<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
/ / Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/X/ Definitive Information Statement
ANVIL HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE>
ANVIL HOLDINGS, INC.
228 EAST 45TH STREET
NEW YORK, NY 10017
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 1998
TO THE HOLDERS OF CLASS B COMMON STOCK
OF ANVIL HOLDINGS, INC.:
The Annual Meeting of Stockholders of Anvil Holdings, Inc. (the "Company") will
be held at 9:00 a.m., Eastern Daylight Time on Tuesday, May 19, 1998 at the
Company's Executive Offices, 228 East 45th Street, New York, NY, 10017, 4th
Floor, for the following purposes:
(1) To elect six directors, to be elected by holders of the Company's Class
B Common Stock.
(2) To transact such other business as may properly be brought before the
meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on April 17, 1998, as the
record date for determining stockholders entitled to notice of, and to vote at
the Annual Meeting.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
By Order of the Board of Directors
Jacob Hollander
Secretary
April 28, 1998
<PAGE>
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
ANVIL HOLDINGS, INC.
228 EAST 45TH STREET
NEW YORK, NY 10017
INFORMATION STATEMENT
Relating to the Annual Meeting of Stockholders
to be held May 19, 1998
This information is being furnished in connection with matters to be considered
and voted upon at the 1998 Annual Meeting of Stockholders of Anvil Holdings,
Inc. to be held at 9:00 a.m., Eastern Daylight Time on Tuesday, May 19, 1998 at
the Company's Executive Offices, 228 East 45th Street, New York, NY, 10017, 4th
Floor, and any adjournment thereof.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, Stockholders will be asked to consider and to take action
on the election of six directors to serve until the next annual meeting of
stockholders or until their respective successors are elected and qualified. See
"Information as to Nominees for Election of Directors," below. In addition, the
meeting will be for the purpose of transacting such other business as may
properly be brought before the meeting and any adjournment thereof.
VOTING PROCEDURES
The Company's Class B Common Stock, $0.01 per share par value (the "Class B
Common"), is the only voting security of the Company entitled to vote at the
meeting. Each holder of Class B Common shall be entitled to one vote in person
or by proxy for each share of Class B Common held by such holder. At April 17,
1998, there were 3,590,000 shares of Class B Common Stock outstanding. Under the
Company's by-laws, at all stockholder meetings, with a quorum present, the
affirmative vote of the majority of shares present in person or by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders.
INFORMATION AS TO NOMINEES FOR ELECTION AS DIRECTORS
The information on the following pages sets forth certain information with
respect to the nominees for election as directors of Anvil Holdings, Inc.
("Holdings"). On January 28, 1995, Holdings acquired the assets and assumed
certain liabilities of the Anvil Knitwear division (the "Predecessor") from
McGregor Corporation ("McGregor") (the "Acquisition"). On March 14, 1997, the
Company completed a reorganization plan (the
1
<PAGE>
"Recapitalization"). The Acquisition and Recapitalization are more fully
described in the Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1998. The positions indicated (other than directorships) are
positions held as officers of Anvil Knitwear, Inc., the Company's wholly-owned
subsidiary ("Anvil"). Holdings has no independent operations; its sole asset
is the capital stock of Anvil. The Board of Directors of Anvil is identical to
that of Holdings.
As used herein, the "Company" refers to Holdings, including, in some instances,
its subsidiaries, as appropriate to the context.
NAME AGE(1) POSITION
Bernard Geller .............64 President, Chief Executive Officer,
Chairman of the Board
Jacob Hollander................56 Executive Vice President, Chief
Administrative Officer, Secretary,
General Counsel and Director
Bruce C. Bruckmann.............44 Director
Stephen F. Edwards.............34 Director
David F. Thomas................48 Director
John D. Weber..................34 Director
- --------------------
(1) All ages are as of December 31, 1997.
BERNARD GELLER has served as the Chief Executive Officer of Anvil, President of
Holdings and has been a Director of Anvil and Holdings since the Acquisition.
