<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939
---------------------
EAGLE-PICHER INDUSTRIES, INC.
(Name of applicant)
580 Walnut Street
PO Box 779
Cincinnati, Ohio 45201
(Address of principal executive offices)
---------------------
Securities to be Issued Under the Indenture to be Qualified
Title of Class Amount
-------------- ------
Senior Unsecured Divestiture Notes $50,000,000
Approximate date of proposed public offering: On, or as soon as practicable
after, the Effective Date (as defined in the Applicant's Third Amended
Consolidated Plan of Reorganization, dated August 28, 1996).
Name and Address of agent for service:
JAMES A. RALSTON
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
EAGLE-PICHER INDUSTRIES, INC.
580 WALNUT STREET
PO BOX 779
CINCINNATI, OHIO 45201
(513) 721-7010
Copy to:
RONALD F. DAITZ, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
<PAGE> 2
GENERAL
1. GENERAL INFORMATION. Furnish the following information as to the applicant:
(a) Form of organization:
A corporation.
(b) State or other sovereign power under the laws of which organized:
Ohio.
2. SECURITIES ACT EXEMPTION APPLICABLE. State briefly the facts relied upon by
the applicant as a basis for the claim that registration of the indenture
securities under the Securities Act of 1933, as amended (the "Securities Act"),
is not required.
Capitalized terms not otherwise defined in this Form T-3 have the
respective meanings assigned to them in that certain Disclosure Statement (the
"Disclosure Statement"), a copy of which is included as Exhibit T3E.1 hereto.
Eagle-Picher Industries, Inc., an Ohio Corporation (the
"Applicant"), and a debtor in possession under chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code"), intends to issue its Senior Unsecured
Divestiture Notes (the "Indenture Securities") on the Initial Distribution Date,
as such term is defined in the Applicant's Third Amended Consolidated Plan of
Reorganization (the "Plan"), which the Applicant, together with its Injury
Claimants' Committee and the Future Claimants' Representative, filed with the
United States Bankruptcy Court for the Southern District of Ohio (the
"Bankruptcy Court") on August 28, 1996. The interest rate on the Indenture
Securities will be the rate determined by the Applicant's financial advisers in
consultation with the financial advisers to the Unsecured Creditors' Committee
that will result in the Indenture Securities having a market value on the
Effective Date (as defined below) equal to their face amount. The Indenture
Securities will mature upon the third anniversary of the Initial Distribution
Date. At a hearing held on August 28, 1996, the Bankruptcy Court approved the
Disclosure Statement and set November 13, 1996 as the date for a hearing to
consider confirmation of the Plan (the "Confirmation Hearing").
If the Plan is confirmed by the Bankruptcy Court at the
Confirmation Hearing, the Applicant presently expects that the Initial
Distribution Date and the consummation of substantially all of the transactions
contemplated by the Plan will occur on or about November 29, 1996 (the
"Effective Date"). On the Effective Date, among other things, certain of the
Applicant's existing creditors will receive, in satisfaction of existing claims,
a pro rata share of the value of the "Plan Consideration." The Plan
Consideration consists of (i) ten million shares of the Applicant's Common Stock
to be issued under the Plan, (ii) $50 million aggregate principal amount of the
Indenture Securities, (iii) Available Cash (as defined in the Plan), (iv) the
Tax Refund Notes (as defined in the Plan), and (v) the Senior Unsecured Sinking
Fund Debentures (as defined in the Plan). Holders of Allowed Unsecured Claims
and Allowed Environmental Claims (as defined in the Plan) will receive such pro
rata share in equal amounts of cash and the Indenture Securities. The trust
created under the Plan for the benefit of holders of Asbestos Personal Injury
Claims and Lead Personal Injury Claims (the "Trust") will receive the Indenture
Securities that are not distributed to the holders of Allowed Unsecured Claims
and Allowed Environmental Claims.
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The Applicant believes that the offer and exchange on the
Effective Date of the Indenture Securities as described above are exempt from
the registration requirements of the Securities Act and of equivalent state
securities and "blue sky" laws, by section 1145(a)(1) of the Bankruptcy Code.
Generally, section 1145(a)(1) of the Bankruptcy Code exempts the offer and sale
of securities under a bankruptcy plan of reorganization from registration under
the Securities Act and under equivalent state securities and "blue sky" laws if
the following requirements are satisfied: (i) the securities are issued by the
debtor (or its successor) under a plan of reorganization; (ii) the recipients of
the securities hold a claim against the debtor, an interest in the debtor or a
claim for an administrative expense against the debtor; and (iii) the securities
are issued entirely in exchange for the recipient's claim against or interest in
the debtor or are issued "principally" in such exchange and "partly" for cash or
property. The Applicant believes that the offer and exchange of the Indenture
Securities under the Plan will satisfy such requirements of section 1145(a)(1)
of the Bankruptcy Code and, therefore, such offer and exchange is exempt from
the registration requirements referred to above.
AFFILIATIONS
3. AFFILIATES. Furnish a list or diagram of all affiliates of the Applicant and
indicate the respective percentages of voting securities or other bases of
control.
As of November 1, 1996
Percentage of
Voting Securities
Owned Directly or
Applicant's Affiliates Indirectly by Applicant
- ---------------------- -----------------------
Cincinnati Industrial Machinery Sales Company 100%
Daisy Parts, Inc. 100%
Diehl & Eagle-Picher GmbH 100%
Dong Yang Eagle-Picher Limited 49%
Eagle-Picher Development Company, Inc. 100%
Transicoil Inc. 100%
Transicoil (Malaysia) SDN. BHD. 100%
Michigan Automotive Research Corporation 100%
Creative Investments Associates 49.5%
EDI, Inc. 100%
Eagle-Picher Far East, Inc. 100%
Eagle-Picher Fluid Systems, Inc. 100%
Eagle-Picher Holding B.V. 100%
Eagle-Picher Espana, S.A. 100%
Eagle-Picher Industries Europe GmbH 100%
Eagle-Picher Industries GmbH 100%
Eagle-Picher Industries Materials GmbH 100%
Eagle-Picher UK Limited 100%
Eagle-Picher Fluid Systems Ltd. 100%
Eagle-Picher Hillsdale Limited 100%
Eagle-Picher, Inc. 100%
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Eagle-Picher Industries of Canada Limited 100%
Eagle-Picher Minerals, Inc. 100%
Eagle-Picher Minerals International S.A.R.L. 100%
United Minerals GmbH & Co. KG 75%
United Minerals Verwaltungs - und Beteiligungs GmbH 75%
EPTEC, S.A. de C.V. 100%
Equipos de Acuna, S.A. de C.V. 100%
Hillsdale Tool & Manufacturing Co. 100%
Yamanaka EP Corporation 35%
Applicant's Controlling Affiliates Bases of Control
---------------------------------- ----------------
Not Applicable Not Applicable
As of the Effective Date of the Plan of Reorganization
The corporate structure of the Applicant will not change from the
structure described above, except that (i) the Trust will own 100% of the
outstanding common stock of the Applicant and will, therefore, be considered a
controlling Affiliate of the Applicant, and (ii) EDI, Inc. will be dissolved on
the Effective Date.
MANAGEMENT AND CONTROL
4. DIRECTORS AND EXECUTIVE OFFICERS. List the names and complete mailing
addresses of all directors and executive officers of the Applicant and all
persons chosen to become directors or executive officers. Indicate all offices
with the Applicant held or to be held by each person named.
As of November 1, 1996
<TABLE>
<CAPTION>
Name Mailing Address Office
- ---- --------------- ------
<S> <C> <C>
Paul W. Christensen, Jr. c/o Eagle-Picher Industries, Inc. Director
580 Walnut Street
P.O. Box 779
Cincinnati, Ohio 45201
V. Anderson Coombe c/o Eagle-Picher Industries, Inc. Director
580 Walnut Street
P.O. Box 779
Cincinnati, Ohio 45201
Roger L. Howe c/o Eagle-Picher Industries, Inc. Director
580 Walnut Street
</TABLE>
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<TABLE>
<S> <C> <C>
P.O. Box 779
Cincinnati, Ohio 45201
Daniel W. LeBlond c/o Eagle-Picher Industries, Inc. Director
580 Walnut Street
P.O. Box 779
Cincinnati, Ohio 45201
Thomas E. Petry c/o Eagle-Picher Industries, Inc. Chairman of the Board of Directors
580 Walnut Street and Chief Executive Officer
P.O. Box 779
Cincinnati, Ohio 45201
Eugene P. Ruehlmann c/o Eagle-Picher Industries, Inc. Director
580 Walnut Street
P.O. Box 779
Cincinnati, Ohio 45201
Andries Ruijssenaars c/o Eagle-Picher Industries, Inc. President and Chief Operating
580 Walnut Street Officer, Director
P.O. Box 779
Cincinnati, Ohio 45201
Powell McHenry c/o Eagle-Picher Industries, Inc. Director
580 Walnut Street
P.O. Box 779
Cincinnati, Ohio 45201
David N. Hall c/o Eagle-Picher Industries, Inc. Senior Vice President-Finance
580 Walnut Street
P.O. Box 779
Cincinnati, Ohio 45201
Wayne R. Wickens c/o Eagle-Picher Industries, Inc. Senior Vice President
580 Walnut Street
P.O. Box 779
Cincinnati, Ohio 45201
Carroll D. Curless c/o Eagle-Picher Industries, Inc. Vice President and Controller
580 Walnut Street
P.O. Box 779
Cincinnati, Ohio 45201
James A. Ralston c/o Eagle-Picher Industries, Inc. Vice President, General Counsel
580 Walnut Street and Secretary
P.O. Box 779
Cincinnati, Ohio 45201
</TABLE>
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As of the Effective Date of the Plan of Reorganization
It is anticipated that the current directors and executive
officers of the Applicant will continue to serve in their respective capacities
immediately after consummation of the Plan. Upon consummation of the Plan, the
Trust will own 100% of the common stock of the Applicant and, accordingly, will
have the right to elect directors.
5. PRINCIPAL OWNERS OF VOTING SECURITIES. Furnish the following information as
to each person owning 10% or more of the voting securities of the Applicant.
As of November 1, 1996
No person owns 10% or more of the voting securities of the Applicant.
As of the Effective Date of the Plan of Reorganization
<TABLE>
<CAPTION>
Name and Title of Amount % of
Mailing Address Class Owned Owned Class
- --------------- ----------- ------ -----
<S> <C> <C> <C>
Eagle-Picher Industries, Inc. Common Stock 10,000,000 100%
Personal Injury Settlement
Trust
</TABLE>
UNDERWRITERS
6. UNDERWRITERS. Give the name and complete mailing address of (a) each person
who, within three years prior to the date of filing the application, acted as an
underwriter of any securities of the Applicant which were outstanding on the
date of filing the application, and (b) each proposed principal underwriter of
the securities proposed to be offered. As to each person specified in (a), give
the title of each class of securities underwritten.
(a) No person has acted as an underwriter of any securities of the
Applicant, within the three years prior to the date hereof, which
securities are outstanding on the date hereof.
(b) No person will act as underwriter or private placement agent of
the Indenture Securities.
CAPITAL SECURITIES
7. CAPITALIZATION. (a) Furnish the following information as to each authorized
class of securities of the Applicant.
As of November 1, 1996
<TABLE>
<S> <C>
Common Stock 30,000,000; 11,125,000 issued and 11,040,932 outstanding
Preference Stock 873,457; none issued
9 1/2% Sinking Fund Debentures due 2017 $50,000,000
Industrial Revenue Bonds $17,975,000
</TABLE>
6
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On the Effective Date of the Plan of Reorganization
Upon consummation of the Plan, all of the currently outstanding
securities of the Applicant will be cancelled and the authorized and outstanding
securities of the reorganized Applicant, as provided in the Plan, will be as
follows:
<TABLE>
<CAPTION>
Title of Class Amount Authorized Amount Outstanding
- -------------- ----------------- ------------------
<S> <C> <C>
Common Stock 20,000,000 shares 10,000,000 shares
Indenture Securities $50,000,000 aggregate $50,000,000 aggregate
principal amount principal amount
Tax Refund Notes $68,900,000 aggregate $68,900,000 aggregate
principal amount principal amount
(estimated) (estimated)
Senior Unsecured Sinking $250,000,000 aggregate $250,000,000 aggregate
Fund Debentures principal amount principal amount
</TABLE>
(b) Give a brief outline of the voting rights of each class of voting
securities referred to in paragraph (a) above.
Each share of Common Stock of the Applicant will be entitled to
one vote, and the Applicant's Amended and Restated Articles of Incorporation
will not provide for cumulative voting. The Indenture Securities, Tax Refund
Notes and Senior Unsecured Sinking Fund Debentures are not entitled to any
voting rights.
INDENTURE SECURITIES
8. ANALYSIS OF INDENTURE PROVISIONS. Insert at this point the analysis of
indenture provisions required under Section 305(a)(2) of the Trust Indenture Act
of 1939.
All references to the Indenture herein refer to the Indenture
(the "Indenture") to be dated as of the Effective Date between the Applicant and
Star Bank, N.A., as trustee (the "Trustee"). Capitalized terms used in this
section 8 which are not otherwise defined below or elsewhere in this Application
on Form T-3 have the respective meanings assigned to them in the Indenture. The
following summary of certain provisions of the Indenture does not purport to be
complete and is subject to, and is qualified in its entirety, by reference to
all of the provisions of the Indenture. A copy of the Indenture, including the
form of Indenture Securities, is included as Exhibit T3C hereto.
(A) EVENTS OF DEFAULT AND WITHHOLDING OF NOTICE. The following are
Events of Default under the Indenture: (i) failure to pay interest on any
Security when the same becomes due and payable, which failure to pay continues
for a period of 5 business days; (ii) failure to pay principal when due at
maturity, upon redemption, or otherwise, or default in payment of the Net
Proceeds as required by the Indenture; (iii)
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<PAGE> 8
violations of any agreement of the Company contained in the Securities or the
Indenture, which violation continues for 30 days after notice; or (iv) the
occurrence of certain bankruptcy related events.
If an Event of Default occurs and is continuing, then, either the
Trustee or the registered owners of not less than 25% in aggregate principal
amount of the Securities, by notice in writing to the Company (and to the
Trustee if given by holders), may declare the principal of and accrued interest
on all the Securities to be due and payable, and upon any such declaration the
same shall become immediately due and payable.
The foregoing provisions are subject to the condition that if, at
any time after the principal of the Securities shall have been so declared due
and payable and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered, all Events of Default in respect of the
Securities other than the nonpayment of the principal of Notes which shall have
become due solely by acceleration, shall have been cured, waived or otherwise
remedied as provided in the Indenture, then the registered owners of a majority
in aggregate principal amount of the Securities by notice to the Trustee, may
waive all defaults with respect to the Securities and rescind and annul such
declaration and its consequences.
The Indenture provides that the Trustee shall give the holders
notice of any event which is an Event of Default within 90 days after it occurs.
Except in the case of a Default in the payment of any Security, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interest of
Securityholders.
(B) AUTHENTICATION AND DELIVERY OF DEBENTURES; APPLICATION OF PROCEEDS.
Each Security will be signed by two Officers of the Company. A Security will
not be valid until authenticated by the manual signature of the Trustee, such
signature to be conclusive evidence that the Security has been authenticated
under the Indenture.
No provisions are contained in the Indenture with respect to use
by the Company of proceeds of issuance of the Indenture Securities. There will
be no proceeds from the issuance of the Indenture Securities because such
securities will be issued pursuant to a plan of reorganization approved by the
United States Bankruptcy Court in exchange for the discharge of certain claims
arising from ownership of certain securities of and claims against the debtors
involved in the bankruptcy proceeding.
(C) RELEASE OF COLLATERAL. Not Applicable
(D) SATISFACTION AND DISCHARGE. The Indenture provides that if the
Securities mature within one year or are called for redemption within one year,
they will be discharged upon deposit with the Trustee of cash or direct
obligations of the United States of America, sufficient to pay principal and
interest on the Securities to maturity or redemption, as the case may be. In the
event the Securities are defeased as aforesaid, the Company will be relieved of
its obligations under the Indenture, with certain specified exceptions.
(E) EVIDENCE OF COMPLIANCE WITH CONDITIONS AND COVENANTS. The Company is
required to furnish the Trustee (within 120 days after the end of each fiscal
year) with an Officers' Certificate of the Applicant relating to the knowledge
of such officers with respect to the existence of any Default that occurred
during the fiscal year, and if they do know of a Default, describing it and its
status.
