and conditions of
which shall be satisfactory to the Debtor, the Subsidiary Debtors and the
Banks.
1.83 Working Capital Facility Documents means that certain Working
Capital Facility loan agreement, by and among Reorganized Sunbeam, certain of
the Reorganized Subsidiaries and certain other Affiliates, as borrowers, the
Reorganized Subsidiaries, as guarantors, and lenders satisfactory to the
Debtors and the Banks, the related collateral documents, the guarantee and
security agreement to be provided by Reorganized Sunbeam and the Reorganized
Subsidiaries, and all ancillary agreements, documents, and instruments to be
issued or given in connection therewith.
Interpretation; Application of Definitions and Rules of Construction.
Wherever from the context it appears appropriate, each term stated in either
the singular or the plural shall include both the singular and the plural and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter. Unless otherwise specified, all section,
article, schedule or exhibit references in the Plan are to the respective
Section in, Article of, Schedule to, or Exhibit to, the Plan. The words
"herein," "hereof," "hereto," "hereunder" and other words of similar import
refer to the Plan as a whole and not to any particular section, subsection or
clause contained in the Plan. The rules of construction contained in section
102 of the Bankruptcy Code shall apply to the construction of the Plan. A term
used herein that is not defined herein, but that is used in the Bankruptcy
Code, shall have the meaning ascribed to that term in the Bankruptcy Code. The
headings in the Plan are for convenience of reference only and shall not limit
or otherwise affect the provisions of the Plan. In the event of any conflict
between the terms of this Plan and the Disclosure Statement, the terms of the
Plan shall govern.
Article II
TREATMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
--------------------------------------
2.1 Administrative Expense Claims. Except to the extent that any entity
entitled to payment of any Allowed Administrative Expense Claim agrees to a
less favorable treatment, each holder of an Allowed Administrative Expense
Claim shall receive Cash in an amount equal to such Allowed Administrative
Expense Claim on the later of the Effective Date and the date such
Administrative Expense Claim becomes an Allowed Administrative Expense Claim,
or as soon thereafter as is practicable; provided, however, that Allowed
Administrative Expense Claims representing liabilities incurred in the
ordinary course of business by the Debtor in Possession or liabilities arising
under loans or advances to or other obligations incurred by the Debtor in
Possession shall be paid in full and performed by Reorganized Sunbeam in the
ordinary course of business in accordance with the terms and subject to the
conditions of any agreements governing, instruments evidencing or other
documents relating to such transactions.
2.2 Professional Compensation and Reimbursement Claims. All entities
seeking an award by the Bankruptcy Court of compensation for services rendered
or reimbursement of expenses incurred through and including the Effective Date
under sections 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy
Code shall (a) file their respective final applications for allowances of
compensation for services rendered and reimbursement of expenses incurred
11
through the Effective Date by no later than the date that is 60 days after the
Effective Date, or such other date as may be fixed by the Bankruptcy Court and
(b) if granted such an award by the Bankruptcy Court, be paid in full in such
amounts as are Allowed by the Bankruptcy Court (i) on the date such
Administrative Expense Claim becomes an Allowed Administrative Expense Claim,
or as soon thereafter as is practicable or (ii) upon such other terms as may
be mutually agreed upon between such holder of an Administrative Expense Claim
and Reorganized Sunbeam; provided, however, that in no event shall the
professionals retained by the Committee seek or otherwise be awarded
professional fees and expenses as an Allowed Administrative Expense Claim in
an amount exceeding $1,000,000 in excess of any payments received prior to
November 25, 2002.
2.3 Priority Tax Claims. Except to the extent that a holder of an Allowed
Priority Tax Claim has been paid by the Debtor prior to the Effective Date or
agrees to a different treatment, each holder of an Allowed Priority Tax Claim
shall receive, in full and complete settlement, satisfaction and discharge of
its Allowed Priority Tax Claim, at the option of Reorganized Sunbeam, (a) Cash
in an amount equal to such Allowed Priority Tax Claim on the later of the
Effective Date and the date such Priority Tax Claim becomes an Allowed
Priority Tax Claim, or as soon thereafter as is practicable or (b) equal
annual Cash payments in an aggregate amount equal to such Allowed Priority Tax
Claim, together with interest at a fixed annual rate equal to 8.0%, over a
period through the sixth anniversary of the date of assessment of such Allowed
Priority Tax Claim, or upon such other terms determined by the Bankruptcy
Court to provide the holder of such Allowed Priority Tax Claim deferred Cash
payments having a value, as of the Effective Date, equal to such Allowed
Priority Tax Claim; provided, however, that the Debtor must obtain the consent
of the Banks in order to elect option (a).
Article III
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
---------------------------------------------
Claims, other than Administrative Expense Claims and Priority Tax
Claims, and Equity Interests, are classified for all purposes, including
voting, confirmation and distribution pursuant to the Plan, as follows:
Class Status
----- ------
Class 1 - Other Priority Claims Unimpaired
Class 2 - Other Secured Claims Unimpaired
Class 3 - Secured Bank Claims Impaired
Class 4 - General Unsecured Claims Impaired
Class 5 - Subordinated Note Claims Impaired
Class 6 - Subordinated Noteholder Securities Claims Impaired
Class 7 - Sunbeam Affiliate Claims Impaired
12
Class 8 - Equity Interests Impaired
Class 9 - Equity Holder Securities Claims Impaired
Article IV
TREATMENT OF CLAIMS AND EQUITY INTERESTS
----------------------------------------
4.1 CLASS 1 - OTHER PRIORITY CLAIMS.
(a) Impairment and Voting. Class 1 is unimpaired by the Plan. Each holder
of an Allowed Other Priority Claim is conclusively presumed to have accepted
the Plan and is not entitled to vote to accept or reject the Plan.
(b) Distributions. Except to the extent that a holder of an Allowed Other
Priority Claim has been paid by the Debtor prior to the Effective Date or
agrees to a different treatment, each holder of an Allowed Other Priority
Claim shall receive, in full and complete settlement, satisfaction and
discharge of its Allowed Other Priority Claim, Cash in an amount equal to such
Allowed Other Priority Claim on the later of the Effective Date and the date
such Allowed Other Priority Claim becomes an Allowed Other Priority Claim, or
as soon thereafter as is practicable.
4.2 CLASS 2 - OTHER SECURED CLAIMS.
(a) Impairment and Voting. Class 2 is unimpaired by the Plan. Each holder
of an Allowed Other Secured Claim is conclusively presumed to have accepted
the Plan and is not entitled to vote to accept or reject the Plan.
(b) Distributions/Reinstatement of Claims. Except to the extent that a
holder of an Allowed Other Secured Claim has been paid by the Debtor prior to
the Effective Date or agrees to a different treatment, each holder of an
Allowed Other Secured Claim shall, in full and complete settlement,
satisfaction and discharge of its Allowed Other Secured Claim, at the option
of Reorganized Sunbeam, (i) be reinstated and rendered unimpaired in
accordance with section 1124 of the Bankruptcy Code, (ii) receive Cash in an
amount equal to such Allowed Other Secured Claim, including any interest on
such Allowed Other Secured Claim required to be paid pursuant to section
506(b) of the Bankruptcy Code, on the later of the Effective Date and the date
such Allowed Other Secured Claim becomes an Allowed Other Secured Claim, or as
soon thereafter as is practicable or (iii) receive the Collateral securing its
Allowed Other Secured Claim and any interest on such Allowed Other Secured
Claim required to be paid pursuant to section 506(b) of the Bankruptcy Code,
on the later of the Effective Date and the date such Allowed Other Secured
Claim becomes an Allowed Other Secured Claim, or as soon thereafter as is
practicable; provided, however, that the Debtor must obtain the consent of the
Banks in order to elect option (ii).
13
4.3 CLASS 3 - SECURED BANK CLAIMS.
(a) Allowance. The Secured Bank Claims shall be deemed Allowed Claims in
the aggregate amount of $1,602,489,994.
(b) Impairment and Voting. Class 3 is impaired by the Plan. Each holder
of an Allowed Secured Bank Claim is entitled to vote to accept or reject the
Plan.
(c) Distributions. On the Effective Date, each holder of an Allowed
Secured Bank Claim as of the Record Date shall receive in full and complete
settlement, satisfaction, release and discharge of its Allowed Secured Bank
Claim: (i) its Pro Rata Share of (A) 98.5% of the Reorganized Sunbeam Common
Stock, and (B) $100,000,000 in principal amount of the New Secured Notes; and
(ii) the releases set forth in Section 11.4 of the Plan. The Reorganized
Sunbeam Common Stock distributed to the holders of Allowed Secured Bank Claims
is subject to dilution by issuance of the Management Investment Securities and
exercise of the Employee Options. In addition, each holder of an Allowed
Secured Bank Claim shall be entitled to retain all amounts paid to it or on
its behalf as adequate protection or otherwise, and Reorganized Sunbeam will
continue to pay the professional fees of the holders of the Allowed Secured
Bank Claims after the Confirmation Date with respect to matters relating to
the Plan or the Chapter 11 Case in accordance with the terms and conditions of
the orders approving the Post-Petition Bank Credit Agreement.
4.4 CLASS 4 - GENERAL UNSECURED CLAIMS.
(a) Impairment and Voting. Class 4 is impaired by the Plan. Each holder
of an Allowed General Unsecured Claim is entitled to vote to accept or reject
the Plan.
(b) Distributions. If Class 4 votes to accept the Plan by the requisite
majorities set forth in section 1126(c) of the Bankruptcy Code, each holder of
an Allowed General Unsecured Claim shall receive its Pro Rata Share of
$1,000,000. If Class 4 does not vote to accept the Plan by the requisite
statutory majorities, the holders of General Unsecured Claims shall not
receive any distributions on account of such Claims.
4.5 CLASS 5 - SUBORDINATED NOTE CLAIMS.
(a) Allowance. The Subordinated Note Claims shall be deemed Allowed
Claims solely for purposes of this Plan in the aggregate amount of
$864,261,481.
(b) Impairment and Voting. Class 5 is impaired by the Plan. Each holder
of a Subordinated Note Claim is entitled to vote to accept or reject the Plan.
(c) Distributions. On the Effective Date, each holder of an Allowed
Subordinated Note Claim as of the Record Date shall receive in full and
complete settlement, satisfaction, release and discharge of its Subordinated
Note Claim its Pro Rata Share of 1.5% of the Reorganized Sunbeam Common Stock,
subject to dilution by issuance of the Management Investment Securities and
exercise of the Employee Options. In accordance with the Securityholders
Agreement, the holders of Allowed Subordinated Note Claims shall be able to
14
transfer all, but not less than all, of the Reorganized Sunbeam Common Stock
to be issued pursuant to the Plan.
4.6 CLASS 6 - SUBORDINATED NOTEHOLDER SECURITIES CLAIMS.
(a) Impairment and Voting. Class 6 is impaired by the Plan. Each holder
of a Subordinated Noteholder Securities Claim is conclusively presumed to have
rejected the Plan as a holder of Subordinated Noteholder Securities Claims and
is not entitled to vote to accept or reject the Plan.
(b) Distributions. In accordance with Section 5.2 of the Plan, the
holders of Subordinated Noteholder Securities Claims shall not receive any
distributions on account of such Claims.
4.7 CLASS 7 - SUNBEAM AFFILIATE CLAIMS.
(a) Impairment and Voting. Class 7 is impaired by the Plan. Each holder
of a Sunbeam Affiliate Claim is conclusively presumed to have rejected the
Plan and is not entitled to vote to accept or reject the Plan.
(b) Distributions. Each holder of an Allowed Sunbeam Affiliate Claim
shall not receive any distributions on account of such Claims. On the
Effective Date, all Sunbeam Affiliate Claims shall be extinguished by either
offset, the distribution or contribution of such Allowed Sunbeam Affiliate
Claims, or otherwise (as determined by the Debtor and the Subsidiary Debtors).
4.8 CLASS 8 - EQUITY INTERESTS.
(a) Impairment and Voting. Class 8 is impaired by the Plan. Each holder
of an Equity Interest is conclusively presumed to have rejected the Plan as a
holder of Equity Interests and is not entitled to vote to accept or reject the
Plan.
(b) Distributions. The holders of Equity Interests shall not receive any
distributions on account of such Equity Interests. On the Effective Date, all
Equity Interests shall be extinguished.
4.9 CLASS 9 - EQUITY HOLDER SECURITIES CLAIMS.
(a) Impairment and Voting. Class 9 is impaired by the Plan. Each holder
of an Equity Holder Securities Claim is conclusively presumed to have rejected
the Plan as a holder of Equity Holder Securities Claims and is not entitled to
vote to accept or reject the Plan.
(b) Distributions. In accordance with Section 5.2 of the Plan, the
holders of Equity Holder Securities Claims shall not receive any distributions
on account of such Claims.
15
Article V
PROVISIONS REGARDING VOTING AND
DISTRIBUTIONS UNDER THE PLAN AND TREATMENT,
OF DISPUTED, CONTINGENT AND UNLIQUIDATED
ADMINISTRATIVE EXPENSE CLAIMS AND CLAIMS
----------------------------------------
5.1 Voting of Claims. Each holder of an Allowed Claim in an impaired
Class of Claims that is entitled to vote on the Plan pursuant to Article IV of
the Plan shall be entitled to vote separately to accept or reject the Plan as
provided in such order as is entered by the Bankruptcy Court establishing
procedures with respect to the solicitation and tabulation of votes to accept
or reject the Plan, or any other order or orders of the Bankruptcy Court.
5.2 Enforcement of Subordination of Securities Claims. The treatment of
the Subordinated Noteholder Securities Claims and Equity Holder Securities
Claims pursuant to the Plan is in accordance with and gives effect to the
provisions of section 510(b) of the Bankruptcy Code.
5.3 Elimination of Vacant Classes. Any Class of Claims that is not
occupied as of the date of commencement of the Confirmation Hearing by an
Allowed Claim or a Claim temporarily allowed under Bankruptcy Rule 3018 shall
be deemed eliminated from the Plan for purposes of voting to accept or reject
the Plan and for purposes of determining acceptance or rejection of the Plan
by such Class pursuant to section 1129(a)(8) of the Bankruptcy Code.
5.4 Nonconsensual Confirmation. If any impaired Class of Claims entitled
to vote shall not accept the Plan by the requisite statutory majorities
provided in section 1126(c) of the Bankruptcy Code, the Debtor reserves the
right to amend the Plan in accordance with Section 11.10 hereof or undertake
to have the Bankruptcy Court confirm the Plan under section 1129(b) of the
Bankruptcy Code or both. With respect to impaired Classes of Claims and Equity
Interests that are deemed to reject the Plan, the Debtor shall request the
Bankruptcy Court to confirm the Plan under section 1129(b) of the Bankruptcy
Code.
5.5 Method of Distributions Under the Plan.
(a) Disbursing Agent. All distributions under the Plan shall be made by
Reorganized Sunbeam as Disbursing Agent or such other entity designated by
Reorganized Sunbeam as Disbursing Agent. A Disbursing Agent shall not be
required to provide any bond, surety or other security for the performance of
its duties, unless otherwise ordered by the Bankruptcy Court; and, in the
event that a Disbursing Agent is so otherwise ordered, all costs and expenses
of procuring any such bond, surety or other security shall be borne by
Reorganized Sunbeam.
(b) Delivery of Distributions. Subject to Bankruptcy Rule 9010, all
distributions made by the Disbursing Agent under the Plan shall be made to the
holder of each Allowed Claim at the address of such holder as listed on the
Schedules as of the Record Date, unless the Debtor or, on and after the
Effective Date, Reorganized Sunbeam, has been notified in writing of a change
of address, including, without limitation, by the filing of a timely proof of
Claim by such holder that provides an address for such holder different from
the address reflected on the Schedules.
16
(c) Distributions of Cash. Any payment of Cash made by Reorganized
Sunbeam pursuant to the Plan shall, at Reorganized Sunbeam's option, be made
by check drawn on a domestic bank or wire transfer.
(d) Distributions on Account of Subordinated Note Claims. Distributions
to the holders of Allowed Subordinated Note Claims shall be made by the
Indenture Trustee.
(e) Surrender of Subordinated Notes. As a condition to receiving any
distributions under the Plan, each holder of a Subordinated Note must
surrender such note to the Indenture Trustee for subsequent surrender to
Reorganized Sunbeam or its designee. Any holder of a Subordinated Note who
fails to (a) surrender such note or (b) execute and deliver an affidavit of
loss and/or indemnity reasonably satisfactory to the Indenture Trustee and
Reorganized Sunbeam and furnish a bond in form, substance, and amount
reasonably satisfactory to the Indenture Trustee and Reorganized Sunbeam
before the first anniversary of the Effective Date shall be deemed to have
forfeited all rights and Claims and may not participate in any distribution
under the Plan.
(f) Timing of Distributions. Any payment or distribution required to be
made under the Plan on a day other than a Business Day shall be made on the
next succeeding Business Day.
(g) Hart-Scott-Rodino Compliance. Any shares of Reorganized Sunbeam
Common Stock to be distributed under the Plan to any entity required to file a
Premerger Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, shall not be distributed until the
notification and waiting periods applicable under such Act to such entity
shall have expired or been terminated.
(h) Minimum Distributions. No payment of Cash less than twenty five
dollars shall be made by Reorganized Sunbeam to any holder of a Claim unless a
request therefor is made in writing to Reorganized Sunbeam.
(i) Fractional Shares. No fractional shares of Reorganized Sunbeam Common
Stock or Cash in lieu thereof, shall be distributed under the Plan. When any
distribution pursuant to the Plan would otherwise result in the issuance of a
number of shares of Reorganized Sunbeam Common Stock that is not a whole
number, the actual distribution of shares of Reorganized Sunbeam Common Stock
shall be rounded as follows: (i) fractions of 1/2 or greater shall be rounded
to the next higher whole number; and (ii) fractions of less than 1/2 shall be
rounded to the next lower whole number. The total number of shares of
Reorganized Sunbeam Common Stock to be distributed pursuant to the Plan shall
be adjusted as necessary to account for the rounding provided in this Section
5.4(i).
(j) [Reserved].
(k) Unclaimed Distributions. All distributions under the Plan that are
unclaimed for a period of one year after distribution thereof shall be deemed
unclaimed property under section 347(b) of the Bankruptcy Code and revested in
Reorganized Sunbeam and any entitlement of any holder of any Claim to such
distributions shall be extinguished and forever barred.
17
(l) Distributions to Holders (Other than Subordinated Note Claims) as of
the Record Date. As at the close of business on the Record Date, the claims
register shall be closed, and there shall be no further changes in the record
holder of any Claim. The Disbursing Agent shall have no obligation to
recognize any transfer of any Claim occurring after the Record Date. The
Disbursing Agent shall instead be authorized and entitled to recognize and
deal for all purposes under the Plan with only those record holders stated on
the claims register as of the close of business on the Record Date.
(m) Distributions to Holders of Subordinated Note Claims as of the Record
Date. As of the close of business on the Record Date, the Indenture Trustee
will have no obligation to recognize any transfer of Subordinated Notes
occurring after the Record Date for purposes of making distributions under the
Plan. The Indenture Trustee will be entitled to recognize and deal for all
purposes herein with only those holders of record stated on the transfer
ledger maintained by the Indenture Trustees or their designees for the
Subordinated Note Claims as of the close of business on the Record Date.
5.6 Objections to and Resolution of Administrative Expense Claims and
Claims. Except as to applications for allowance of compensation and
reimbursement of expenses under sections 330 and 503 of the Bankruptcy Code,
Reorganized Sunbeam shall, on and after the Effective Date, have the exclusive
right to make and file objections to Administrative Expense Claims and Claims.
On and after the Effective Date, Reorganized Sunbeam shall have the authority
to compromise, settle, otherwise resolve or withdraw any objections to
Administrative Expense Claims and Claims and compromise, settle or otherwise
resolve Disputed Administrative Expense Claims and Disputed Claims without
approval of the Bankruptcy Court. Unless otherwise ordered by the Bankruptcy
Court, the Debtor and, on and after the Effective Date, Reorganized Sunbeam,
shall file all objections to Administrative Expense Claims that are the
subject of proofs of claim or requests for payment filed with the Bankruptcy
Court (other than applications for allowances of compensation and
reimbursement of expenses) and Claims and serve such objections upon the
holder of the Administrative Expense Claim or Claim as to which the objection
is made as soon as is practicable, but in no event later than 90 days after
the Effective Date or such later date as may be approved by the Bankruptcy
Court.
5.7 Cancellation of Existing Securities and Agreements. Except as
expressly provided for herein, on the Effective Date, the promissory notes,
share certificates, option agreements, bonds and any and all other instruments
or documents evidencing any Claim or Equity Interest, other than an Other
Secured Claim that is reinstated and rendered unimpaired pursuant to Section
4.2 of the Plan, shall be deemed cancelled without further act or action under
any applicable agreement, law, regulation, order or rule and the obligations
of the Debtor under the agreements, indentures and certificates of
designations governing such Claims and Equity Interests, as the case may be,
shall be discharged.
5.8 Registration of New Common Stock. All shares of Reorganized Sunbeam
Common Stock, including shares issued upon exercise of the Employee Options
and Management Investment Securities, shall be issued subject to, and all
holders thereof shall automatically become parties to, the Registration Rights
Agreement.
18
5.9 Securityholders Agreement. All shares of Reorganized Sunbeam Common Stock
and such other equity interests as are agreed to by the Debtor and the Banks,
including shares issued upon exercise of the Employee Options and Management
Investment Securities, shall be issued subject to, and all holders thereof
shall automatically become parties to, the Securityholders Agreement.