Since the Recapitalization, Mr. Geller has served as Chairman of the Board of
Anvil and Holdings and since July 1997 as President of Anvil. From 1989 to 1995,
Mr. Geller served as Chairman of the Predecessor. From 1986 to 1989, Mr. Geller
served as President of the Predecessor, and from 1975 to 1986, as Controller and
then President of the Predecessor. Before joining the Predecessor, Mr. Geller
was with Union Underwear Co., Inc., a subsidiary of Fruit of the Loom, Inc.,
where he worked for 14 years, principally as that company's controller.
JACOB HOLLANDER has served as Executive Vice President, Chief Administrative
Officer, Secretary and General Counsel of Anvil and Vice President, Secretary
and General Counsel of Holdings since the Acquisition. Since the
Recapitalization, Mr. Hollander has served as a Director of Anvil and Holdings.
From 1991 to 1995, Mr. Hollander served as Vice President and General Counsel of
Astrum International Corp. From 1985 to 1990, Mr. Hollander served as Vice
President and General Counsel of McGregor and Faberge, Incorporated, and from
1987 to 1989, Mr. Hollander also served as Vice President and General Counsel of
Elizabeth Arden, Inc. During 1990, Mr. Hollander provided legal consulting
services to the Unilever group of companies and to McGregor. Prior to its
acquisition by McGregor, Mr. Hollander was Vice President of Faberge,
Incorporated.
BRUCE C. BRUCKMANN has served as a Director of Anvil and Holdings since the
Recapitalization. Since 1994, Mr. Bruckmann has served as a Managing Director of
Bruckmann, Rosser, Sherrill & Co., L.P. ("BRS"). From 1983 until 1994, Mr.
2
<PAGE>
Bruckmann served as an officer and subsequently a Managing Director of Citicorp
Venture Capital, Ltd. ("CVC"). CVC is an affiliate of 399 Venture Partners, Inc.
(399 Venture"). Prior to joining CVC, Mr. Bruckmann was an associate at the New
York law firm of Patterson, Belknap, Webb & Tyler. Mr. Bruckmann is currently a
director of Jitney Jungles Stores of America, Inc., Mohawk Industries, Inc.,
AmeriSource Distribution Corporation, Chromcraft Revington Corporation, CORT
Business Services Corporation and Town Sports International, Inc., and a
director of several private companies.
STEPHEN F. EDWARDS has served as a Director of Anvil and Holdings since the
Recapitalization. Since 1994, Mr. Edwards has served as a principal of BRS. From
1993 until 1994, Mr. Edwards served as an officer of CVC. From 1988 through
1991, he was an associate of CVC. Prior to joining CVC, Mr. Edwards worked with
Citicorp/Citibank in various corporate finance positions. Mr. Edwards is
currently a director of several private companies.
DAVID F. THOMAS has served as a Director of Anvil and Holdings since the
Recapitalization. Mr. Thomas has been President of 399 Venture since December
1994. In addition, Mr. Thomas has been a Managing Director of CVC for over five
years. Mr. Thomas is currently a director of Galey & Lord, Inc., Lifestyle
Furnishings International, Inc., Neenah Foundry Company, Plainwell, Inc., Stage
Stores Inc., and a number of private companies.
JOHN D. WEBER has served as a Director of Anvil and Holdings since the
Recapitalization. Since 1994, Mr. Weber has been a Vice President at CVC and a
Vice President at 399 Venture. Previously, Mr. Weber worked at Putnam
Investments from 1992 until 1994. Mr. Weber is currently a director of
Plainwell, Inc., Neenah Foundry Company, and a number of private companies.
Directors are elected at the annual meeting of stockholders and each director so
elected holds office until the next annual meeting of stockholders and until a
successor is duly elected and qualified. There are no family relations among any
of the directors of Holdings.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has created two standing committees: an Audit Committee and a
Compensation Committee. The Board may also establish other committees to assist
in the discharge of its responsibilities. Currently, there is no standing
nominating committee of the Board.