The Indenture provides that upon any application or request by
the Company to the Trustee to take any action under a provision of the
Indenture, the Company must furnish to the Trustee such certificates
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<PAGE> 9
and opinions as are required by the Trust Indenture Act or the Indenture. Each
such certificate or opinion must be in the form of an Officers' Certificate or
an Opinion of Counsel. Any certificate or opinion must comply with the
requirements of the Trust Indenture Act and the Indenture, and must include the
following: a statement that each individual signing the certificate or opinion
has read such covenant or condition; a statement of the nature and scope of
investigation or examination upon which such certificate or opinion is based; a
statement that, in the opinion of such individual, he has made such
investigation or examination as is necessary to enable him to express an
informed opinion as to whether such covenant or condition has been complied
with; and a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
9. OTHER OBLIGORS. Give the name and complete mailing address of any person,
other than the Applicant, who is an obligor upon the indenture securities.
There is no other person who is an obligor under the Indenture or
otherwise upon the Indenture Securities.
Contents of application for qualification. This application for qualification
comprises:
(a) Pages numbered __ to __, consecutively. (1)
(b) The statement of eligibility and qualification of the Trustee
under the Indenture to be qualified on Form T-1.
(c) The following exhibits in addition to those filed as part of the
statement of eligibility and qualification of the trustee:
Exhibit T3A.1 Articles of Incorporation of the Applicant,
currently in effect.
Exhibit T3A.2 Form of Certificate of Reorganization and
Certificate of Amended and Restated Articles of
Incorporation of the reorganized Applicant.
Exhibit T3B.1 Existing Code of Regulations of the Applicant.
Exhibit T3B.2 Form of Amended Regulations of the
reorganized Applicant.
Exhibit T3C Form of Indenture to be qualified (including
form of Note attached as Exhibit A thereto).
Exhibit T3E.1 Disclosure Statement for Third Amended
Consolidated Plan of Reorganization, dated August
28, 1996 (including the appendices and exhibits
attached thereto).
Exhibit T3E.2 Form of Ballots.
Exhibit T3F See the cross-reference sheet contained in the
Indenture filed herewith as Exhibit T3C.
(1) Pursuant to Rule 309(a) of Regulation ST, requirements as to
sequential numbering shall not apply to this electronic format
document.
9
<PAGE> 10
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
the Applicant, Eagle-Picher Industries, Inc., a corporation organized and
existing under the laws of Ohio, has duly caused this application to be signed
on its behalf by the undersigned, thereunto duly authorized, all in the City of
Cincinnati, State of Ohio, on the 8th day of November, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By /s/David N. Hall
------------------------------------
Attest: By /s/ James A. Ralston Name: David N. Hall
------------------------ Title: Senior Vice President-Finance and
Chief Financial Officer
10
<PAGE> 11
Securities Act of 1933 File No.___________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------------------------------------------------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
PURSUANT TO SECTION 305(b) (2) / X /
--------------------------------------------------
STAR BANK, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A National Banking Association 31-0841368
(IRS Employer Identification No.)
425 Walnut Street
Cincinnati, Ohio 45202
(Address of Principal Executive Offices (Zip Code)
Cheri Scott-Geraci
Senior Trust Officer
Star Bank, National Association
425 Walnut Street
Cincinnati, Ohio 45202
(513) 632-4389
(Name, address, and telephone number of agent for services)
EAGLE-PICHER INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Ohio 31-0268670
(State of Incorporation) (IRS Employer Identification No.)
580 Building, 580 Walnut Street, Suite 13, Cincinnati, OH 45202
(Address of principal executive offices) (Zip Code)
% Senior Unsecured Divestiture Notes
(Title of the Indenture securities)
<PAGE> 12
1. General Information. Furnish the following information as Trustee --
(a) Name and address of each examining or supervising authority to which it
is subject.
Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of Cleveland, Ohio
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
2. Affiliations with obligor. If the obligor is an affiliate of the trustee,
describe each such affiliation.
The obligor is not an affiliate of the Trustee (including its
parent and any affiliates).
NOTE: Items 3 through 15 are not applicable because all of the obligor's
indebtedness will be discharged upon consummation of the obligor's
Plan of Reorganization.
3. Voting Securities of the trustee. Furnish the following information as
to each class of voting securities of the trustee (and its parent).
As of _____________ (insert date within 31 days)
Col A. Col B
(Title of Class) (Amount Outstanding)
4. Trusteeships under other Indentures. If the trustee is a trustee under
another Indenture under which any other securities, or certificates of
interest or participation in any other securities, of the obligor are
outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other
indenture.
(b) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of Section
310(b) (1)
<PAGE> 13
of the Act arises as a result of the trusteeship under any such
other indenture, including a statement as to how the indenture
securities will rank as compared with the securities issued under
such other indenture.
5. Interlocking directorates and similar relationships with the obligor or
underwriters. If the trustee (including its parent and any other
affiliates) or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor,
identify each such person having any such connection and state the
nature of each such connection.
6. Voting securities of the trustee (including its parent and any
affiliate) owned by the obligor or its officials. Furnish the following
information as to the voting securities of the trustee (including
its parent and any affiliates) owned beneficially by the obligor and
each director, partner and executive officer of the obligor:
As of _______________________ (insert date within 31 days)
<TABLE>
<CAPTION>
Col. A. Col. B. Col. C Col. D
Percentage of
Voting Securities
Represented by
Amount Owned Amount Given
Name of Owner Title of Class Beneficially in Col. C
<S> <C> <C> <C> <C>
</TABLE>
7. Voting securities of the trustee (including its parent and any
affiliates) owned by underwriters or their officials. Furnish the
following information as to the voting securities of the trustee
(including its parent and any affiliates) owned beneficially by each
underwriter for the obligor and each director, partner, and executive
officer of each such underwriter:
As of ___________________(insert date within 31 days)
<TABLE>
<CAPTION>
Col. A. Col B. Col. C Col. D
Percentage of
Voting Securities
Represented by
Amount Owned Amount Given
Name of Owner Title of Class Beneficially in Col. C
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 14
8. Securities of the obligor owned or held by the trustee (including its
parent and any affiliates). Furnish the following information as to
securities of the obligor owned beneficially or held as collateral
security for obligations default by the trustee (including its parent
and any affiliates):
As of ___________________(insert date within 31 days)
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Amount Owned
Whether the Beneficially or
Securities Are Held as Collateral Percent of
Voting or Security for Class Represented
Nonvoting obligations in by Amount Given
Title of Class Securities Default in Col. C
<S> <C> <C> <C> <C>
</TABLE>
9. Securities of underwriters owned or held by the trustee (including its
parent and any affiliates). If the trustee (including its parent and
any affiliates) owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the
obligor, furnish the following information as to each class of
securities of such underwriter any of which are so owned or held by the
trustee:
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Amount Owned
Beneficially or
Held as Collateral Percent of
Security for Class Represented
Title of Issuer Obligations in by Amount
and Title of Amount Default by Given in
Class Outstanding Trustee Col. C
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 15
10. Ownership or holdings by the trustee (including its parent and any
affiliates) of voting securities of certain affiliates or security
holders of the obligor. If the trustee (including its parent and any
affiliates) owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10% or more of the voting securities
of the obligor or (2) is an affiliate, other than a subsidiary, of the
obligor, furnish the following information as to the voting securities
of such person:
As of _______________________(insert date within 31 days)
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Amount Owned
Beneficially or
Held as Collateral Percent of
Security for Class Represented
Title of Issuer Obligations in by Amount
and Title of Amount Default by Given in
Class Outstanding Trustee Col. C
<S> <C> <C> <C> <C>
</TABLE>
11. Ownership or holdings by the trustee (including its parent and any
affiliates) of any securities of a person owning 50 percent or more of
the voting securities of the obligor. If the trustee (including its
parent and any affiliates) owns beneficially or holds as collateral
security for obligations in default any securities of a person who, to
the knowledge of the trustee, owns 50 percent or more of the voting
securities of the obligor, furnish the following information as to each
class of securities of such person any of which are so owned or held by
the trustee (including its parent and affiliates):
As of ______________________(insert date within 31 days)
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Amount Owned
Beneficially or
Held as Collateral Percent of
Security for Class Represented
Title of Issuer Obligations in by Amount
and Title of Amount Default by Given in
Class Outstanding Trustee Col. C
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 16
12. Indebtedness of the Obligor to the Trustee. Except as noted in the
instructions, if the obligor is indebted to the trustee, furnish the
following information:
As of ____________________(insert date with 31 days)
<TABLE>
<CAPTION>
Col. A Col. B Col. C
Amount
Nature of Indebtedness Outstanding Due Date
<S> <C> <C>
</TABLE>
13. Defaults by the Obligor.
a) State whether there is or has been a default with respect to
the securities under this indenture. Explain the nature of
any such default.
-NONE-
b) If the Trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, or is trustee for more than one outstanding
series or securities under the indenture, state whether there
has been a default under any such indenture or series,
identify the indenture or series affected, and explain the
nature of any such default.
As of January 17, 1994 (insert date within 31 days)
-NONE-
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Amount Owned
Beneficially or
Held as Collateral Percent of
Security for Class Represented
Title of Issuer Obligations in by Amount
and Title of Amount Default by Given in
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
Class Outstanding Trustee Col. C
<S> <C> <C> <C> <C>
</TABLE>
14. Affiliations with the Underwriters. If any underwriter is an affiliate
of the trustee (including its parent and any affiliates), described
each such affiliation.
15. Foreign Trustee. Identify the order or rule pursuant to which the
foreign trustee is authorized to act as sole trustee under indentures
qualified or to be qualified under the Act.
16. List of Exhibits. List below all exhibits filed as part of this
statement of eligibility.
1. (a) A copy of the Articles of Association of Star Bank, National
Association, Cincinnati (now Star Bank, National
Association) as now in effect.
(b) A copy of the Amended Articles of Association dated June 14,
1991, changing the name of the association to Star Bank,
National Association.
2. (a) A copy of the certificate of authority of The First National
Bank of Cincinnati (now Star Bank, National Association) to
commence business dated September 1, 1922.
(b) A copy of a Certificate of the Comptroller of the Currency
dated December 21, 1973, authorizing F N National Bank to
commence the business of banking.
(c) A copy of a Certificate of the Comptroller of the Currency
dated December 28, 1973, approving the merger of The First
National Bank of Cincinnati (now Star Bank, National
Association) into F N National Bank under the title "The
First National Bank of Cincinnati" effective January 2, 1974.
<PAGE> 18
(d) A copy of a letter dated June 8, 1988, from the Comptroller of
the Currency indicating the change in the name of the association
to Star Bank, National Association, Cincinnati, effective July 1,
1988.
(e) A copy of a letter dated July 15, 1991, from the Comptroller of
the Currency indicating the change in the name of the association
to Star Bank, National Association, effective June 14, 1991.
3. A copy of the authorization of The First National Bank of Cincinnati
(now Star Bank, National Association) to exercise corporate trust
powers.
4. A copy of existing By-Laws to Star Bank, National Association,
Cincinnati (now Star Bank, National Association)
5. The consent of the Trustee required by section 321 (b) of the Trust
Indenture Act of 1939.
6. A copy of the latest report of condition of Star Bank, National
Association, published pursuant to law or the requirements of its
supervising or examining authority.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Star Bank, National Association, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Cincinnati and State
of Ohio on the 8th day of November, 1996.
STAR BANK, NATIONAL ASSOCIATION
By: /s/ Stephen J. Blackstone
-------------------------------------
Stephen J. Blackstone
Trust Officer
<PAGE> 19
EXHIBIT 1 (a)
STAR BANK, NATIONAL ASSOCIATION, CINCINNATI
CHARTER NO. 24
ARTICLES OF ASSOCIATION
FIRST: The title of this Association shall be "Star Bank, National Association,
Cincinnati."*
SECOND: The main office of the Association shall be in the City of Cincinnati,
County of Hamilton, State of Ohio. The general business of the Association shall
be conducted at its main office and its branches.
THIRD: The Board of Directors of this Association shall consist of not less than
five (5) nor more than twenty-five (25) shareholders, the exact number of
Directors within such minimum and maximum limits to be fixed and determined from
time to time by resolution of a majority of the full Board of Directors or by
resolution of the shareholders at any annual or special meeting thereof. Unless
otherwise provided by the laws of the United States, any vacancy in the Board of
Directors for any reason, including an increase in the number thereof, may be
filled by action of the Board of Directors.
FOURTH: The annual meeting of the shareholders for the election of Directors and
the transaction of whatever other business may be brought before said meeting
shall be held at the main office or such other place as the Board of Directors
may designate, on the day of each year specified therefor by the Bylaws, but if
no election is held on that day, it may be held on any subsequent day according
to the provisions of law; and all elections shall be held according to such
lawful regulations as may be prescribed by the Board of Directors.
FIFTH: The authorized amount of capital stock of this Association shall be
3,640,000 shares of common stock of the par value of five dollars ($5.00) each,
but said capital stock may be increased or decreased from time to time, in
accordance with the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any pre-emptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix.
<PAGE> 20
The Association, at any time and from time to time, may authorized and issue
debt obligations, whether or not subordinated, without the approval of the
shareholders.
*Amended June 14, 1991, see attached.
SIXTH: The Board of Directors shall appoint one of its members President of this
Association, who shall be Chairman of the Board, unless the Board appoints
another Director to be the Chairman. The Board of Directors shall have the power
to appoint one or more Vice Presidents; and to appoint a Cashier and such other
officers and employees as may be required to transact the business of this
Association. The Board of Directors shall have the power to define the duties of
the officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all Bylaws that it may be lawful for them to make and
generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
The Board of Directors, without need for approval of shareholders, shall have
the power to change the location of the main office of this Association, subject
to such limitations as from time to time may be provided by law; and shall have
the power to establish or change the location of any branch or branches of the
Association to any other location, without the approval of the shareholders, but
subject to the approval of the Comptroller of the Currency.
SEVENTH: The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
EIGHTH: The Board of Directors of this Association, the Chairman of the Board,
the President, or any three or more shareholders owning, in the aggregate, not
less twenty-five percent of the stock of this Association, may call a special
meeting of shareholders at any time. Unless otherwise provided by the laws of
the United States, a notice of the time, place, and purpose of every annual and
special meeting of the shareholders shall be given by first-class mail, postage
prepaid, mailed at least ten days prior to the date of such meeting to each
shareholder of record at his address as shown upon the books of this
Association.
NINTH: Any person, his heirs, executors, or administrators, may be indemnified
or reimbursed by the Association for reasonable expenses actually incurred in
connection with any action, suit, or proceeding, civil or criminal, to which he
or they shall be made a party by reason of his being or having been a director,
officer, or employee of the Association or of any firm, corporation, or
organization which he served in any such capacity at the request of the
Association. Provided, however, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding as to
which he shall finally be adjudged to have been guilty of or liable for gross
negligence, willful misconduct or criminal acts in the performance of his duties
to the Association; and, provided further, that no person shall be so
indemnified or reimbursed in relation to any matter in such action, suit, or
proceeding which has
<PAGE> 21
been made the subject of a compromise settlement except with the approval of a
court of competent jurisdiction, or the holders of record of a majority of the
outstanding shares of the Association, or the Board of Directors, acting by vote
of Directors not parties to the same or substantially the same action, suit, or
proceeding, constituting a majority of the whole number of Directors. The
foregoing right of indemnification shall not be exclusive of other rights to
which such person, his heirs, executors, or administrators, may be entitled as a
matter of law. The Association may, upon the affirmative vote of a majority of
its Board of Directors, purchase insurance for the purpose of indemnifying its
directors, officers and other employees to the extent that such indemnification
is allowed in the preceding paragraph. Such insurance may, but need not, be for
the benefit of all directors, officers, or employees.
TENTH: These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law and in that case by the vote of the holders
of such greater amount.
August 18, 1988
<PAGE> 22
EXHIBIT 1(B)
STAR BANC
CORPORATION
June 14, 1991
Deputy Comptroller
Central District
Office of the Comptroller of the Currency
One Financial Place
440 S. LaSalle, Suite 2700
Chicago, Illinois 60605
Dear Deputy Comptroller:
Re: Letter of Notification
Star Bank, National Association, Cincinnati, Charter #24 intends to
change its corporate title to Star Bank, National Association. The effective
date of the change is June 14, 1991.