Article VI
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
----------------------------------------
6.1 Assumption or Rejection of Executory Contracts and Unexpired Leases.
(a) Executory Contracts and Unexpired Leases. Pursuant to sections 365(a)
and 1123(b)(2) of the Bankruptcy Code, all executory contracts and unexpired
leases that exist between the Debtor and any Person or Entity shall be deemed
assumed by the Debtor as of the Effective Date, except for any executory
contract or unexpired lease (i) that has been rejected pursuant to an order of
the Bankruptcy Court entered prior to the Confirmation Date, (ii) as to which
a motion for approval of the rejection of such executory contract or unexpired
lease has been filed and served prior to the Confirmation Date or (iii) that
is set forth in Schedule 6.1(a)(x) (executory contracts) or Schedule 6.1(a)(y)
(unexpired leases), which Schedules shall be included in the Plan Supplement;
provided, however, that the Debtor reserves the right, on or prior to the
Confirmation Date, to amend Schedules 6.1(a)(x) or 6.1(a)(y) to delete any
executory contract or unexpired lease therefrom or add any executory contract
or unexpired lease thereto, in which event such executory contract(s) or
unexpired lease(s) shall be deemed to be, respectively, assumed by the Debtor
or rejected. The Debtor shall provide notice of any amendments to Schedules
6.1(a)(x) or 6.1(a)(y) to the parties to the executory contracts and unexpired
leases affected thereby. The listing of a document on Schedules 6.1(a)(x) and
6.1(a)(y) shall not constitute an admission by the Debtor that such document
is an executory contract or an unexpired lease or that the Debtor has any
liability thereunder.
(b) Schedules of Rejected Executory Contracts and Unexpired Leases;
Inclusiveness. Each executory contract and unexpired lease listed or to be
listed on Schedules 6.1(a)(x) or 6.1(a)(y) that relates to the use or
occupancy of real property shall include (i) modifications, amendments,
supplements, restatements, or other agreements made directly or indirectly by
any agreement, instrument, or other document that in any manner affects such
executory contract or unexpired lease, without regard to whether such
agreement, instrument or other document is listed on Schedules 6.1(a)(x) or
6.1(a)(y) and (ii) executory contracts or unexpired leases appurtenant to the
premises listed on Schedules 6.1(a)(x) or 6.1(a)(y), including, without
limitation, all easements, licenses, permits, rights, privileges, immunities,
options, rights of first refusal, powers, uses, usufructs, reciprocal easement
agreements, vault, tunnel or bridge agreements or franchises, and any other
interests in real estate or rights in rem relating to such premises to the
extent any of the foregoing are executory contracts or unexpired leases,
unless any of the foregoing agreements previously has been assumed or assumed
and assigned by the Debtor.
(c) Insurance Policies. All of the Debtor's insurance policies and any
agreements, documents or instruments relating thereto, are treated as
executory contracts under the Plan. Nothing contained in this Section 6.1(c)
shall constitute or be deemed a waiver of any Cause of
19
Action that the Debtor may hold against any entity, including, without
limitation, the insurer under any of the Debtor's policies of insurance.
(d) Approval of Assumption, Assumption and Assignment or Rejection of
Executory Contracts and Unexpired Leases. Entry of the Confirmation Order
shall, subject to and upon the occurrence of the Effective Date, constitute
(i) the approval, pursuant to sections 365(a) and 1123(b)(2) of the Bankruptcy
Code, of the assumption of the executory contracts and unexpired leases
assumed pursuant to Section 6.1(a) hereof, (ii) the extension of time,
pursuant to section 365(d)(4) of the Bankruptcy Code, within which the Debtor
may assume, assume and assign or reject the unexpired leases specified in
Section 6.1(a) hereof through the date of entry of an order approving the
assumption, assumption and assignment or rejection of such unexpired leases
and (iii) the approval, pursuant to sections 365(a) and 1123(b)(2) of the
Bankruptcy Code, of the rejection of the executory contracts and unexpired
leases rejected pursuant to Section 6.1(a) hereof.
(e) Cure of Defaults. Except as may otherwise be agreed to by the
parties, within 30 days after the Effective Date, Reorganized Sunbeam shall
cure any and all undisputed defaults under any executory contract or unexpired
lease assumed by the Debtor pursuant to Section 6.1(a) hereof, in accordance
with section 365(b)(1) of the Bankruptcy Code. All disputed defaults that are
required to be cured shall be cured either within 30 days of the entry of a
Final Order determining the amount, if any, of Reorganized Sunbeam's liability
with respect thereto, or as may otherwise be agreed to by the parties.
(f) Bar Date for Filing Proofs of Claim Relating to Executory Contracts
and Unexpired Leases Rejected Pursuant to the Plan. Claims arising out of the
rejection of an executory contract or unexpired lease pursuant to Section 6.1
of the Plan must be filed with the Bankruptcy Court and served upon the Debtor
or, on and after the Effective Date, Reorganized Sunbeam, by no later than 30
days after the later of (i) notice of entry of an order approving the
rejection of such executory contract or unexpired lease, (ii) notice of entry
of the Confirmation Order and (iii) notice of an amendment to Schedule
6.1(a)(x) or 6.1(a)(y) relating to such executory contract or unexpired lease.
All such Claims not filed within such time will be forever barred from
assertion against the Debtor and its estate and Reorganized Sunbeam and its
property.
(g) Assumed Indemnification Obligations. Entry of the Confirmation Order
shall, subject to and upon the occurrence of the Effective Date, constitute
the approval, pursuant to sections 365(a) and 1123(b)(2) of the Bankruptcy
Code, of the assumption of the Assumed Indemnification Claims. The Assumed
Indemnification Claims shall, in all respects, irrespective of whether such
claims arise under contracts or executory contracts, survive confirmation of
the Plan, remain unaffected thereby, and not be discharged irrespective of
whether indemnification, defense, reimbursement or limitation is owed in
connection with an event occurring before, on or after the Commencement Date.
(h) Compensation and Benefit Programs. Except as provided in Section
6.1(a) of the Plan, all Benefit Plans, all directors and officers liability
and other insurance and all workers' compensation programs are treated as
executory contracts under the Plan and shall, on the Effective Date, be deemed
assumed by the Debtor in accordance with sections 365(a) and 1123(b)(2) of the
Bankruptcy Code.
20
6.2 Retiree Benefits. Payments, if any, due to any Person for the purpose
of providing or reimbursing payments for retired employees and their spouses
and dependents for medical, surgical, or hospital care benefits, or benefits
in the event of sickness, accident, disability, or death under any plan, fund,
or program (through the purchase of insurance or otherwise) maintained or
established in whole or in part by the Debtor prior to the Commencement Date
shall be continued for the duration of the period the Debtor has obligated
itself to provide such benefits, subject to the Debtor's right to amend or
modify such benefit plans, funds or programs in accordance with the terms
thereof and applicable law.
Article VII
IMPLEMENTATION OF THE PLAN
--------------------------
7.1 General. On the Effective Date, the management, control and operation
of Reorganized Sunbeam shall become the general responsibility of the Board of
Directors of Reorganized Sunbeam.
7.2 Retention of Derivative Securities Litigation Claims. The Derivative
Securities Litigation Claims are property of the estate of the Debtor pursuant
to section 541 of the Bankruptcy Code. On or after the Effective Date, all
Derivative Securities Litigation Claims, whether or not pending as of the
Commencement Date, shall be retained by, vest in and/or and become the
property of Reorganized Sunbeam. The Confirmation Order shall provide that all
named plaintiffs, including certified and uncertified classes of plaintiffs,
in the actions currently pending relating to the Derivative Securities
Litigation Claims and their respective servants, agents, attorneys and
representatives shall, on and after the Effective Date, be permanently
enjoined, stayed and restrained from pursuing or prosecuting any of the
Derivative Securities Litigation Claims.
7.3 Directors and Officers of Reorganized Sunbeam.
(a) Board of Directors. Subject to the terms of the Securityholders
Agreement, the initial Board of Directors of Reorganized Sunbeam shall consist
of five individuals, four of whom are to be selected by the Banks (one member
selected by each of the Banks and one member selected by all of the Banks) and
one of whom shall be the Chief Executive Officer and Chairman of the Board of
Directors of Reorganized Sunbeam. The names of the members of the initial
Board of Directors of Reorganized Sunbeam shall be disclosed at or prior to
the Confirmation Hearing. Each of the members of such initial Board of
Directors shall serve in accordance with the Reorganized Sunbeam Certificate
of Incorporation, Reorganized Sunbeam By-laws and the Securityholders
Agreement, as the same may be amended from time to time.
(b) Officers. The officers of the Debtor immediately prior to the
Effective Date shall serve as the initial officers of Reorganized Sunbeam on
and after the Effective Date. Such officers shall serve in accordance with any
employment agreement (that was not rejected pursuant to section 365 of the
Bankruptcy Code) with Reorganized Sunbeam and applicable law.
7.4 By-laws and Certificates of Incorporation. The Reorganized Sunbeam
By-laws and the Reorganized Sunbeam Certificate of Incorporation shall contain
provisions necessary (a) to prohibit the issuance of nonvoting equity
securities as required by section 1123(a)(6) of the
21
Bankruptcy Code, subject to further amendment of such certificates of
incorporation and by-laws as permitted by applicable law and (b) to effectuate
the provisions of the Plan, in each case without any further action by the
stockholders or directors of the Debtor, the Debtor in Possession or
Reorganized Sunbeam.
7.5 Issuance of New Securities. The issuance of the following securities
by Reorganized Sunbeam is hereby authorized without further act or action
under applicable law, regulation, order or rule:
(a) Reorganized Sunbeam Common Stock;
(b) Employee Options; and
(c) Management Investment Securities.
7.6 Management Equity Plans. On the Effective Date, and subject to the
separate affirmative vote of the holders of Allowed Secured Bank Claims in
Class 3, which holders will receive, in the aggregate, 100% of the shares of
Reorganized Sunbeam Common Stock to be issued under the Plan, the Board of
Directors of Reorganized Sunbeam shall adopt the Management Equity Plan for
Reorganized Sunbeam and the Boards of Directors of Reorganized Sunbeam and the
Reorganized Subsidiaries shall adopt the Management Equity Plans for the
Reorganized Subsidiaries. Pursuant to the Management Equity Plan to be adopted
by Reorganized Sunbeam an aggregate of approximately 6.75% of the outstanding
shares of Reorganized Sunbeam Common Stock on a fully diluted basis will be
available for issuance of Employee Options subject to the conditions of such
Management Equity Plan.
Article VIII
EFFECT OF CONFIRMATION OF PLAN
------------------------------
8.1 Term of Bankruptcy Injunction or Stays. Unless otherwise provided,
all injunctions or stays provided for in the Chapter 11 Case under section 105
or 362 of the Bankruptcy Code, or otherwise, and in existence on the
Confirmation Date, shall remain in full force and effect until the Effective
Date.
8.2 Revesting of Assets.
(a) On the Effective Date, except as otherwise provided for in the Plan,
the property of the estate of the Debtor shall vest in Reorganized Sunbeam.
(b) From and after the Effective Date, Reorganized Sunbeam may operate
its businesses, and may use, acquire and dispose of property free of any
restrictions imposed under the Bankruptcy Code.
(c) As of the Effective Date, all property of Reorganized Sunbeam shall
be free and clear of all liens, claims and interests of holders of Claims and
Equity Interests, except as otherwise provided in the Plan.
22
8.3 Claims Extinguished. As of the Effective Date, any and all avoidance
claims accruing to the Debtor and Debtor in Possession under sections 502(d),
544, 545, 547, 548, 549, 550 and 551 of the Bankruptcy Code and not then
pending, shall be extinguished.
8.4 Discharge of Debtor. The rights afforded herein and the treatment of
all Claims and Equity Interests herein shall be in exchange for and in
complete satisfaction, discharge and release of Claims and Equity Interests of
any nature whatsoever, including any interest accrued on such Claims from and
after the Commencement Date, against the Debtor and the Debtor in Possession,
or any of their assets or properties. Except as otherwise provided herein, (a)
on the Effective Date, all such Claims against and Equity Interests in the
Debtor shall be satisfied, discharged and released in full and (b) all Persons
shall be precluded from asserting against Reorganized Sunbeam, its successors,
or its assets or properties any other or further Claims or Equity Interests
based upon any act or omission, transaction or other activity of any kind or
nature that occurred prior to the Confirmation Date.
8.5 Injunction. Except as otherwise expressly provided in the Plan, the
Confirmation Order or a separate order of the Bankruptcy Court, all entities
who have held, hold or may hold Claims against or Equity Interests in the
Debtor, are permanently enjoined, on and after the Effective Date, from (a)
commencing or continuing in any manner any action or other proceeding of any
kind with respect to any such Claim or Equity Interest, (b) the enforcement,
attachment, collection or recovery by any manner or means of any judgment,
award, decree or order against the Debtor on account of any such Claim or
Equity Interest, (c) creating, perfecting or enforcing any encumbrance of any
kind against the Debtor or against the property or interests in property of
the Debtor on account of any such Claim or Equity Interest, (d) asserting any
right of setoff, subrogation or recoupment of any kind against any obligation
due from the Debtor or against the property or interests in property of the
Debtor on account of any such Claim or Equity Interest and (e) commencing or
continuing in any manner any action or other proceeding of any kind with
respect to any claims and Causes of Action which are extinguished, dismissed
or released pursuant to the Plan. Such injunction shall extend to successors
of the Debtor, including, without limitation, Reorganized Sunbeam and its
properties and interests in property; provided, however, that nothing
contained in this Section shall enjoin, bar or otherwise impair the
commencement or prosecution of direct personal claims against any Person other
than the Debtor.
8.6 Continuation of Pension Plans. Upon entry of the Confirmation Order,
subject to the occurrence of the Effective Date, Reorganized Sunbeam and/or
one or more wholly-owned subsidiaries thereof will continue the Pension Plans
subject to the terms of such plans and applicable law, including ERISA.
Article IX
CONFIRMATION AND EFFECTIVENESS OF THE PLAN
------------------------------------------
9.1 Conditions Precedent to Confirmation. The Plan shall not be confirmed
by the Bankruptcy Court unless and until the following conditions shall have
been satisfied or waived pursuant to Section 9.4 of the Plan:
23
(a) The Class of holders of Secured Bank Claims (Class 3) shall have
voted to accept the Plan by the requisite majorities provided in section
1126(c) of the Bankruptcy Code;
(b) The class of secured Bank claims in the Subsidiaries Plan shall have
voted to accept the Subsidiaries Plan by the requisite majorities provided in
section 1126(c) of the Bankruptcy Code;
(c) All exhibits to the Plan and the Subsidiaries Plan, including those
contained in the Plan Supplement and the Subsidiaries Plan Supplement, shall
be in form and substance reasonably acceptable to the Debtor and the Banks;
(d) No monetary default or event of default under the Post-Petition Bank
Credit Agreement shall have occurred and be continuing;
(e) No default or event of default under the postpetition receivables
program provided by GECC or the documents related thereto shall have occurred
and be continuing, the postpetition receivables program provided by GECC shall
be in full force and effect, and no material reduction in the availability
under the postpetition receivables program provided by GECC shall have
occurred;
(f) No material adverse change on the business, assets, operations,
property, condition (financial or otherwise) of Sunbeam Corporation or any of
its subsidiaries (other than inactive subsidiaries) shall have occurred and be
continuing;
(g) No material unanticipated claims shall have been filed or asserted in
the Debtor's Chapter 11 Case or the chapter 11 cases of the Subsidiary
Debtors;
(h) One or more financial institutions acceptable to the Debtor and the
Banks shall have agreed to provide the Working Capital Facility to Reorganized
Sunbeam and the Reorganized Subsidiaries after the effectiveness of the Plan
and the Subsidiaries Plan, on terms acceptable to the Debtor, the Subsidiary
Debtors and the Banks; and
(i) The Confirmation Order shall provide for (i) the release of all
claims held by the Debtor against the Banks and their respective Affiliates
(including Morgan Stanley) and known loan participants and (ii) the dismissal
of the Adversary Proceeding with prejudice.
9.2 Conditions Precedent to Effectiveness. The Plan shall not become
effective unless and until the following conditions shall have been satisfied
or waived pursuant to Section 9.4 of the Plan:
(a) The Confirmation Order, in form and substance reasonably acceptable
to the Debtor and the Banks, shall have become a Final Order;
(b) the order confirming the Subsidiaries Plan, in form and substance
reasonably acceptable to the Debtor and the Banks, shall have become a Final
Order;
(c) the Effective Date shall have occurred on or before December 31, 2002
or such later date as the Debtor and the Banks may agree;
(d) all actions, documents and agreements necessary to implement the Plan
in form and substance reasonably acceptable by the Debtor and the Banks shall
have been effected or executed;
(e) the Working Capital Facility shall be in full force and effect;
24
(f) the Debtor shall have received all authorizations, consents,
regulatory approvals, rulings, letters, no-action letters, opinions or
documents that are determined by the Debtor to be necessary to implement the
Plan;
(g) the Chief Executive Officer of the Debtor shall have made an
investment of not less than $3,000,000 in the equity of Reorganized Sunbeam;
and
(h) the Banks shall be reasonably satisfied with the senior management of
Reorganized Sunbeam.
9.3 Effect of Failure of Conditions. In the event that one or more of the
conditions specified in Section 9.2 of the Plan have not occurred on or before
60 days after the Confirmation Date (unless extended for up to 60 additional
days by the Debtor and the Banks), (a) the Confirmation Order shall be
vacated, (b) no distributions under the Plan shall be made, (c) the Debtor and
all holders of Claims and Equity Interests shall be restored to the status quo
ante as of the day immediately preceding the Confirmation Date as though the
Confirmation Date never occurred and (d) the Debtor's obligations with respect
to Claims and Equity Interests shall remain unchanged and nothing contained
herein shall constitute or be deemed a waiver or release of any Claims or
Equity Interests by or against the Debtor or any other Person or Entity or to
prejudice in any manner the rights of the Debtor or any Person or Entity in
any further proceedings involving the Debtor.
9.4 Waiver of Conditions. The Debtor may waive, with the consent of the
Banks, by a writing signed by an authorized representative of the Debtor and
subsequently filed with the Bankruptcy Court, one or more of the conditions
precedent set forth in Sections 9.1 and 9.2 of the Plan (other than the
conditions set forth in Section 9.1(a), 9.1(b), 9.2(a) (except as to timing
and finality) and 9.2(b) (except as to timing and finality)).
Article X
RETENTION OF JURISDICTION
-------------------------
10.1 Retention of Jurisdiction. The Bankruptcy Court shall have exclusive
jurisdiction of all matters arising out of, and related to, the Chapter 11
Case and the Plan pursuant to, and for the purposes of, sections 105(a) and
1142 of the Bankruptcy Code and for, among other things, the following
purposes:
(a) To hear and determine pending applications for the assumption or
rejection of executory contracts or unexpired leases, if any are pending, and
the allowance of cure amounts and Claims resulting therefrom;
(b) To hear and determine any and all adversary proceedings, applications
and contested matters;
(c) To hear and determine any objection to Administrative Expense Claims
or Claims;
(d) To enter and implement such orders as may be appropriate in the event
the Confirmation Order is for any reason stayed, revoked, modified or vacated;
25
(e) To issue such orders in aid of execution and consummation of the
Plan, to the extent authorized by section 1142 of the Bankruptcy Code;
(f) To consider any amendments to or modifications of the Plan, to cure
any defect or omission, or reconcile any inconsistency in any order of the
Bankruptcy Court, including, without limitation, the Confirmation Order;
(g) To hear and determine all applications for compensation and
reimbursement of expenses of professionals under sections 330, 331 and 503(b)
of the Bankruptcy Code;
(h) To hear and determine disputes arising in connection with the
interpretation, implementation or enforcement of the Plan;
(i) To recover all assets of the Debtor and property of the Debtor's
estate, wherever located;
(j) To hear and determine matters concerning state, local and federal
taxes in accordance with sections 346, 505 and 1146 of the Bankruptcy Code;
(k) To hear any other matter not inconsistent with the Bankruptcy Code;
and
(l) To enter a final decree closing the Chapter 11 Case.
Article XI
MISCELLANEOUS PROVISIONS
------------------------
11.1 Effectuating Documents and Further Transactions. The Debtor and
Reorganized Sunbeam are authorized to execute, deliver, file or record such
contracts, instruments, releases, indentures and other agreements or documents
and take such actions as may be necessary or appropriate to effectuate and
further evidence the terms and conditions of the Plan and any securities
issued pursuant to the Plan.
11.2 Corporate Action. On the Effective Date, all matters provided for
under the Plan that would otherwise require approval of the stockholders or
directors of the Debtor or Reorganized Sunbeam, including, without limitation,
(a) the authorization to issue or cause to be issued Reorganized Sunbeam
Common Stock, New Secured Term Notes, Management Investment Securities and
Employee Options, (b) the authorization and effectiveness of the Reorganized
Sunbeam Certificate of Incorporation, Reorganized Sunbeam By-laws,
Registration Rights Agreement, Securityholders Agreement, New Secured Term
Notes Documents, Working Capital Facility Documents and Management Equity
Plans, and (c) the election or appointment, as the case may be, of directors
and officers of Reorganized Sunbeam pursuant to the Plan, shall be deemed to
have occurred and shall be in effect from and after the Effective Date
pursuant to the applicable general corporation law of Delaware, the state in
which the Debtor and Reorganized Sunbeam are incorporated, without any
requirement of further action by the stockholders or directors of the Debtor
or Reorganized Sunbeam. On the Effective Date, or as soon thereafter as is
practicable, Reorganized Sunbeam shall, if required, file its amended
certificate of incorporation with the Secretary of State of Delaware, in
accordance with the applicable general corporation law of Delaware.
26
11.3 Exemption from Transfer Taxes. Pursuant to section 1146(c) of the
Bankruptcy Code, the issuance, transfer or exchange of notes or issuance of
debt or equity securities under the Plan, the creation of any mortgage, deed
of trust or other security interest, the making or assignment of any lease or
sublease, or the making or delivery of any deed or other instrument of
transfer under, in furtherance of, or in connection with the Plan, including,
without limitation, any merger agreements or agreements of consolidation,
deeds, bills of sale or assignments executed in connection with any of the
transactions contemplated under the Plan, shall not be subject to any stamp,
real estate transfer, mortgage recording, sales or other similar tax. All sale
transactions consummated by the Debtor and approved by the Bankruptcy Court on
and after the Commencement Date through and including the Effective Date,
including, without limitation, the sales, if any, by the Debtor of owned
property or assets pursuant to section 363(b) of the Bankruptcy Code and the
assumptions, assignments and sales, if any, by the Debtor of unexpired leases
of non-residential real property pursuant to section 365(a) of the Bankruptcy
Code, shall be deemed to have been made under, in furtherance of, or in
connection with the Plan and, therefore, shall not be subject to any stamp,
real estate transfer, mortgage recording, sales or other similar tax.