The Audit Committee reviews and, as it deems appropriate, recommends to the
Board internal accounting and financial controls for the Company and accounting
procedures to be employed in the preparation and review of financial statements
of the Company. The Audit Committee makes recommendations to the Board
concerning the engagement of independent public accountants to audit the annual
financial statements of the Company
3
<PAGE>
and reviews the scope of the audit to be undertaken by such accountants.
Deloitte & Touche LLP presently serves as the independent auditors of the
Company. Representatives of Deloitte and Touche LLP will not be present at the
Annual Meeting. Messrs. Weber, Edwards and Hollander have been appointed to the
Audit Committee. The Audit Committee met once during the fiscal year ended
January 31, 1998.
The Compensation Committee reviews and, as it deems appropriate, recommends to
the Board policies, practices and procedures relating to the compensation of
managerial employees and the establishment and administration of employee
benefit plans. The Compensation Committee has and exercises all authority under
any employee stock option plans of the Company as the committee therein
specified (unless the Board appoints any other committee to exercise such
authority), and otherwise advises and consults with the officers of the Company
regarding managerial personnel policies. Messrs. Thomas, Bruckmann and Geller
have been appointed to the Compensation Committee. The Compensation Committee
met once during the fiscal year ended January 31, 1998.
Prior to the Recapitalization, the Boards of Holdings and Anvil were controlled
by Vestar Equity Partners, L.P. ("Vestar"). Following the Recapitalization,
pursuant to the Stockholders Agreement (as defined), 399 Venture, BRS and
certain management investors (the "Management Investors") have agreed to vote
their shares of Common Stock so that each of the Boards of Holdings and Anvil
have up to eight members, comprised of up to three members of each Board
designated by 399 Venture, three members of each Board designated by BRS and two
members of each Board designated by the Management Investors. The Directors that
are designated by BRS are Messrs. Bruckmann and Edwards, the Directors that are
designated by 399 Venture are Messrs. Thomas and Weber, and the Directors that
are designated by the Management Investors are Messrs. Geller and Hollander. See
"Security Ownership of Certain Beneficial Owners and Management--Stockholders
Agreement."
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors of Anvil and Holdings do not receive compensation for services
rendered in that capacity, but are reimbursed for any out-of-pocket expenses
incurred by them in connection with their travel to and attendance of board
meetings and committees thereof.
Compensation of all executive officers of the Company is fixed by the Board and
no executive officer is prevented from receiving compensation by virtue of the
fact that he is also a Director. The table on the following page sets forth
information for the periods presented concerning the compensation for the
Company's Chief Executive Officer and each of the three other most highly
compensated executive officers of the Company who were serving as executive
officers of the Company at the end of fiscal 1997 (collectively, the "Named
Executive Officers") for services rendered in all capacities to the Company
during such period. The Company has no other executive officers.
4
<PAGE>
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------------------------------
FISCAL OTHER ANNUAL ALL OTHER
YEAR SALARY BONUS(2) COMPENSATION(3) COMPENSATION(4)
---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Bernard Geller...........................1997 $425,000 $380,763 (5) $16,628 $2,852,754
Chief Executive Officer
Jacob Hollander..........................1997 295,000 135,000 12,171 954,441
Executive Vice President, Chief
Administrative Officer,
Secretary and General Counsel
Anthony Corsano..........................1997 291,058 115,000 12,630 954,421
Executive Vice President of
Sales and Marketing
William H. Turner........................1997 197,692 170,000 3,478 954,007
Executive Vice President
of Manufacturing
</TABLE>
-----------------------------
(1) See also, "Old Stock Option Plan," "Phantom Equity Plan" and "Certain
Relationships and Related Transactions"-- "Transaction Fees" and "Benefits
of Recapitalization to Certain Existing Stockholders and Named Executive
Officers," below.
(2) The Company provides bonus compensation based on the Company's operating
performance. See "Bonus Plan," below.
(3) None of the Named Executive Officers received any Other Annual Compensation
in an amount in excess of either $50,000 or 10% of such Named Executive
Officer's salary and bonus.