A certified copy of the amendment to the articles of association is
enclosed. The amendment conforms to the requirements of 12 USC 21 a.
Sincerely,
/s/
F. Kristen Koepcke
FKK:bjt
Enclosure
<PAGE> 23
EXHIBIT 1 (b)
MINUTES OF SPECIAL MEETING OF THE SHAREHOLDER
STAR BANK, NATIONAL ASSOCIATION, CINCINNATI
A Special Meeting of the shareholder of Star Bank, National Association,
Cincinnati (the "Bank") was held on June 14, 1991.
Mr. Oliver W. Waddell called the meeting to order and selected Mr. F. Kristen
Koepke to act as Secretary.
The Secretary reported that all the outstanding shares of the Bank were
represented at this meeting and that the shareholder had waived notice of this
special meeting. Therefore, a quorum was present.
Mr. Waddell stated that the purpose of the meeting was to consider a proposed
name change for the Bank as recommended by the Board of Directors. On motion
duly made and carried, the following resolution was adopted:
RESOLVED, That Article First of the Articles of Association of
the Bank be amended in its entirely to read as follows:
FIRST: The title of this Association shall be "Star Bank,
National Association."
There being no further business to come before the meeting, on motion duly made
and carried, the meeting was adjourned.
/s/
----------------------------------------
F. Kristen Koepke, Secretary
Approved:
/s/
- --------------------------------
Oliver W. Waddell
Chairman, Star Banc Corporation,
Shareholder Certified Copy
/s/
----------------------------------------
Secretary
<PAGE> 24
EXHIBIT 2 (a)
COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE
TO COMMENCE BUSINESS:
NO. 24
E Pluribus Unum
TREASURY DEPARTMENT
Office of Comptroller of the Currency
Washington, D.C., September 1, 1992
WHEREAS, the Act of Congress of the United States, entitled, "An Act to
amend section 5136, Revised Statutes of the United States, relating to corporate
powers of associations, so as to provide succession thereof for a period of
ninety-nine years or until dissolved, and to apply said section as so amended to
all national banking association", approved by the President on July 1, 1922,
provided that all national banking associations organized and operating under
any law of the United States on July 1, 1992 should have succession until
ninety-nine years from that date, unless such association should be sooner
dissolved by the act of its shareholders owning two-thirds of its stock, or
unless its franchise should become forfeited by reason of violation of law, or
unless it should be terminated by an Act of Congress hereinafter enacted;
NOW THEREFORE, I, D. R. Crissinger Comptroller of the Currency, do
hereby certify that The First National Bank of Cincinnati and State of Ohio ,
was organized and operating under the laws of the United States on July 1, 1922,
and that its corporate existence was extended for the period of ninety-nine
years from that date in accordance with and subject to the condition in the Act
of Congress hereinbefore recited.
(SEAL) IN TESTIMONY WHEREOF, witness my hand
and seal of office this first day of
September, 1922
(Signed) D. R. Crissinger
--------------------------------------
Comptroller of the Currency
<PAGE> 25
EXHIBIT 2 (b)
Comptroller of the Currency
TREASURY DEPARTMENT OF THE UNITED STATES
Washington, D.C.
Whereas, satisfactory evidence has been presented to the
Comptroller of the Currency that "FN NATIONAL BANK", located in CINCINNATI,
State of OHIO, has complied with all provisions of the Statutes of the United
States required to be complied with before being authorized to commence the
business of banking as National Banking Association;
Now, therefore, I hereby certify that the above-named
association is authorized to commence the business of banking as a National
Banking Association.
In testimony whereof, witness my signature and seal of
SEAL office this 21st day of December, 1913.
/S/
---------------------------------
<PAGE> 26
EXHIBIT 2 (c)
Comptroller of the Currency
TREASURY DEPARTMENT OF THE UNITED STATES
Washington, D.C.
WHEREAS, satisfactory evidence has been presented to the
Comptroller of the Currency that all requisite legal and corporate action has
been taken, in accordance with the statutes of the United States, to merge The
First National Bank of Cincinnati, Cincinnati, Ohio, into FN National Bank,
Cincinnati, Ohio, under the charter of FN National Bank and under the title "The
First National Bank of Cincinnati," with capital stock of $18,200,000;
NOW, THEREFORE, it is hereby certified that such merger was
approved November 29, 1973, and is effective as of the opening of business
January 2, 1974.
IN TESTIMONY WHEREOF witness my signature and seal
of office this 28th day of December, 1973
SEAL /S/
----------------------------------------
James E. Smith
Comptroller of the Currency
<PAGE> 27
EXHIBIT 2(d)
- --------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- --------------------------------------------------------------------------------
Central District
One Financial Plaza, Suite 2700
440 South LaSalle Street
Chicago, Illinois 60605
June 8, 1988
Mr. Raymond D. Beck
Secretary & Counsel
First National Cincinnati Corporation
First National Bank Center
425 Walnut Street
Cincinnati, Ohio 45201-1038
Dear Mr. Beck:
The office of the Comptroller of the Currency acknowledges receipt of your
letters concerning First National Cincinnati Corporation's banking subsidiarys'
title changes and the appropriate amendments to each bank's articles of
association. The Office has recorded the following banks' title changes
effective July 1, 1988.
<TABLE>
<CAPTION>
Old Title New Title
<S> <C>
The First National Bank of Ironton Star Bank, National Association,
Ironton, Ohio Tri-State
Charter No. 16607
Farmers and Traders National Bank Star Bank, National Association
Hillsboro, Ohio Hillsboro
Charter No. 17646
The First National Bank of Cincinnati Star Bank, National Association
Cincinnati, Ohio Cincinnati
Charter No. 24
The First National Bank & Trust Company Star Bank, National Association
Troy, Ohio Troy
Charter No. 9336
</TABLE>
<PAGE> 28
Page 2
Mr. Raymond D. Beck (cont'd)
<TABLE>
<S> <C>
The Second National Bank of Hamilton Star Bank, National Association
Hamilton, Ohio Butler County
Charter No. 17200
The Second National Bank of Richmond Star Bank, National Association
Richmond, Indiana Eastern Indiana
Charter No. 1988
The First National Bank of Aurora Star Bank, National Association
Aurora, Indiana Aurora
Charter No. 699
The Peoples National Bank of Lawrenceburg Star Bank, National Association
Lawrenceburg, Indiana Southeastern Indiana
Charter No. 2612
Newport National Bank Star Bank, National Association
Newport, Kentucky Campbell County
Charter No. 4765
The First National Bank Star Bank, National Association
Sidney, Ohio Sidney
Charter No. 5214
</TABLE>
Very truly yours,
David J. Rogers
National Bank Examiner
Analysis Division
<PAGE> 29
EXHIBIT 2(e)
- --------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- --------------------------------------------------------------------------------
Central District
One Financial Place
440 S. LaSalle, Suite 2700
Chicago, Illinois 60605
July 15, 1991
Mr. F. Kristen Koepcke
Vice President, General Counsel and Secretary
Star Banc Corporation
425 Walnut Street
P.O. Box 1038
Cincinnati, Ohio 45201-1038
Dear Mr. Koepcke:
The Office of the Comptroller of the Currency has received your letter
concerning the title change and the appropriate amendment to the bank's articles
of association. The Office has recorded that as of June 14, 1991, the title of
Star Bank, National Association, Cincinnati, Charter No. 24, was changed to Star
Bank, National Association.
As a result of the Garn-St Germain Depository Institutions Act of 1982, this
Office is no longer responsible for the approval of national bank name changes
nor does it maintain official records on the use of alternate titles. The use of
other titles or the retention of the rights to any previously used title is the
responsibility of the bank's board of directors. Legal counsel should be
consulted to determine whether or not the new title, or any previously used
title, could be challenged by competing institutions under the provisions of
federal or state law.
Very truly yours,
David J. Rogers
National Bank Examiner
Analysis Division
<PAGE> 30
EXHIBIT 3
THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS:
FEDERAL RESERVE BOARD
Washington, D.C.
October 9, 1919
Pursuant to authority vested in the Federal Reserve Board by the Act of
Congress approved December 23, 1913, known as the Federal Reserve Act, as
amended by the Act of September 26, 1918, the
FIRST NATIONAL BANK OF CINCINNATI
has been granted the right to act, when not in contravention of State or local
law, as TRUSTEE, EXECUTOR, ADMINISTRATOR, REGISTRAR OF STOCKS AND BONDS,
GUARDIAN OF ESTATES, ASSIGNEE, RECEIVER OR IN ANY OTHER FIDUCIARY CAPACITY IN
WHICH STATE BANKS, TRUST COMPANIES OR OTHER CORPORATIONS WHICH COME INTO
COMPETITION WITH NATIONAL BANKS ARE PERMITTED TO ACT UNDER THE LAWS OF THE STATE
OF OHIO. The exercise of such rights shall be subject to regulations prescribed
by the Federal Reserve Board.
Federal Reserve Board,
By W. P. G. Harding
Governor.
ATTEST:
W. T. Chapman
Secretary.
STATE OF OHIO
DEPARTMENT OF BANKS AND BANKING
Certificate of Authority No. 17
NATIONAL BANKS
I, Philip C. Berg, Superintendent of Banks, do hereby certify that the
First National Bank of Cincinnati, Hamilton County, Ohio has complied with all
the requirements provided by law and is authorized to transact the business of a
trust company and to perform all the functions granted to such companies by the
laws of this state.
Given under my hand and official Seal at Columbus,
Ohio, this twenty-fifth day of November, A.D. 1919
Philip C. Berg,
Superintendent of Banks.
(SEAL)
<PAGE> 31
EXHIBIT 4
BY-LAWS
STAR BANK, N.A., CINCINNATI
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING
The annual meeting of shareholders shall be held in the main banking house of
the Association at 11:00 a.m. on the second Tuesday in February of each year.
Notice of such meeting shall be mailed to shareholders not less than ten (10)
nor more than sixty (60) days prior to the meeting date.
SECTION 2. SPECIAL MEETINGS
Special meetings of shareholders may be called and held at such times and upon
such notice as is specified in the Articles of Association.
SECTION 3. QUORUM
A majority of the outstanding capital stock represented in person or by proxy
shall constitute a quorum of any meeting of the shareholders, unless otherwise
provided by law, but less than a quorum may adjourn any meeting, from time to
time, and the meeting may be held as adjourned without further notice.
SECTION 4. INSPECTORS
The Board of Directors may, and in the event of its failure so to do, the
Chairman of the Board shall appoint Inspectors of Election who shall determine
the presence of a quorum, the validity of proxies, and the results of all
elections and all other matters voted upon by shareholders at all annual and
special meetings of shareholders.
SECTION 5. VOTING
In deciding on questions at meetings of shareholders, except in the election of
directors, each shareholder shall be entitled to one vote for each share of
stock held. A majority of votes cast shall decide each matter submitted to the
shareholders, except where by law a larger vote is required. In all elections of
directors, each shareholder shall have the right to vote the number of shares
owned by him for as many persons as there are directors to be elected, or to
cumulate such shares and give one candidate as many votes as the number of
directors multiplied by the number
<PAGE> 32
of his shares equal, or to distribute them on the same principle among as many
candidates as he shall think fit.
ARTICLE II
SECTION 1. TERM OF OFFICE
The directors of this Association shall hold office for one year and until their
successors are duly elected and qualified.
SECTION 2. REGULAR MEETINGS
The organization meeting of the Board of Directors shall be held as soon as
practical following the annual meeting of shareholders at the main banking
house. Other regular meetings of the Board of Directors shall be held without
notice at 11:00 a.m. on the second Tuesday of each month except February, at the
main banking house, or, provided notice is given by telegram, letter, telephone
or in person to every Director, at such time and place as may be designated in
the notice of the meeting. When any regular meeting of the Board falls on a
holiday, the meeting shall be held on the next banking business day, unless the
Board shall designate some other day.
SECTION 3. SPECIAL MEETINGS
Special meetings of the Board of Directors may be called by the Chairman of the
Board of the Association, or at the request of three or more Directors. Notice
of the time, place and purposes of such meetings shall be given by telegram,
letter, telephone or in person to every Director.
SECTION 4. QUORUM
A majority of the entire membership of the Board shall constitute a quorum at
any meeting of the Board.
SECTION 5. NECESSARY VOTE
A majority of those Directors present and voting at any meeting of the Board of
Directors shall decide each matter considered, except where otherwise required
by law or the Articles or By-Laws of this Association.
SECTION 6. COMPENSATION
Directors, excluding full-time employees of the Bank, shall receive such
reasonable compensation as may be fixed from time to time by the Board of
Directors.
SECTION 7. ELECTION-AGE LIMITATION
No person shall be elected or reelected a Director after reaching his seventieth
(70th) birthday, provided that any person who is a Director on December 10,
1985, may continue to be reelected a Director until he reaches his seventy-fifth
(75th) birthday.
<PAGE> 33
SECTION 8 RETIREMENT-AGE LIMITATION
Every Director of the Bank shall retire no later than the first month next
following his seventieth (70th) birthday, except for any person who was a
Director on December 10, 1985, who shall retire not later that the first of the
next month following his seventy-fifth (75th) birthday.
SECTION 9 DIRECTORS EMERITUS
The Board shall have the right from time to time to choose as Directors Emeritus
persons who have had prior service as members of the Board and who may receive
such compensation as shall be fixed from time to time by the Board of Directors.
ARTICLE III
OFFICERS
SECTION 1 WHO SHALL CONSTITUTE
The Officers of the Association shall be a Chairman of the Board, a President, a
Secretary, and other officers such as Chairman of the Executive Committee, Vice
Chairman of the Board, Executive Vice Presidents, Senior Vice Presidents, Vice
Presidents, Assistant Secretaries, Trust Officers, Trust Investment Officers,
Trust Real Estate Officers, Assistant Trust Officers, a Controller, Assistant
Controller, an Auditor and Assistant Auditors, as the Board may appoint from
time to time. Any person may hold two offices. The Chairman of the Board, all
Vice Chairmen of the Board and the President shall at all times be members of
the Board of Directors.
SECTION 2 TERM OF OFFICE
All officers shall be elected for and shall hold office for one year and until
their successors are elected and qualified, subject to the right in the Board of
Directors by a majority vote of the entire membership to discharge any officer
at any time.
SECTION 3 CHAIRMAN OF THE BOARD (Amended 12/13/88-see attachment)
The Chairman of the Board shall be the Chief Executive Officer of the
Association and shall have all duties, responsibilities and powers of the Chief
Executive Officer. He shall, when present, preside at all meetings of
shareholders and directors and shall be ex officio a member of all committees of
the Board. He shall name all members of the committees of the Board, subject to
the confirmation thereof by the Board.
In the event that there is a vacancy in the position of President or in the
event of the absence or incapacity of the President, the Chairman may appoint,
or in the event of his failure to do so, the Board of Directors or the Executive
Committee thereof may designate any Vice Chairman of the
<PAGE> 34
Board, any Executive Vice President or any Senior Vice President of the
Association temporarily to exercise the powers and perform the duties of the
Chairman as Chief Executive Officer when the Chairman is absent or
incapacitated.
The Board of Directors shall have the power to elect a Chairman of the Executive
Committee. Any such Chairman of the Executive Committee shall participate in the
formation of the policies of the Association and shall have such other duties as
may be assigned to him from time to time by the President or by the Board of
Directors.
SECTION 4 PRESIDENT (amended 12/13/88-see attachment)
The President shall participate in the formation and supervision of the policies
and operations of the Association and shall perform such other duties as may be
assigned to him from time to time by the Board of Directors or by the Chairman
of the Board. In the event that there is a vacancy in the position of the
Chairman of the Board, the President shall be the Chief Executive Officer of the
Association and shall have all the powers and perform all the duties of the
Chairman of the Board, including the same power to name temporarily a Chief
Executive Officer to serve in the absence of the President.
SECTION 5 CHAIRMAN OF THE EXECUTIVE COMMITTEE
The Board of Directors shall have the power to elect a Chairman of the Executive
Committee. Any such Chairman of the Executive Committee shall participate in the
formation of the policies of the Association and shall have such other duties as
may be assigned to him from time to time by the President or by the Board of
Directors.
SECTION 6 VICE CHAIRMEN OF THE BOARD
The Board of Directors shall have the power to elect one or more Vice Chairmen
of the Board of Directors. Any such Vice Chairmen of the Board shall participate
in the formation of the policies of the Association and shall have such other
duties as may be assigned to him from time to time by the Chairman of the Board
or by the Board of Directors.