11.4 Limited Releases of Releasees. As of the Effective Date, the Debtor
and the Debtor in Possession releases all of the Releasees from any and all
Causes of Action held by, assertable on behalf of or derivative from the
Debtor or the Debtor in Possession, in any way relating to the Debtor, the
Debtor in Possession, the Chapter 11 Case, the Plan, negotiations regarding or
concerning the Plan and the ownership, management and operation of the Debtor;
provided, however, that the foregoing shall not operate as a waiver of or
release from any Causes of Action arising out of any express contractual
obligation owing by any former director, officer or employee to the Debtor or
any reimbursement obligation of any former director, officer or employee with
respect to a loan or advance made by the Debtor to such former director,
officer or employee and is not a waiver of or release for any attorneys
retained in connection with the Chapter 11 Case from claims by their
respective clients. Nothing in Section 11.4 of the Plan shall effect a release
in favor of any person other than the Debtor with respect to any debt owed to
the United States Government, any state, city or municipality for any
liability of such person arising under (i) the Internal Revenue Code, or any
state, city or municipal tax code, (ii) the environmental laws of the United
States, any state, city or municipality or (iii) any criminal laws of the
United States, any state, city or municipality.
11.5 Limited Release by Releasees. Except as otherwise provided under the
Plan, as of the Effective Date, each of the Releasees, in any capacity,
generally releases the Debtor and the Debtor in Possession, in each case in
any capacity, from any and all Causes of Action held by, assertable on behalf
of or derivative from such Releasee, in any way relating to the Debtor, the
Debtor in Possession, the Chapter 11 Case, the Plan, negotiations regarding or
concerning the Plan and the ownership, management and operation of the Debtor.
11.6 Exculpation. None of the Debtor, Reorganized Sunbeam, the Committee,
the Banks and their respective Affiliates, known loan participants and Morgan
Stanley, the Post-Petition Banks, and their respective Affiliates, known loan
participants and Morgan Stanley or GECC or any of their respective members,
officers, directors, employees, advisors, professionals or agents shall have
or incur any liability to any holder of a Claim or Equity Interest for any act
or omission in connection with, related to, or arising out of, the Chapter 11
Case, negotiations
27
regarding or concerning the Plan, the pursuit of confirmation of the Plan, the
consummation of the Plan or the administration of the Plan or the property to
be distributed under the Plan, except for willful misconduct or gross
negligence, and, in all respects, the Debtor, Reorganized Sunbeam, the
Committee, the Banks and their respective Affiliates, known loan participants
and Morgan Stanley, the Post-Petition Banks and their respective Affiliates,
known loan participants and Morgan Stanley and GECC and each of their
respective members, officers, directors, employees, advisors, professionals
and agents shall be entitled to rely upon the advice of counsel with respect
to their duties and responsibilities under the Plan; provided that, subject to
Article VIII hereof, nothing in this section shall effect a release in favor
of any person other than the Debtor with respect to any debt owed to the
United States Government, any state, city or municipality for any liability of
such person arising under (i) the Internal Revenue Code, or any state, city or
municipal tax code, (ii) the environmental laws of the United States, any
state, city or municipality or (iii) any criminal laws of the United States,
any state, city or municipality; and provided further that the Debtor's
reorganization process and Plan in no way discharge, release, or relieve the
Debtor, Reorganized Sunbeam, any other members of Sunbeam's or Reorganized
Sunbeam's controlled groups (as defined in 29 U.S.C. ss. 1301(a)(14)), or the
Releasees, in any capacity, from any liability under Part 4, Subtitle B, Title
I or under Title IV of ERISA with respect to any Benefit Plans or Pension
Plans. PBGC and the Pension Plans shall not be enjoined or precluded from
enforcing such liability, if any, as a result of the Plan's provisions or
confirmation.
11.7 Termination of Committee. The appointment of the Committee shall
terminate on the Effective Date.
11.8 Post-Effective Date Fees and Expenses. From and after the Effective
Date, Reorganized Sunbeam shall, in the ordinary course of business and
without the necessity for any approval by the Bankruptcy Court, pay the
reasonable fees and expenses of professional persons thereafter incurred by
Reorganized Sunbeam, including, without limitation, those fees and expenses
incurred in connection with the implementation and consummation of the Plan.
11.9 Payment of Statutory Fees. All fees payable pursuant to section 1930
of title 28 of the United States Code, as determined by the Bankruptcy Court
at the Confirmation Hearing, shall be paid on the Effective Date.
11.10 Amendment or Modification of the Plan. Alterations, amendments or
modifications of or to the Plan may be proposed in writing by the Debtor with
the consent of the Banks, provided that such consent shall not be unreasonably
withheld, at any time prior to the Confirmation Date, provided that the Plan,
as altered, amended or modified, satisfies the conditions of sections 1122 and
1123 of the Bankruptcy Code, and the Debtor shall have complied with section
1125 of the Bankruptcy Code. Subject to obtaining the approval of the Banks,
the Plan may be altered, amended or modified by the Debtors at any time after
the Confirmation Date and before substantial consummation, provided that the
Plan, as altered, amended or modified, satisfies the requirements of sections
1122 and 1123 of the Bankruptcy Code and the Bankruptcy Court, after notice
and a hearing, confirms the Plan, as altered, amended or modified, under
section 1129 of the Bankruptcy Code and the circumstances warrant such
alterations, amendments or modifications. A holder of a Claim that has
accepted the Plan shall be deemed to have accepted the Plan, as altered,
amended or modified, if the proposed
28
alteration, amendment or modification does not materially and adversely change
the treatment of the Claim of such holder.
11.11 Severability. In the event that the Bankruptcy Court determines
that any provision in the Plan is invalid, void or unenforceable, such
provision shall be invalid, void or unenforceable with respect to the holder
or holders of such Claims or Equity Interests as to which the provision is
determined to be invalid, void or unenforceable. The invalidity, voidness or
unenforceability of any such provision shall in no way limit or affect the
enforceability and operative effect of any other provision of the Plan.
11.12 Revocation or Withdrawal of the Plan. Subject to obtaining the
approval of the Banks, the Debtor reserves the right to revoke or withdraw the
Plan prior to the Confirmation Date. If the Debtor revokes or withdraws the
Plan prior to the Confirmation Date, then the Plan shall be deemed null and
void. In such event, nothing contained herein shall constitute or be deemed a
waiver or release of any claims by or against the Debtor or any other Person
or Entity or to prejudice in any manner the rights of the Debtor or any Person
or Entity in any further proceedings involving the Debtor.
11.13 Binding Effect. The Plan shall be binding upon and inure to the
benefit of the Debtor, the holders of Claims and Equity Interests and their
respective successors and assigns, including, without limitation, Reorganized
Sunbeam.
11.14 Notices. All notices, requests and demands to or upon the Debtor
or, on and after the Effective Date, Reorganized Sunbeam, to be effective
shall be in writing and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when actually delivered or, in the case
of notice by facsimile transmission, when received and telephonically
confirmed, addressed as follows:
If to the Debtor or Reorganized Sunbeam:
Sunbeam Corporation
2381 Executive Center Drive
Boca Raton, Florida 33431
Attn: General Counsel
Telephone: (561) 912-4438
Facsimile: (561) 912-4612
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Lori R. Fife, Esq.
George A. Davis, Esq.
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
If to the Banks:
29
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Peter V. Pantaleo, Esq.
Telephone: (212) 455-2000
Facsimile: (212) 455-2502
If to the Committee:
Kasowitz Benson Torres & Friedman LLP
1633 Broadway
New York, New York 10019
Attn: David Friedman, Esq.
Telephone: (212) 506-1700
Facsimile: (212) 506-1800
11.15 Governing Law. Except to the extent the Bankruptcy Code, Bankruptcy
Rules or other federal law is applicable, or to the extent an exhibit to the
Plan provides otherwise, or any contract, instrument or other agreement or
document entered into in connection with the Plan provides otherwise, the
rights and obligations arising under this Plan shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York.
11.16 Withholding and Reporting Requirements. In connection with the
consummation of the Plan, the Debtor or Reorganized Sunbeam, as the case may
be, shall comply with all withholding and reporting requirements imposed by
any federal, state, local or foreign taxing authority and all distributions
hereunder shall be subject to any such withholding and reporting requirements.
11.17 Plan Supplement. The Reorganized Sunbeam Certificate of
Incorporation, the Reorganized Sunbeam By-laws, the New Secured Term Notes
Documents, Schedules 6.1(a)(x) and 6.1(a)(y) referred to in Section 6.1 of the
Plan, the Registration Rights Agreement, the Securityholders Agreement and the
Management Equity Plans, shall be contained in the Plan Supplement and filed
with the Clerk of the Bankruptcy Court at least 10 days prior to the last day
upon which holders of Claims may vote to accept or reject the Plan. Upon its
filing with the Bankruptcy Court, the Plan Supplement may be inspected in the
office of the Clerk of the Bankruptcy Court during normal court hours. Holders
of Claims or Equity Interests may obtain a copy of the Plan Supplement upon
written request to the Debtor in accordance with Section 11.14 of the Plan.
11.18 Sections 1125 and 1126 of the Bankruptcy Code. As of and subject to
the occurrence of the Confirmation Date, (i) the Debtor shall be deemed to
have solicited acceptances of the Plan in good faith and in compliance with
the applicable provisions of the Bankruptcy Code, including, without
limitation section 1125(a) of the Bankruptcy Code, and any applicable
nonbankruptcy law, rule or regulation governing the adequacy of disclosure in
connection with such solicitation and (ii) the Debtor, the Banks and each of
their respective affiliates, agents, directors, officers, employees, advisors
and attorneys shall be deemed to have participated in good faith and in
compliance with the applicable provisions of the Bankruptcy Code in the offer
and issuance of any securities under the Plan, and therefore are not, and on
account of such offer,
30
issuance and solicitation will not be, liable at any time for any violation of
any applicable law, rule or regulation governing the solicitation of
acceptances or rejections of the Plan or the offer and issuance of any
securities under the Plan.
11.19 Allocation of Plan Distributions. All distributions in respect of
Allowed Claims other than Claims in Class 4 or Class 5 will be allocated first
to the portion of such Claims representing interest (as determined for federal
income tax purposes), second to the original principal amount of such Claims
(as determined for federal income tax purposes), and any excess to the
remaining portion of such Claims. All distributions in respect of Allowed
Class 4 and Class 5 Claims will be allocated first to the original principal
amount of such Claims (as determined for federal income tax purposes), second
to the portion of such Claims representing interest (as determined for federal
income tax purposes), and any excess to the remaining portion of such Claims.
11.20 Headings. Headings are used in the Plan for convenience and
reference only, and shall not constitute a part of the Plan for any other
purpose.
11.21 Exhibits/Schedules. All exhibits and schedules to the Plan,
including the Plan Supplement, are incorporated into and are a part of the
Plan as if set forth in full herein.
11.22 Filing of Additional Documents. On or before substantial
consummation of the Plan, the Debtor shall file with the Bankruptcy Court such
agreements and other documents as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan.
11.23 Change of Name. On the Effective Date, Sunbeam Corporation will be
renamed in a manner that eliminates the word "Sunbeam" from its corporate
name.
Dated: New York, New York
November 25, 2002
SUNBEAM CORPORATION
By: /s/ Steven R. Isko
----------------------------------
Name: Steven R. Isko
Title: Senior Vice President
31
EXHIBIT A
DERIVATIVE SECURITIES LITIGATION CLAIMS
ACTION
Krim Derivative Action Krim v. Dunlap, Sunbeam Corp.
98-3168 (15th Judicial Circuit, Palm Beach, Fla.)
Judge Moses Baker, Jr.
EXHIBIT B
EQUITY HOLDERS SECURITIES LITIGATION CLAIMS
ACTION
Consolidated Shareholder In re: Sunbeam Corp. Securities Litigation,
Litigation ------------------------------------------
98-CV-8258 (U.S. District Court, S.D. Fla.)
Judge Middlebrooks
Cases consolidated into 98-CV-8258: Bird v. Sunbeam Corp., et al., 98-CV-8258;
Goldberg v. Dunlap, et al., 98-CV-8260; Mintz v. Sunbeam Corp., et al., 98-CV-8281;
Lindeman v. Sunbeam Corp., et al, 98-CV-8289; Lembeck v. Dunlap, et al., 98-CV-8307;
Frankel v. Sunbeam Corp., et al., 98-CV-8310; Klewin v. Sunbeam Corp., et al.,
98-CV-8313; Applestein v. Sunbeam Corp, et al., 98-CV-8316;
Cutler v. Sunbeam Corp., et al., 98-CV-8321; Singleton v. Sunbeam Corp., et al.,
98-CV-8347; Lionelli v. Sunbeam Corp., et al., 98-CV-8323; Kavlak v. Dunlap, et al.,
98-CV-8400; Gottlieb v. Sunbeam Corp., et al., 98-CV-8401; Cunningham v. Sunbeam
Corp., 98-CV-6723; Stapleton v Sunbeam Corp., et al., 98-CV-1676; Klein v. Sunbeam
Corp., et al., 98-CV-8418; Havsy v. Sunbeam Corp., et al., 98-CV-8475; U.S. Nat'l Bank
of Galveston v. Sunbeam Corp., 99-CV-283 (transferred from S.D. Tex.); Clay v. Sunbeam
Corp., et al., CV-99-A-1124-N (transferred from U.S. District Court, M.D. Ala.).
Fee Advancement Actions Dunlap and Kersh v. Sunbeam Corp.,
---------------------------------
No. 17048 (Delaware Chancery Ct.)
Chancellor Chandler
Texas Securities Fraud U.S. National Bank of Galveston, et al. v. Sunbeam Corp.
Action --------------------------------------------------------
98CV0828 (Tex. Dist. Ct., Galveston Cty., 56th Judicial Dist.)
98CV505 (U.S. District Court, S.D. Tex.) (removed from state court)
Judge Ewing Werlein, Jr.
99CV8283 (U.S. District Court, S.D. Fla.) (transferred from U.S. District Court, S.D.
Tex.)
Consolidated into 98-CV-8258 (U.S. District Court, S.D. Fla.)
Judge Middlebrooks
Alabama Securities Fraud Clay v. Sunbeam Corp., et al., No. CV-99-2799 (Circuit Court for Montgomery County,
Action Alabama)
No. CV-99-A-1124-N (U.S. District Court, M.D.
Ala.) (removed from state court) Judge W. Harold
Albritton
Consolidated into 98-CV-8258 (U.S. District Court, S.D. Fla.)
Judge Middlebrooks
EXHIBIT C
Summary Terms of New Secured Notes
Issuer: Reorganized Sunbeam.
Guarantors: All domestic subsidiaries of Sunbeam other than
Coleman International Holdings, LLC (the
"Guarantors").
Principal Amount: $100,000,000.
Trustee: An institution reasonably satisfactory to the Debtor
and the Banks.
Maturity: Seven (7) years after the Effective Date.
Interest rate: 7.50%, to accrue and compound quarterly (non-cash
pay until maturity).
Covenants: Standard covenants to be negotiated.
Collateral: Second priority liens and security interests in
all assets of Reorganized Sunbeam and the
Guarantors (other than the receivables subject to a
lien securing the securitization facility existing
as of the Effective Date and any replacement
facilities), and not more than 66% of the equity
interests of Coleman International Holdings, LLC
and any first tier foreign subsidiary.
EXHIBIT D
Summary of Terms of New Warrants
Number of Warrants: Holders of Allowed Subordinated Note
Claims may be issued New Warrants to purchase up
to 1% of Reorganized Sunbeam Common Stock on the
Effective Date, subject to dilution by shares
issued upon the exercise of options granted
under the Management Equity Plans.
Each New Warrant shall be exercisable to acquire
one share of Reorganized Sunbeam Common Stock.
Vesting Of Warrants: The New Warrants shall vest and shall be exercisable
on the 180th day after the date of issuance (the
"Initial Exercise Date").
Term: The New Warrants shall be exercisable at any time,
or from time to time, for a term commencing on the
Initial Exercise Date and until the tenth
anniversary of the Effective Date.
Strike Price: The New Warrants shall have a fair market
value strike price based upon an assumed equity
value of $550,000,000 for Reorganized Sunbeam
and its subsidiaries.
Antidilution Protection: Proportionate adjustments to the strike price and
the number of shares issuable upon exercise shall
be made for stock splits, recapitalizations and
similar events.
Transferability: The New Warrants will be transferable by the
holders thereof in whole and not in part. As a
result, recipients of New Warrants under the Plan
may not transfer, assign or encumber less than all
of their respective holdings of New Warrants.
EXHIBIT E
SUBORDINATED NOTEHOLDERS SECURITIES LITIGATION CLAIMS
ACTION
Debenture Litigation Camden Asset Management, L.P. v. Sunbeam Corp.,
et al.,
98-CV-8275 (U.S. District Court, S.D. Fla.)
Judge Middlebrooks
Cases consolidated into 98-CV-8275:
Hamilton Partners v. Sunbeam Corp., et al., (U.S.
District Court, S.D. Fla.);
Stark Investments L.P. v. Sunbeam Corp.,
00-C-1337 (U.S. District Court, E.D. Wis.)
Stark Actions Stark Investments L.P. v. Sunbeam Corporation,
00CV246, State of Wisconsin, Circuit Court,
Ozaukee County
Stark Investments L.P. v. Sunbeam Corporation,
00-C-1337 (E.D. Wis.); consolidated into
98-CV-8275 (U.S. District Court, S.D. Fla.)
Fee Advancement Actions Dunlap and Kersh v. Sunbeam Corp.,
No. 17048 (Delaware Chancery Ct.)
Chancellor Chandler
EXHIBIT B
SECURITYHOLDERS' AGREEMENT
dated as of December 18, 2002
among
AMERICAN HOUSEHOLD, INC.,
MORGAN STANLEY SENIOR FUNDING, INC.,
BANC OF AMERICA STRATEGIC SOLUTIONS, INC.,
WACHOVIA BANK NATIONAL ASSOCIATION,
OCM OPPORTUNITIES FUND III, L.P.
OCM OPPORTUNITIES FUND II, L.P.
HCA SEPARATE ACCOUNT II
GRYPHON DOMESTIC VI, LLC
and
THE OTHER SECURITYHOLDERS NAMED HEREIN OR BOUND HEREBY
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.....................................................1
1.1 Defined Terms...................................................1
1.2 Other Definitional Provisions; Interpretation...................4
SECTION 2. VOTING AGREEMENTS...............................................5
2.1 Election of Directors...........................................5
2.2 Chairman of the Board...........................................6
2.3 Solicitation of Proxies.........................................6
2.4 Committees......................................................6
2.5 Observer Rights.................................................6
2.6 Majority Vote Required for Certain Actions......................7
2.7 Certificate of Incorporation and By-Laws........................9
2.8 Other Voting Matters............................................9
SECTION 3. TRANSFERS AND ISSUANCES.........................................9
3.1 Limitations on Transfer.........................................9
3.2 Transfers to Affiliates........................................10
3.3 Effect of Void Transfers.......................................10
3.4 Legend on Securities...........................................10
3.5 Tag-Along Rights...............................................11
3.6 Public Offerings, etc..........................................13
3.7 Drag-Along Rights..............................................13
3.8 Participation Right............................................14
SECTION 4. MISCELLANEOUS..................................................16
4.1 Additional Securities Subject to Agreement.....................16
i
4.2 Termination....................................................16
4.3 Injunctive Relief..............................................16
4.4 Other Securityholders' Agreements..............................16
4.5 Amendments.....................................................16
4.6 Successors, Assigns and Transferees............................17
4.7 Notices........................................................17
4.8 Integration....................................................17
4.9 Severability...................................................17
4.10 Counterparts...................................................17
4.11 Governing Law, Etc.............................................17
4.12 Additional Management Securityholders..........................18
4.13 Non-Management Stockholders....................................18
-ii-
SECURITYHOLDERS' AGREEMENT, dated as of December 18, 2002 among American
Household Inc. (the "Company"), Morgan Stanley Senior Funding, Inc. ("Morgan
Stanley"), Banc of America Strategic Solutions, Inc. ("BoA"), Wachovia Bank
National Association ("Wachovia" and, together with Morgan Stanley and BoA,
the "Bank Stockholders"), OCM Opportunities Fund III, L.P., OCM Opportunities
Fund II, L.P., HCA Separate Account II and Gryphon Domestic VI, LLC
(collectively "Oaktree"), the Non-Management Stockholders (as defined below)
and the Management Securityholders (as defined below) (collectively with the
Bank Stockholders, Oaktree and the Non-Management Stockholders, the
"Securityholders").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the parties hereto wish to enter into certain agreements with
respect to the Company and its Subsidiaries and their respective ownership of
certain securities thereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, terms defined in the
heading and the recitals shall have their respective assigned meanings, and
the following capitalized terms shall have the meanings ascribed to them
below:
"Affiliate" (a) shall mean, with respect to any Person, any Person
that directly or indirectly controls, is controlled by or is under common
control with, such Person or any Immediate Family Member of such Person;
and (b) shall also include, with respect to any Person who is an
individual, a trust the beneficiaries of which, or a corporation or
partnership the stockholders or limited or general partners of which,
include only such individual and/or such individual's Immediate Family
Members.
"Agreement" shall mean this Securityholders' Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
"Amended Plan" shall mean the amended Chapter 11 plan of
reorganization for the Company (Case No. 01-40291 (AJG)) (United States
Bankruptcy Court, Southern District of New York).
"Bank Stockholders" shall have the meaning set forth in the Preamble
hereto.
"beneficial owner", "beneficially own" and "beneficial ownership"
shall have the meanings set forth in Rule 13d-3 under the Exchange Act.
"Business Day" shall mean a day other than a Saturday, Sunday,
federal or New York State holiday or other day on which commercial banks
in New York City are authorized or required by law to close.
"Cause" shall mean (i) willful malfeasance or willful misconduct by
a director in connection with the performance of his duties as such, (ii)
the commission by a director of (a) any felony or (b) a misdemeanor
involving moral turpitude or (iii) a determination by a court of
competent jurisdiction in the United States that such director, as such
or in any other capacity (whether or not relating to the Company),
breached a fiduciary duty owed by him or her to another Person; provided,
however, that with respect to Jerry W. Levin, "Cause" shall mean the
definition of "Cause" set forth in the Levin Employment Agreement so long
as such employment agreement is in effect and Mr. Levin is an executive
officer of the Company.