(4) All Other Compensation includes: (i) matching contributions under the
Company's Savings and Investment Plan relating to before-tax contributions
made by each of the Named Executive Officers in the following amounts: Mr.
Geller--$7,125, Mr. Hollander--$7,125, Mr. Corsano--$7,125, and Mr.
Turner--$7,125; (ii) insurance premiums paid by the Company with respect to
term life insurance for the benefit of the Named Executive Officers in the
following amounts: Mr. Geller--$1,776, Mr. Hollander--$1,233, Mr.
Corsano--$1,213, and Mr. Turner--$799; (iii) the amount of premiums paid by
the Company under a life insurance policy designed to fund certain
retirement benefits for Mr. Geller--$5,603. Also included are the "Value
Realized" amounts from the exercise of options reported under "Old
Stock Option Plan," and a Management Bonus paid pursuant to the
Racapitalization Agreement.
(5) Includes a bonus payment of $107,763 received by Mr. Geller pursuant to an
agreement entered into at the time of the Acquisition.
5
<PAGE>
OLD STOCK OPTION PLAN
At the time of the Acquisition, the Company adopted its 1995 Stock Option Plan
(the "Old Stock Option Plan"), which authorized the granting of options of up to
600,000 shares of its then existing common stock ("Old Common Stock"). Pursuant
to the Old Stock Option Plan, the Management Investors were granted options in
the following aggregate amounts: Mr. Geller - 300,000; and Messrs. Hollander,
Corsano and Turner - 100,000 each. The exercise price of the options granted
under the Old Stock Option Plan was $0.64 per share. The Old Stock Option Plan
provided that, so long as a Management Investor is an employee of the Company,
certain of such options were subject to time and performance vesting. In
general, the options granted under the Old Stock Option Plan would vest and
become exercisable upon the sale of the Company or other event where Vestar
received a 35% internal rate of return on its investment in Holdings. Pursuant
to the Recapitalization, all unexercised outstanding options became fully
vested and were exercised.
The following table sets forth information concerning options exercised by the
Named Executive Officers during the Company's last fiscal year for the Old
Common Stock pursuant to the Old Stock Option Plan
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING SHARES ACQUIRED
NAME BEGINNING OF YEAR ON EXERCISE VALUE REALIZED (1)
- ---- ----------------- ----------- --------------
<S> <C> <C> <C>
Bernard Geller..................... 262,500 262,500 $2,588,250
Jacob Hollander.................... 87,500 87,500 862,750
Anthony Corsano.................... 87,500 87,500 862,750
William H. Turner.................. 87,500 87,500 862,750
</TABLE>
- -----------------------
(1) Assumes a fair market value of the Old Common Stock at exercise date equal
to $10.50 per share. The exercise price of all options was $.64 per share.
EMPLOYMENT AGREEMENTS
As of January 31, 1995, the Company entered into employment agreements with
Messrs. Geller, Hollander, Corsano and Turner (collectively, the "Employment
Agreements"). The Employment Agreements are for an initial term of four years
with automatic one year extensions unless terminated as set forth in the
Employment Agreements. The Employment Agreements provide for Messrs. Geller,
Hollander, Corsano and Turner (collectively, the "Executives") to serve in the
same or similar capacity with the Company as they did with the Predecessor. The
Employment Agreements provide for an initial annual base salary of $330,000,
$250,000, $235,000 and $150,000 for Messrs. Geller, Hollander, Corsano and
Turner, respectively. The Employment Agreements also provide each Executive with
customary fringe benefits and vacation periods as well as entitle the Executive
to participate in all of the Company's employee pension plans, welfare benefit
plans, tax deferred savings plans, or other welfare or retirement benefits, the
Bonus Plan and any stock option plan. Each Executive's employment may be
terminated by the Company at any time with or without Cause (as defined below).