SECTION 7 OTHER OFFICERS
The Secretary and all other officers appointed by the Board of Directors shall
have such duties as defined by law and as may from time to time be assigned to
them by the Chief Executive Officer or the Board of Directors.
SECTION 8 RETIREMENT
Every officer of the Association shall retire not later than the first of the
month next following his sixty-fifth (65th) birthday. The Board of Directors
may, in its discretion, set the retirement date and terms of retirement of an
officer at a date later than provided above.
<PAGE> 35
ARTICLE IV
COMMITTEES
SECTION 1 EXECUTIVE COMMITTEE
There shall be a standing committee of Directors in this Association to be known
as the Executive Committee. This Committee shall meet at 11:00 a.m. on the first
and fourth Tuesday of each month. It shall have all of the powers of the Board
of Directors between meetings of the Board, except as the Board only by law is
authorized to perform or exercise. All actions of the Executive Committee shall
be reported to the Board of Directors. In the event that any member of the
Executive Committee is unable to attend a meeting of that committee, the
Chairman of the Board or the President may, at his discretion, appoint another
Director to attend said meeting of the Executive Committee and for that meeting
to serve as a member of the Executive Committee with full power to act in place
of the absent regular member of the committee.
SECTION 2 COMPENSATION COMMITTEE
There shall be a standing committee of directors of this Association to be known
as the Compensation Committee who shall review the compensation of all Executive
Officers and those officers who participate in the Profit Sharing Pool as well
as fees for directors of the Association. They will recommend specific
compensation arrangements to the Board of Directors for their confirmation.
SECTION 3 COMMITTEE ON AUDIT
There shall be a standing committee of Directors of this Association to be known
as the Committee on Audit, none of whose members shall be active officers of the
Association. This Committee shall make or cause to be made a suitable
examination of the affairs of the Association and the Trust Department at least
once during each period of twelve months. The results of such examination shall
be reported in writing to the Board at the next regular meeting thereafter
stating whether the Association and/or Trust Department is in a sound solvent
condition, whether adequate internal audit controls and procedures are being
maintained and make such recommendations as it deems advisable.
SECTION 4 TRUST COMMITTEE
There shall be a standing committee of Directors of this Association to be known
as the Trust Committee. The Trust Committee shall determine policies of the
Department and review actions of the Trust Investment Committee. All actions of
the Trust Committee shall be reported to the Board of Directors.
SECTION 5 TRUST INVESTMENT COMMITTEE
There shall be a standing committee of this Association to be known as the Trust
Investment Committee composed of officers of the Association. The Trust
Investment Committee or such
<PAGE> 36
officers as may be duly designated by the Trust Investment Committee, shall pass
upon the acceptance of all trusts, the closing out or relinquishment of all
trusts and the making, retention, or disposition of all investments of trust
funds in conformity with policies established by the Trust Committee. Actions of
the Trust Investment Committee shall be reported to the Trust Committee.
SECTION 6 PENSION COMMITTEE
There shall be a standing committee of directors or officers of this Association
to be known as the Pension Committee, who shall have the powers and duties as
set forth in the Association's Employees' Pension Plan. A report of the
condition of the pension fund shall be submitted annually to the Board of
Directors.
SECTION 7 OTHER COMMITTEES
The Chairman may appoint, from time to time, other committees for such purposes
and with such powers as he or the Board may direct.
ARTICLE V
SEAL
SECTION 1 IMPRESSION
The following is an impression of the seal of this Association.
August 25, 1988
<PAGE> 37
RESOLVED, That Section 3 of Article III of the By-Laws of the Bank shall be
amended to read:
SECTION 3 CHAIRMAN OF THE BOARD
The Chairman of the Board shall have general executive powers and duties and
shall perform such other duties as amy be assigned from time to time by the
Board of Directors. In addition, unless the Board of Directors shall have
designated the President to be the Chief Executive Officer, the Chairman of the
Board shall be the Chief Executive Officer and shall have all the powers and
duties of the Chief Executive Officer. He shall, when present, preside at all
meetings of shareholders and directors and shall be ex officio a member of all
committees of the Board. He shall name all members of the committees of the
Board, subject to the confirmation thereof by the Board.
If he is Chief Executive Officer, in the event that there is a vacancy in the
position of President or in the event of the absence or incapacity of the
President, the Chairman may appoint, or in the event of his failure to do so,
the Board of Directors or the Executive Committee thereof may designate, any
Vice Chairman of the Board, any Executive Vice President or any Senior Vice
President of the Association temporarily to exercise the powers and perform the
duties of the Chairman as Chief Executive Officer when the Chairman is absent or
incapacitated.
If the President has been designated Chief Executive Officer by the Board of
Directors, in the event that there is a vacancy in the position of the President
or in the event of the absence or incapacity of the President, the Chairman
shall be the Chief Executive Officer of the Association and shall have all the
powers and perform all the duties of the President, including the powers to name
temporarily a Chief Executive Officer to serve in the absence of the Chairman.
FURTHER RESOLVED, That Section 4 of Article III of the By-Laws of the bank shall
be amended to read:
SECTION 4 PRESIDENT
The President shall have general executive powers and duties and shall perform
such other duties as may be assigned from time to time by the Board of
Directors. In addition, if designated by the Board of Directors, the President
shall be the Chief Executive Officer and shall have all the powers and duties of
the Chief Executive Officer, including the same power to name temporarily a
Chief Executive Officer to serve in the absence of the President if there is a
vacancy in the position of the Chairman or in the event of the absence or
incapacity of the Chairman.
If the Chairman has been designated Chief Executive Officer by the Board of
Directors, in the event that there is a vacancy in the position of the Chairman
of the Board or in the event of the absence or incapacity of the Chairman of the
Board, the President shall be the Chief Executive Officer of the Association and
shall have all the powers and perform all the duties of the Chairman of the
Board, including the same power to name temporarily a Chief Executive Officer to
serve in the absence of the President.
<PAGE> 38
EXHIBIT 5
THE CONSENT OF THE TRUSTEE
REQUIRED BY 321 (b) OF THE ACT
Star Bank, National Association, the Trustee executing the
statement of eligibility and qualification to which this Exhibit is attached
does hereby consent that reports of examinations of the undersigned by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor in accordance
with the provisions of 321 (b) of the Trust Indenture Act of 1939.
STAR BANK, NATIONAL ASSOCIATION
11/6/96 BY: /s/ Stephen J. Blackstone
____________________________ ____________________________________
Date Stephen J. Blackstone
Trust Officer
<PAGE> 39
CONSOLIDATED REPORT OF CONDITION FOR INSURANCE COMMERCIAL AND STATE-CHARTERED
SAVINGS BANKS FOR SEPTEMBER 30, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
<S> <C>
C400
Dollar Amounts in Thousands RCFD Bil Mil Thou
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin (1) 451,065
b. Interest-bearing balances (2) 0
2. Securities:
a. Held-to-maturity securities (from Schedule RE-B, Column A) 1,447,188
b. Available-for-sale securities (from Schedule RC-B, Column D) 198,643
3. Federal funds sold and securities purchased under agreements to resell in
domestic offices
of the bank and of its Edge and Agreements subsidiaries, and in YBFs:
a. Federal funds sold 5,924
b. Securities purchased under agreements to resell 0
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income(from Schedule RC-C)
b. LESS: Allowance for loan and lease losses
c. LESS: Allocated transfer risk reserve
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) 5,919,755
5. Trading assets (from Schedule RC-D) 0
6. Premises and fixed assets (including capitalized leases) 100,250
7. Other real estate owned (from Schedule RC-M) 2,745
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) 0
9. Customers' liability to this bank on acceptances outstanding 25,372
10. Intangible assets (from Schedule RC-M) 215,460
11. Other assets (from Schedule RC-F) 173,361
12. Total assets (sum of items 1 through 11) 8,539,763
</TABLE>
<PAGE> 40
SCHEDULE RC--CONTINUES
<TABLE>
<CAPTION>
<S> <C>
C400
Dollar Amounts in Thousands RCFD Bil Mil Thou
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-B,
part I) 6,604,080
(1) Noninterest-bearing (1) 1,197,784
(2) Interest-bearing 5,406,296
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from
Schedule RC-E, Part II) 41,512
(1) Noninterest-bearing 0
(2) Interest-bearing 41,512
14. Federal funds purchased and securities sold under agreements ro repurchase
in domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased 838,507
b. Securities sold under agreements ro repurchase 5,549
15. a. Demand notes issued to the U.S. Treasury 117,994
b. Trading liabilities (from Schedule RC-D) 0
16. Other borrowed money:
a. With original maturity of one year or less 2,422
b. With original maturity of more than one year 0
17. Mortgage indebtedness and obligations under capitalizated leases 11,711
18. Bank's liability on acceptances executed and outstanding 25,372
19. Subordinated notes and debentures 148,361
20. Other liabilities (from Schedule RC-G) 95,782
21. Total liabilities (sum of items 13 through 20) 7,891,290
22. Limited-life preferred stock and related surplus
23. Perpetual preferred stock and related surplus 0
24. Common Stock 18,200
25. Surplus [exclude all surplus related to preferred stock] 197,890
26. a. Undivided profits and capital reserves 437,179
---------
b. Net unrealized holding gains (losses) on available-for-sale securities (4,796)
---------
27. Cumulative foreign currency translation adjustments 0
---------
28. Total equity capital (sum of items 23 through 27) 648,473
---------
29. Total liabilities, limited-life preferred stock, and equity capital (sum of
items 21, 22, and 28) ///////////////////
8,539,763
</TABLE>
<PAGE> 41
EXHIBIT INDEX
Exhibit Name and Number Page No.
- ----------------------- --------
Exhibit T3A.1 Articles of Incorporation of the
Applicant, currently in effect.
Exhibit T3A.2 Form of Certificate of Reorganization
and Certificate of Amended and Restated
Articles of Incorporation of the reorganized
Applicant.
Exhibit T3B.1 Existing Code of Regulations of the
Applicant.
Exhibit T3B.2 Form of Amended Regulations of the
reorganized Applicant.
Exhibit T3C Form of Indenture to be qualified
(including form of Note attached as Exhibit A
thereto).
Exhibit T3E.1 Disclosure Statement for Third Amended
Consolidated Plan of Reorganization, dated
August 28, 1996 (including the appendices and
exhibits attached thereto).
Exhibit T3E.2 Form of Ballots.
Exhibit T3F Cross Reference Sheet showing the
location in the Indenture of the provisions
inserted therein pursuant to Section 310
through 318(a), inclusive, of the Trust
Indenture Act of 1939 (included in Exhibit
T3C hereof).
11
<PAGE> 1
Exhibit 99.T3A.1
CERTIFICATE OF ADOPTION
OF
AMENDMENT TO ARTICLES OF INCORPORATION
OF
EAGLE-PICHER INDUSTRIES, INC.
John W. Painter, Executive Vice President, and Charles S. Dautel,
Secretary, of Eagle-Picher Industries, Inc., an Ohio corporation, with its
principal office located in Cincinnati, Hamilton County, Ohio (the
"Corporation"), do hereby certify that a meeting of the shareholders of the
Corporation entitled to vote on the proposal to amend the Amended Articles of
Incorporation of the Corporation, as set forth in the following resolution, was
duly called and held on May 28, 1986, at which meeting a quorum of such
shareholders was present in person or by proxy, and that, by the affirmative
vote of shareholders of the Corporation entitled to exercise at least
two-thirds of the voting power of the Corporation on such proposal the
following resolution was adopted:
RESOLVED, that Section 2 be hereby added and that the following
Article I, Item Fourth, Division B of the Amended Articles of
Incorporation shall supercede and take the place of existing Article
I, Item Fourth, Division B:
DIVISION B
Express Terms of Common Stock
-----------------------------
SECTION 1. The Common Stock shall be subject to the express
terms of the Serial Preference Stock and any series thereof.
Each share of Common Stock shall be equal to every other share of
Common Stock; and the holders thereof shall be entitled to one vote
for each share of such stock on all questions presented to the
shareholders.
SECTION 2. The holders of Common Stock shall have no pre-emptive
right to purchase or have offered to them for purchase any shares
or other securities of the Corporation, whether now or hereafter
authorized.
IN WITNESS WHEREOF, John W. Painter, Executive Vice President, and
Charles S. Dautel, Secretary, of Eagle-Picher Industries, Inc. have hereunto
subscribed their names this 28th day of May, 1986.
/s/ John W. Painter
------------------------------------------
John W. Painter, Executive Vice President
/s/ Charles S. Dautel
------------------------------------------
Charles S. Dautel, Secretary
<PAGE> 2
Amended Articles of Incorporation
Eagle-Picher Industries, Inc.
______________
As Adopted May 1, 1985
______________
ARTICLE I
The Amended Articles of Incorporation of Eagle-Picher Industries, Inc.
(hereinafter in this Article I referred to as the "Corporation") shall be and
be deemed to be further amended to read as set forth below:
FIRST: Name
The name of the Corporation is Eagle-Picher Industries, Inc.
SECOND: Principal Office
The place in this State where the principal office of the Corporation is
to be located is Cincinnati, Hamilton County.
THIRD: Purposes
The purposes of the Corporation are:
To manufacture, purchase or otherwise acquire, invest in, own, mortgage,
pledge, produce, compound, process, develop, sell or otherwise dispose of,
trade and generally deal in and with:
Oxides, pigments, acids and chemicals of every kind and description.
Primary and secondary batteries of all types.
Insulation, both for home and industrial use, of every type and
description.
Diatomaceous earth and products derived therefrom by any processes or
treatment.
Molded, extruded, and rubber-to-metal mechanical rubber products;
products from rubber, natural, synthetic, and silicone; and rubber
products, materials and articles of any and all kinds, for any and all
uses and purposes.
Plastics and plastic products, materials and articles of any and all
kinds for any and all uses and purposes.
Paper, waxed paper, coated and impregnated paper, paper board and all
products composed in whole or in part of paper; fibre board and fibre
board products of all kinds; fibre glass and fibre glass products of all
kinds; felt and felt products of all kinds; cellophane and related
products; decorative and industrial high-pressure laminates; carpet floor
mats for automobiles; and flocked materials.
Motors, engines, generators and appliances of every type and nature,
and all parts and accessories, appliances, devices and equipment of
every kind and nature.
All substances and products, kindred to or competitive with any or all
of the foregoing and all that may result from or be convenient to the
production, manufacture, sale and dealing in any or all of the foregoing
substances and products.
All substances, materials and articles made from or containing any or
all of the foregoing or entering into or convenient for the manufacture
and sale of any or all of the foregoing products.
To engage in any and all phases of operating, maintaining and conducting
the business of a foundry and machine shop, manufacturing and producing
ferrous and non-ferrous metals, doing mold cutting and forming, building
machines, dies and tools, making patterns, models and appurtenances thereto
and to acquire, lease, purchase, own, hold, mortgage, pledge, or sell,
real, personal and intangible property which may be necessary, incidental,
required, useful or convenient in connection with the prosecution of such
business.
To search, explore, prospect, mine or drill for, extract, process,
manufacture, purchase, or otherwise acquire, sell, or otherwise dispose of,
and generally to deal in and with all kinds of ores, metals, minerals, and any
other useful or valuable elements, substances or deposits, including rights,
leases, claims and interests to and in lands containing the same.
To manufacture, purchase or otherwise acquire, invest in, own, mortgage,
pledge, produce, compound, process, develop, sell or otherwise dispose of,
trade and generally deal in and with goods, wares and merchandise and personal
property of every kind and description.
[1]
<PAGE> 3
To do all things necessary or incident to any or all the foregoing
purposes, and to purchase, acquire, hold, sell, convey, exchange, lease,
mortgage or dispose of property, real or personal, tangible or intangible; to
borrow money and to issue notes, bonds, or debentures or other evidences of
indebtedness, and to make loans to any firm, association, corporation and/or
individual.
To carry on any other lawful business whatever which may seem to the
Board of Directors capable of being carried on in connection with the above,
or calculated, directly or indirectly, to promote the interests of the
Corporation or to enhance the values of its properties; and to have, enjoy and
exercise the rights, powers and privileges which are now or which may hereafter
be conferred upon corporations organized under the same statutes as this
Corporation.