"Common Stock" shall mean the common stock, par value $.01 per
share, of the Company.
"Common Stock Equivalents" shall mean any warrants, rights, calls,
options or other securities exchangeable or exercisable for or
convertible into Common Stock of the Company or common stock of any of
its Subsidiaries.
"Competitor" shall mean, with respect to the Company and its
Subsidiaries, any Person engaged in the manufacture and sale of (i) small
electronic household appliances, (ii) outdoor recreational products,
(iii) outdoor barbeque grills, (iv)(a) portable generators or small
standby generators, (b) compressors or (c) pressure washers, or (v) smoke
detectors, carbon monoxide detectors, fire extinguishers or other home
security products.
"Control Transaction" shall mean the consummation of any transaction
as a result of which a Person or group of Persons (other than parties to
this Agreement and their Affiliates) obtains the right to elect a
majority of the Board of Directors of a Person or beneficial ownership of
a majority of the voting power of the outstanding Voting Securities of
such Person.
"Equity Interests" shall have the meaning set forth in Section
3.8(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as the
same may be amended from time to time.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government.
"Immediate Family Member" shall mean, with respect to any Person, a
spouse, parent, child, grandchild or sibling of such Person.
"Issuance" shall have the meaning set forth in Section 3.8(a).
"Levin Employment Agreement" means the Employment Agreement, dated
as of the date hereof, between the Company and Jerry W. Levin, as the
same may be modified or amended from time to time.
-2-
"Management Condition" shall mean, with respect to voting matters
under Section 2.6, Section 3.8 and Section 4.5 of this Agreement, that
for a period of twenty-one (21) months from the date of this Agreement,
all shares of Common Stock held by Management Securityholders shall be
voted in the same proportion as the shares of Common Stock voted by Bank
Stockholders and Oaktree.
"Management Equity Plans" shall mean that certain management equity
plan provided for in the Amended Plan and/or the management equity plans
provided for in the Subsidiary Plans, in each case, as such plans may be
amended from time to time in accordance with their terms.
"Management Securityholders" shall mean employees (and their
Affiliates) or former employees (and their Affiliates) of any of the
Company and its Subsidiaries who hold Equity Interests.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"Other Agreements" shall have the meaning set forth in Section 4.8.
"Non-Management Stock" shall mean Common Stock issued to holders of
Allowed Claims in Class 5 of the Amended Plan (as such terms are defined
in the Amended Plan) in accordance with the Amended Plan.
"Non-Management Stockholders" means holders of Non-Management Stock.
"Permitted Transferee" shall mean any Person to whom a
Securityholder (or any direct or indirect Permitted Transferee thereof)
Transfers Equity Interests in accordance with the terms of this Agreement
by which such transferor is bound and, in the case of Transfers other
than Transfers of Common Stock of the Company or common stock of a
Subsidiary of the Company pursuant to a Public Offering or pursuant to
Rule 144 under the Securities Act, who becomes a party to, and is bound
to the same extent as its transferor by the terms of, this Agreement.
"Person" shall mean any individual, corporation, partnership,
limited liability company, trust, joint stock company, business trust,
unincorporated association, joint venture, Governmental Authority or
other entity of any nature whatsoever.
"Plan Effective Date" shall mean the effective date of the Amended
Plan.
"Public Offering" shall mean the sale of Common Stock or common
stock of a Subsidiary of the Company to the public pursuant to an
effective registration statement filed under the Securities Act, which
results in an active trading market in such Common Stock or common stock
of a Subsidiary of the Company (it being understood that such an active
trading market shall be deemed to exist if, without limitation, such
Common Stock or common stock of a Subsidiary of the Company is listed on
a national securities exchange or on NASDAQ).
-3-
"Registration Rights Agreement" shall mean that certain Registration
Rights Agreement dated the date hereof among the Company and the holders
named therein.
"Right" shall have the meaning set forth in Section 3.8(a).
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, as the same may be
amended from time to time.
"Securityholders" shall have the meaning set forth in the Preamble
hereto.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership, association or other business entity of which
fifty percent (50%) or more of the total voting power of shares of
capital stock entitled (without regard to the occurrence of any
contingency) to vote generally in the election of directors, managers or
trustees thereof, or fifty percent (50%) or more of the equity interest
therein, is at the time owned or controlled, directly or indirectly, by
any Person or one or more of the other Subsidiaries of such Person or a
combination thereof.
"Subsidiary Plans" shall mean the Chapter 11 plans for substantially
all of the domestic subsidiaries of the Company (Case Nos. 01-40252 (AJG)
through 01-40290 (AJG)) (United States Bankruptcy Court, Southern
District of New York).
"Tagging Stockholder" shall have the meaning set forth in Section
3.5(a).
"Third Party" shall mean any Person other than the Securityholders
and their Affiliates.
"Transfer" shall mean any direct or indirect transfer, sale, offer,
assignment, exchange, distribution, mortgage, pledge, hypothecation or
other disposition of any Equity Interests.
"Transferring Stockholder" shall have the meaning set forth in
Section 3.5(a).
"Voting Securities" of any Person shall mean the capital stock or
other securities of such Person which entitle the holder thereof to vote
generally in the election of the directors, managers or trustees of such
Person.
1.2 Other Definitional Provisions; Interpretation. (a) The words
"hereof", "herein", and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, Subsection, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(b) The headings in this Agreement are included for convenience of
reference only and shall not limit or otherwise affect the meaning or
interpretation of this Agreement.
-4-
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. VOTING AGREEMENTS
2.1 Election of Directors. (a) Each Securityholder hereby agrees
that such Securityholder will vote all of the Voting Securities of the Company
beneficially owned or held of record by such Securityholder so as to elect
and, subject to Sections 2.1(b) and (c) below, to continue in office a Board
of Directors of the Company consisting of five directors as follows:
(i) One (1) designee of each of the three Bank
Stockholders (so long as such Bank Stockholder and its Affiliates,
but not any other Permitted Transferee of any thereof, beneficially
own an aggregate number of shares of Common Stock representing not
less than ten percent (10%) of the shares of Common Stock then
outstanding) (each a "Qualified Bank Stockholder"); provided,
however, that at such time as any Bank Stockholder no longer is a
Qualified Bank Stockholder, the Board of Directors of the Company
shall not be reduced so long as the other Qualified Bank Stockholder
or Stockholders beneficially own(s) an aggregate number of shares of
Common Stock representing fifty percent (50%) or more of the shares
of Common Stock then outstanding, it being understood such other
Qualified Bank Stockholder(s) shall designate that director in
accordance with Section 2.1(a)(ii) below;
(ii) One (1) designee (together with the directors
designated in accordance with Section 2.1(a)(i) above, the
"Designated Directors") jointly designated by the Qualified Bank
Stockholders (the Qualified Bank Stockholders acting in such
capacity, the "Qualified Bank Stockholders Group") (such designee to
be selected by the holders of a majority of the shares of Common
Stock beneficially owned by such Qualified Bank Stockholders Group
on a fully diluted basis) so long as at least one Bank Stockholder
and its respective Affiliates, but not any other Permitted
Transferee thereof, is a Qualified Bank Stockholder; it being
understood that such director shall continue to be designated only
by such Qualified Bank Stockholders Group; and
(iii) The chief executive officer of the Company.
(b) If any Qualified Bank Stockholder or the Qualified Bank
Stockholders Group shall notify the other Securityholders in writing of its or
their desire to remove, without Cause, any director of the Company previously
designated by it or them, as the case may be, each Securityholder shall vote
or execute a written consent with respect to all of the Voting Securities of
the Company beneficially owned or held of record by it so as to remove such
director.
(c) The parties hereto hereby agree that any individual designated
as a director of the Company may be removed for Cause pursuant to the
Company's certificate of incorporation and by-laws, the Levin Employment
Agreement and applicable law with or without the consent of the Securityholder
which designated such director.
-5-
(d) If any director previously designated by any Qualified Bank
Stockholder or the Qualified Bank Stockholders Group, as the case may be,
ceases to serve on the Board of Directors of the Company (whether by reason of
death, resignation, removal or otherwise), the Qualified Bank Stockholder or
Qualified Bank Stockholders Group, as the case may be, which designated such
director shall be entitled to designate a successor director to fill the
vacancy created thereby, in accordance with Section 2.1(a)(i) or 2.1(a)(ii),
as applicable. Each Securityholder agrees that such Securityholder will vote
or execute a written consent with respect to all of the Voting Securities
beneficially owned or held of record by such Securityholder so as to elect any
such director.
(e) No individual who is an officer, director, partner or the holder
of five percent (5%) or more of the voting power of the Voting Securities of
any Competitor of any of the Company and its Subsidiaries (excluding the Bank
Stockholders and their Affiliates) shall serve as a director of the Company.
2.2 Chairman of the Board. The Qualified Bank Stockholders shall,
from time to time, appoint a Chairman of the Board of the Directors of the
Company. Such Chairman of the Board may, but is not required to be, the chief
executive officer of the Company; provided, however, that, notwithstanding the
foregoing, so long as Jerry W. Levin serves as the chief executive officer of
the Company, he shall also serve as a director and as the Chairman of the
Board of Directors of the Company.
2.3 Solicitation of Proxies. The Company shall use its reasonable
best efforts to solicit proxies or written consents from the holders of Voting
Securities of the Company in favor of the nominees designated in accordance
with Section 2.1. If directors are to be elected at a meeting of stockholders,
the Company shall duly call and hold a meeting of stockholders for such
purpose in accordance with the Company's certificate of incorporation and
by-laws, as the same may be amended from time to time, and applicable law. The
Company shall, if required under applicable law, prepare and file with the SEC
a proxy statement and such other materials, including a notice of meeting, as
are necessary in connection with such meeting and distribute such materials,
or cause such materials to be distributed, to the stockholders of the Company
entitled to notice of and to vote at such meeting. Each party hereto hereby
covenants and agrees to provide for inclusion in any such proxy statement and
other materials such information regarding itself and its designee(s) as may
be required under applicable law.
2.4 Committees. Each director of the Company who is appointed
pursuant to Section 2.1(a)(i) and 2.1(a)(ii) shall be entitled to
representation on each committee, if any, of the Board of Directors of the
Company at least proportionate to his or her representation on the Board of
Directors, unless and except to the extent otherwise required by any
applicable law or rule promulgated by the SEC or stock exchange on which the
securities of the Company are listed. Jerry W. Levin shall be entitled to
representation on committees of the Board of Directors of the Company in
accordance with the provisions of the Levin Employment Agreement.
2.5 Observer Rights. Each Qualified Bank Stockholder shall have the
right to appoint one individual (a "Stockholder Observer") to observe and
participate in the discussion of any proceeding of the Board of Directors of
the Company or a committee thereof. Each Stockholder Observer shall have the
right to receive (i) any written material or other information
-6-
provided to members of such Board of Directors or committee thereof, provided,
that such Stockholder Observer shall acknowledge and agree that he or she will
be bound to satisfy the same duties and obligations of confidentiality with
respect to such information that members of such Board of Directors or
committee must satisfy and (ii) any notice provided to the Board of Directors
of the Company or a committee thereof at the same time and in the same manner
as such Board of Directors or committee thereof.
2.6 Majority Vote Required for Certain Actions. Until the earlier to
occur of (a) the termination of this Agreement in accordance with Section 4.2
hereof or (b) the date on which the Bank Stockholders and their Affiliates
cease to own 50% or more of the outstanding shares of Common Stock, the prior
written consent of holders of 51% or more of the outstanding shares of Common
Stock ((i) subject to the Management Condition and (ii) excluding
Non-Management Stock) (a "Majority Vote") shall be required to approve and
authorize any of the following:
(a) any material change, through acquisitions, dispositions of
assets, or otherwise, in the nature of the business of the Company and its
Subsidiaries;
(b) any authorization, issuance or sale by any of the Company and
its Subsidiaries of any equity securities, or securities convertible into, or
exercisable or exchangeable for, or options to acquire, equity securities of
any of the Company and its Subsidiaries, other than any such securities issued
(x) to the Company or a wholly-owned Subsidiary of the Company in connection
with the organization of a new wholly-owned Subsidiary of the Company, (y)
upon the grant of options pursuant to the Management Equity Plans or upon the
exercise thereof or (z) upon the exercise of registration rights under the
Registration Rights Agreement;
(c) any borrowing or lending of money or guarantee of indebtedness
in excess of $25 million by any of the Company and its Subsidiaries;
(d) any material change to the Management Equity Plans or the
creation of any other stock option, restricted stock or other equity-based
compensation plan by any of the Company and its Subsidiaries;
(e) any merger, consolidation, business combination or joint venture
involving any of the Company and its Subsidiaries, or any sale or other
disposition of all or substantially all of the Company's assets on a
consolidated basis, other than mergers, consolidations, business combinations
or joint ventures with an aggregate enterprise value in any calendar year of
less than the greater of (A) $10 million or (B) 10% of earnings before
interest, taxes, depreciation and amortization of the Company and its
Subsidiaries on a consolidated basis for the twelve-month period ending on the
most recently completed fiscal quarter for which financial statements are
available;
(f) any amendment to the Company's or any of its Subsidiaries'
certificate of incorporation or bylaws (or equivalent governing documents);
(g) any declaration or payment of dividends or similar payments or
other distributions on or redemptions of the capital stock of any of the
Company and its Subsidiaries,
-7-
other than payments or distributions on, or redemptions of, capital stock held
solely by the Company or a Subsidiary;
(h) the adoption of any plan or proposal for a complete or partial
liquidation or dissolution of the Company or any of its Subsidiaries or any
reorganization or recapitalization of the Company or any of its Subsidiaries
or commencement of any case, proceeding or action seeking relief under any
existing or future laws relating to bankruptcy, insolvency, conservatorship or
relief of debtors with respect to the Company or any of its Subsidiaries,
other than any liquidation or dissolution of one or more immaterial
Subsidiaries of the Company in connection with any ordinary course
restructuring of the Company's Subsidiaries;
(i) any significant change in accounting policies or procedures of
the Company or any of its Subsidiaries unless required under United States
generally accepted accounting principles or, in the case of foreign
Subsidiaries, the applicable generally accepted accounting principles;
(j) any transaction involving the Company or any of its
Subsidiaries, on the one hand, and any Affiliate of the Company (other than a
Subsidiary of the Company) or any Person in which an Affiliate of the Company
or any of its Subsidiaries (other than a Subsidiary of the Company) has an
interest as a director, officer, employee or greater than 5% stockholder or
interest through a relationship with an Immediate Family Member or any Person
related by marriage to an Immediate Family Member, on the other hand, other
than (i) compensation and employee benefits of officers and employees of the
Company and its Subsidiaries in their capacities as such and reimbursement of
business expenses incurred by any such officer or employee or (ii) pursuant to
borrowings or financing arrangements approved pursuant to Section 2.6(c);
(k) the acquisition by any of the Company and its Subsidiaries of
any assets or business, other than acquisitions with an aggregate enterprise
value in any calendar year of less than the greater of (A) $10 million or (B)
10% of earnings before interest, taxes, depreciation and amortization of the
Company and its Subsidiaries on a consolidated basis for the twelve-month
period ending on the most recently completed fiscal quarter for which
financial statements are available;
(l) the election or reelection of any Person to the Board of
Directors of any Subsidiary of the Company who is not as of such date an
employee of the Company or any of its Subsidiaries or a director of the
Company, other than the election or reelection to the Board of Directors of
any Subsidiary of the Company organized under the laws of a foreign
jurisdiction of (A) a Person who is not an employee of the Company or any of
its Subsidiaries or a director of the Company solely for the purpose of
complying with laws or regulations of such foreign jurisdiction requiring such
Person to serve on such Board and (B) one Person who is outside counsel or an
employee of an accounting firm retained by the Company solely for reasons of
administrative convenience; and
(m) the retention by the Company or any of its Subsidiaries of any
financial advisor.
-8-
2.7 Certificate of Incorporation and By-Laws. The Company and the
Securityholders shall take or cause to be taken all lawful action necessary to
ensure at all times that the certificate of incorporation and by-laws (or
equivalent governing documents) of each of the Company and its Subsidiaries,
as the same may be amended from time to time in accordance with the terms
hereof and thereof, are not, at any time, inconsistent with the provisions of
this Agreement.
2.8 Other Voting Matters. (a) Except as otherwise provided in the
certificate of incorporation or by-laws of the Company or the Levin Employment
Agreement, all actions of the Board of Directors of any of the Company and its
Subsidiaries shall require the approval of a majority of such Board of
Directors.
(b) Each Securityholder hereby agrees that such Securityholder will
take or cause to be taken all lawful action necessary to ensure that the
provisions of this Agreement are effected in accordance with their terms.
(c) All holders of Equity Interests in Subsidiaries of the Company
entitled to vote shall vote such Equity Interests on any matter in the same
manner as the holder(s) of a majority of the voting power of the voting
securities of such Subsidiary unless and until the initial Public Offering of
such Subsidiary is consummated.
SECTION 3. TRANSFERS AND ISSUANCES
3.1 Limitations on Transfer. (a) Each Securityholder hereby agrees
that, subject to the last sentence of Section 4.8, no Transfer shall occur in
any manner that violates the provisions of this Agreement or any applicable
federal or state securities laws.
(b) Each Securityholder hereby agrees that, except for Transfers
pursuant to Section 3.2, 3.5 or 3.7 or Transfers effected pursuant to an
effective registration statement filed under the Securities Act, no Transfer
shall occur unless the Company has been furnished with an opinion in form and
substance reasonably satisfactory to the Company from counsel reasonably
satisfactory to the Company that such Transfer may be made without
registration under Section 5 under the Securities Act and any applicable state
securities laws; provided, however, that this Section 3.1(b) shall not apply
to Transfers by a Person (or Persons) who (i) beneficially owns less than 5%
of the shares of Common Stock then outstanding; (ii) is not an "Affiliate" (as
such term is defined under the Securities Act), of the Company, and (iii) has
furnished the Company with a certificate, in form and substance reasonably
satisfactory to the Company, signed by an authorized officer of the Person
effecting such Transfer, to the effect that the requirements of clauses (i)
and (ii) of this proviso are satisfied and that the Person making such
Transfer did not receive the securities proposed to be Transferred with a view
to a subsequent distribution.
(c) Each Securityholder hereby agrees that, except for Transfers in
connection with a Public Offering and Transfers pursuant to Rule 144 under the
Securities Act, no Transfer shall occur unless the Transferee shall agree to
become a party to, and be bound to the same extent as its Transferor by the
terms of, this Agreement pursuant to the provisions of Section 4.6.
(d) Notwithstanding any other provisions of this Agreement to the
contrary and including Transfers otherwise permitted pursuant to the
provisions of Section 3.2, (i) no
-9-
Transfer shall occur if such Transfer would result in the Company being
subject to the periodic reporting requirements of the Exchange Act, except in
connection with a Public Offering and (ii) in connection with any Transfer of
Non-Management Stock otherwise permitted under this Agreement prior to the
date on which the first Public Offering of the Company is consummated, the
holder of such Non-Management Stock shall only be permitted to Transfer all,
but not less than all, of such holder's Non-Management Stock.
3.2 Transfers to Affiliates. Notwithstanding any other provision of
this Agreement to the contrary, but subject to Section 3.1(d) and the last
sentence of Section 4.8, each Securityholder and its Affiliates (but not any
other Permitted Transferee of any thereof) shall be entitled under this
Agreement, without compliance with Section 3.5, to Transfer from time to time
any or all of the Equity Interests beneficially owned by it to any of its
Affiliates (other than a Competitor) who agree to become a party to, and be
bound to the same extent as its Transferor by the terms of, this Agreement
pursuant to the provisions of Section 4.6; provided, however, that for
purposes of this Section 3.2 only, if any Transfer of Equity Interests
permitted under this Section is not permitted under the Other Agreements, then
such Transfer shall not be permitted hereunder.
3.3 Effect of Void Transfers. In the event of any purported Transfer
in violation of the provisions of this Agreement, such purported Transfer
shall be void and of no effect and the Company and its Subsidiaries shall not
give effect to such Transfer.
3.4 Legend on Securities. (a) Each certificate representing Equity
Interests issued to any Securityholder (except for unexercised options issued
pursuant to Management Equity Plans, which shall bear the legend set forth in
Section 3.4(b) below), including any additional shares of Common Stock that
become subject to this Agreement pursuant to Section 4.1 hereof, shall bear
the following legend on the face thereof; provided, however, that certificates
representing Equity Interests not subject to the Registration Rights
Agreement, shall make no reference to the Registration Rights Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAW AND ARE SUBJECT TO A SECURITYHOLDERS' AGREEMENT
AMONG AMERICAN HOUSEHOLD, INC., MORGAN STANLEY SENIOR FUNDING, INC.,
BANC OF AMERICA STRATEGIC SOLUTIONS, INC., WACHOVIA BANK, NATIONAL
ASSOCIATION, OCM OPPORTUNITIES FUND III, L.P., OCM OPPORTUNITIES
FUND II, L.P., HCA SEPARATE ACCOUNT II, GRYPHON DOMESTIC VI, LLC AND
THE OTHER SECURITYHOLDERS PARTIES THERETO AND A REGISTRATION RIGHTS
AGREEMENT AMONG THE COMPANY AND CERTAIN HOLDERS OF REGISTRABLE
COMMON STOCK (AS THAT TERM IS DEFINED IN THE REGISTRATION RIGHTS
AGREEMENT), COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE
COMPANY. NO DIRECT OR INDIRECT TRANSFER, SALE, OFFER, ASSIGNMENT,
EXCHANGE, DISTRIBUTION, MORTGAGE, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH
SECURITYHOLDERS'
-10-
AGREEMENT AND REGISTRATION RIGHTS AGREEMENT AND (A) PURSUANT TO A
REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR (B) IF THE COMPANY HAS BEEN FURNISHED EITHER WITH AN
OPINION REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
TRANSFER, SALE, OFFER, ASSIGNMENT, EXCHANGE, DISTRIBUTION, MORTGAGE,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION MAY BE MADE WITHOUT
REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS THEREUNDER AND APPLICABLE
STATE SECURITIES LAWS OR WITH THE CERTIFICATE SPECIFIED IN SECTION
3.1(B) OF SUCH SECURITYHOLDERS' AGREEMENT, IF APPLICABLE. THE HOLDER
OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE
BOUND BY ALL OF THE PROVISIONS OF SUCH SECURITYHOLDERS' AGREEMENT
AND REGISTRATION RIGHTS AGREEMENT, INCLUDING RESTRICTIONS RELATING
TO THE EXERCISE OF ANY VOTING RIGHTS GRANTED BY THE SECURITIES."