If such Executive is terminated by the Company without Cause or such Executive
resigns for
6
<PAGE>
Good Reason (as defined below), other than in connection with a Strategic Sale
(as defined below), the Executive will be entitled to receive his base salary
through the end of the term then in effect (the "Severance Period"), plus any
bonus that would have been payable to the Executive for the bonus year in which
the termination takes place. In addition, the Executive is entitled to continue
to participate in the Company's benefit plans through the end of the fiscal year
in which such termination occurs. Moreover, subject to certain restrictions and
at the discretion of the Company's Chief Executive Officer, if the Executive is
not engaged in regular employment at the end of the Severance Period, the
Company may make additional monthly payments to the Executive for up to two
years. If the Executive's employment terminates for any other reason, such
Executive will be entitled to only his base salary and benefits through the end
of the calendar month in which termination occurs, excluding bonuses.
Each of the Executives is subject to confidentiality, non-competition and
non-solicitation provisions. The non-competition provision provides that the
Executive is not to own, manage, control, participate in, consult with, render
services for, or in any manner engage in, any business that competes anywhere in
the world with the businesses of the Company and is enforceable for the term of
the Employment Agreement or during any period of time the Executive is receiving
payments thereunder unless the Company terminates the Executive without Cause or
the Executive resigns for Good Reason, in which case the provision expires upon
such termination.
"Cause" is defined in the Employment Agreements to mean: (i) a material breach
of the Employment Agreement by the Executive which is not cured within thirty
days of receipt of written notice from the Board; (ii) the Executive's willful
and repeated failure to comply with the lawful directives of the Board or his
superior officers(s) consistent with the terms of the Employment Agreement;
(iii) gross negligence or willful misconduct in the performance of the
Executive's duties under the Employment Agreement which results in material
injury to Holdings, Anvil or their subsidiaries; (iv) fraud committed by the
Executive with respect to Holdings, Anvil or their subsidiaries or (v)
indictment for a felony or a crime involving moral turpitude, conviction of
which would materially injure relationships with customers, suppliers or
employees or otherwise cause material injury to the Company or its subsidiaries.
"Good Reason" is defined in the Employment Agreements to mean: (i) a material
breach of the Employment Agreement which is not cured within thirty days after
the Board's receipt of written notice from the Executive of non-compliance; (ii)
the assignment to the Executive of duties inconsistent with the Executive's
position, duties or responsibilities as in effect after the date of execution of
the Employment Agreement; (iii) the relocation by the Company of its executive
officers to a location outside a thirty mile radius around its current location
or (iv) upon a sale of the Company to a corporation or other legal entity that
is, or is part of a group of such entities, engaged in operating a material
business in competition with, or similar or related to the business of the
Company at the time of such a sale. The Executive must give a written
notice of his election to terminate employment for Good Reason.
7
<PAGE>
BONUS PLAN
The Company maintains an Executive Bonus Plan (the "Bonus Plan") which provides
annual incentive bonuses to certain management employees of the Company. The
Bonus Plan provides for an aggregate annual bonus pool equal to 4.0% of the
Company's income before provision for income taxes (subject to adjustment by the
Board to exclude certain charges). The Chief Executive Officer of the Company
determines the allocation of the bonus pool among the participants of the Bonus
Plan.
In addition, the Management Investors received a Management Bonus aggregating
$500,000 pursuant to the Recapitalization Agreement.
NEW STOCK OPTION PLAN
Holdings has a stock option plan which authorizes the granting of options for
approximately 5.0% of the outstanding Class B Common on a fully diluted basis
(the "New Stock Option Plan"). Options under the New Stock Option Plan may be
granted to certain members of management and key employees, which include the
Named Executive Officers, and are subject to time and performance vesting
provisions. The exercise price of such options is the fair market value of the
Common Stock as of the date of grant. During fiscal 1997, no options were
granted to any of the Named Executive Officers. Options to purchase 90,000
shares were granted to certain other officers and key employees at an exercise
price of $1 per share.
PHANTOM EQUITY PLAN
At the time of the Acquisition, Holdings and certain members of the Company's
management entered into the Phantom Equity Plan (the "Phantom Equity Plan").