To conduct its business, and to have and maintain one or more offices,
within and without the State of Ohio and in all other states and territories
and in the District of Columbia, in all dependencies, colonies, or possessions
of the United States of America and in foreign countries; and to purchase, or
otherwise acquire, hold, own, equip, improve, manage, operate, finance,
promote, sell, convey, mortgage or otherwise dispose of the real and personal
property in all such states and places, to the extent that the same may be
permissible under the laws thereof.
The foregoing clauses shall be construed as objects, purposes and powers
and it is hereby expressly provided that the foregoing enumerated specific
objects, purposes and powers shall not be held to limit or restrict in any
manner the powers of this Corporation, and are in furtherance of, and in
addition to, and not in limitation of the general powers conferred by the
laws of the State of Ohio.
It is the intention that the objects, purposes and powers herein
enumerated, and all subdivisions thereof shall, except as otherwise expressly
provided, in nowise be limited or restricted, by reference to or inference from
the terms of any other clause or paragraph hereof, and that each of the
purposes, objects and powers specified herein shall be regarded as an
independent purpose, object and power.
FOURTH: The number of shares which the Corporation is authorized to
have outstanding is 30,873,457 which shall be classified as follows:
873,457 shares of Serial Preference Stock without par value
(hereinafter called "Serial Preference Stock"); and
30,000,000 shares of Common Stock of the par value of $1.25 each
(hereinafter called "Common Stock"). The shares of such classes of stock
shall have the following express terms:
DIVISION A
Express Terms of Serial Preference Stock
SECTION 1. The Serial Preference Stock may be issued from time to time
in one or more series. All shares of Serial Preference Stock shall be of equal
rank and shall be identical, except in respect of the particulars that may be
fixed and determined by the Board of Directors as hereinafter provided, and
each share of each series shall be identical in all respects with all other
shares of such series, except as to the date from which dividends are
cumulative. Subject to the provisions of Sections 2 to 8, both inclusive, of
this Division, which provisions shall apply to all Serial Preference Stock, the
Board of Directors hereby is empowered to cause the same to be issued in one or
more series and with respect to each such series prior to the issuance thereof
to fix and determine by adopting amendments to the Articles of Incorporation:
(a) The designation of the series.
(b) The authorized number of shares of the series, which number may be
increased (except where otherwise provided by the Board of Directors in
creating the series) or decreased (but not below the number then outstanding)
by action of the Board of Directors.
(c) The annual dividend rate.
(d) The redemption rights and price or prices, if any.
(e) The terms and amount of any sinking fund provided for the purchase
or redemption of shares.
(f) The amounts payable in the event of voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation.
(g) The conversion rights, if any.
(h) Restrictions, if any (in addition to those set forth in Section
6(b) of this Division) on the issuance of shares of the same series or of any
other class or series.
[2]
<PAGE> 4
SECTION 2. The holders of the Serial Preference Stock of each series,
in preference to the holders of Common Stock and of any other class of shares
ranking junior to the Serial Preference Stock, shall be entitled to receive
out of any funds legally available and when and as declared by the Board of
Directors dividends in cash at the rate for such series fixed in accordance
with the provisions of Section 1 of this Division, payable quarterly on the
second day of January, April, July and October of each year. Such dividends
shall be cumulative, in the case of shares of each particular series, from and
after the date of issuance thereof. No dividends may be paid upon, or declared
or set apart for, any shares of Serial Preference Stock for any quarterly
dividend period unless at the same time there shall be paid upon, or declared
or set apart for, all series of Serial Preference Stock then outstanding and
entitled to receive such a dividend, a dividend for such quarterly dividend
period ratably in proportion to the respective annual dividend rates of each
such series.
SECTION 3. In no event so long as any Serial Preference Stock shall be
outstanding shall any dividends, except a dividend payable in Common Stock or
other shares ranking junior to the Serial Preference Stock, be paid or declared
or any distribution be made except as aforesaid on the Common Stock or any other
shares ranking junior to the Serial Preference Stock, nor shall any Common
Stock or any other shares ranking junior to the Serial Preference Stock, be
purchased, retired or otherwise acquired by the Corporation:
(a) Unless all accrued but unpaid dividends on Serial Preference Stock,
including the full dividends for the current quarterly dividend period,
shall have been declared and paid or a sum sufficient for payment thereof
set apart; and
(b) Unless there shall be no arrearages with respect to the redemption
of Serial Preference Stock of any series from any sinking fund provided
for shares of such series in accordance with the provisions of Section 1
of this Division.
SECTION 4. (a) Subject to the express terms of each series, the
Corporation may from time to time redeem all or any part of the Serial
Preference Stock of any series at the time outstanding (i) at the option of the
Board of Directors at the applicable redemption price for such series fixed in
accordance with the provisions of Section 1 of this Division, or (ii) in
fulfillment of the requirements of any sinking fund provided for shares of such
series at the applicable sinking fund redemption price fixed in accordance with
the provisions of Section 1 of this Division, together in each case with
accrued but unpaid dividends to the redemption date.
(b) Notice of every such redemption shall be mailed, postage prepaid,
to the holders of record of the Serial Preference Stock to be redeemed at their
respective addresses then appearing on the books of the Corporation, and
shall be published at least once in a newspaper of general circulation in the
City of Cincinnati, Ohio, not less than thirty (30) days nor more than sixty
(60) days prior to the date fixed for such redemption. At any time before or
after notice has been given as above provided, the Corporation may deposit the
aggregate redemption price of the shares of Serial Preference Stock to be
redeemed with any bank or trust company in the State of Ohio having capital and
surplus of more than Five Million Dollars ($5,000,000), named in such notice,
directed to be paid to the respective holders of the shares of Serial
Preference Stock so to be redeemed, in amounts equal to the redemption price of
all shares of Serial Preference Stock so to be redeemed, on surrender of the
stock certificate or certificates held by such holders, and upon the making of
such deposit such holders shall cease to be shareholders with respect to such
shares, and after such notice shall have been given and such deposit shall have
been made such holders shall have no interest in or claim against the
Corporation with respect to such shares and shall be entitled only to receive
such moneys from such bank or trust company without interest, subject, however,
to such rights to convert such shares prior to the redemption date thereof as
may be provided by the terms of each respective series. In case less than all
of the outstanding shares of a series of Serial Preference Stock are to be
redeemed, the Corporation shall select by lot the shares so to be redeemed in
such manner as shall be prescribed by its Board of Directors.
If the holders of shares of Serial Preference Stock which shall have
been called for redemption shall not, within six years after such deposit,
claim the amount deposited for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the Corporation such unclaimed amounts,
and thereafter such bank or trust company shall be relieved of all
responsibility in respect thereof and to such holders and such holders shall be
entitled to look only to the Corporation for the payment thereof as general
unsecured creditors of the Corporation.
(c) Any shares of Serial Preference Stock which are redeemed by the
Corporation pursuant to the provisions of this Section 4 and any shares of
Serial Preference Stock which are purchased and delivered in satisfaction of
any sinking fund requirements provided for shares of such series and any shares
of Serial Preference Stock which are converted in accordance with the express
terms thereof shall be cancelled and not reissued. Any shares of Serial
Preference Stock otherwise acquired by the Corporation shall resume the status
of authorized and unissued shares of Serial Preference Stock without serial
designation.
[3]
<PAGE> 5
SECTION 5. (a) The holders of the Serial Preference Stock of any series
shall, in case of liquidation, dissolution or winding up of the affairs of
the Corporation, be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be paid or
distributed among the holders of the Common Stock or any other shares ranking
junior to the Serial Preference Stock, the amounts fixed with respect to shares
of such series in accordance with Section 1 of this Division, plus an amount
equal to all dividends accrued but unpaid thereon to the date of payment of the
amount due pursuant to such liquidation, dissolution or winding up of the
affairs of the Corporation. In case the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon all outstanding
shares of Serial Preference Stock of the full preferential amount to which
they are respectively entitled, then such net assets shall be distributed
ratably to all outstanding shares of Serial Preference Stock in proportion to
the full preferential amount to which each such share is entitled.
After payment to holders of Serial Preference Stock of the full
preferential amounts as aforesaid, holders of Serial Preference Stock as such
shall have no right or claim to any of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or with any
other corporation, or the merger of any other corporation into it, or the sale,
lease or conveyance of all or substantially all the property of the
Corporation, shall not be deemed to be a dissolution, liquidation or winding
up, voluntary or involuntary, for the purposes of this Section 5.
SECTION 6. (a) The holders of Serial Preference Stock shall be entitled
at all times to one-half of one vote for each share, and, except as otherwise
provided herein or required by law, the holders of the Serial Preference Stock
and the holders of Common Stock of the Corporation shall vote together as one
class on all matters.
If, and so often as, the Corporation shall be in default in the payment
of the equivalent of six (6) full quarterly dividends on all shares of all
series of Serial Preference Stock at the time outstanding, whether or not
earned or declared, the holders of Serial Preference Stock of all series,
voting separately as a class and in addition to all other rights to vote for
Directors, shall be entitled to elect as herein provided two members of the
Board of Directors of the Corporation; provided, however, that the holders of
shares of Serial Preference Stock shall not have or exercise such special
class voting rights except at meetings of the shareholders for the election of
Directors, and provided further that the special class voting rights provided
for herein when the same shall have become vested shall remain so vested until
all accrued unpaid dividends of the Serial Preference Stock of all series then
outstanding shall have been paid, whereupon the holders of the Serial
Preference Stock shall be divested of their special class voting rights in
respect of subsequent elections of Directors, subject to the revesting of such
special class voting rights in the event hereinabove specified in this Section.
In the event of default entitling the holders of Serial Preference
Stock to elect two Directors as above specified, a special meeting of the
shareholders for the purpose of electing such Directors shall be called by the
Secretary of the Corporation upon written request of, or may be called by, the
holders of record of at least ten percent of the shares of Serial Preference
Stock of all series at the time outstanding, and notice thereof shall be given
in the same manner as that required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be required to call such
special meeting if the annual meeting of shareholders shall be held within
ninety days after the date of receipt of the foregoing written request from the
holders of Serial Preference Stock. At any meeting at which the holders of the
Serial Preference Stock shall be entitled to elect Directors, the vote of the
holders of a majority of such shares present in person or by proxy at any such
meeting shall be sufficient to elect the members of the Board of Directors
which the holders of the Serial Preference Stock are entitled to elect as
hereinabove provided.
(b) In addition to such votes or consents as may be required by law,
the consent of the holders of at least two-thirds of the number of shares of
Serial Preference Stock at the time outstanding given in person or by proxy,
either in writing or at a meeting called for the purpose at which the holders
of the Serial Preference Stock shall vote separately as a class, shall be
necessary to effect any one or more of the following:
(i) Any amendment, alteration or repeal of any of the provisions of
these Articles of Incorporation, as the same may at any time be amended,
which affects materially and adversely the preferences of the holders of
Serial Preference Stock, including the amendment of these Articles of
Incorporation, as the same may at any time be amended, so as to authorize
or create, or to increase the authorized amount of, Serial Preference
Stock or any shares of any class ranking on a parity with the Serial
Preference Stock; provided, however, that if such amendment, alteration or
repeal affects materially and adversely the preferences of one or more
but not all series of Serial Preference Stock at the time outstanding,
only the consent of the holders of at least two-thirds of the number of
the shares of the series so affected at the time outstanding shall be
required;
[4]
<PAGE> 6
(ii) The authorization or creation of, or the increase in the
authorized amount of, any shares of any class, or any security convertible
into shares of any class, ranking prior to the Serial Preference Stock; or
(iii) The purchase or redemption (for sinking fund purposes or
otherwise) of less than all of the Serial Preference Stock then
outstanding except in accordance with a stock purchase offer made to all
holders of record of Serial Preference Stock, unless all dividends upon
all Serial Preference Stock then outstanding for all previous quarterly
dividend periods shall have been declared and paid or funds therefor set
apart and all accrued sinking fund obligations applicable thereto shall
have been complied with.
(c) In addition to such votes or consents as may be required by law,
the consent of the holders of at least a majority of the number of shares of
Serial Preference Stock at the time outstanding, given in person or by proxy
either in writing or at a meeting called for the purpose at which the holders
of the Serial Preference Stock shall vote separately as a class, shall be
necessary to effect the sale, lease or conveyance by the Corporation of all or
substantially all of its property or business or the voluntary parting with the
control thereof, or its consolidation with or merger into any other
corporation unless the corporation resulting from such consolidation or merger
will have after such consolidation or merger no class of shares either
authorized or outstanding ranking prior to or on a parity with the Serial
Preference Stock except the same number of shares ranking prior to or on a
parity with the Serial Preference Stock and having the same rights and
preferences as the shares of the Corporation authorized and outstanding
immediately preceding such consolidation or merger, and unless each holder of
Serial Preference Stock immediately preceding such consolidation or merger
shall receive the same number of shares, with the same rights and preferences,
of the resulting corporation.
(d) If, in accordance with paragraph (b) or (c) of this Section 6, the
consent of the holders of at least two-thirds, or a majority, as the case may
be, of the number of shares of Serial Preference Stock outstanding shall be
obtained in writing without a meeting for the purpose of taking any action
described in such paragraphs, the Corporation shall forthwith upon obtaining
such consent give notice thereof to each holder of Serial Preference Stock.
SECTION 7. The holders of the Serial Preference Stock shall have no
pre-emptive right to purchase or have offered to them for purchase any shares
or other securities of the Corporation, whether now or hereafter authorized
SECTION 8. For the purposes of this Division A:
Whenever reference is made to shares "ranking prior to the Serial
Preference Stock" or "on a parity with the Serial Preference Stock" such
reference shall mean and include all shares of the Corporation in respect of
which the rights of the holders thereof as to the payment of dividends or as to
distributions in the event of an involuntary liquidation, dissolution or
winding up of the Corporation are given preference over, or rank on an equality
with (as the case may be) the rights of the holders of the Serial Preference
Stock; and whenever reference is made to shares "ranking junior to the Serial
Preference Stock" such reference shall mean and include all shares of the
Corporation in respect of which the rights of the holders as to the payment of
dividends and as to distributions in the event of an involuntary liquidation,
dissolution or winding up of the Corporation are junior and subordinate to
the rights of the holders of the Serial Preference Stock.
DIVISION B
Express Terms of Common Stock
The Common Stock shall be subject to the express terms of the Serial
Preference Stock and any series thereof. Each share of Common Stock shall be
equal to every other share of Common Stock; and the holders thereof shall be
entitled to one vote for each share of such stock on all questions presented to
the shareholders.
FIFTH: The Corporation may from time to time, pursuant to authorization
by its Board of Directors and without action by the shareholders, purchase or
otherwise acquire shares of the Corporation of any class; subject, however, to
such limitation or restrictions, if any, as is contained in the express terms
of any class of shares of the Corporation outstanding at the time of such
purchase or acquisition.
SIXTH: Except as otherwise provided herein or required by law, these
Amended Articles of Incorporation, or any part thereof, may be amended by the
affirmative vote of the holders of a majority of the voting power of the Common
Stock and Serial Preference Stock, voting together as a single class.
SEVENTH: These Amended Articles of Incorporation shall supersede and take
the place of the heretofore existing Articles of Incorporation of the
Corporation and all amendments thereto.
[5]
<PAGE> 7
EIGHTH: Certain Business Combinations.
SECTION 1. Vote Required for Certain Business Combinations.
A. Higher Vote for Certain Business Combinations. In addition to any
affirmative vote required by law or the Articles, and except as otherwise
expressly provided in Section 2, of this Item Eighth:
(i) any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (a) any Interested Shareholder (as
hereinafter defined) or (b) any other corporation (whether or not
itself an Interested Shareholder) which is, or after such merger or
consolidation would be, an Affiliate (as hereinafter defined) of an
Interested Shareholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or
with any Interested Shareholder or any Affiliate of any Interested
Shareholder of any assets of the Corporation or any Subsidiary
having an aggregate Fair Market Value of $10,000,000 or more; or
(iii) the issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Shareholder or any
Affiliate of any Interested Shareholder in exchange for cash,
securities or other property (or a combination thereof having an
aggregate Fair Market Value of $10,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an
Interested Shareholder or any Affiliate of any Interested Shareholder;
or
(v) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger
or consolidation of the Corporation with any of its Subsidiaries or
any other transaction (whether or not with or into or otherwise
involving an Interested Shareholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Shareholder or any Affiliate of any Interested
Shareholder;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (the "Voting Stock"),
voting together as a single class (it being understood that for purposes of
this Item Eighth, each share of the Voting Stock shall have the number of votes
granted to it pursuant to these Articles). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that a
lesser percentage may be specified, by law or in any agreement with any
national securities exchange or otherwise.