(b) Each unexercised option issued pursuant to Management Equity
Plans shall bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND
ARE SUBJECT TO A SECURITYHOLDERS' AGREEMENT AMONG AMERICAN
HOUSEHOLD, INC., MORGAN STANLEY SENIOR FUNDING, INC., BANC OF
AMERICA STRATEGIC SOLUTIONS, INC., WACHOVIA BANK NATIONAL
ASSOCIATION, OCM OPPORTUNITIES FUND III, L.P., OCM OPPORTUNITIES
FUND II, L.P., HCA SEPARATE ACCOUNT II, GRYPHON DOMESTIC VI, LLC AND
THE OTHER SECURITYHOLDERS PARTIES THERETO AND THE OPTION AGREEMENT,
COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY. THE
HOLDER OF THIS OPTION, BY ACCEPTANCE HEREOF, AGREES TO BE BOUND BY
ALL OF THE PROVISIONS OF SUCH SECURITYHOLDERS' AGREEMENT AND OPTION
AGREEMENT, INCLUDING RESTRICTIONS RELATING TO THE EXERCISE OF ANY
VOTING RIGHTS GRANTED BY THE SECURITIES."
3.5 Tag-Along Rights. (a) With respect to any proposed Transfer
(other than any Transfer in connection with a mortgage, pledge or
hypothecation) in one transaction or a series of related transactions of 10%
or more of the outstanding shares of Common Stock on a fully diluted basis by
any Securityholder and its Affiliates (but not any other Permitted Transferee
of any thereof) (in such capacity, a "Transferring Stockholder"), other than
as provided in Section 3.2 or pursuant to a Public Offering or pursuant to
Rule 144 promulgated under the Securities Act, and subject to the last
sentence of Section 4.8, the Transferring Stockholder shall have the
obligation, and each other Securityholder shall have the right but not the
obligation, to require the proposed Transferee to purchase from each
Securityholder having and exercising such right (a "Tagging Stockholder") a
number of shares of Common Stock equal to the product of (i) such Tagging
Stockholder's percentage ownership on a fully diluted basis
-11-
(excluding shares subject to a Transfer restriction referred to in the last
sentence of this Section 3.5(a)) of all the outstanding shares of Common Stock
on a fully diluted basis (excluding shares subject to a Transfer restriction
referred to in the last sentence of this Section 3.5(a)) multiplied by (ii)
the total number of shares of Common Stock proposed to be Transferred by the
Transferring Stockholder. Such Tagging Stockholder shall sell its shares of
Common Stock at the same price per share and upon the same terms and
conditions (including without limitation time of payment and form of
consideration) as to be paid and given to the Transferring Stockholder,
provided that in order to be entitled to exercise its right to sell shares of
Common Stock to the proposed Transferee pursuant to this Section 3.5, a
Tagging Stockholder must agree to make to the proposed Transferee the same
representations, warranties, covenants, indemnities and agreements as the
Transferring Stockholder agrees to make in connection with the proposed
Transfer of the shares of Common Stock of the Transferring Stockholder (except
that in the case of representations and warranties pertaining specifically to
the Transferring Stockholder, a Tagging Stockholder shall make the comparable
representations and warranties pertaining specifically to itself, and except
that in the case of covenants or agreements capable of performance only by
certain Securityholders, such covenants or agreements shall be made only by
such certain Securityholders) and provided further that all representations,
warranties, covenants, agreements and indemnities made by the Transferring
Stockholder and the Tagging Stockholders pertaining specifically to themselves
shall be made by each of them severally and not jointly and provided further
that each of the Transferring Stockholder and each Tagging Stockholder shall
be severally (but not jointly) liable for breaches of representations,
warranties, covenants and agreements of or (in the case of representations and
warranties) pertaining to the Company and its Subsidiaries, and for
indemnification obligations arising out of or relating to any such breach or
otherwise pertaining to the Company and its Subsidiaries, on a pro rata basis
(based on the number of shares of Common Stock sold by each Transferring
Stockholder and each Tagging Stockholder), such liability of each such
Securityholder not to exceed such Securityholder's pro rata portion of the
gross proceeds of the sale. Subject to the next sentence, any Tagging
Stockholder that is a holder of Common Stock Equivalents of the Company and
wishes to participate in a sale of Common Stock pursuant to this Section
3.5(a) shall convert into or exercise or exchange such number of Common Stock
Equivalents for Common Stock as may be required therefor on or prior to the
closing of such Transfer. Notwithstanding anything in this Section 3.5 to the
contrary, if any Transfer of Common Stock or Common Stock Equivalents of the
Company pursuant to this Section 3.5 is not permitted under an Other
Agreement, then such Transfer shall not be permitted hereunder.
(b) The Transferring Stockholder shall give notice to all
Securityholders, including any Permitted Transferees thereof, of each proposed
Transfer giving rise to the rights of the Tagging Stockholders set forth in
the first sentence of Section 3.5(a) at least 30 days prior to the proposed
consummation of such Transfer, setting forth the name of the Transferring
Stockholder, the number of shares of Common Stock proposed to be so
Transferred, the name and address of the proposed Transferee, the proposed
amount and form of consideration and other terms and conditions offered by the
proposed Transferee, and a representation that the proposed Transferee has
been informed of the tag-along rights provided for in this Section 3.5 and has
agreed to purchase shares of Common Stock from any Tagging Stockholder or
Tagging Stockholders in accordance with the terms hereof. The tag-along rights
provided by this Section 3.5 must be exercised by each Tagging Stockholder
within 20 days following receipt of the notice required by the preceding
sentence, by delivery of a written notice to the Transferring
-12-
Stockholder indicating such Tagging Stockholder's desire to exercise its
rights and specifying the number of shares of Common Stock it desires to sell.
The Transferring Stockholder shall be entitled under this Section 3.5 to
Transfer to the proposed Transferee the number of shares of Common Stock equal
to the difference between the number referred to in clause (ii) of paragraph
(a) above and the aggregate number of shares of Common Stock set forth in the
written notices, if any, delivered by the Tagging Stockholders pursuant to the
preceding sentence (up to the maximum number of shares of Common Stock
beneficially owned by such Tagging Stockholders required to be purchased by
the proposed Transferee pursuant to the first sentence of Section 3.5(a)). If
the proposed Transferee fails to purchase shares of Common Stock from any
Tagging Stockholder that has properly exercised its tag-along rights, then the
Transferring Stockholder shall not be permitted to make the proposed Transfer,
and any such attempted Transfer shall be void and of no effect, as provided in
Section 3.3 hereof.
(c) If any of the Tagging Stockholders exercise their rights under
Section 3.5(a), the closing of the purchase of the Common Stock with respect
to which such rights have been exercised shall take place concurrently with
the closing of the sale of the Transferring Stockholder's Common Stock. No
Transfer shall occur pursuant to this Section 3.5 unless the Transferee shall
agree to become a party to, and be bound to the same extent as its Transferor
by the terms of, this Agreement pursuant to the provisions of Section 4.6.
3.6 Public Offerings, etc. The provisions of Sections 3.5 and 3.7
shall not be applicable to offers and sales of Common Stock in a Public
Offering or pursuant to Rule 144 under the Securities Act.
3.7 Drag-Along Rights. Subject to the last sentence of Section 4.8,
if any Securityholder or group of Securityholders and their Affiliates (or, in
the case of Subsidiaries of the Company, the Company or its Subsidiary which
is the direct parent of such Subsidiary) (the "Selling Stockholder(s)") owning
fifty percent (50%) or more of the outstanding shares of Common Stock of any
of the Company or common stock of any of its Subsidiaries on a fully diluted
basis receives an offer from a Third Party proposing a Control Transaction
with respect to the Company or a Subsidiary, as the case may be (whether
pursuant to a sale of stock, a merger or otherwise), and such offer is
accepted by the Selling Stockholder(s), then each Securityholder hereby agrees
that, if requested to do so by such Selling Stockholder(s), it will Transfer
all of its shares of Common Stock of the Company or common stock of the
applicable Subsidiary or Subsidiaries, as the case may be, to such Third Party
on the terms of the offer so accepted by the Selling Stockholder(s), including
making the same representations, warranties, covenants, indemnities and
agreements that the Selling Stockholder(s) agrees to make (except that, in the
case of representations and warranties pertaining specifically to the Selling
Stockholder(s), each other Securityholder shall make the comparable
representations and warranties pertaining specifically to itself, and except
that, in the case of covenants or agreements capable of performance only by
certain Securityholders, such covenants or agreements shall be made only by
such certain Securityholders, and provided that all representations,
warranties, covenants, agreements and indemnities made by the Securityholders
pertaining specifically to themselves shall be made by each of them severally
and not jointly and provided further that each Securityholder shall be
severally (but not jointly) liable for breaches of representations,
warranties, covenants and agreements of or (in the case of representations and
warranties) pertaining to the Company and its Subsidiaries, and for
indemnification obligations
-13-
arising out of or relating to any such breach or otherwise pertaining to the
Company and its Subsidiaries, on a pro rata basis (based on the number of
shares of Common Stock or common stock of a Subsidiary, as the case may be,
sold by each Selling Stockholder and each of the other Securityholders), such
liability of each such Securityholder not to exceed such Securityholder's pro
rata portion of the gross proceeds of the sale). If the Selling Stockholder(s)
accepts such Control Transaction, such Selling Stockholder(s) shall give
written notice to all Securityholders of the proposed Control Transaction at
least 30 days prior to the proposed consummation of such Control Transaction.
Subject to the next sentence, if requested to do so by the Selling
Stockholder(s), any Securityholder that is a holder of Common Stock
Equivalents shall convert, exercise or exchange such Common Stock Equivalents
into or for Common Stock of the Company or common stock of its Subsidiary, as
the case may be, in accordance with their terms on or prior to the closing
date of such Control Transaction. Notwithstanding anything in this Section 3.7
to the contrary, (i) in the event a Securityholder that holds Common Stock
Equivalents (other than options to acquire shares of Common Stock or common
stock of a Subsidiary of the Company granted under the Management Equity
Plans, which are governed by clause (ii) below) is required to Transfer such
Common Stock Equivalents in a Control Transaction, such Securityholder shall
not be required to convert, exercise or exchange any such Common Stock
Equivalent if and to the extent that the applicable conversion, exercise or
exchange price of such Common Stock Equivalent is equal to or greater than the
value of the consideration to be received by Securityholders in the Control
Transaction giving rise to drag-along rights under this Section 3.7 and, in
lieu of such conversion, exercise or exchange, at the election of such holder
of Common Stock Equivalents, any such Common Stock Equivalents shall instead
be cancelled and forfeited; (ii) in connection with any Control Transaction
giving rise to drag-along rights under this Section 3.7, the treatment of
options to acquire shares of Common Stock or common stock of a Subsidiary of
the Company granted under the Management Equity Plans shall be governed by the
terms of Section 6(f) (or any successor provision) of the applicable
Management Equity Plan and (iii) if any Transfer of Common Stock or common
stock of a Subsidiary of the Company or Common Stock Equivalents of the
Company or a Subsidiary of the Company pursuant to this Section 3.7 is not
permitted under an Other Agreement, then such Transfer shall not be permitted
or required hereunder.
3.8 Participation Right. (a) Subject to Section 3.8(c) hereof, the
Company shall not issue nor permit any of its Subsidiaries to issue (an
"Issuance") additional shares of Common Stock, common stock of a Subsidiary of
the Company, Common Stock Equivalents or any other equity securities or
securities convertible into, or exercisable or exchangeable for, or options to
acquire, equity securities of the Company or any of its Subsidiaries
(collectively "Equity Interests") to any Person unless, prior to such
Issuance, the Company notifies (i) each Bank Stockholder, (ii) Oaktree and
(iii) Jerry W. Levin and his Affiliates that beneficially own Equity Interests
(for purposes of this Section 3.8 only, each a "Participation Securityholder")
in writing of the proposed Issuance and grants to such Participation
Securityholder the right (the "Right") to subscribe for and purchase up to a
portion of such additional Equity Interests so issued at the same price and
upon the same terms and conditions (including, in the event such Equity
Interests are issued as a unit together with other securities, the purchase of
such other securities) as issued in the Issuance such that:
(i) in the case of an Issuance in which shares of Common
Stock or Common Stock Equivalents of the Company are to be issued,
immediately after
-14-
giving effect to the Issuance and full exercise of the Right
(including, for purposes of this calculation, the issuance of shares
of Common Stock upon conversion, exchange or exercise of any Common
Stock Equivalent issued in the Issuance or subject to the Right),
the shares of Common Stock beneficially owned by each such
Participation Securityholder and their respective Affiliates on a
fully diluted basis (rounded to the nearest whole share) shall
represent the same percentage of the aggregate number of shares of
Common Stock outstanding on a fully diluted basis as was
beneficially owned by such Participation Securityholder and their
respective Affiliates immediately prior to the Issuance; and
(ii) in the case of an Issuance in which Equity Interests of a
Subsidiary are to be issued, each such Participation Securityholder
and their respective Affiliates shall have the Right to acquire a
percentage of such Equity Interests to be issued in the Issuance
equal to the percentage of shares of Common Stock on a fully diluted
basis that was beneficially owned by such Participation
Securityholder and their Affiliates immediately prior to the
Issuance.
(b) The Right may be exercised by each such Participation
Securityholder at any time by written notice to the Company received by the
Company within 10 Business Days after the date on which such Participation
Securityholder receives notice from the Company of the proposed Issuance, and
the closing of the purchase and sale pursuant to the exercise of the Right
shall occur on the date scheduled by the Company for the Issuance, which may
not be earlier than 10 Business Days after the Company receives notice of the
exercise of the Right. Notwithstanding the foregoing, the Right shall not
apply to any Issuance (i) in payment of the purchase price of assets acquired
by the Company or any of its Subsidiaries, including any Issuance in
connection with a merger, joint venture, licensing transaction or exchange of
shares, (ii) upon the grant or exercise of options granted to directors or
employees of the Company or its Subsidiaries or the grant or exercise of
options pursuant to the Management Equity Plans, or (iii) pursuant to a Public
Offering of the Company or any of its Subsidiaries. In connection with the
exercise of a Right to purchase Equity Interests other than Common Stock, the
Participation Securityholders shall receive registration rights no less
favorable than the registration rights granted to any other holder of such
Equity Interests or, if none are granted, registration rights comparable to
the registration rights granted to them with respect to Common Stock under the
Registration Rights Agreement.
(c) If any Issuance under Section 3.8(a)(ii) involves an Issuance of
Equity Interests to a Third Party (a "Third Party Issuance") and the holders
of fifty-one percent (51%) or more of the outstanding shares of Common Stock
((i) subject to the Management Condition and (ii) excluding Non-Management
Stock) agree in writing that, in their good faith opinion, the exercise by all
the Participation Securityholders of their respective participation rights
would materially adversely affect the consummation of such Third Party
Issuance, the Company or its Subsidiary, as the case may be, shall (1) issue
such amount of Equity Interests to such Third Party as is approved in
accordance with this Agreement and (2) if additional amounts of Equity
Interests may be issued without materially adversely affecting the
consummation of such Third Party Issuance in the good faith opinion of the
holders of fifty-one percent (51%) or more of the outstanding Common Stock
((i) subject to the Management Condition and (ii) excluding Non-
-15-
Management Stock), pro rata among the Participation Securityholders who
exercise their participation rights in accordance with Section 3.8(b).
SECTION 4. MISCELLANEOUS
4.1 Additional Securities Subject to Agreement. Each Securityholder
agrees that any other securities which it shall hereafter acquire by means of
a stock split, stock dividend, distribution or otherwise (other than pursuant
to a Public Offering) shall be subject to the provisions of this Agreement to
the same extent as if held on the date hereof.
4.2 Termination. This Agreement shall terminate upon the first to
occur of (i) the written consent thereto by each Qualified Bank Stockholder,
(ii) the absence of any Qualified Bank Stockholder, (iii) the merger of the
Company into or with any entity, other than a Subsidiary of the Company;
provided that immediately after such merger, the Bank Stockholders own in the
aggregate less than 50% of the voting power of the outstanding Voting
Securities of the combined entity, (iv) the sale of all or substantially all
of the assets of the Company, other than to a Subsidiary of the Company, or
(v) the consummation of a Control Transaction of the Company.
4.3 Injunctive Relief. The Securityholders, their Permitted
Transferees and the Company acknowledge and agree that a violation of any of
the terms of this Agreement will cause the Securityholders and their Permitted
Transferees irreparable injury for which adequate remedy at law is not
available. Accordingly, it is agreed that each of the Company, the
Securityholders and their Permitted Transferees shall be entitled to an
injunction, restraining order or other equitable relief to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States
or any state thereof, in addition to any other remedy to which it may be
entitled at law or equity.
4.4 Other Securityholders' Agreements. None of the Securityholders
shall enter into any agreement or other arrangement of any kind with any
Person with respect to Equity Interests which is inconsistent with the
provisions of this Agreement or which may impair its ability to comply with
this Agreement.
4.5 Amendments. This Agreement may be amended only by a written
instrument signed by (a) each Qualified Bank Stockholder, (b) the Company and
(c) Securityholders holding a majority of the outstanding shares of Common
Stock; provided, however, that if an amendment to, or termination of, this
Agreement is proposed as an integral part of (x) a transaction requiring
approval under Section 2.6 hereof, such amendment or termination, as the case
may be, may be effected by a written instrument signed by (i) holders of 51%
or more of the outstanding shares of Common Stock ((A) subject to the
Management Condition and (B) excluding Non-Management Stock) and (ii) the
Company or (y) an initial Public Offering of the Company or a Subsidiary of
the Company or a Control Transaction of the Company (as opposed to a
Subsidiary of the Company), whether or not Section 2.6 is in effect, such
amendment or termination, as the case may be, may be effected by a written
instrument signed by (i) holders of 51% or more of the outstanding shares of
Common Stock ((A) subject to the Management Condition and (B) excluding
Non-Management Stock) and (ii) the Company.
-16-
4.6 Successors, Assigns and Transferees. The provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their Permitted Transferees and their respective successors, each
of which Permitted Transferees and successors shall agree in a writing in form
and substance reasonably satisfactory to the Company to become a party hereto
and be bound to the same extent as its Transferor hereby, provided that no
Securityholder may assign to any Permitted Transferee any of its rights or
obligations hereunder other than in connection with a Transfer to such
Permitted Transferee of Equity Interests in accordance with the provisions of
this Agreement. Any purported assignment in violation of this provision shall
be null and void ab initio.
4.7 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or two business days
after being delivered to a recognized courier (whose stated terms of delivery
are two business days or less to the destination of such notice), or five days
after being deposited in the mail or, in the case of telecopy notice, when
received, addressed as set forth on Schedule A hereto to the parties hereto,
or to such other address as may be hereafter notified by the respective
parties hereto.
4.8 Integration. This Agreement and the documents referred to herein
or delivered pursuant hereto and, in the case of a Management Securityholder,
all option, subscription, restricted stock, employment and other agreements
entered into by such Management Securityholder and any of the Company and its
Subsidiaries (the "Other Agreements"), contain the entire understanding of the
parties with respect to the subject matter hereof and thereof. There are no
agreements, representations, warranties, covenants or undertakings with
respect to the subject matter hereof and thereof other than those expressly
set forth herein and therein. This Agreement and such documents supersede all
prior agreements and understandings between the parties with respect to such
subject matter hereof and thereof. Notwithstanding anything else in this
Agreement to the contrary, if any Transfer of restricted Common Stock
permitted or required under this Agreement is not permitted under any of the
Other Agreements applicable to such restricted Common Stock, then such
Transfer shall not be permitted or required hereunder.
4.9 Severability. If one or more of the provisions, paragraphs,
words, clauses, phrases or sentences contained herein, or the application
thereof in any circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision, paragraph, word, clause, phrase or sentence in every other respect
and of the remaining provisions, paragraphs, words, clauses, phrases or
sentences hereof shall not be in any way impaired, it being intended that all
rights, powers and privileges of the parties hereto shall be enforceable to
the fullest extent permitted by law.
4.10 Counterparts. This Agreement may be executed in two or more
counterparts, and by different parties on separate counterparts each of which
shall be deemed an original, but all of which shall constitute one and the
same instrument.
4.11 Governing Law, Etc. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to contracts made
-17-
and to be performed therein, except (i) with respect to the Company and each
Subsidiary organized under the laws of the State of Delaware, for matters
directly within the purview of the General Corporation Law of the State of
Delaware (the "DGCL"), which shall be governed by the DGCL and (ii) with
respect to Subsidiaries not organized under the laws of the State of Delaware,
for matters directly within the purview of the business corporation law of the
jurisdiction of organization of such Subsidiary (the "Applicable Corporation
Law"), which shall be governed by the Applicable Corporation Law. The parties
executing this Agreement hereby (i) agree to submit to the exclusive
jurisdiction of the federal and state courts located in the Southern District
of New York in any action or proceeding arising out of or relating to this
Agreement, (ii) waive any objection to the laying of venue of any actions or
proceedings brought in any such court and any claim that such actions or
proceedings have been brought in an inconvenient forum, and (iii) agree that
service of any process, summons, notice or document by U.S. registered mail to
the address for such party specified in Section 4.7 shall be effective service
of process for any action or proceeding in New York with respect to any matter
specified above.
4.12 Additional Management Securityholders. Each Management
Securityholder on the date hereof is deemed a party hereto by the Amended Plan
or the Subsidiary Plans (as the case may be) and pursuant to the Amended Plan
or the Subsidiary Plans (as the case may be) is bound hereby. After the date
hereof, the Company shall not issue, and shall cause its Subsidiaries not to
issue, any Equity Interests to an employee of the Company or any of its
Subsidiaries, including any Affiliate of such employee, unless he, she or it
first delivers to the Company a writing, in form and substance satisfactory to
the Company, agreeing that he, she or it is bound by the terms hereof as a
Management Securityholder.