Pursuant to the Phantom Equity Plan, such management members were entitled to
receive a cash payment equal to 5.0% of any excess of the aggregate sale price
over $100.0 million in the event of a sale of the Company. Pursuant to the
Recapitalization Agreement such management members received $5.3 million as
final payment under the Phantom Equity Plan and the Phantom Equity Plan was
terminated.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
All of Anvil's issued and outstanding capital stock is owned by Holdings. The
following table sets forth certain information with respect to the beneficial
ownership of the Company's common stock as of April 15, 1998 by (i) any person
or group who beneficially owns more than five percent of any class of Holdings'
voting securities, (ii) each Named Executive Officer and Director and (iii) all
Directors and Executive Officers of Holdings as a group.
8
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED PERCENTAGE OF
-------------------------
CLASS A COMMON CLASS B COMMON VOTING POWER(1)
-------------- -------------- -------------
<S> <C> <C> <C>
Bruckmann, Rosser, Sherrill & Co., L.P(2)....... 117,645 1,298,152 36.2%
126 East 56th Street
New York, New York 10022
399 Venture Partners, Inc.(3) .................. 97,751 1,078,634 30.0
399 Park Avenue, 14th Floor
New York, New York 10043
CCT Partners II, L.P (4) ....................... 17,250 190,347 5.3
399 Park Avenue, 14th Floor
New York, New York 10043
Executive Officers and Directors:
Bernard Geller.................................. 22,516 248,447 6.9
Jacob Hollander................................. 7,505 82,816 2.3
Anthony Corsano................................. 7,505 82,816 2.3
William H. Turner............................... 7,505 82,816 2.3
Bruce C. Bruckmann(5)........................... 119,958 1,323,676 36.9
Stephen F. Edwards(5)........................... 117,645 1,298,152 36.2
David F. Thomas(6).............................. 100,946 1,113,884 31.0
John D. Weber(6)................................ 98,171 1,083,271 30.2
Directors and executive officers
as a group (8persons)(7)...................... 266,355 2,939,091 81.9
</TABLE>
- ------------------------------
(1) Calculated pursuant to Rule 13d-3(d) under the Exchange Act. The Class B
Common is the only voting security of Holdings and entitles the holder
thereof to one vote per share. The Class A Common is nonvoting and is
entitled to the Class A Preference upon any distribution by Holdings.
(2) Excludes shares held individually by Mr. Bruckmann and another individual,
each of whom is a principal of BRS.
(3) Excludes shares held individually by Messrs. Thomas and Weber and by certain
individuals (and affiliates thereof), each of whom is employed by 399
Venture. Also excludes shares held by a family trust established by Mr.
Thomas.
(4) CCT Partners II, L.P. is a Delaware limited partnership, the limited
partners of which are certain employees of 399 Venture.
[Footnotes continue on following page]
9
<PAGE>
(5) Includes shares held by BRS. Messrs. Bruckmann and Edwards each disclaims
beneficial ownership of such shares. The address for such persons is c/o BRS
& Co., 126 East 56th Street, New York, New York 10022.
(6) Includes shares held by 399 Venture. Messrs. Thomas and Weber each disclaims
beneficial ownership of such shares. The address for such persons is c/o 399
Venture Partners, Inc., 399 Park Avenue, 14th floor, New York, New York
10043. Also includes shares held by a family trust established by Mr.
Thomas. Mr. Thomas disclaims beneficial ownership of such shares.
(7) Includes: (i) shares held by BRS, which may be deemed to be owned
beneficially by Messrs. Bruckmann and Edwards, and (ii) shares held by 399
Venture, which may be deemed to be owned beneficially by Messrs. Thomas and
Weber. Excluding the shares beneficially owned by BRS and 399 Venture, the
Directors and Executive Officers as a group beneficially own 50,958 shares
of Class A Common and 562,305 shares of Class B Common, which represents
approximately 15.7% of the voting power of the Common Stock.
STOCKHOLDERS AGREEMENT
Pursuant to the Recapitalization, Holdings, 399 Venture, BRS and the Management
Investors entered into a Stockholders Agreement (the "Stockholders Agreement").