B. Definition of "Business Combination". The term "Business Combination"
as used in this Item Eighth shall mean any transaction which is referred to in
any one or more of clauses (i) through (v) of paragraph A of this Section 1.
SECTION 2. When Higher Vote is Not Required. The provisions of Section
1 of this Item Eighth shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such affirmative
vote as is required by law and any other provision of these Articles, if all of
the conditions specified in either of the following paragraphs A and B are met:
A. Approval by Disinterested Directors. The Business Combination shall
have been approved by a majority of the Disinterested Directors (as
hereinafter defined).
B. Price and Procedure Requirements. All of the following conditions
shall have been met:
(i) The aggregate amount of the cash and the Fair Market Value (as
hereinafter defined) as of the date of the consummation of the
Business Combination of consideration other than cash to be received
per share by holders of Common Stock in such Business Combination
shall be at least equal to the higher of the following:
(a) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Shareholder for any shares of Common
Stock acquired by it (1) within the two-year period immediately
prior to the first public announcement of the proposal of the
Business Combination (the "Announcement Date") or (2) in the
transaction in which it became an Interested Shareholder,
whichever is higher; and
(b) The Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested
Shareholder became an Interested Shareholder (such latter date is
referred to in this Item Eighth as the "Determination Date"),
whichever is higher.
(ii) The aggregate amount of the cash and the Fair Market Value as of the
date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of
shares
[6]
<PAGE> 8
of any other class of outstanding Voting Stock shall be at
least equal to the highest of the following (it being intended that
the requirements of this paragraph B(ii) shall be required to be met
with respect to every class of outstanding Voting Stock whether or
not the Interested Shareholder has previously acquired any shares
of a particular class of Voting Stock):
(a) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Shareholder for any shares of such
class of Voting Stock acquired by it (1) within the two-year
period immediately prior to the Announcement Date or (2) in the
transaction in which it became an Interested Shareholder,
whichever is higher;
(b) (if applicable) the highest preferential amount per share
to which the holders of shares of such class of Voting Stock are
entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation; and
(c) The Fair Market Value per share of such class of Voting
Stock on the Announcement Date or on the Determination Date,
whichever is higher.
(iii) The consideration to be received by holders of a particular class
of outstanding Voting Stock (including Common Stock) shall be in
cash or in the same form as the Interested Shareholder has
previously paid for shares of such class of Voting Stock. If the
Interested Shareholder has paid for shares of any class of Voting
Stock with varying forms of consideration, the form of consideration
for such class of Voting Stock shall be either cash or the form used
to acquire the largest number of shares of such class of Voting Stock
previously acquired by it. The price determined in accordance with
paragraphs B(i) and B(ii) of this Section 2 shall be subject to
appropriate adjustment in the event of any stock dividend, stock
split, combination of shares or similar event.
(iv) After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business
Combination: (a) except as approved by a majority of the
Disinterested Directors, there shall have been no failure to declare
and pay at the regular date therefor any full quarterly dividends
(whether or not cumulative) on any series of then outstanding
Preferred Stock; (b) there shall have been (1) no reduction in the
annual rate of dividends paid on the Common Stock (except as
necessary to reflect any stock dividend, stock split or other
subdivision of the Common Stock), except as approved by a majority
of the Disinterested Directors, and (2) an increase in such annual
rate of dividends as necessary to reflect any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect of
reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is approved by a
majority of the Disinterested Directors; and (c) such Interested
Shareholder shall have not become the beneficial owner of any
additional shares of Voting Stock except as part of the transaction
which results in such Interested Shareholder becoming an
Interested Shareholder.
(v) After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the
benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantages
provided by the Corporation, whether in anticipation of or in
connection with such Business Combination or otherwise.
(vi) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder
(or any subsequent provisions replacing such Act, rules or
regulations) shall be mailed to stockholders of the Corporation
at least 30 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent
provisions).
SECTION 3. Certain Definitions. For the purposes of this Item Eighth:
A. A "person" shall mean any individual, firm, corporation or other entity.
B. "Interested Shareholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly, of
more than 20% of the voting power of the outstanding Voting Stock;
or
(ii) is an Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date
[7]
<PAGE> 9
in question was the beneficial owner, directly or indirectly, of
20% or more of the voting power of the then outstanding Voting
Stock; or
(iii) is an assignee of or has otherwise succeeded to any shares of Voting
Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by any Interested
Shareholder, if such assignment or succession shall have occurred in
the course of a transaction or services of transactions not
involving a public offering within the meaning of the Securities Act
of 1933.
C. A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or Associates has (a) the
right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (b)
the right to vote pursuant to any agreement, arrangement or
understanding; or
(iii) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of Voting
Stock.
D. For the purposes of determining whether a person is an Interested
Shareholder pursuant to paragraph B of this Section 3, the number of shares of
Voting Stock deemed to be outstanding shall include shares deemed owned through
application of paragraph C of this Section 3 but shall not include any other
shares of Voting Stock which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
E. "Affiliate" or "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on March 26, 1985.
F. "Subsidiary" means any corporation of which a majority of any class of
equity security is owned, directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of Interested Shareholder set
forth in paragraph B of this Section 3, the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity security is owned,
directly or indirectly, by the Corporation.
G. "Disinterested Director" means any member of the Board of Directors of
the Corporation (the "Board") who is unaffiliated with the Interested
Shareholder and was a member of the Board prior to the time that the Interested
Shareholder became an Interested Shareholder, and any successor of a
Disinterested Director who is unaffiliated with the Interested Shareholder and
is recommended to succeed a Disinterested Director by a majority of
Disinterested Directors then on the Board.
H. "Fair Market Value" means: (i) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding the date in
question on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or if no such quotations are
available, the fair market value on the date in question of a share of such
stock as determined by the Board in good faith; and (ii) in the case of property
other than cash or stock, the fair market value of such property on the date in
question as determined by the Board in good faith.
I. In the event of any Business Combination in which the Corporation
survives, the phrase "other consideration to be received" as used in paragraph
B(i) and (ii) of Section 2 of this Item Eighth of Article I shall include the
shares of Common Stock and/or the shares of any other class of outstanding
Voting Stock retained by the holders of such shares.
SECTION 4. Powers of the Board of Directors. A majority of the directors
of the Corporation shall have the power and duty to determine for the purposes
of this Item Eighth, on the basis of information known to them after reasonable
inquiry, (A) whether a person is an Interested Shareholder, (B) the number of
shares of Voting Stock beneficially owned by any person, (C) whether a person is
an Affiliate or Associate of another, (D) whether the assets which are the
subject of any Business Combination have, or the consideration to be received
for the issuance or transfer of securities by the Corporation or any Subsidiary
in any Business Combination has, an aggregate Fair Market Value of $10,000,000
or more. A majority of the Directors of
[8]
<PAGE> 10
the Corporation shall have the further power to interpret all of the terms and
provisions of this Item Eighth of Article I of the Articles.
SECTION 5. No Effect on Fiduciary Obligations of Interested Shareholders.
Nothing contained in this Item Eighth shall be construed to relieve any
Interested Shareholder from any fiduciary obligation imposed by law.
SECTION 6. Amendment, Repeal, etc. Nothwithstanding any other provisions
of these Amended Articles of Incorporation or the Code of Regulations of the
Corporation (and notwithstanding the fact that a lesser percentage may be
specified by law, these Amended Articles or the Code of Regulations), the
affirmative vote of the holders of 80% or more of the outstanding Voting Stock,
voting together as a single class, shall be required to amend or repeal, or
adopt any provisions inconsistent with this Item Eighth; provided, however,
shareholder action without a meeting shall require the unanimous written consent
of all shareholders entitled to vote thereon pursuant to Article II, Section
2.(b) of the Code of Regulations.
[9]
<PAGE> 1
Exhibit 99.T3A.2
CERTIFICATE OF REORGANIZATION
OF
EAGLE-PICHER INDUSTRIES, INC.
The undersigned, Andries Ruijssenaars, President and Chief Operating
Officer, and James A. Ralston, Vice President, General Counsel and Secretary, of
Eagle-Picher Industries, Inc. (the "Corporation"), do hereby certify that: (1)
the Corporation is the Debtor in that certain Chapter 11 case identified as
Consolidated Case No. 1-91-00100 in the United States Bankruptcy Court for the
Southern District of Ohio, Western Division (the "Case"), (2) in the Case, the
Corporation has filed a Consolidated Plan of Reorganization that provides for
the adoption of Amended and Restated Articles of Incorporation for the
Corporation in the form set forth as Exhibit A to this Certificate, (3) the
Consolidated Plan of Reorganization, including the Amended and Restated Articles
of Incorporation that are Exhibit A hereto, was confirmed by the order of the
United States District Court for the Southern District of Ohio, Western
Division, on November __, 1996, and (4) such order remains in full force and
effect at the date hereof.
The Amended and Restated Articles of Incorporation annexed hereto may be
certified by the office of the Secretary of State of Ohio separately from this
Certificate of Reorganization.
IN WITNESS WHEREOF, the undersigned President and Secretary of Eagle-Picher
Industries, Inc., have executed this Certificate of Reorganization this ___ day
of November, 1996.
______________________________
Name: Andries Ruijssenaars
Title: President and Chief
Operating Officer
______________________________
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
<PAGE> 2
CERTIFICATE OF AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
EAGLE-PICHER INDUSTRIES, INC.
The undersigned, Andries Ruijssenaars, President and Chief Operating
Officer and James A. Ralston, Vice President, General Counsel and Secretary, of
Eagle-Picher Industries, Inc. (the "Corporation"), do hereby certify that in
connection with a Plan of Reorganization confirmed by the United States District
Court for the Southern District of Ohio, Western Division, in the chapter 11
case of the Corporation, the Articles of the Corporation were amended and
restated, pursuant to such Plan and the authority granted by Section 1701.75 of
the Ohio Revised Code ("O.R.C."), to read as follows:
FIRST: The name of the Corporation is Eagle-Picher Industries, Inc.
SECOND: The place in Ohio where the principal office of the Corporation is
to be located is Cincinnati, Hamilton County, Ohio.
THIRD: The purpose for which the Corporation is formed is to engage in any
lawful act or activity for which corporations may be formed under Sections
1701.01 to 1701.98 inclusive, of the O.R.C.
FOURTH: (a) All shares of the Corporation that are authorized for issuance
immediately prior to the time as of which these Amended and Restated Articles of
Incorporation become effective (the "Effective Time") are hereby canceled. As
of the Effective Time, the number of shares that the Corporation is authorized
to have outstanding is 20,000,000 common shares, without par value (the "Common
Stock").
(b) Pursuant to the requirements of Section 1123(a)(6) of the Bankruptcy
Code, the Corporation shall not issue nonvoting equity securities, subject,
however, to further amendment of these Amended and Restated Articles of
Incorporation as and to the extent permitted by applicable law.
FIFTH: The Corporation, by action of its board of directors, may purchase
its own shares at any time and from time-to-time to the extent permitted by law.
SIXTH: The shares of the Corporation's Common Stock, other rights or
options to purchase shares of the Corporation's Common
<PAGE> 3
Stock and any other interests that would be treated as "stock" of the
Corporation under Section 382 of the Internal Revenue Code (collectively, the
"Corporate Securities") are subject to the following restrictions:
1. During the period beginning on the Effective Time and ending
twenty-five (25) months thereafter, any attempted sale, purchase, transfer,
assignment, conveyance, pledge or other disposition of any share or shares of
Corporate Securities ("Transfer") to any person or entity or to any group of
persons or entities acting in concert ("Transferee") who directly or indirectly
owns, or is treated as owning (within the meaning of the attribution rules
applicable under Section 382 of the Internal Revenue Code ("Own")), 4.75% or
more of any class of Corporate Securities, or after giving effect to the
Transfer, would directly or indirectly Own more than 4.75% of the outstanding
shares of any class of Corporate Securities, shall be void AB INITIO and shall
not be effective to Transfer any of such shares to the extent the Transfer
increases the Transferee's direct or indirect ownership of the Corporate
Securities above 4.75% of the total outstanding shares of such class of
Corporate Securities. Similarly, any Transfer by a transferor who directly or
indirectly Owns 5% or more of the outstanding shares of any class of Corporate
Securities shall be void AB INITIO and shall not be effective to Transfer any
of such shares to the purported Transferee.
2. (a) If the Board of Directors of the Corporation determines
that a Transfer of Corporate Securities constitutes a Transfer prohibited by
Section 1 hereof (a "Prohibited Transfer"), then upon written demand made by any
officer of the Corporation, the purported Transferee shall transfer or cause to
be transferred any certificate or other evidence of ownership of Corporate
Securities that are the subject of the Prohibited Transfer ("Prohibited
Securities"), together with any dividends or other distributions that were
received by the Transferee from the Corporation with respect to such Prohibited
Securities ("Prohibited Distributions"), to an agent designated by the Board of
Directors of the Corporation (the "Agent"). The Agent shall then sell to a
buyer or buyers the Prohibited Securities so transferred to it. If, before
receiving the demand of the Corporation to transfer the Prohibited Securities to
the Agent, the purported Transferee has resold the Prohibited Securities, the
purported Transferee shall be deemed to have sold the Prohibited Securities for
and on behalf of the Agent and, in lieu of transferring the Prohibited
Securities to the Agent, shall transfer to the Agent any Prohibited
Distributions and the proceeds of such sale. If the purported Transferee fails
to surrender the Prohibited Securities or the proceeds of a sale thereof,
together with any Prohibited Distributions, to the Agent within thirty (30)
business days from the date on which the Corporation makes its demand for
surrender hereunder, the Corporation shall institute legal proceedings to compel
the surrender. The costs of any such proceeding in which the court
<PAGE> 4
shall compel such surrender or award damages shall be borne by the purported
Transferee.
(b) Upon the receipt of the proceeds of any sale of Prohibited
Securities by the Agent or, upon the receipt from the purported Transferee
thereof of the proceeds from any previous sale of such Prohibited Securities by
such Transferee, the amount so received shall be applied by the Agent as
follows: (i) first, to the payment of the reasonable expenses of the Agent
incurred in connection with the performance of its duties hereunder; (ii)
second, to the purported Transferee up to the amount paid by the purported
Transferee for the Prohibited Securities, which amount shall be determined by
the Board of Directors of the Corporation in its sole discretion; and (iii)
third, to one or more organizations that shall then be qualified under Section
501(c)(3) of the Internal Revenue Code as selected by the Board of Directors of
the Corporation.
3. Neither the Corporation nor any transfer agent or other person on
its behalf shall effect a Prohibited Transfer on the stock record books of the
Corporation and the purported Transferee thereof shall not be recognized as a
shareholder of the Corporation for any purpose whatsoever in respect of the
Prohibited Securities. Until the Prohibited Securities are acquired by another
person in a Transfer that is not a Prohibited Transfer, the purported Transferee
shall not be entitled with respect to such Prohibited Securities to any rights
of shareholders of the Corporation, including, without limitation, the right to
vote such Prohibited Securities and to receive dividend distributions, whether
liquidating or otherwise, in respect thereof, if any. Once the Prohibited
Securities have been acquired in a Transfer that is not a Prohibited Transfer,
the Corporate Securities shall cease to be Prohibited Securities.
4. All certificates evidencing any Corporate Securities issued by the
Corporation after the Effective Time, shall bear a conspicuous legend reading
substantially as follows:
THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO RESTRICTION
PURSUANT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
REORGANIZED EAGLE-PICHER, WHICH RESTRICTION IS REPRINTED IN ITS ENTIRETY ON
THE BACK OF THIS CERTIFICATE.
With respect to any Corporate Securities that are not evidenced by a
certificate, but are uncertificated securities, the foregoing legend shall be
set forth in the initial transaction statement required for restrictions on
transfer by Section 1308.11 of the O.R.C.
5. Notwithstanding any other provisions of these Amended and Restated
Articles of Incorporation or the Regulations of the
<PAGE> 5
Corporation (and notwithstanding the fact that a lesser percentage may be
specified by law, these Amended and Restated Articles or the Code of
Regulations), the affirmative vote of the holders of 80% or more of the
outstanding shares, voting together as a single class, shall be required to
amend or repeal, or adopt any provisions inconsistent with this Article Sixth;
provided, however, that shareholder action without a meeting shall require the
unanimous written consent of all shareholders entitled to vote thereon.