4.13 Non-Management Stockholders. Each Non-Management Stockholder is
deemed a party hereto by the Amended Plan and pursuant to the Amended Plan is
bound hereby. The Company shall not issue Common Stock to a Non-Management
Stockholder until such Non-Management Stockholder first delivers to the
Company a writing, in form and substance satisfactory to the Company,
acknowledging that such holder is bound by the terms hereof as a
Non-Management Stockholder.
-18-
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
AMERICAN HOUSEHOLD, INC.
By: /s/ Steven Isko
--------------------------------------
Name: Steven Isko
Title: Chief Legal Officer
MORGAN STANLEY SENIOR FUNDING, INC.
By: /s/ Michael Petrick
--------------------------------------
Name: Michael Petrick
Title: Managing Director
BANC OF AMERICA STRATEGIC SOLUTIONS, INC.
By: /s/ H.G. Wheelock
--------------------------------------
Name: H.G. Wheelock
Title: Managing Director
WACHOVIA BANK NATIONAL ASSOCIATION
By: /s/ Joel Thomas
--------------------------------------
Name: Joel Thomas
Title: Director
OCM OPPORTUNITIES FUND III, L.P.
By:
--------------------------------------
Name:
Title:
-19-
OCM OPPORTUNITIES FUND II, L.P.
By:
--------------------------------------
Name:
Title:
HCA SEPARATE ACCOUNT II
By:
--------------------------------------
Name:
Title:
GRYPHON DOMESTIC VI, LLC
By:
--------------------------------------
Name:
Title:
MANAGEMENT SECURITYHOLDERS (Each of the
undersigned signing individually, and not
on behalf of any other Management
Securityholder)
/s/ Jerry Levin
------------------------------------------
Name: Jerry Levin
-20-
SCHEDULE A
NOTICES
-------
If to the Company, to:
American Household, Inc.
2381 Executive Center Drive
Boca Raton, Florida 33431
Attention: Chief Legal Officer
Telecopy: (561) 912-4612
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
Wilmington, Delaware 19801
Attention: Richard L. Easton, Esq.
Telecopy: (302) 651-3001
With an additional copy to:
Simpson Thacher & Bartlett
Attention: Peter J. Gordon, Esq.
425 Lexington Avenue
New York, New York 10017
Telecopy: (212) 455-2502
If to the Securityholders, to:
Such Securityholder, at such Securityholder's address or to
such Securityholder's telephone or telecopy number reflected
in the Company's books and records.
-21-
EXHIBIT C
==============================================================================
REGISTRATION RIGHTS AGREEMENT
by and among
AMERICAN HOUSEHOLD, INC.
and
THE HOLDERS NAMED HEREIN
-----------------------------------------
Dated as of December 18, 2002
-----------------------------------------
==============================================================================
TABLE OF CONTENTS
Page
1. Definitions..............................................................1
2. Securities Act Shelf Registration on Request.............................4
(a) Shelf Registration..............................................4
(b) Effective Registration Statement................................4
3. Securities Act Registration on Request...................................5
(a) Request.........................................................5
(b) Registration of Other Securities................................6
(c) Registration Statement Form.....................................6
(d) Effective Registration Statement................................7
(e) Selection of Underwriters.......................................8
(f) Priority in Requested Registration..............................8
(g) Shelf Registrations.............................................8
4. Piggyback Registration...................................................9
5. Expenses................................................................10
6. Registration Procedures.................................................10
7. Underwritten Offerings..................................................14
(a) Requested Underwritten Offerings...............................14
(b) Piggyback Underwritten Offerings: Priority.....................15
(c) Holders of Registrable Common Stock to be Parties to
Underwriting Agreement.........................................16
(d) Holdback Agreements............................................16
8. Preparation: Reasonable Investigation...................................17
(a) Registration Statements........................................17
(b) Confidentiality................................................17
Article Title Page
------- ----- ----
9. Postponements...........................................................18
10. Indemnification.........................................................19
(a) Indemnification by the Company.................................19
(b) Indemnification by the Offerors and Sellers....................19
(c) Notices of Losses, etc.........................................20
(d) Contribution...................................................20
(e) Other Indemnification..........................................21
(f) Indemnification Payments.......................................21
11. Registration Rights to Others...........................................21
12. Adjustments Affecting Registrable Common Stock..........................21
13. Rule 144 and Rule 144A..................................................22
14. Amendments and Waivers..................................................22
15. Nominees for Beneficial Owners..........................................22
16. Assignment..............................................................23
17. Calculation of Percentage or Number of Shares of Registrable
Common Stock............................................................23
18. Termination of Registration Rights......................................23
19. Miscellaneous...........................................................23
(a) Further Assurances.............................................23
(b) Headings.......................................................24
(c) Conflicting Instructions.......................................24
(d) Remedies.......................................................24
(e) Entire Agreement...............................................24
(f) Notices........................................................24
(g) Governing Law..................................................24
(h) Severability...................................................24
ii
Article Title Page
------- ----- ----
(i) Counterparts...................................................25
20. Management Holders......................................................25
21. Non-Management Holders..................................................25
SCHEDULES:
SCHEDULE A - HOLDERS OF REGISTRABLE COMMON STOCK
SCHEDULE B - NOTICES
iii
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of December 18, 2002 (this
"Agreement"), by and among American Household, Inc., a Delaware corporation
(the "Company"), and the holders of Registrable Common Stock (as hereinafter
defined) who are signatories to this Agreement or who agree to be or otherwise
are bound by the terms hereof (the "Holders").
This Agreement is being entered into in connection with the
acquisition of Common Stock (as hereinafter defined) on the date hereof by
certain holders (the "Original Holders") pursuant to the Plan (as hereinafter
defined). Upon the issuance of the Common Stock, each Original Holder will own
the number of shares of Common Stock specified with respect to such Original
Holder in Schedule A hereto.
To induce the Original Holders to vote in favor of the Plan and to
accept the issuance of the Common Stock by the Company under the Plan, the
Company has undertaken to register Registrable Common Stock under the
Securities Act (as hereinafter defined) and to take certain other actions with
respect to the Registrable Common Stock. This Agreement sets forth the terms
and conditions of such undertaking.
In consideration of the premises and the mutual agreements set forth
herein, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein and in the recitals above shall have the following meanings:
"Affiliate" of a Person means any Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such other Person. For purposes of this
definition, "control" means the ability of one Person to direct the management
and policies of another Person.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law
to be closed.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock" means the shares of common stock, $.01 par value per
share, of the Company, as adjusted to reflect any merger, consolidation,
recapitalization, reclassification, split-up, stock dividend, rights offering
or reverse stock split made, declared or effected with respect to the Common
Stock.
"Company Indemnitee" has the meaning set forth in Section 10(a)
hereof.
"Effective Date" means the effective date of the Plan pursuant to
the terms thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, or any similar or successor
statute.
2
"Expenses" means all expenses incident to the Company's performance
of or compliance with its obligations under this Agreement, including, without
limitation, all registration, filing, listing, stock exchange and NASD fees
(including, without limitation, all fees and expenses of any "qualified
independent underwriter" required by the rules of the NASD), all fees and
expenses of complying with state securities or blue sky laws (including the
reasonable fees, disbursements and other charges of counsel for the
underwriters in connection with blue sky filings), all word processing,
duplicating and printing expenses, messenger, telephone and delivery expenses,
all rating agency fees, the fees, disbursements and other charges of counsel
for the Company and of its independent public accountants, including the
expenses incurred in connection with "cold comfort" letters required by or
incident to such performance and compliance, the fees and expenses incurred in
connection with the listing of the securities to be registered on each
securities exchange or national market system on which similar securities
issued by the Company are then listed, any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, the
reasonable fees, disbursements and other charges of one firm of counsel (per
registration statement prepared) to the holders of Registrable Common Stock
making a request pursuant to Section 2(a) or Section 3(a) hereof (selected by
the Holders holding a majority of the shares of Registrable Common Stock
covered by such registration), the fees and expenses of any special experts
retained by the Company in connection with such registration, and the fees and
expenses of other persons retained by the Company, but excluding underwriting
discounts and commissions and applicable transfer taxes, if any, which
discounts, commissions and transfer taxes shall be borne by the seller or
sellers of Registrable Common Stock in all cases; provided, that, if the
Company shall, in accordance with Section 4 or Section 9 hereof, not register
any securities with respect to which it had given written notice of its
intention to register to holders of Registrable Common Stock, notwithstanding
anything to the contrary in the foregoing, all reasonable out-of-pocket
expenses incurred by Requesting Holders in connection with such registration
(other than the reasonable fees, disbursements and other charges of counsel
other than the one firm of counsel referred to above) shall be deemed to be
Expenses.
"Holder Indemnitee" has the meaning set forth in Section 10(b)
hereof.
"Initial Shelf" has the meaning set forth in Section 3(a) hereof.
"Initiating Holders" has the meaning set forth in Section 3(a)
hereof.
"Initiating Request" has the meaning set forth in Section 3(a)
hereof.
"Loss" and "Losses" have the meanings set forth in Section 10(a)
hereof.
"Management Condition" shall mean, with respect to voting matters
under Section 12, Section 14 and Section 16 of this Agreement, that for a
period of twenty-one (21) months from the date of this Agreement, all shares
of Registrable Common Stock held by Management Holders shall be voted in the
same proportion as the shares of Registrable Common Stock voted by all
Original Holders (excluding Jerry W. Levin and Non-Management Holders).
3
"Management Holders" means Holders of Registrable Common Stock who
are (i) employees or former employees of the Company and (ii) Affiliates of
employees or former employees of the Company.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
"Non-Management Holders" means holders of Allowed Claims in Class 5
of the Plan (as such terms are defined in the Plan) issued Registrable Common
Stock pursuant to the Plan.
"Offering Documents" has the meaning set forth in Section 10(a)
hereof.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint stock company, trust, unincorporated organization,
governmental or regulatory body or subdivision thereof or other entity.
"Piggyback Requesting Holder" has the meaning set forth in Section 4
hereof.
"Plan" means the Plan of Reorganization under Chapter 11 of the
United States Bankruptcy Code for the Company, as the same may be amended,
modified or supplemented from time to time in accordance with the terms
thereof.
"Public Offering" means a public offering and sale of Common Stock
pursuant to an effective registration statement under the Securities Act.
"Registrable Common Stock" means any of the Common Stock owned by
the Holders from time to time, provided, however, that a share of Common Stock
will cease to be Registrable Common Stock after it has been sold under a
registration statement effected pursuant hereto (or, in the case of a
Management Holder, a registration statement on Form S-8 which includes a
resale prospectus on Form S-3) or pursuant to Rule 144 promulgated under the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations thereunder, or any similar or successor statute.
"Selling Holders" means the holders of Registrable Common Stock
requested to be registered pursuant hereto.
"Shelf Filing Date" has the meaning set forth in Section 2(a)
hereof.
"Shelf Registration" has the meaning set forth in Section 2(a)
hereof.
"Shelf Registration Statement" has the meaning set forth in Section
2(a) hereof.
4
"Shelf Requesting Holders" means one or more Holders (other than
Management Holders or Non-Management Holders) holding 45% or more of the
shares of Registrable Common Stock outstanding on the Shelf Request Date
(excluding shares held by Management Holders or Non-Management Holders).
"Shelf Request Date" has the meaning set forth in Section 2(a)
hereof.
"Transfer" means any transfer, sale, assignment, pledge,
hypothecation or other disposition of any interest. "Transferor" and
"Transferee" have correlative meanings.
2. Securities Act Shelf Registration on Request.
(a) Shelf Registration. Shelf Requesting Holders may request the
Company to file a shelf registration statement (a "Shelf Registration
Statement") pursuant to Rule 415 promulgated under the Securities Act (a
"Shelf Registration") providing for the sale by the Holders of any or all of
the Registrable Common Stock held by such Shelf Requesting Holders (the date
of such request, the "Shelf Request Date"). Shelf Requesting Holders may make
such request at any time after the earlier to occur of (i) the initial Public
Offering of the Company or (ii) the first anniversary of the Effective Date.
The Company shall (i) use its best efforts to file such Shelf Registration
Statement under the Securities Act at the earliest practicable date, but in
any event not later than 90 days after the Shelf Request Date (the "Shelf
Filing Date"), and (ii) use its best efforts to have such Shelf Registration
Statement thereafter declared effective by the Commission at the earliest
practicable date, but in any event not later than 90 days after the Shelf
Filing Date or, if a Shelf Registration Statement is reviewed by the Staff of
the Securities and Exchange Commission, not later than 210 days after the
Shelf Request Date. Subject to Section 9(b), the Company agrees to use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective under Rule 415 of the Securities Act until the earlier to occur of
(i) the second anniversary of the date such Shelf Registration Statement
initially is declared effective by the Commission (plus a number of Business
Days equal to the number of Business Days, if any, that the Shelf Registration
Statement is not kept effective after the initial date of its effectiveness
and prior to the second anniversary thereof), (ii) the day after the date on
which all of the Registrable Common Stock covered by the Shelf Registration
Statement has been sold pursuant to the Shelf Registration Statement or (iii)
the first date on which there shall cease to be any Registrable Common Stock
covered by such Shelf Registration Statement. The Company further agrees, if
necessary, to supplement or amend the Shelf Registration Statement, if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration or by the
Securities Act or by any other rules and regulations thereunder for shelf
registration, and the Company agrees to furnish to the Holders whose
Registrable Common Stock is included in such Shelf Registration Statement
copies of any such supplement or amendment promptly after its being issued or
filed with the Commission.
(b) Effective Registration Statement. A Shelf Registration pursuant
to Section 2(a) hereof shall not be deemed to have been effected
(i) unless a registration statement with respect thereto
has been declared effective by the Commission and remains effective
in compliance with the provisions of the Securities Act and the laws
of any state or other jurisdiction applicable
5
to the disposition of Registrable Common Stock covered by such
registration statement until such time as all of such Registrable
Common Stock have been disposed of in accordance with such
registration statement or there shall cease to be any Registrable
Common Stock covered by such Shelf Registration Statement (provided
that such period need not exceed the applicable period provided for
in Section 2(a)), or
(ii) if, after it has become effective, such registration
is subject to any stop order, injunction or other order or
requirement of the Commission or other governmental or regulatory
agency or court preventing the sale of securities under such
registration statement for any reason other than a violation of
applicable law solely by any Holder and has not thereafter become
effective.
3. Securities Act Registration on Request.
(a) Request. At any time and from time to time after the expiration
(in accordance with Section 2(a) above) or cessation of effectiveness of the
Shelf Registration Statement filed by the Company pursuant to Section 2(a)
hereof (the "Initial Shelf") and prior to the termination of the Company's
obligations hereunder pursuant to and in accordance with the terms of Section
18 hereof, one or more Holders (other than Management Holders and
Non-Management Holders, who shall have no request rights under this Section
3(a)) (the "Initiating Holders") may make a written request (the "Initiating
Request") to the Company for the registration with the Commission under the
Securities Act of all or part of such Initiating Holders' Registrable Common
Stock; provided, however, that such request shall be made by one or more
Holders (other than Management Holders and Non-Management Holders) holding at
least 10% of the outstanding shares of Registrable Common Stock, which request
shall specify the number of shares to be disposed of by such Holders and the
proposed plan of distribution therefor. Upon the receipt of any Initiating
Request for registration pursuant to this paragraph, the Company promptly
shall notify in writing all other Holders (including the Management Holders
and Non-Management Holders) of the receipt of such request and will use its
reasonable best efforts to effect, at the earliest practicable date, such
registration under the Securities Act, including a Shelf Registration, if
applicable, of
(i) the Registrable Common Stock which the Company has
been so requested to register by such Initiating Holder or Holders,
and
(ii) all other Registrable Common Stock which the Company
has been requested to register by any other Holders by written
request given to the Company within 30 days after the giving of
written notice by the Company to such other Holders of the
Initiating Request,
all to the extent necessary to permit the disposition (in accordance with
Section 3(c) hereof) of the Registrable Common Stock so to be registered;
provided, that,
(A) the Company shall not be required to effect more than
a total of six registrations pursuant to this Section 3(a) for all
Holders of Registrable Common Stock,
6
(B) if the intended method of distribution is an
underwritten Public Offering, the Company shall not be required to
effect such registration pursuant to this Section 3(a) unless such
underwriting shall be conducted on a "firm commitment" basis,
(C) if the Company shall have previously effected a
registration pursuant to Section 2, this Section 3(a) or shall have
previously effected a registration of which notice has been given to
the Holders pursuant to Section 4 hereof, the Company shall not be
required to effect any registration pursuant to this Section 3(a)
until a period of 180 days shall have elapsed from the date on which
the previous such registration ceased to be effective,
(D) any Holder whose Registrable Common Stock was to be
included in any such registration pursuant to this Section 3(a), by
written notice to the Company, may withdraw such request and, on
receipt of such notice of the withdrawal of such request from
Holders (excluding Management Holders and Non-Management Holders)
holding a percentage of Registrable Common Stock, such that the
Holders (excluding Management Holders and Non-Management Holders)
that have not elected to withdraw do not hold, in the aggregate, the
requisite percentage of the Registrable Common Stock to initiate a
request under this Section 3(a), the Company shall not effect such
registration, and
(E) the Company shall not be required to effect any
registration to be effected pursuant to this Section 3(a) unless at
least 10% of the shares of Registrable Common Stock outstanding at
the time of such request is to be included in such registration.
(b) Registration of Other Securities. Whenever the Company shall
effect a registration pursuant to Section 3(a) hereof, no securities other
than (i) Registrable Common Stock and (ii) subject to Section 3(f), Common
Stock to be sold by the Company for its own account shall be included among
the securities covered by such registration unless the Selling Holders
(excluding Management Holders and Non-Management Holders) holding not less
than a majority of the shares of Registrable Common Stock to be covered by
such registration (excluding shares held by Management Holders and
Non-Management Holders) shall have consented in writing to the inclusion of
such other securities.
(c) Registration Statement Form. Registrations under Section 3(a)
hereof shall be on such appropriate registration form prescribed by the
Commission under the Securities Act as shall be selected by the Company and as
shall permit the disposition of the Registrable Common Stock pursuant to an
underwritten offering unless the Selling Holders (excluding Management Holders
and Non-Management Holders) holding at least a majority of the shares of
Registrable Common Stock requested to be included in such registration
statement (excluding shares held by Management Holders and Non-Management
Holders) determine otherwise, in which case pursuant to the method of
distribution determined by such Selling Holders. The Company agrees to include
in any such registration statement filed pursuant to Section 3(a) hereof all
information which the Selling Holders (excluding Management Holders and
Non-Management Holders) holding a majority of shares of the Registrable Common
Stock covered by such registration
7
statement (excluding shares held by Management Holders and Non-Management
Holders) effected pursuant hereto, upon advice of counsel, shall reasonably
request. The Company may, if permitted by law, effect any registration
requested under this Section 3 by the filing of a registration statement on
Form S-3 or, if Form S-3 is not then available to the Company, on Form S-1 (or
any successors to such forms).
(d) Effective Registration Statement. A registration requested
pursuant to Section 3(a) hereof shall not be deemed to have been effected
(i) unless a registration statement with respect thereto
has been declared effective by the Commission and remains effective
in compliance with the provisions of the Securities Act and the laws
of any state or other jurisdiction applicable to the disposition of
Registrable Common Stock covered by such registration statement
until such time as all of such Registrable Common Stock have been
disposed of in accordance with such registration statement or there
shall cease to be any Registrable Common Stock covered by such
registration statement, provided, that, except with respect to any
Shelf Registration, such period need not exceed 90 days, and,
provided, further, that with respect to any Shelf Registration, such
period need not extend beyond the period provided for in Section
3(g) hereof,
(ii) if, after it has become effective, such registration
is subject to any stop order, injunction or other order or
requirement of the Commission or other governmental or regulatory
agency or court for any reason other than a violation of applicable
law solely by any Selling Holder (excluding Management Holders and
Non-Management Holders) preventing or impairing the sale of
securities under such registration statement and has not thereafter
become effective, it being acknowledged and agreed that, if sales
are prevented or impaired under any such registration statement as a
result of a violation of applicable law by a Management Holder or a
Non-Management Holder, the Selling Holders entitled to make a demand
for registration under Section 3(a) shall be entitled to make a
demand for registration under Section 3(a) as though such
registration statement had not been filed (provided that no Selling
Holder other than a Management Holder or a Non-Management Holder
shall have violated applicable law and thereby caused sales under
such registration statement to be prevented or impaired), but in no
event shall any such Selling Holder be entitled to, nor shall any
such Selling Holder make a claim for, damages or any other remedy
against the Company solely as a result thereof, or
(iii) if, in the case of an underwritten offering, the
conditions to closing specified in an underwriting agreement to
which the Company is a party are not satisfied or waived other than
by reason of any breach or failure by any Selling Holder (excluding
Management Holders and Non-Management Holders), or are not otherwise
waived, it being acknowledged and agreed that, if such breach or
failure is attributable to a Management Holder or a Non-Management
Holder, the Selling Holders entitled to make a demand for
registration under Section 3(a) shall be entitled to make a demand
for registration under Section 3(a) as though such registration
statement had not been filed (provided that such breach or failure
is not attributable to a Selling Holder other than a Management
Holder or a Non-Management Holder), but in no event shall any such
8
Selling Holder be entitled to, nor shall any such Selling Holder
make a claim for, damages or any other remedy against the Company
solely as a result thereof.
The Holders of Registrable Common Stock to be included in a
registration statement (pursuant to Section 3(a) (excluding Management Holders
and Non-Management Holders) may at any time terminate such request for
registration in accordance with Section 3(a)(ii)(D).
(e) Selection of Underwriters. The underwriter or underwriters of
each underwritten offering, if any, of the Registrable Common Stock to be
registered pursuant to Section 2(a) or Section 3(a) hereof shall be mutually
selected by the Selling Holders (excluding Management Holders and
Non-Management Holders) owning at least a majority of the shares of
Registrable Common Stock to be registered (excluding shares held by Management
Holders and Non-Management Holders) and the Company. In the case of any
offering initiated by the Company or any other offering not effected pursuant
to Section 2(a) or Section 3(a) hereof, including any offering pursuant to
which the holders of Registrable Common Stock shall have piggyback rights
pursuant to Section 4 hereof, the Company shall select the underwriter or
underwriters for such offering in its sole discretion.