The Stockholders Agreement provides: (i) that all parties thereto will vote
their shares of Common Stock so as to cause the Boards of Directors of Anvil and
Holdings each to consist of eight members, three to be selected by 399 Venture,
three to be selected by BRS and two to be selected by the Management Investors;
(ii) for certain restrictions on transfer of the Common Stock including, but not
limited to, provisions providing that Holdings and certain holders of Common
Stock will have limited rights of first offer and certain limited participation
rights in any proposed third party sale of Common Stock by 399 Venture or BRS;
(iii) that if Holdings authorizes the issuance or sale of any Common Stock
(other than as a dividend on the outstanding Common Stock) to 399 Venture or
BRS, Holdings will first offer to sell to each of the other parties thereto a
percentage of the shares of such issuance equal to the percentage of Common
Stock held, respectively, by each of them at the time of such issuance and (iv)
that upon approval by the Board of Directors of Holdings of a sale of all or
substantially all of the consolidated assets of Holdings or substantially all
the outstanding capital stock of Holdings (whether by merger, consolidation or
otherwise), each party thereto will consent to and raise no objections against
such sale and sell its Common Stock in such sale. In reference to paragraph (iv)
above, (A) at any time, both the holders of a majority of 399 Venture
Stockholder Shares (as defined) and the holders of a majority of BRS Stockholder
Shares (as defined), acting together as group may, and (B) after March 14, 2001,
either a majority of 399 Venture Stockholder Shares or the holders of a majority
of BRS Stockholder Shares may, require that Holdings enter into, and the Board
of Directors approve, such a sale. None of the parties received compensation for
entering into the Stockholders Agreement. The Stockholders Agreement is governed
by Delaware law, which explicitly authorizes transfer limitations and voting
arrangements of the type and nature contemplated by the Stockholders Agreement.
10
<PAGE>
REGISTRATION RIGHTS AGREEMENT
Pursuant to the Recapitalization, 399 Venture, BRS, the Management Investors and
Donaldson, Lufkin & Jenrette entered into a Registration Rights Agreement (the
"Equity Registration Rights Agreement") which inures to the benefit of the
transferees of the Class B Common initially issued in connection with the
Initial Units Offering, subject to the limitations set forth therein. The
Equity Registration Rights Agreement provides that, subject to certain
conditions, 399 Venture and BRS each have the right to exercise a limited
number of long-form and shelf demand registrations, and an unlimited number
of short-form demand registrations under the Securities Act of their respective
shares of Common Stock. The Equity Registration Rights Agreement also provides
for piggyback registration rights, allowing the parties thereto to include
their Common Stock in any registration filed by Holdings other than pursuant
to a registration statement on Form S-8 or S-4 or any similar form or in
connection with a registration the primary purpose of which is to register
debt securities (i.e., in connection with a so-called "equity kicker").
However, if the piggyback registration is an underwritten primary
registration on behalf of Holdings, and the managing underwriters advise
Holdings that in their opinion the aggregate number of shares of Common Stock
which the participants elect to include in such offering exceeds the number
which can be sold in such offering without adversely affecting the marketability
of such offering, the number of such shares sold in such offering shall be
allocated according to the following priority: (i) first, the securities
Holdings proposes to sell; (ii) second, the Common Stock requested to be
included in such registration, pro rata among the holders of such Common Stock
on the basis of the number of shares of Common Stock owned by each such holder;
and (iii) third, other securities requested to be included in such registration.
In addition, the parties thereto (other than certain individual investors and
the Unit holders and successors) are, subject to certain conditions, prohibited
from selling their shares of Common Stock within 180 days after the
effectiveness of any demand registration or piggyback registration (except as
part of such underwritten registration) unless the underwriters managing the
registered offering otherwise agree.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENTS
In connection with the Acquisition, Anvil, Holdings and Anvil (Czech), Inc., a
wholly-owned subsidiary of Anvil ("ACI"), entered into a Management Agreement
(the "Old Management Agreement") whereby affiliates of Vestar and 399 Venture
and Culligan, agreed to provide certain advisory and consulting services in
relation to the affairs of Holdings, Anvil and ACI. In exchange for these
services, affiliates of Vestar, 399 Venture and Culligan were to receive annual
fees of $200,000, $120,000 and $180,000, respectively. In fiscal 1996, the
Company made payments aggregating $472,000 under the Old Management Agreement,
which was terminated pursuant to the Recapitalization Agreement.