SEVENTH: All certificates evidencing any shares of the Corporation's
Common Stock issued by the Corporation after the Effective Time, shall bear a
conspicuous legend reading substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE,
OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED.
EIGHTH: These Amended and Restated Articles of Incorporation supersede and
take the place of all prior Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF, the undersigned President and Chief Operating Officer
and Vice President, General Counsel and Secretary of Eagle-Picher Industries,
Inc. have executed this Certificate this _____ day of November, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By ____________________________
Name: Andries Ruijssenaars
Title: President and Chief
Operating Officer
_______________________________
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
<PAGE> 1
Exhibit 99.T3B.1
Eagle-Picher Industries, Inc.
CODE OF REGULATIONS
________
ARTICLE I
Seal
SECTION 1. Form. The seal of the Corporation shall have upon it the name
and words "Eagle-Picher Industries, Inc. Incorporated 1867 - Seal" and shall be
circular in form.
ARTICLE II
Shareholders
SECTION 1. Place of Meetings. Meetings of shareholders shall be held at
the office of the Corporation in Cincinnati, Ohio, or at such other place in
Cincinnati as may be designated by the Board of Directors.
SECTION 2. (a) Annual Meeting. The annual meeting of shareholders shall be
held at 2 o'clock P.M. on the fourth Tuesday in March of each year, if not a
legal holiday, but, if a legal holiday, then, at the same hour, on the next
succeeding business day which is not a legal holiday, at which time there shall
be elected, by ballot, in accordance with the laws of the State of Ohio and
these regulations, members of the Board of Directors to serve and hold office as
provided in Article III hereof.
(b) Shareholder Action. Any action required to be taken at a meeting of
shareholders shall be taken at an annual or special meeting thereof, or without
a meeting upon the unanimous written consent of all shareholders entitled to
vote thereon.
(c) Shareholder Nominations. Subject to the rights of holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation, nominations for the election of directors may be made by the
Board of Directors or by any shareholder entitled to vote in the election of
directors generally. However, any shareholder entitled to vote in the election
of directors generally may nominate one or more persons for
[3]
<PAGE> 2
election as directors, at an annual meeting or at a special meeting called in
whole or in part to vote on the election of directors, only if written notice of
such shareholder's intent to make such nomination or nominations has been
delivered to or mailed and received by the Secretary of the Corporation not less
than 60 days nor more than 90 days in advance of such meeting; provided,
however, that if less than 70 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, notice by the shareholder
must be so received not later than the close of business on the 10th day
following the date on which such notice of the date of the meeting was first
mailed or such public disclosure was made. Each such shareholder's notice shall
set forth: (a) the name and address, as they appear on the Corporation's books,
of the shareholder who intends to make the nomination and the name, age,
business address and residence address of the person or persons to be nominated;
(b) a representation that the shareholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; (d) the principal occupation or employment of the person or
persons to be nominated; (e) the class and number of shares of the Corporation
which are beneficially owned by the shareholder intending to make the nomination
and by the person or persons to be nominated; (f) such other information
regarding each nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission, had the nominee been nominated, or intended
to be nominated, by the Board of Directors; and (g) the written consent of each
nominee to being named in the proxy statement and serving as a director of the
Corporation if so elected. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
shareholder's notice of nomination which pertains to such nominee. No person to
be nominated by a shareholder shall be eligible for election as a director of
the Corporation unless nominated in accordance with the procedures set forth in
this Section 2.(c). The chairman of the meeting shall, if the facts warrant,
refuse to acknowledge the nomination of any person not made in compliance with
the foregoing procedure and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.
(d) Notice of Shareholder Business. At an annual meeting of shareholders,
only such business shall be conducted as shall have been properly brought before
the meeting. To be properly brought before an annual meeting, busi-
[4]
<PAGE> 3
ness must be (a) specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, (b) otherwise properly
brought before the meeting by or at the direction of the Board of Directors, or
(c) otherwise properly brought before the meeting by a shareholder. For business
to be properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation, not
less than 60 days nor more than 90 days prior to the meeting; provided, however,
that in the event that less than 70 days' notice or prior public disclosure of
the date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address, as
they appear on the Corporation's books, of the shareholder proposing such
business, (c) the class and number of shares of the Corporation which are
beneficially owned by the shareholder, and (d) any material interest of the
shareholder in such business. Notwithstanding anything in these regulations to
the contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 2.(d), Article II. The
chairman of the annual meeting shall, if the facts warrant, determine that
business was not properly brought before the meeting and in accordance with the
provisions of this Section 2.(d), Article II, and if he should so determine, he
shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted.
(e) Notwithstanding anything in these regulations to the contrary, the
affirmative vote of the holders of 80% of the voting power of all shares of
the Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to alter, amend, adopt any
provision inconsistent with or repeal these subsections (b), (c), (d) and (e) of
Section 2, Article II; provided, however, shareholder action without a meeting
shall require the unanimous written consent of all shareholders entitled to vote
thereon pursuant to Section 2.(b) hereof.
SECTION 3. Special Meetings of Shareholders. Subject to the rights of the
holders of any class or series of stock having preference over the Common Stock
as to dividends or upon liquidation, special meetings of shareholders may be
called by the Chairman of the Board of Directors, the President, or the
directors by action at a meeting or a majority of the directors
[5]
<PAGE> 4
acting without a meeting, persons who hold fifty percent of all shares
outstanding and entitled to vote thereat, the Secretary or an Assistant
Secretary. Any shareholder or shareholders entitled to call a special meeting
pursuant to this Section 3, Article II, must, in order properly to call such
meeting, deliver a written notice to the Secretary of the Corporation requesting
that a special meeting be called. Such meeting shall be held on a date fixed by
the Board of Directors of the Corporation, which date shall be not less than 60
days nor more than 90 days after the date of receipt of such notice by the
Secretary of the Corporation. Any such notice shall set forth as to each matter
proposed to be brought before the special meeting (a) a brief description of the
business desired to be brought before the meeting, (b) the name and address, as
they appear on the Corporation's books, of the shareholder or shareholders
proposing such business, (c) the class and number of shares of the Corporation
which are beneficially owned by the shareholder, and (d) any material interest
of the shareholder in such business. Notwithstanding anything in these
regulations to the contrary, the Secretary shall not call a special meeting upon
the request of any shareholder if such shareholder has failed to comply with
this Section 3, Article II, with respect to all matters proposed to be brought
before such meeting and, subject to Section 2.(c) of this Article II with
respect to shareholder nominations for election of directors, no business shall
be conducted at a special meeting except business proposed in accordance with
the procedures set forth in this Section 3, Article II. The Chairman of the
special meeting shall, if the facts warrant, determine that business was not
properly brought before the meeting and in accordance with the provisions of
this Section 3, Article II, and if he should so determine, he shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted. Notwithstanding anything in these regulations to the
contrary, the affirmative vote of the holders of 80% of the voting power of all
shares of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required to alter, amend,
adopt any provision inconsistent with or repeal this Section 3 of Article II;
provided, however, shareholder action without a meeting shall require the
unanimous written consent of all shareholders entitled to vote thereon pursuant
to Section 2.(b) hereof.
SECTION 4. Notice of Meetings. A notice, as required by law, of each
regular or special meeting of shareholders shall be given in writing by the
Chairman of the Board of Directors, the President, the Secretary, or an
Assistant Secretary, not less than ten (10) days before the meeting.
SECTION 5. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of
shareholders for the transaction of business, except as otherwise provided by
law. by the articles of incorporation, or by these regulations, if, however,
[6]
<PAGE> 5
such majority shall not be present or represented at any meeting of
shareholders, the shareholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting, from time to
time, without notice other than announcement at the meeting, until the requisite
amount of voting stock shall be present or represented. At such adjourned
meeting, at which the requisite amount of voting stock shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
SECTION 6. Proxies. Any shareholder entitled to vote at a meeting of
shareholders may be represented and vote thereat by proxy, appointed by an
instrument in writing, subscribed by the shareholder or his duly authorized
agent, and submitted to the Secretary of the Corporation not less than
forty-eight hours before such meeting; provided, any such proxy, other than for
a corporation, shall himself be a shareholder.
SECTION 7. Organization. The Chairman of the Board of Directors, or the
President, shall preside at all meetings of shareholders. In the absence of
both, the Board of Directors shall designate a presiding officer, who shall have
all the powers herein conferred upon the presiding officer of the meeting. The
Secretary of the Corporation shall act as secretary of all meetings but, in the
absence of the Secretary, the presiding officer of shareholders may appoint any
person to act as secretary of the meeting.
SECTION 8. Order of Business. At all shareholders' meetings the order of
business shall be as follows:
1. Proof of notice of meeting.
2. Presentation and examination of proxies.
3. Reading of minutes of previous meeting and acting thereon.
4. Report of Directors or Committees.
5. Reports of Officers.
6. Unfinished business
7. Election of Directors.
8. New or miscellaneous business.
9. Adjournment.
This order may be changed by affirmative vote of the holders of a majority of
the outstanding shares, present in person or represented by proxy.
[7]
<PAGE> 6
ARTICLE III
Board of Directors
SECTION 1. (a) Number, Election and Terms. Except as otherwise fixed by or
pursuant to the provisions of Article Fourth, Division A of the Articles of
Incorporation relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect additional directors under specified circumstances, the
Board of Directors of the Corporation shall consist of eleven (11) members or
such other number as may be determined from time to time by action of the Board
of Directors. The directors, other than those who may be elected by the holders
of any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, shall be classified, with respect to the time for
which they severally hold office, into three classes, as nearly equal in number
as possible, as determined by the Board of Directors of the Corporation, one
class to be originally elected for a term expiring at the annual meeting of
shareholders to be held in 1986, another class to be originally elected for a
term expiring at the annual meeting of shareholders to be held in 1987, and
another class to be originally elected for a term expiring at the annual meeting
of shareholders to be held in 1988, with each class to hold office until its
successor is elected and qualified. At each annual meeting of shareholders of
the Corporation, the successors of the class of directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the annual
meeting of shareholders held in the third year following the year of their
election.
(b) Newly Created Directorships and Vacancies. Newly created directorships
resulting from any increase in the number of directors shall be filled by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any vacancies on the Board
of Directors shall be filled as provided by law. Any director so elected shall
hold office for the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
(c) Removal. Any director may be removed from office as provided by law;
provided, however, the removal of directors by shareholders shall require an
affirmative vote of the holders of 80% of the combined voting power of the
then outstanding shares of stock entitled to vote generally in the election of
directors, voting together as a single class; provided, however, shareholder
action without a meeting shall require the unanimous written consent of all
shareholders entitled to vote thereon pursuant to Article II, Section 2.(b)
hereof.
[8]
<PAGE> 7
(d) Amendment, Repeal, Inconsistent Provisions. Notwithstanding anything
in these regulations to the contrary, the affirmative vote of the holders of 80%
of the voting power of all shares of the Corporation entitled to vote generally
in the election of directors, voting as a single class, shall be required to
alter, amend, adopt any provisions inconsistent with or repeal these Subsections
(a), (b), (c) and (d) of Section 1, Article III; provided, however, shareholder
action without a meeting shall require the unanimous written consent of all
shareholders entitled to vote thereon pursuant to Article II, Section 2.(b)
hereof.
SECTION 2. Time and Place of Meetings. A meeting of the Board of Directors
shall be held immediately following each meeting of shareholders at which
directors are elected, and notice of such meeting need not be given. Other
meetings of the Board may be held at such times and places, either within or
without the State of Ohio, as may be fixed by resolution of the Board or as may
be specified in the call and notice of meetings; and shall be held at least
quarterly.
SECTION 3. Call and Notice of Meetings. Meetings may be called at any time
by the Chairman of the Board, the President, the Secretary, or by a majority of
the Board. The Board shall decide what notice of meetings shall be given and the
length of time prior to the meeting that such notice shall be given. Any meeting
at which all directors are present shall be a valid meeting, whether notice
thereof was given or not, and any business may be transacted at such meeting.
Notice for call of any meeting may be waived by any one or all of the directors.
SECTION 4. Quorum. A majority of the Board of Directors shall constitute a
quorum for the transaction of business and, if at any meeting of the Board there
be less than a quorum present, a majority of those present may adjourn the
meeting from time to time.
SECTION 5. Compensation of Directors and Members of the Executive
Committee. The directors are authorized to fix, from time to time, their own
compensation for attendance at meetings of the Board and the compensation of
members of the Executive Committee for attendance at meetings of such Committee,
which may include expenses of attendance when meetings are not held at the place
of residence of any director or member.
SECTION 6. General Powers. The powers of the Corporation shall be
exercised, its business and affairs conducted, and its property controlled by
the Board of Directors, except as otherwise provided in the General Corporation
Law of Ohio or in the articles of incorporation of the Corporation and
amendments thereto. The Board of Directors shall have power to fix, define and
limit the powers and duties of all officers.
[9]
<PAGE> 8
SECTION 7. Indemnification of Directors and Officers. Each director and
each officer now, heretofore, or hereafter in office, shall be indemnified by
the Corporation against all costs imposed upon, and/or expenses reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding of whatever nature (whether the same be settled or proceed to
judgement) in which he may be or become involved by reason of his being or
having been a director or officer of the Corporation, any subsidiary of the
Corporation, or any company or corporation which he serves as a director or
officer at the request of the Corporation (whether or not he continues to be a
director or officer at the time of the imposition of such costs and/or
expenses), except in respect to matters as to which he shall be finally adjudged
in such action, suit or proceeding to be liable for gross negligence or wilful
misconduct in the performance of his duty as such director or officer. The
foregoing right of indemnification shall be in addition to and not exclusive of
any and all other rights to which he may be entitled as a matter of law.
ARTICLE IV
Executive Committee
SECTION 1. Executive Committee. The Board of Directors may, by resolution,
designate not less than three (3) of its number to constitute an Executive
Committee, but may repeal said resolution and dispense with said Committee at
any time.
SECTION 2. Powers of Executive Committee. The Executive Committee shall
have charge of the management of the business and affairs of the Corporation in
the interim between meetings of the Board of Directors, and generally shall have
all of the authority of the Board, in the transaction of such business of the
Corporation as, in the judgement of the Committee, may require action between
meetings of the Board.
SECTION 3. Limitation of Powers of Executive Committee. The Board of
Directors shall have authority to limit or quality the powers of the Executive
Committee at any time, and may rescind any action of the Committee to the extent
that no rights of third persons shall have intervened.
SECTION 4. Record of Executive Committee. The Executive Committee shall
keep a record of its proceedings and make a report of its acts and transactions
to the Board of Directors, all of which shall form part of the records of the
Corporation.
ARTICLE V
Officers
SECTION 1. Number. The officers of the Corporation shall be a President,
one or more Vice-Presidents, a Secretary, one or more Assistant Secretar-
[10]
<PAGE> 9
ies, a Treasurer and one or more Assistant Treasurers. Any two or more of the
offices may be held by the same person, but no officer shall execute,
acknowledge, or verify any instrument in more than one capacity if such
instrument is required to be executed, acknowledged, or verified by two or more
officers.
SECTION 2. Other Officers. The Board of Directors is authorized in its
discretion to establish the office of Chairman of the Board, and shall have the
further power to provide for such other offices and agencies as it shall deem
necessary from time to time and to dispense with any of said offices and
agencies at any time.
SECTION 3. Election, Term and Removal. At the meeting of the Board of
Directors immediately following each meeting of shareholders at which directors
are elected, the Board shall select one of its members to be President of the
Corporation. It shall also select all other officers of the Corporation, none of
whom shall be required to be a member of the Board, except the Chairman of the
Board if that office be established. All officers of the Corporation shall hold
office during the pleasure of the Board, or until their successors shall have
been elected and qualified, and the Board may remove or suspend any officer at
any time, without notice, by the affirmative vote of a majority of the entire
Board.
SECTION 4. Vacancies and Absence. If any office shall become vacant by
reason of the death, resignation, disqualification, or removal of the incumbent
thereof, or other cause, the Board of Directors may select a successor to hold
office for the unexpired term in respect to which such vacancy occurred or was
created. In case of the absence of any officer of the Corporation or for any
reason that the Board of Directors may determine as sufficient, the Board may
for the time being delegate the powers and duties of such officer to any other
officer, or to any director, except where otherwise provided by these
regulations or by statute.