(f) Priority in Requested Registration. If a registration under
Section 3 hereof involves an underwritten Public Offering, and the managing
underwriter of such underwritten offering shall advise the Company in writing
(with a copy to each Selling Holder requesting that Registrable Common Stock
be included in such registration statement) that, in its opinion, the number
of shares of Registrable Common Stock requested to be included in such
registration exceeds the number of such securities that can be sold in such
offering within a price range stated to such managing underwriter by Selling
Holders (excluding Management Holders and Non-Management Holders) owning at
least a majority of the shares of Registrable Common Stock requested to be
included in such registration (excluding shares held by Management Holders and
Non-Management Holders) to be acceptable to such Selling Holders, the Company
shall include in such registration, to the extent of the number of shares
which the Company is advised can be sold in such offering, all Registrable
Common Stock requested to be registered pursuant to Section 3(a) hereof,
first, pro rata among the Selling Holders (excluding Management Holders and
Non-Management Holders) requested to be included in such registration on the
basis of the number of shares of Registrable Common Stock requested to be
registered by all such Selling Holders, and second, if additional shares may
be sold based on the opinion of the managing underwriter, pro rata among the
Management Holders and Non-Management Holders and then, pro rata among the
Company and any other Person.
(g) Shelf Registrations. If the first demand made pursuant to
Section 3(a) hereof is for a Shelf Registration, the period for which such
Shelf Registration Statement must remain effective need not extend beyond one
year from the date on which such Shelf Registration Statement initially is
declared effective by the Commission and the period for which any subsequent
Shelf Registration Statement must remain effective need not extend beyond nine
months from the date on which such Shelf Registration Statement initially is
declared effective by the Commission (plus, in each case, a number of Business
Days equal to the number of Business Days, if any, that the Shelf Registration
Statement is not kept effective after the initial
9
date of its effectiveness and prior to such first-year or nine-month, as the
case may be, anniversary thereof).
4. Piggyback Registration. If the Company, at any time when a Shelf
Registration Statement covering all outstanding shares of Registrable Common
Stock is not effective, proposes to register Common Stock under the Securities
Act by registration on any forms other than Form S-4 or S-8 (or any successor
or similar form(s)), whether or not pursuant to registration rights granted to
other holders of its securities and whether or not for sale for its own
account, it shall give prompt written notice to all of the Holders of its
intention to do so and of such Holders' rights (if any) under this Section 4,
which notice, in any event, shall be given at least 30 days prior to such
proposed registration. Upon the written request of any Holder receiving notice
of such proposed registration that is a holder of Registrable Common Stock (a
"Piggyback Requesting Holder") made within 20 days after the receipt of any
such notice (10 days if the Company states in such written notice or gives
telephonic notice to the relevant securityholders, with written confirmation
to follow promptly thereafter, stating that (i) such registration will be on
Form S-3 and (ii) such shorter period of time is required because of a planned
filing date), which request shall specify the Registrable Common Stock
intended to be disposed of by such Piggyback Requesting Holder and the minimum
offering price per share at which the Holder is willing to sell its
Registrable Common Stock, the Company shall, subject to Section 7(b) hereof,
effect the registration under the Securities Act of all Registrable Common
Stock which the Company has been so requested to register by the Piggyback
Requesting Holders thereof; provided, that,
(A) prior to the effective date of the registration
statement filed in connection with such registration, promptly
following receipt of notification by the Company from the managing
underwriter (if an underwritten offering) of a range of prices at
which such securities are likely to be sold, the Company shall so
advise each Piggyback Requesting Holder of such price, and if such
price is below the minimum price which shall be acceptable to such
Piggyback Requesting Holder, such Piggyback Requesting Holder shall
then have the right irrevocably to withdraw its request to have its
Registrable Common Stock included in such registration statement, by
delivery of written notice of such withdrawal to the Company within
three Business Days of its being advised of such price, without
prejudice to the rights of any such Holder or Holders to include
Registrable Common Stock in any future registration (or
registrations) pursuant to this Section 4 or to cause such
registration to be effected as a registration under Section 3(a)
hereof, as the case may be;
(B) if at any time after giving written notice of its
intention to register any securities and prior to the effective date
of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to
register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to
each Piggyback Requesting Holder and (i) in the case of a
determination not to register, shall be relieved of its obligation
to register any Registrable Common Stock in connection with such
registration (but not from any obligation of the Company to pay the
Expenses in connection therewith), without prejudice, however, to
the rights of
10
any Holder to include Registrable Common Stock in any future
registration (or registrations) pursuant to this Section 4 or, if
applicable, to cause such registration to be effected as a
registration under Section 3(a) hereof, as the case may be, and (ii)
in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Common Stock, for the
same period as the delay in registering such other securities; and
(C) if such registration was initiated by the Company for
its own account and involves an underwritten offering, each
Piggyback Requesting Holder shall sell its Registrable Common Stock
on the same terms and conditions as those that apply to the Company,
and the underwriters of each such underwritten offering shall be a
nationally recognized underwriter (or underwriters) selected by the
Company in its sole discretion.
No registration effected under this Section 4 shall relieve the
Company of its obligation to effect any registration upon request under
Section 3(a) hereof and no registration effected pursuant to this Section 4
shall be deemed to have been effected pursuant to Section 3(a) hereof.
5. Expenses. The Company shall pay all Expenses in connection with
any registration initiated pursuant to Sections 2(a), 3(a) or 4 hereof,
whether or not such registration shall become effective and whether or not all
or any portion of the Registrable Common Stock originally requested to be
included in such registration are ultimately included in such registration.
6. Registration Procedures. If and whenever the Company is required
to effect any registration under the Securities Act as provided in Sections
2(a), 3(a) and 4 hereof, the Company shall, as expeditiously as possible:
(a) prepare and file with the Commission (promptly and, in
the case of any registration pursuant to Section 3(a), in any event
on or before the date that is (i) 90 days after the end of the
period within which requests for registration may be given to the
Company or (ii) if, as of such ninetieth day, the Company does not
have the audited financial statements required to be included in the
registration statement, 30 days after the receipt by the Company
from its independent public accountants of such audited financial
statements, which the Company shall use its reasonable best efforts
to obtain as promptly as practicable) the requisite registration
statement to effect such registration and thereafter use its
reasonable best efforts to cause such registration statement to
become and remain effective; provided, however, that the Company may
discontinue any registration of its securities that are not shares
of Registrable Common Stock (and, under the circumstances specified
in Sections 4 and 9(b) hereof, its securities that are shares of
Registrable Common Stock) at any time prior to the effective date of
the registration statement relating thereto;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions
11
of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Common Stock covered by such
registration statement until such time as all of such Registrable
Common Stock has been disposed of in accordance with the method of
disposition set forth in such registration statement; provided,
that, except with respect to any Shelf Registration, such period
need not extend beyond 90 days after the effective date of the
registration statement; and provided, further, that with respect to
the Initial Shelf, such period need not extend beyond the applicable
period provided for in Section 2(a) hereof and, with respect to any
Shelf Registration other than the Initial Shelf, such period need
not exceed the applicable period provided for in Section 3(g)
hereof;
(c) furnish to each seller of Registrable Common Stock
covered by such registration statement and each underwriter, if any,
such number of copies of such drafts and final conformed versions of
such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits and any
documents incorporated by reference), such number of copies of such
drafts and final versions of the prospectus contained in such
registration statement (including each preliminary prospectus and
any summary prospectus) and any other prospectus filed under Rule
424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, as the sellers of a
majority of the Registrable Common Stock covered by such
registration statement or any underwriter may reasonably request in
writing;
(d) use its reasonable best efforts (i) to register or
qualify all Registrable Common Stock and other securities, if any,
covered by such registration statement under such other securities
or blue sky laws of such states or other jurisdictions of the United
States of America as the sellers of Registrable Common Stock covered
by such registration statement shall reasonably request in writing,
(ii) to keep such registration or qualification in effect for so
long as such registration statement remains in effect and (iii) to
take any other action that may be necessary or reasonably advisable
to enable such sellers to consummate the disposition in such
jurisdictions of the securities to be sold by such sellers, except
that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this
subsection (d) be obligated to be so qualified, to subject itself to
taxation in such jurisdiction or to consent to general service of
process in any such jurisdiction;
(e) use its reasonable best efforts to cause all
Registrable Common Stock covered by such registration statement to
be registered with or approved by such other federal or state
governmental agencies or authorities as may be necessary upon the
advice of counsel to the Company and counsel to the seller or
sellers of Registrable Common Stock to enable the seller or sellers
thereof to consummate the disposition of such Registrable Common
Stock;
(f) use its reasonable best efforts to obtain and, if
obtained, furnish to each seller of Registrable Common Stock, and
each such seller's underwriters, if any, a signed
12
(i) opinion of counsel for the Company, dated the
effective date of such registration statement (and, if such
registration involves an underwritten offering, dated the date of
the closing under the underwriting agreement and addressed to the
underwriters), reasonably satisfactory (based on the customary form
and substance of opinions of issuers' counsel customarily given in
such an offering) in form and substance to such seller, and
(ii) "cold comfort" letter, dated the effective date of
such registration statement (and, if such registration involves an
underwritten offering, dated the date of the closing under the
underwriting agreement and addressed to the underwriters) and signed
by the independent public accountants who have certified the
Company's financial statements included or incorporated by reference
in such registration statement, reasonably satisfactory (based on
the customary form and substance of "cold comfort" letters of
issuers' independent public accountant customarily given in such an
offering) in form and substance to such seller,
in each case, covering substantially the same matters with respect
to such registration statement (and the prospectus included therein)
and, in the case of the accountants' comfort letter, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in
accountants' comfort letters delivered to underwriters in such types
of offerings of securities;
(g) notify each seller of Registrable Common Stock and
other securities covered by such registration statement, if any, at
any time when a prospectus relating thereto is required to be
delivered under the Securities Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus included
in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made, and, at the written request of any such
seller of Registrable Common Stock, promptly prepare and furnish to
it a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus, as
supplemented or amended, shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading
in the light of the circumstances under which they were made;
(h) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of a
registration statement relating to the Registrable Common Stock at
the earliest possible moment;
(i) otherwise comply with all applicable rules and
regulations of the Commission and any other governmental agency or
authority having jurisdiction over the offering, and make available
to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months,
but not more than eighteen months, beginning with the first full
calendar month after the effective date of
13
such registration statement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder, and furnish to each seller of Registrable
Common Stock and to the managing underwriter, if any, at least ten
days prior to the filing thereof (or such shorter time period
reasonably necessary in light of applicable legal requirements) a
copy of any amendment or supplement to such registration statement
or prospectus;
(j) use its reasonable best efforts to cause all
Registrable Common Stock covered by a Registration Statement (i) to
be listed on a national securities exchange on which similar
securities issued by the Company are then listed, if the listing of
such Registrable Common Stock is then permitted under the rules of
such exchange, or (ii) if the Company is not required pursuant to
clause (i) above to list Registrable Common Stock on a national
securities exchange, use its reasonable best efforts to list the
Registrable Common Stock on the New York Stock Exchange or secure
designation of all Registrable Common Stock as a NASDAQ "national
market system security" within the meaning of Rule 11Aa2-1 of the
Commission or, failing that, to secure NASDAQ authorization for the
Registrable Common Stock and, without limiting the generality of the
foregoing, use its reasonable best efforts to arrange for at least
two market makers to register with the NASD as such with respect to
such Registrable Common Stock;
(k) provide a transfer agent and registrar for the
Registrable Common Stock covered by a Registration Statement no
later than the effective date thereof;
(l) enter into such agreements (including an underwriting
agreement in customary form) and take such other actions as the
Holders holding a majority of the shares of Registrable Common Stock
covered by such registration statement shall reasonably request in
order to expedite or facilitate the disposition of such Registrable
Common Stock, including customary indemnification;
(m) if requested by the managing underwriter(s) or the
Holders holding a majority of the shares of Registrable Common Stock
being sold in connection with an underwritten offering, promptly
incorporate in a prospectus supplement or post-effective amendment
such information provided to the Company in writing as the managing
underwriter(s) and the Holders of a majority of the Registrable
Common Stock being sold agree should be included therein relating to
the plan of distribution with respect to such Registrable Common
Stock, including without limitation, information with respect to the
number of shares of Registrable Common Stock being sold to such
underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten
offering of the Registrable Common Stock to be sold in such
offering; and make all required filings of such prospectus
supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such prospectus supplement or
post-effective amendment; and
(n) cooperate with the Selling Holders of Registrable
Common Stock and the managing underwriter(s), if any, to facilitate
the timely preparation and delivery of certificates representing
Registrable Common Stock to be sold and not bearing any restrictive
legends; and enable such Registrable Common Stock to be in such
share
14
amounts and registered in such names as the managing underwriter(s)
or, if none, the Selling Holders holding a majority of the shares of
Registrable Common Stock being sold, may request at least three
business days prior to any sale of Registrable Common Stock to the
underwriters;
As a condition to the obligations of the Company to complete any
registration pursuant to this Agreement with respect to the Registrable Common
Stock of a Holder, such Holder must furnish to the Company in writing such
information regarding itself, the Registrable Common Stock held by it and the
intended methods of disposition of the Registrable Common Stock held by it as
is necessary to effect the registration of such Holders' Registrable Common
Stock and is requested in writing by the Company. At least thirty days prior
to the first anticipated filing date of a Registration Statement for any
registration under this Agreement, the Company will notify in writing each
Holder of the information referred to in the preceding sentence which the
Company is requesting from that Holder whether or not such Holder has elected
to have any of its Registrable Common Stock included in the registration
statement. If, within ten days prior to the anticipated filing date, the
Company has not received the requested information from a Holder, then the
Company may file the registration statement without including Registrable
Common Stock of that Holder.
Each Holder agrees that as of the date that a final prospectus is
made available to it for distribution to prospective purchasers of Registrable
Common Stock it shall cease to distribute copies of any preliminary prospectus
prepared in connection with the offer and sale of such Registrable Common
Stock. Each Holder further agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in subsection (g)
of this Section 6, such Holder shall forthwith discontinue such Holder's
disposition of Registrable Common Stock pursuant to the registration statement
and prospectus relating to such Registrable Common Stock until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated
by subsection (g) of this Section 6 and, if so directed by the Company, shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Holder's possession of the prospectus
relating to such Registrable Common Stock at the time of receipt of such
notice. If any event of the kind described in subsection (g) of this Section 6
occurs and such event is the fault solely of a Holder (or Holders), such
Holder (or Holders) shall pay all Expenses attributable to the preparation,
filing and delivery of any supplemented or amended prospectus contemplated by
subsection (g) of this Section 6.
7. Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
underwriters in connection with a request for a registration under Section 3
hereof, the Company shall enter into a firm commitment underwriting agreement
with such underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to the Company and a majority of the
Selling Holders whose Registrable Common Stock is to be included in such
registration, and the underwriters and to contain such representations and
warranties by the Company and the Selling Holders and such other terms as are
customary in agreements of that type, including, without limitation,
indemnification and contribution to the effect and to the extent provided in
Section 10 hereof.
15
(b) Piggyback Underwritten Offerings: Priority.
(i) If the Company proposes to register any of its
securities under the Securities Act for its own account as
contemplated by Section 4 hereof and such securities are to be
distributed by or through one or more underwriters, and if the
managing underwriter of such underwritten offering shall advise the
Company in writing (with a copy to the Piggyback Requesting Holders)
that if all the Registrable Common Stock requested to be included in
such registration were so included, in its opinion, the number and
type of securities proposed to be included in such registration
would exceed the number and type of securities which the managing
underwriter believes could be sold in such offering within a price
range acceptable to the Company (such writing to state the basis of
such opinion and the approximate number and type of securities which
the managing underwriter believes may be included in such offering
without such effect), then the Company shall include in such
registration pursuant to Section 4, to the extent of the number and
type of securities which the Company is so advised the managing
underwriter believes can be sold in such offering, (i) first,
securities that the Company proposes to issue and sell for its own
account, (ii) second, Registrable Common Stock requested to be
registered by Piggyback Requesting Holders pursuant to Section 4
hereof, pro rata among the Piggyback Requesting Holders on the basis
of the number of shares of Registrable Common Stock requested to be
registered by all such Piggyback Requesting Holders and (iii) third,
other securities, if any.
(ii) In the case of any other registration contemplated by
Section 4 involving an underwriting Public Offering, if the managing
underwriter of such underwritten offering shall advise the Company
in writing (with a copy to the Piggyback Requesting Holders) that if
all Registrable Common Stock requested to be included in such
registration were so included, in its opinion, the number and type
of securities proposed to be included in such registration would
exceed the number and type of securities which the managing
underwriter believes could be sold in such offering within a price
range stated to such managing underwriter by Selling Holders owning
at least a majority of the shares of Registrable Common Stock
requested to be included in such registration to be acceptable to
such Selling Holders (such writing to state the basis of such
opinion and the approximate number and type of securities which the
managing underwriter believes may be included in such offering
without such effect), then the Company shall include in such
registration pursuant to Section 4, to the extent of the number and
type of securities which the Company is so advised the managing
underwriter believes can be sold in such offering, (i) first,
Registrable Common Stock requested to be registered by Piggyback
Requesting Holders pursuant to Section 4 hereof, pro rata among the
Piggyback Requesting Holders on the basis of the number of shares of
Registrable Common Stock requested to be registered by all such
Piggyback Requesting Holders, (ii) securities that the Company
proposed to issue and sell for its own account and (iii) third,
other securities.
Any Holder may withdraw its request to have all or any portion of
its Registrable Common Stock included in any such offering by notice to the
Company within 10 Business Days after receipt of a copy of a notice from the
managing underwriter pursuant to this Section 7(b).
16
(c) Holders of Registrable Common Stock to be Parties to
Underwriting Agreement. The Holders of Registrable Common Stock to be
distributed by underwriters in an underwritten offering contemplated by
subsections (a) or (b) of this Section 7 shall be parties to the underwriting
agreement between the Company and such underwriters and any such Holder, at
its option, may reasonably require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such Holders (except to the extent any such provision contradicts the terms of
this Agreement) and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holders. No such Holder shall
be required to make any representations or warranties to or agreements with
the Company or the underwriters other than representations, warranties or
agreements regarding such Holder, such Holder's Registrable Common Stock and
such Holder's intended method of distribution.
(d) Holdback Agreements. Each Holder agrees, unless otherwise agreed
to by the managing underwriter for any underwritten offering pursuant to this
Agreement, not to effect any sale or distribution of any equity securities of
the Company or securities convertible into or exchangeable or exercisable for
equity securities of the Company, including any sale under Rule 144 under the
Securities Act, during the 10 days prior to the date on which an underwritten
registration of Registrable Common Stock pursuant to Section 2(a), 3 or 4
hereof has become effective and until the earlier of (a) the date on which all
Registrable Common Stock to be sold pursuant to such underwritten registration
has been sold by the underwriters and (b) 180 days after the effective date of
such underwritten registration or such shorter period of time acceptable to
the managing underwriter of such underwritten offering, if any, except as part
of such underwritten registration or to the extent that such Holder is
prohibited by applicable law from agreeing to withhold securities from sale or
is acting in its capacity as a fiduciary or an investment adviser. Without
limiting the scope of the term "fiduciary," a Holder shall be deemed to be
acting as a fiduciary or an investment adviser if its actions or the
securities proposed to be sold are subject to the Employee Retirement Income
Security Act of 1974, as amended, the Investment Company Act of 1940, as
amended, or the Investment Advisers Act of 1940, as amended, or if such
securities are held in a separate account under applicable insurance law or
regulation.
The Company agrees (i) not to effect any Public Offering or
distribution of any equity securities of the Company, or securities
convertible into or exchangeable or exercisable for equity securities of the
Company (except pursuant to registrations on Form S-4 or Form S-8 or any
successor thereto), during the 10 days prior to the date on which any
underwritten registration pursuant to Section 2(a), 3 or 4 hereof has become
effective and until the earlier of (a) the date on which all Registrable
Common Stock to be sold pursuant to such underwritten registration has been
sold by the underwriters and (b) 180 days (or such shorter period of time
approved in writing by the managing underwriter of such underwritten offering,
if any), after the effective date of such underwritten registration, except as
part of such underwritten registration, and (ii) to cause each holder of any
equity securities, or securities convertible into or exchangeable or
exercisable for equity securities, in each case, acquired from the Company at
any time on or after the date of this Agreement (other than in a Public
Offering), to agree not to effect any Public Offering or distribution of such
securities, during such period (or such shorter
17
period of time approved in writing by the managing underwriter of such
underwritten offering, if any).
8. Preparation: Reasonable Investigation.
(a) Registration Statements. In connection with the preparation and
filing of each registration statement under the Securities Act pursuant to
this Agreement, the Company shall (i) give representatives (designated to the
Company in writing) of each Holder or group of Holders holding at least 20% of
the shares of Registrable Common Stock registered under such registration
statement, the underwriters, if any, and one firm of counsel, one firm of
accountants and one firm of other agents retained on behalf of all
underwriters and one firm of counsel, one firm of accountants and one firm of
other agents retained by Holders (excluding Non-Management Holders) holding a
majority of the shares of Registrable Common Stock covered by such
registration statement (excluding shares held by Management Holders and
Non-Management Holders) on behalf of all Holders of Registrable Common Stock
registered under such registration statement, the reasonable opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, (ii) upon reasonable advance notice to the Company, give
each of them such reasonable access to all financial and other records,
corporate documents and properties of the Company and its subsidiaries, as
shall be necessary, in the reasonable opinion of such Holders' and such
underwriters' counsel, to conduct a reasonable due diligence investigation for
purposes of the Securities Act, and (iii) upon reasonable advance notice to
the Company, provide such reasonable opportunities to discuss the business of
the Company with its officers, directors, employees and the independent public
accountants who have certified its financial statements as shall be necessary,
in the reasonable opinion of such Holders' and such underwriters' counsel, to
conduct a reasonable due diligence investigation for purposes of the
Securities Act.