11
<PAGE>
Anvil and Holdings have reached an agreement in principle with BRS for a
new Management Agreement (the "Management Agreement"), effective as of the
Recapitalization, whereby BRS would provide certain advisory and consulting
services in relation to the affairs of Anvil and Holdings in connection with
strategic financial planning, selection, supervision and retention of
independent auditors, the selection, retention and supervision of outside
legal counsel, and the selection, retention and supervision of investment
bankers or other financial advisors or consultants. The definitive Management
Agreement is expected to be executed during fiscal 1998. BRS is a significant
stockholder of the Company and has two representatives on the Company's
Board of Directors.
PROMISSORY NOTES
In connection with their purchase of Holdings' securities under the Stock
Purchase Agreement, Messrs. Geller and Corsano each borrowed $125,000 from
Holdings under promissory notes, each dated as of January 30, 1995 (the
"Promissory Notes"). The Promissory Notes accrued interest at a rate of 7.19%
per annum and would have matured on January 30, 2002. The largest aggregate
amount of indebtedness outstanding to any individual during the last fiscal year
was $133,988. The Promissory Notes were repaid pursuant to the Recapitalization
Agreement.
SUBORDINATED PROMISSORY NOTE
In connection with the Acquisition, the Company issued a subordinated promissory
note to Culligan International Company ("Culligan") in the principal amount of
$7,500,000 due January 30, 2005, or earlier upon a change in ownership, as
defined. The Note was recorded at the fair value of the property received and
the discount ($1,600,000 at February 1, 1997) was being amortized on a straight-
line basis over the term of the Note. Principal and interest on the Note was
prepaid on March 14, 1997. In connection with such payment, the Company
recorded an extraordinary loss of $1,580,000, before a tax benefit of $630,000
representing the balance of the unamortized debt discount.
RECAPITALIZATION PAYMENTS
In connection with the Acquisition, affiliates of Vestar and 399 Venture
received transaction fees of $1.6 million and $.9 million, respectively, for
investment banking services rendered to the Company. In connection with the
Recapitalization, affiliates of BRS, 399 Venture and the Management Investors
received transaction fees of approximately $1.27 million, $1.27 million and
$0.47 million, respectively, in the form of cash and dividends. In addition, the
Management Investors received a Management Bonus aggregating $500,000 pursuant
to the Recapitalization Agreement.
12
<PAGE>
BENEFITS OF RECAPITALIZATION TO CERTAIN EXISTING STOCKHOLDERS AND NAMED
EXECUTIVE OFFICERS
In connection with the Recapitalization, Holdings redeemed all of its then
outstanding preferred stock and repurchased all of its then outstanding common
stock (other than retained/exchanged shares). Set forth below, for those
stockholders who immediately prior to the Recapitalization owned more than five
percent of Holdings' capital stock and the Named Executive Officers of the
Company, is the aggregate amount paid to such stockholder or Named Executive
Officer in connection with such redemption and repurchase:
<TABLE>
<CAPTION>
AGGREGATE AMOUNT
NAME RECEIVED
(In millions)
<S> <C>
Vestar........................................... $ 47.9
Culligan......................................... 41.1
399 Venture...................................... 7.2
Bernard Geller................................... 8.8
Jacob Hollander.................................. 2.9
Anthony Corsano.................................. 2.9
William H. Turner................................ 2.9
</TABLE>
See also, "Compensation of Directors and Executive Officers"--"Old Stock Option
Plan," "Bonus Plan" and "Phantom Equity Plan," above.
Jacob Hollander
Secretary
April 28, 1998
13
