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ANVIL HOLDINGS, INC.
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
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
Payment of Filing Fee:
[ X ] No fee required.
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WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
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ANVIL HOLDINGS, INC.
228 EAST 45TH STREET
NEW YORK, NY 10017
INFORMATION STATEMENT
Relating to the Annual Meeting of Stockholders
to be held May 25, 2000
This information is being furnished in connection with matters to be considered
and voted upon at the 2000 Annual Meeting of Stockholders of Anvil Holdings,
Inc. ("Holdings" or the "Company") to be held at 9:00 a.m., Eastern Daylight
Time on Thursday, May 25, 2000, 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,
2000, 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 the Company. On January 28,
1995, the Company (through its wholly owned subsidiary, Anvil Knitwear, Inc.
["Anvil"]) 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
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Company completed a reorganization plan (the "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 29, 2000. The
positions indicated (other than directorships) are positions held as officers of
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.
<TABLE>
<CAPTION>
NAME AGE(1) POSITION
<S> <C>
Bernard Geller .............66 President, Chief Executive Officer,
Chairman of the Board
Jacob Hollander................58 Executive Vice President, Chief Administrative Officer,
Secretary, General Counsel and Director
Bruce C. Bruckmann.............46 Director
Stephen F. Edwards.............36 Director
David F. Thomas................50 Director
John D. Weber..................36 Director
</TABLE>
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(1) All ages are as of December 31, 1999.
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.
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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, Town
Sports International, Inc., Mediq, Inc., Penhall International, Inc., and
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 Partners since
December 1994. In addition, Mr. Thomas has been a Managing Director of Citicorp
Venture Capital for more than five years. Mr. Thomas is currently a director of
Lifestyle Furnishings International, Inc., Neenah Corporation, Sleepmaster
Corporation, American Commercial Lines, LLC., Plainwell, Inc., and Zatarain's
Brand, Inc..
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 for three years. Mr. Weber is currently a director of Electrocal
Designs, Inc., FFC Holdings, Inc., Gerber Childrenswear, Inc., Graphic Design
Technologies, Marine Optical, Inc., Plainwell, Inc., Sleepmaster Corporation,
Smith Alarm, and Neenah Corporation.
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 the scope of the work performed by the independent
public accountants and the results thereof, including internal accounting and
financial controls for the Company and accounting procedures to be employed in
the preparation
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of the 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, affirms
their independence and review 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 29, 2000.
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
the employee stock option plan of the Company 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 29, 2000.
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, up to three members of each
Board designated by BRS and up to 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 at 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 1999 (collectively, the "Named
Executive Officers") for services rendered in all capacities to the Company
during such period. The Company has no other executive officers.
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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 1999 $455,000 $145,000 $14,932 $13,720
President and 1998 455,000 370,511 (5) 17,870 14,402
Chief Executive Officer 1997 425,000 380,763 (5) 16,628 2,852,754
Jacob Hollander 1999 315,000 87,000 14,925 8,523
Executive Vice President, 1998 315,000 145,000 12,637 8,923
Chief Administrative Officer, 1997 295,000 135,000 12,171 954,441
Secretary and General Counsel
Anthony Corsano 1999 308,077 72,000 10,949 8,455
Executive Vice President of 1998 300,000 120,000 11,124 9,088
Sales and Marketing 1997 291,058 115,000 12,630 954,421
William H. Turner 1999 220,866 108,000 5,319 8,205
Executive Vice President 1998 205,000 181,000 6,983 8,636
of Manufacturing 1997 197,692 170,000 3,478 954,007
</TABLE>
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(1) See also, "Old Stock Option Plan," "Phantom Equity Plan" and "Certain
Relationships and Related Transactions," 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 for
fiscal 1999, 1998 and 1997, respectively: Mr. Geller--$7,520, $7,648 and
$7,125, Mr. Hollander--$7,577, $7,669 and $7,125, Mr. Corsano--$7,535,
$7,888 and $7,125, and Mr. Turner--$7,552, $7,815 and $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--$888, $1,442 and $1,776, Mr. Hollander--$946, $1,254 and $1,235, Mr.
Corsano--$920, $1,200 and $1,213, and Mr. Turner--$653, $821 and $799; (iii)
the amount of premiums paid by the Company under a life insurance policy
designed to fund certain retirement benefits for Mr. Geller--$5,312, $5,312
and $5,603. Also included in Fiscal 1997 are the "Value Realized" amounts
from the exercise of options reported under "Old Stock Option Plan," and a
management bonus aggregating $500,000 paid pursuant to the Recapitalization.
(5) Includes bonus payments of $115,511 in fiscal 1998 and $107,763 in fiscal
1997 received by Mr. Geller pursuant to an agreement entered into at the
time of the Acquisition.
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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 (the "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. Pursuant to the Recapitalization,
all unexercised outstanding options became fully vested and were exercised
during the year ended January 31, 1998, as described below, and the Old Stock
Option Plan was terminated.
<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>
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(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 and
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
Company is presently negotiating new, longer-term, agreements with each of the
Executives. The current employment agreement expiration dates are January 31,
2002 for Messrs. Geller, Hollander and Turner and January 31, 2001 for Mr.
Corsano. 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 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
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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.
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 operating income (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.
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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. No options have been granted to any of the
Named Executive Officers.
PHANTOM EQUITY PLAN
At the time of the Acquisition, Holdings and the Management Investors entered
into the Phantom Equity Plan (the "Phantom Equity Plan"). In fiscal 1997,
pursuant to the Recapitalization Agreement such Management Investors 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 17, 2000 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.
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<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 (8 persons)(7)..................... 266,355 2,939,091 81.9
</TABLE>
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(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.
(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.
[Footnotes continue on following page]
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(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 up to eight members, up to three to be selected by
399 Venture, up to three to be selected by BRS and up to 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.
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
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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 AGREEMENT
Anvil, Holdings and Cottontops have entered into a management agreement with BRS
(the "Management Agreement"), effective as of the Recapitalization, whereby BRS
is to provide certain advisory and consulting services in relation to the
affairs of Anvil, Holdings and Cottontops, including services in connection with
strategic financial planning, and the selection, retention and supervision of
investment bankers or other financial advisors or consultants. Annual fees under
the Management Agreement are $250,000.
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FINANCING FEES
Holdings' Articles of Incorporation provide for dividends on its Series 1-Class
A Common Stock, all of which is held by 399 Venture and its affiliates. In lieu
of such dividends Holdings has agreed to pay 399 Venture financing fees in the
aggregate annual amount of $250,000 from the date of the Recapitalization.
BRS and 399 Venture are significant stockholders of the Company and each has two
representatives on the Company's Board of Directors.
Jacob Hollander
Secretary
April 27, 2000