(b) Confidentiality. Each Holder of Registrable Common Stock shall
maintain the confidentiality of any confidential information received from or
otherwise made available by the Company to such Holder of Registrable Common
Stock. Information that (i) is or becomes available to a Holder of Registrable
Common Stock from a public source other than as a result of a disclosure by
such Holder or any of its Affiliates, (ii) is disclosed to a Holder of
Registrable Common Stock by a third-party source who the Holder of Registrable
Common Stock reasonably believes is not bound by an obligation of
confidentiality to the Company or (iii) is or becomes required to be disclosed
by a Holder of Registrable Common Stock by law, including by court order,
shall not be deemed to be confidential information for purposes of this
Agreement. If any Holder or any such Holder's representative is requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process by any
government or governmental agencies or authority or by law or regulation) to
disclose any such confidential information, such Holder shall promptly notify
the Company of such request or requirement so that the Company may seek a
protective order or other appropriate remedy. If such protective order or
other remedy is not obtained, such Holder and such Holders' representative
will furnish only that portion of the confidential information which such
Holder or its representative is advised by its counsel is legally required to
be disclosed and reasonably cooperate with the Company, at the Company's sole
cost and expense, with any reasonable action of the Company to obtain a
protective order or other reasonable
18
assurance that confidential treatment will be accorded the confidential
information. The Holders of Registrable Common Stock shall not grant access,
and the Company shall not be required to grant access, to information under
this Section 8 to any Person who will not agree to maintain the
confidentiality (to the same extent a Holder is required to maintain
confidentiality) of any confidential information received from or otherwise
made available to it by the Company or the holders of Registrable Common Stock
under this Agreement.
9. Postponements.
o) If the Company shall fail to file any registration statement to
be filed pursuant to a request for registration under Section 3(a) hereof, the
Holders requesting such registration shall have the right to withdraw the
request for registration if such withdrawal shall be made by Holders of Common
Stock (excluding Management Holders and Non-Management Holders) holding an
amount of Common Stock such that the Holders (excluding Management Holders and
Non-Management Holders) that have not elected to withdraw do not hold the
requisite percentage of shares of Common Stock to initiate a request under
Section 3. Any such withdrawal shall be made by giving written notice to the
Company within 20 days after, in the case of a request pursuant to Section
3(a) hereof, the date on which a registration statement would otherwise have
been required to have been filed with the Commission under clause (i) of
Section 6 (a) hereof (i.e., 20 days after the date that is 90 days after the
conclusion of the period within which requests for registration may be given
to the Company, or, if, as of such ninetieth day, the Company does not have
the audited financial statements required to be included in the registration
statement, 30 days after the receipt by the Company from its independent
public accountants of such audited financial statements). In the event of such
withdrawal, the request for registration shall not be counted for purposes of
determining the number of registrations to which Holders are entitled pursuant
to Section 3 hereof. The Company shall pay all Expenses incurred in connection
with a request for registration withdrawn pursuant to this paragraph.
p) The Company shall not be obligated to file any registration
statement, or file any amendment or supplement to any registration statement,
and may suspend the registration process and/or any Selling Holder's ability
to use a prospectus, at any time (but not to exceed one time in any
twelve-month period) when the Company, in the good faith judgment of its Board
of Directors, reasonably believes that the continuation of the registration
process thereof at the time requested would adversely affect a pending or
proposed significant financing or a significant acquisition, merger,
recapitalization, consolidation, reorganization or similar transaction, or
negotiations, discussions or pending proposals with respect thereto, or would
require the disclosure of material non-public information that, in the good
faith judgment of the Board of Directors, would have a material adverse effect
on the Company and its subsidiaries taken as a whole or a material adverse
effect on any significant subsidiary (as defined in Rule 12b-2 under the
Exchange Act). The filing of a registration statement, or any amendment or
supplement thereto, by the Company cannot be deferred, and the Selling
Holders' rights to make sales pursuant to an effective registration statement
cannot be suspended, pursuant to the provisions of the preceding sentence for
more than ten days after the abandonment or consummation of any of the
foregoing proposals or transactions or for more than 120 days after the date
of the Board's determination referenced in the preceding sentence. If the
Company suspends the sellers' rights to make sales pursuant hereto, the
applicable registration period shall be extended by the number of days of such
suspension.
19
10. Indemnification.
(a) Indemnification by the Company. In connection with any
registration statement filed by the Company pursuant to Section 2(a), 3(a) or
4 hereof, to the fullest extent permitted by law the Company shall, and hereby
agrees to, indemnify and hold harmless, each Holder and seller of any
Registrable Common Stock covered by such registration statement and each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls (within the meaning of
the Exchange Act) such Holder or seller or any such underwriter, and their
respective stockholders, directors, officers, employees, partners, agents and
Affiliates (each, a "Company Indemnitee" for purposes of this Section 10(a)),
against any losses, claims, damages, liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof and whether or not such
Indemnified Party is a party thereto), joint or several, and expenses,
including, without limitation, the reasonable fees, disbursements and other
charges of legal counsel and reasonable costs of investigation, to which such
Company Indemnitee may become subject under the Securities Act or otherwise
(collectively, a "Loss" or "Losses"), insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered or otherwise offered or sold under the Securities
Act or otherwise, any preliminary prospectus, final prospectus or summary
prospectus related thereto, or any amendment or supplement thereto
(collectively, "Offering Documents"), or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein in the light of the circumstances in which they
were made not misleading, or any violation by the Company of any federal or
state law, rule or regulation applicable to the Company and relating to action
required of or inaction by the Company in connection with any such
registration; provided, that, the Company shall not be liable in any such case
to the extent that any such Loss arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Offering Documents in reliance upon and in conformity with information
furnished to the Company in a writing duly executed by such Company Indemnitee
specifically stating that it is expressly for use therein; and provided,
further, that the Company shall not be liable to any Person who participates
as an underwriter in the offering or sale of Registrable Common Stock or any
other person, if any, who controls (within the meaning of the Exchange Act)
such underwriter, in any such case to the extent that any such Loss arises out
of such Person's failure to send or give a copy of the final prospectus
(including any documents incorporated by reference therein), as the same may
be then supplemented or amended, to the Person asserting an untrue statement
or alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Common Stock to such Person if
such statement or omission was corrected in such final prospectus. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Company Indemnitee and shall
survive the transfer of such securities by such Company Indemnitee.
(b) Indemnification by the Offerors and Sellers. In connection with
any registration statement filed by the Company pursuant to Section 2(a), 3(a)
or 4 hereof in which a Holder has registered for sale Registrable Common
Stock, each such Holder or seller of Registrable Common Stock shall, and
hereby agrees to, indemnify and hold harmless to the fullest extent permitted
by law the Company and each of its directors, officers, employees, agents,
partners, stockholders, Affiliates and each other Person, if any, who controls
(within the
20
meaning of the Exchange Act) the Company and each other seller and such
seller's employees, directors, officers, stockholders, partners, agents and
Affiliates (each, a "Holder Indemnitee" for purposes of this Section 10(b)),
against all Losses insofar as such Losses arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
any Offering Documents (or any document incorporated by reference therein) or
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein in the light of
circumstances in which they were made not misleading, if such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with information furnished to the Company in a
writing duly executed by such Holder or seller of Registrable Common Stock
specifically stating that it is expressly for use therein; provided, however,
that the liability of such indemnifying party under this Section 10(b) shall
be limited to the amount of the net proceeds received by such indemnifying
party in the sale of Registrable Common Stock giving rise to such liability.
Such indemnity shall remain in full force and effect, regardless of any
investigation made by or on behalf of the Holder Indemnitee and shall survive
the transfer of such securities by such indemnifying party.
(c) Notices of Losses, etc. Promptly after receipt by an indemnified
party of written notice of the commencement of any action or proceeding
involving a Loss referred to in the preceding subsections of this Section 10,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
Section 10, except to the extent that the indemnifying party is materially and
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, the indemnifying party shall be entitled
to participate in and, unless in such indemnified party's reasonable judgment
a conflict of interest between such indemnified and indemnifying parties may
exist in respect of such Loss, to assume and control the defense thereof, in
each case at its own expense, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after its assumption of the
defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties arises
in respect of such claim after the assumption of the defense thereof. No
indemnifying party shall be liable for any settlement of any such action or
proceeding effected without its written consent, which shall not be
unreasonably withheld. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such Loss or which requires action on the part of such
indemnified party or otherwise subjects the indemnified party to any
obligation or restriction to which it would not otherwise be subject.
(d) Contribution. If the indemnification provided for in this
Section 10 shall for any reason be unavailable to an indemnified party under
subsection (a) or (b) of this Section 10 in respect of any Loss, then, in lieu
of the amount paid or payable under subsection (a) or (b) of
21
this Section 10, the indemnified party and the indemnifying party under
subsection (a) or (b) of this Section 10 shall contribute to the aggregate
Losses (including legal or other expenses reasonably incurred in connection
with investigating the same) (i) in such proportion as is appropriate to
reflect the relative fault of the Company and the prospective sellers of
Registrable Common Stock covered by the registration statement which resulted
in such Loss or action in respect thereof, with respect to the statements,
omissions or action which resulted in such Loss or action in respect thereof,
as well as any other relevant equitable considerations, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and such prospective sellers, on the
other hand, from their sale of Registrable Common Stock; provided, that, for
purposes of this clause (ii), the relative benefits received by the
prospective sellers shall be deemed not to exceed the amount received by such
sellers. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. The
obligations, if any, of the selling holders of Registrable Common Stock to
contribute as provided in this subsection (d) are several in proportion to the
relative value of their respective Registrable Common Stock covered by such
registration statement and not joint. In addition, no Person shall be
obligated to contribute hereunder any amounts in payment for any settlement of
any action or Loss effected without such Person's consent, which shall not be
unreasonably withheld.
(e) Other Indemnification. The Company and, in connection with any
registration statement filed by the Company pursuant to Section 2(a), each
Holder or seller, shall, and, in connection with any registration statement
filed by the Company pursuant to Section 3(a) or 4, each Holder or seller who
has registered for sale Registrable Common Stock, shall, with respect to any
required registration or other qualification of securities under any Federal
or state law or regulation of any governmental authority other than the
Securities Act, indemnify Holder Indemnitees and Company Indemnitees,
respectively, against Losses, or, to the extent that indemnification shall be
unavailable to a Holder Indemnitee or Company Indemnitee, contribute to the
aggregate Losses of such Holder Indemnitee or Company Indemnitee in a manner
similar to that specified in the preceding subsections of this Section 10
(with appropriate modifications).
(f) Indemnification Payments. The indemnification and contribution
required by this Section 10 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when any
Loss is incurred and is due and payable.
11. Registration Rights to Others.
If the Company shall at any time hereafter provide to any holder of
any securities of the Company rights with respect to the registration of such
securities under the Securities Act or the Exchange Act, such rights shall not
be in conflict with or adversely affect any of the rights provided to the
holders of Registrable Common Stock in, or conflict (in a manner that
adversely affects holders of Registrable Common Stock) with any other
provisions included in, this Agreement.
12. Adjustments Affecting Registrable Common Stock.
22
Without the written consent of Holders ((i) subject to the
Management Condition and (ii) excluding Non-Management Holders) of a majority
of the outstanding shares of Registrable Common Stock (excluding shares held
by Non-Management Holders), the Company shall not effect or permit to occur
any combination, subdivision or reclassification of Registrable Common Stock
that would materially adversely affect the ability of the Holders to include
such Registrable Common Stock in any registration of its securities under the
Securities Act contemplated by this Agreement or the marketability of such
Registrable Common Stock under any such registration or other offering.
13. Rule 144 and Rule 144A.
If the Company has a class of equity securities registered under the
Exchange Act, the Company shall take all actions reasonably necessary to
enable Holders to sell Registrable Common Stock without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule
144 under the Securities Act, as such Rule may be amended from time to time,
(b) Rule 144A under the Securities Act, as such Rule may be amended from time
to time, or (c) any similar rules or regulations hereafter adopted by the
Commission, including, without limiting the generality of the foregoing,
filing on a timely basis all reports required to be filed under the Exchange
Act. Upon the written request of any Holder, the Company shall deliver to such
Holder a written statement as to whether it has complied with such
requirements.
14. Amendments and Waivers.
Any provision of this Agreement may be amended, modified or waived
if, but only if, the written consent to such amendment, modification or waiver
has been obtained from (i) except as provided in clause (ii) below, the Holder
or Holders ((i) subject to the Management Condition and (ii) excluding
Non-Management Holders) of at least a majority of the shares of Registrable
Common Stock (excluding shares held by Non-Management Holders) affected by
such amendment, modification or waiver and (ii) in the case of any amendment,
modification or waiver of any provision of Section 5 or 9 hereof or this
Section 14 or any provisions as to the number of requests for registration to
which holders of Registrable Common Stock are entitled under Section 3 or 4
hereof, or any amendment, modification or waiver which adversely affects any
right and/or obligation under this Agreement of any Holder, the written
consent of each Holder so affected.
15. Nominees for Beneficial Owners.
In the event that any Registrable Common Stock is held by a nominee
for the beneficial owner thereof, the beneficial owner thereof may, at its
election in writing delivered to the Company, be treated as the Holder of such
Registrable Common Stock for purposes of any request or other action by any
Holder or Holders pursuant to this Agreement or any determination of the
number or percentage of shares of Registrable Common Stock held by any Holder
or Holders contemplated by this Agreement. If the beneficial owner of any
Registrable Common Stock so elects, the Company may require assurances
reasonably satisfactory to it of such owner's beneficial ownership of such
Registrable Common Stock.
23
16. Assignment.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors and
permitted assigns. Any Holder may assign to any permitted Transferee (as
permitted under applicable law and the Securityholders' Agreement, dated of
even date herewith, by and among the Company and certain holders of Common
Stock) of its Registrable Common Stock its rights and obligations under this
Agreement, provided that such Transferee shall agree in writing with the
parties hereto prior to the assignment to be bound by this Agreement as if it
were an original party hereto, whereupon such assignee shall for all purposes
be deemed to be a Holder (and, in the case of a Transferee of a Management
Holder, a Non-Management Holder or a Transferee thereof, a Management Holder
or Non-Management Holder) under this Agreement. Except as provided above or
otherwise permitted by this Agreement, neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by any Holder without the prior written consent of the other
parties hereto. The Company may not assign this Agreement or any right,
remedy, obligation or liability arising hereunder or by reason hereof without
the consent of the Holders ((i) subject to the Management Condition and (ii)
excluding Non-Management Holders) holding a majority of the outstanding shares
of Registrable Common Stock.
17. Calculation of Percentage or Number of Shares of Registrable
Common Stock.
For purposes of this Agreement, all references to a percentage or
number of shares of Registrable Common Stock or Common Stock shall be
calculated based upon the number of shares of Registrable Common Stock or
Common Stock, as the case may be, outstanding at the time such calculation is
made and shall exclude any Registrable Common Stock or Common Stock, as the
case may be, owned by the Company or any subsidiary of the Company. For the
purposes of calculating any percentage or number of shares of Registrable
Common Stock or Common Stock as contemplated by the previous sentence, the
terms "Holder", "Initiating Holder", "Management Holder", "Non-Management
Holder" and "Original Holder" shall include all Affiliates thereof owning any
shares of Registrable Common Stock or Common Stock.
18. Termination of Registration Rights. This Agreement, including,
without limitation, the Company's obligations under Sections 2(a), 3(a) and 4
hereof to register Common Stock for sale under the Securities Act shall
terminate on the earlier of (i) the first date on which no shares of
Registrable Common Stock are outstanding or (ii) the first date on which less
than 10% of the aggregate number of shares of Common Stock issued pursuant to
the Plan are held by the Original Holders or their Affiliates. Notwithstanding
any termination of this Agreement pursuant to this Section 18, the parties'
obligations under Section 5 and Section 10 hereof shall continue in full force
and effect.
19. Miscellaneous.
(a) Further Assurances. Each of the parties hereto shall execute
such documents and other papers and perform such further acts as may be
reasonably required or advisable to carry out the provisions of this Agreement
and the transactions contemplated hereby.
24
(b) Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
any provisions hereof.
(c) Conflicting Instructions. A person or entity is deemed to be a
holder of Registrable Common Stock whenever such person or entity owns of
record such Registrable Common Stock. If the Company receives conflicting
instructions, notices or elections from two or more persons or entities with
respect to the same Registrable Common Stock, the Company will act upon the
basis of instructions, notice or election received from the registered owner
of such Registrable Common Stock.
(d) Remedies. Each Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Agreement and the
Company hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(e) Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, or undertakings with respect to the
subject matter hereof, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.
(f) Notices. Any notices or other communications to be given
hereunder by any party to another party shall be in writing, shall be
delivered personally, by telecopy, by certified or registered mail, postage
prepaid, return receipt requested, or by Federal Express or other comparable
delivery service, to the address of the party set forth on Schedule B hereto
or to such other address as the party to whom notice is to be given may
provide in a written notice to the other parties hereto, a copy of which shall
be on file with the Secretary of the Company. Notice shall be effective when
delivered if given personally, when receipt is acknowledged if telecopied,
three days after mailing if given by registered or certified mail as described
above, and one business day after deposit if given by Federal Express or
comparable delivery service.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
(h) Severability. Notwithstanding any provision of this Agreement,
neither the Company nor any other party hereto shall be required to take any
action which would be in violation of any applicable Federal or state
securities law. The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of any other provision of this Agreement in such jurisdiction
or the validity, legality or enforceability of this Agreement, including any
such provision, in any other jurisdiction, it being intended that all rights
and obligations of the parties hereunder shall be enforceable to the fullest
extent permitted by law.
25
(i) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
20. Management Holders. Each employee of the Company (and his or her
Affiliates) who is or becomes a Holder of Registrable Common Stock is deemed a
party hereto by the Plan and pursuant to the Plan is or shall be bound hereby.
The Company shall not issue any Registrable Common Stock to any employee of
the Company, or to any Affiliate of an employee of the Company, unless he, she
or it first delivers to the Company a writing, in form and substance
satisfactory to the Company, acknowledging that he, she or it is bound by the
terms hereof as a Management Holder.
21. Non-Management Holders. Each Non-Management Holder is deemed a
party hereto by the Plan and pursuant to the Plan is bound hereby. The Company
may, in its sole discretion, refuse to issue Registrable Common Stock to a
Non-Management Holder until the Non-Management Holder first delivers to the
Company a writing, in form and substance satisfactory to the Company,
acknowledging that such holder is bound by the terms hereof as a
Non-Management Holder.
26
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
AMERICAN HOUSEHOLD, INC.
By: /s/ Steven Isko
-------------------------------------
Name: Steven Isko
Title: Chief Legal Officer
HOLDERS:
--------
MORGAN STANLEY SENIOR FUNDING, INC.
By: /s/ Michael Petrick
-------------------------------------
Name: Michael Petrick
Title: Managing Director
BANC OF AMERICA STRATEGIC SOLUTIONS, INC.
By: /s/ H.G. Wheelock
-------------------------------------
Name: H.G. Wheelock
Title: Managing Director
WACHOVIA BANK NATIONAL ASSOCIATION
By: /s/ Joel Thomas
-------------------------------------
Name: Joel Thomas
Title: Director
OCM OPPORTUNITIES FUND III, L.P.
By:
-------------------------------------
Name:
Title:
27
OCM OPPORTUNITIES FUND II, L.P.
By:
-------------------------------------
Name:
Title:
HCA SEPARATE ACCOUNT II
By:
-------------------------------------
Name:
Title:
GRYPHON DOMESTIC VI, LLC
By:
-------------------------------------
Name:
Title:
MANAGEMENT HOLDERS
(Each of the undersigned signing
individually, and not on behalf of any
other Management Holder)
By: /s/ Jerry Levin
-------------------------------------
Name: Jerry Levin
Title: Chief Executive Officer
SCHEDULE A
HOLDERS OF REGISTRABLE COMMON STOCK
-----------------------------------
Number of
Original Holder Shares Owned
--------------- ------------
MORGAN STANLEY SENIOR FUNDING, INC. 12,317,167
WACHOVIA BANK NATIONAL ASSOCIATION 9,237,875
BANC OF AMERICA STRATEGIC SOLUTIONS, INC. 6,466,513
OCM OPPORTUNITIES FUND III, L.P., OCM OPPORTUNITIES 2,771,363
FUND II, L.P., HCA SEPARATE ACCOUNT II AND GRYPHON
DOMESTIC VI, LLC (COLLECTIVELY, "OAKTREE")
JERRY W. LEVIN
97,615
SCHEDULE B
NOTICES
-------
If to the Company, to:
American Household, Inc.
2381 Executive Center Drive
Boca Raton, Florida 33431
Attention: Chief Legal Officer
Tel: (561) 912-4438
Fax: (561) 912-4612
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
Wilmington, Delaware 19801
Attention: Richard L. Easton, Esq.
Tel: (302) 651-3040
Fax: (302) 651-3001
with an additional copy to:
Simpson Thacher & Bartlett
Attention: Peter J. Gordon, Esq.
425 Lexington Avenue
New York, New York 10017
Tel: (212) 455-2605
Fax: (212) 455-2502
If to the Holders, to:
such Holder, at such Holder's address or to such Holder's telephone or
telecopy number reflected in the Company's books and records.
EXHIBIT D
JOINT FILING AGREEMENT
Each of the undersigned acknowledges and agrees that the foregoing
statement on Schedule 13D is filed on behalf of the undersigned and that all
subsequent amendments to this statement on Schedule 13D shall be filed on
behalf of the undersigned without the necessity of filing additional joint
acquisition statements. Each of the undersigned acknowledges that it shall be
responsible for the timely filing of such amendments, and for the completeness
and accuracy of the information concerning it contained therein, but shall not
be responsible for the completeness and accuracy of the information concerning
the other, except to the extent that he or it knows or has reason to believe
that such information is inaccurate.
Date: December 30, 2002
WACHOVIA BANK, N.A.
By: /s/ George C. Ullrich
-----------------------------------
Name: George C. Ullrich
Title: Senior Vice President
WACHOVIA CORPORATION
By: /s/ George C. Ullrich
-----------------------------------
Name: George C. Ullrich
Title: Senior Vice President