SECTION 5. Salaries. The Board of Directors or the Executive Committee
shall fix the salaries of all officers; and shall supervise the salaries of all
other employees of the Corporation.
ARTICLE VI
Duties of Officers
SECTION 1. Chairman of the Board. The Chairman of the Board of Directors
(if the Board establishes such office) shall preside at all meetings of the
Board, appoint all special or other committees (unless otherwise ordered by the
Board) and shall confer with and advise all other officers of the Corporation.
He shall have such executive and managerial powers and authority and shall
perform such duties as may, from time to time, be delegated to him by the Board
of Directors or the Executive Committee.
[11]
<PAGE> 10
SECTION 2. President. The President shall, unless otherwise prescribed by
the Board of Directors or the Executive Committee, be the chief executive
officer and active head of the Corporation and, in the recesses of the Board of
Directors and the Executive Committee, shall have general control and management
of all of its business affairs. He shall make annual reports to the Board of
Directors, showing the condition of the affairs of the Corporation, making such
recommendations as he thinks proper, and from time to time shall bring before
the Board of Directors, or the Executive Committee, such information as may be
required touching upon the business and property of the Corporation. He shall
perform such other duties as may, from time to time, be assigned to him by the
Board of Directors. If there be no Chairman of the Board, or in his absence, the
President shall preside at all meetings of the Board and appoint all special or
other committees (unless otherwise ordered by the Board).
SECTION 3. Vice-Presidents. The Vice-Presidents shall perform such duties
as may be delegated to them by the Board of Directors, or assigned to them from
time to time by the Board of Directors, the Executive Committee, the Chairman of
the Board, or the President. In the absence of the Chairman of the Board and the
President, the Board of Directors shall designate one of the Vice-Presidents, or
some other person, to perform the duties and have the powers of the Chairman of
the Board and the President, and, during such absence, such person shall be
authorized to exercise all of the functions of the Chairman of the Board and the
President.
SECTION 4. Secretary. The Secretary shall keep a record of all proceedings
of the Board of Directors and of all meetings of shareholders, and shall perform
such other duties as may be assigned to him by the shareholders, the Board of
Directors, the Executive Committee, the Chairman of the Board, or the President.
SECTION 5. Assistant Secretaries. The Assistant Secretaries shall perform
such duties as may be assigned to them by the Board of Directors, the Executive
Committee, the Chairman of the Board, the President or the Secretary. The Board
of Directors shall designate one of the Assistant Secretaries to be acting
Secretary during the absence or disability of the Secretary.
SECTION 6. Treasurer. The Treasurer shall have charge of the funds of the
Corporation. He shall keep proper books of account showing all transactions
entered into by, for and on behalf of the Corporation, with vouchers in support
thereof. He shall also, from time to time as required, make reports and
statements to the Board of Directors and the Executive Committee as to the
financial condition of the Corporation, and submit detailed statements of
receipts and disbursements; and shall perform such other duties as may be
assigned to him from time to time by the Board of Directors, the Executive
Committee, the Chairman of the Board, or the President.
[12]
<PAGE> 11
SECTION 7. Assistant Treasurers. The Assistant Treasurers shall perform
such duties as may be assigned to them by the Board of Directors, the Executive
Committee, the Chairman of the Board, the President or the Treasurer. The Board
of Directors shall designate one of the Assistant Treasurers to be acting
Treasurer during the absence or disability of the Treasurer.
SECTION 8. Bonds of Officers. The Board of Directors or the Executive
Committee shall determine which officers of the Corporation shall give bond, and
the amount thereof, the expense to be paid by the Corporation.
ARTICLE VII
Certificates for Shares of Stock
SECTION 1. Certificates. Certificates evidencing the ownership of shares
of the Corporation shall be issued to those entitled to them by transfer or
otherwise. Each certificate for shares shall bear the signature of the Chairman
of the Board, or the President or one of the Vice-Presidents, and of the
Secretary or an Assistant Secretary, the seal of the Corporation (but failure to
affix the seal shall not invalidate the certificate if properly signed) and such
recitals as may be required by law.
SECTION 2. Mutilated and Lost Certificates. If any certificate for shares
of the Corporation becomes worn, defaced or mutilated, the Board of Directors,
upon surrender thereof, may order the same cancelled and a new certificate
issued in lieu thereof. If any certificate for shares be lost or destroyed, a
new certificate may be issued upon such terms and under such regulations as may
be adopted by the Board of Directors.
ARTICLE VIII
Committees
SECTION 1. Committees. The Board of Directors shall have power to create
from time to time such committees, standing or special, as it shall deem best,
and to revoke their appointment or restrict or modify their powers.
ARTICLE IX
Closing Stock Transfer Books
SECTION 1. Closing Stock Transfer Books. The Board of Directors may fix a
time, not exceeding forty-five (45) days preceding the date of any meeting of
shareholders or any dividend payment date or any date for the allotment of
rights, as a record date for the determination of the shareholders entitled to
notice of such meeting or to vote thereat or to receive such dividends or rights
as the case may be and/or the Board of Directors may close the books of the
Corporation against transfer of shares of stock during the whole or any part of
such period.
[13]
<PAGE> 12
ARTICLE X
Amendments
SECTION 1. Amendments. These regulations, or any of them, may be altered,
amended, added to or repealed as may be provided by law.
ARTICLE XI
Assent of Shareholders
SECTION 1. Assent of Shareholders. Any person becoming a shareholder in
this Corporation shall be deemed to assent to these regulations, and any
alterations, amendments, or additions thereto, lawfully adopted, and shall
designate to the Secretary or appointed Transfer Agents of the Corporation, the
address to which he desires that notices herein required to be given may be
sent, and all notices mailed to such address, with postage prepaid, shall be
considered as duly given at the date of mailing; provided, however, that, in the
event any shareholder shall have failed to so designate an address to which
notices shall be sent, said notices shall be sent to any address where the
Secretary believes he may be reached, otherwise to "General Delivery,
Cincinnati, Ohio." The mailing or any notice to "General Delivery, Cincinnati,
Ohio," shall be conclusive evidence that the Secretary knows of no address where
he believes said shareholder may be reached.
[14]
<PAGE> 1
Exhibit 99.T3B.2
REGULATIONS OF
EAGLE-PICHER INDUSTRIES, INC.
(THE "CORPORATION")
(AMENDED AS OF ___________)
ARTICLE I
SHAREHOLDERS
SECTION 1.1. PLACE OF MEETINGS. Meetings of shareholders, whether annual
or special, shall be held at such place within or outside of the State of Ohio
as shall be determined by the Board of Directors. In the absence of such
determination, meetings shall be held at the principal office of the
Corporation.
SECTION 1.2. ANNUAL MEETING. The annual meeting of shareholders of the
Corporation shall be held on such date as shall be designated by the Board of
Directors. In the absence of such designation, the annual meeting shall be held
at 2:00 P.M. on the fourth Tuesday of March in each year if not a legal
holiday, and, if a legal holiday, then on the next day not a legal holiday. At
the annual meeting, directors shall be elected, reports of the affairs of the
Corporation shall be considered, and such other business shall be transacted as
may properly be brought before the meeting.
SECTION 1.3. SPECIAL MEETINGS. Special meetings of the shareholders may be
called at any time by any of the following:
(i) the Chairman of the Board or the President, or in case of the
President's absence, death or disability, the Vice President authorized to
exercise the President's authority;
(ii) the Board of Directors by action at a meeting or by a majority of
the directors acting without a meeting;
(iii) the Secretary or Assistant Secretary of the Corporation; or
(iv) at the request of persons holding twenty-five per cent of all
outstanding shares entitled to vote.
SECTION 1.4. ACTIONS WITHOUT MEETING. Any action that may be authorized
or taken at a meeting of the shareholders may be authorized or taken without a
meeting with the affirmative vote or approval of, and in a writing or writings
signed by, all the shareholders who
<PAGE> 2
would be entitled to vote at a meeting of the shareholders held for such
purpose, which writing or writings shall be filed with or entered upon the
records of the Corporation.
SECTION 1.5. NOTICE OF MEETINGS. Written notice of each meeting of
shareholders, stating the time, place and purposes of the meeting, shall be
given not less than ten nor more than sixty days before the date of the meeting
by or at the direction of the President, the Secretary or any other officer
designated by the Board of Directors. Notice of adjournment of a meeting need
not be given if the time and place to which it is adjourned are fixed and
announced at the meeting.
SECTION 1.6. WAIVER OF NOTICE. Notice of the time, place and purposes of
any meeting of shareholders may be waived in writing by any shareholder, either
before or after the holding of such meeting. Such writing shall be filed with
or entered upon the records of the meeting. The attendance of any shareholder
at any meeting without protesting, prior to or at the commencement of the
meeting, the lack of proper notice shall be deemed to be a waiver by the
shareholder of notice of the meeting.
SECTION 1.7. QUORUM. The holders of a majority of the shares of the
Corporation, present in person or by proxy, shall constitute a quorum at such
meetings. If a quorum is not present at a meeting of the shareholders, those
shareholders present in person or by proxy shall have the power to adjourn the
meeting without notice other than announcement at the meeting of the place, date
and hour of the adjourned meeting, until a quorum is present in person or by
proxy at the adjourned meeting. At an adjourned meeting at which a quorum is
present in person or by proxy, the Corporation may transact any business which
might have been transacted at the original meeting.
SECTION 1.8. VOTING. When a quorum is present at any meeting, except as
otherwise expressly required by statute, the Articles of Incorporation or these
Regulations, a majority of the votes cast at a meeting of shareholders shall
control. Unless the express terms of the shares of the Corporation provide
otherwise, each share shall entitle the holder of such share to one vote upon
each matter properly submitted to the shareholders for their vote at a meeting
of shareholders.
SECTION 1.9. PROXIES. Persons entitled to vote shares or to act with
respect to shares may vote or act in person or by proxy. The person appointed
as a proxy need not be a shareholder. A proxy must be appointed in a writing
signed by the shareholder. No appointment of a proxy is valid after the
expiration of eleven months after it is made, unless the writing specifies the
date on which it is to expire or the length of time for which it is to continue
in force. Every appointment of a proxy shall be revocable, unless the
appointment is coupled with an interest.
- 2 -
<PAGE> 3
ARTICLE II
----------
DIRECTORS
---------
SECTION 2.1. GENERAL POWERS. All of the authority of the Corporation
shall be exercised by or under the direction of the Board of Directors, subject
to limitations imposed by law, the Articles of Incorporation or these
Regulations.
SECTION 2.2. NUMBER, CLASSES AND ELECTION. The election of directors
shall take place at the annual meeting of shareholders or at a special meeting
called for that purpose. The number of directors of the Corporation shall be
such number, not less than three, as shall be determined from time to time by
action of the Board of Directors of the Corporation.
SECTION 2.3 VACANCIES. All vacancies in the Board of Directors, whether
caused by resignation, death or removal of any director, or by the failure of
the shareholders at any time to elect the whole authorized number of directors,
may be filled by a majority of the remaining directors. A director thus elected
to fill any vacancy shall hold office for the unexpired term of such director's
predecessor.
SECTION 2.4 REMOVAL. Any director may be removed from office as
provided by law.
SECTION 2.5. PLACE OF MEETINGS. All meetings of the Board of Directors
shall be held at the principal office of the Corporation or at such place,
within or outside of the State of Ohio, as may be designated from time to time
by a majority of the directors, or as may be designated in the notice or in the
waiver of notice of such meeting.
SECTION 2.6. ORGANIZATIONAL MEETINGS. An organizational meeting of the
Board of Directors may be held, without call or notice, immediately following
each annual meeting of the shareholders of this Corporation or at such
alternative time as may be provided in a notice of meeting.
SECTION 2.7. OTHER MEETINGS; NOTICE. Other meetings of the Board of
Directors may be held at any time on the call of the Chairman of the Board, the
President, any Vice President or any two directors. Written notice of any such
meeting, unless waived, shall be given not less than two days prior to the day
of the meeting. Notice also may be given personally or by telephone at least
two days prior to such meeting. The notice shall state the time and place, but
need not state the purposes, of the meeting. If the Secretary fails or refuses
to give such notice promptly, the notice may be given by the person who called
the meeting. Notice of adjournment of a meeting of the Board of Directors need
not be given if the time and place to which it is adjourned are fixed and
announced at such meeting.
SECTION 2.8. WAIVER OF NOTICE. Notice of the time and place of any
meeting of the Board of Directors may be waived in writing, either before or
after the meeting takes place, by
- 3 -
<PAGE> 4
any director, which writing shall be filed with or entered upon the records of
the meeting. The attendance of any director at any meeting without protesting,
prior to or at the commencement of the meeting, the lack of proper notice,
shall be deemed to be a waiver by such director of notice of the meeting.
SECTION 2.9. QUORUM. A majority of the whole authorized number of
directors is necessary to constitute a quorum for a meeting of the Board of
Directors, except that a majority of the directors in office constitutes a
quorum for filling a vacancy in the Board of Directors. The act of a majority
of the directors present at a meeting at which a quorum is present is the act of
the Board of Directors, except as otherwise provided by law, the Articles of
Incorporation or these Regulations.
SECTION 2.10. TELEPHONIC MEETINGS. Meetings of the directors may be held
by means of any communications equipment if all persons participating can hear
each other, and participation in a meeting in such manner shall constitute
presence at such meeting.
SECTION 2.11. ACTIONS WITHOUT MEETING. Any action that may be authorized
or taken at a meeting of the Board of Directors of the Corporation may be
authorized or taken without a meeting with the affirmative vote or approval of,
and in a writing or writings signed by, all the directors, which writing or
writings shall be filed with or entered upon the records of the Corporation.
SECTION 2.12. EXECUTIVE AND OTHER COMMITTEES. When the number of
directors authorized pursuant to Section 2.2 is greater than three, the Board of
Directors may create an executive committee and/or other committees, of the
Board, each of which shall consist of no fewer than three members. Such
committees shall have and may exercise such powers of the Board of Directors in
the management of the Corporation as may be conferred or authorized by the
resolutions appointing them; however, no committee shall have the power to fill
vacancies among the directors or in any committee. The Board of Directors shall
have the power at any time to fill vacancies in, to change the membership of, or
to discharge any such committee. All such committees shall be discharged and
shall cease to function at such time as the authorized number of directors is
three or less.
Such committees shall act only during the intervals between meetings of the
Board of Directors and subject to the direction of the Board of Directors. Acts
of any committee within the authority delegated to it shall be effective for all
purposes as the act or authorization of the directors. A majority of the
members of any committee may fix the time and place of its meetings. Committee
members may participate at meetings by means of communications equipment if all
participants can hear each other, and such participation shall constitute
presence at the meeting. Such committees may act by a majority of their
respective members at meetings or by a writing or writings signed by all members
of such committee.
- 4 -
<PAGE> 5
ARTICLE III
-----------
OFFICERS
--------
SECTION 3.1. OFFICERS; TERMS; DUTIES. The officers of the Corporation
shall consist of a President, Secretary and Treasurer; and the Board of
Directors may, in its discretion, elect a Chairman of the Board and such Vice
Presidents, Assistant Secretaries, Assistant Treasurers, a Controller and such
other officers and agents as the Board of Directors may determine. All officers
shall be elected by the Board of Directors, and they shall hold office for such
period, exercise such authority and perform such duties as the Board of
Directors may from time to time determine. Any two or more offices may be held
by the same person, but no officer shall execute, acknowledge, or verify any
instrument in more than one capacity if such instrument is required by law, the
Articles of Incorporation or these Regulations to be executed, acknowledged or
verified by two or more officers.
SECTION 3.2. ELECTION, TERM, ELIGIBILITY AND REMOVAL. The officers of the
Corporation shall be elected annually by the Board of Directors at its
organizational meeting held pursuant to Section 2.6 or at a special meeting held
for such purpose. New or additional officers may be elected at any meeting of
the Board of Directors. Each officer shall serve at the pleasure of the Board
of Directors, and each officer shall hold office until his or her successor is
chosen or until his or her death, resignation or removal. Only the Chairman of
the Board need be a member of the Board of Directors. Any officer may be
removed, with or without cause, by the Board of Directors without prejudice to
the contract rights of such officer.
SECTION 3.3. VACANCIES. If any office shall become vacant by reason of
death, resignation, removal or otherwise, the Board of Directors shall elect a
successor to fill such office.
SECTION 3.4. DELEGATION OF DUTIES. In case of the absence of any officer
of the Corporation or for any other reason that may seem sufficient to the Board
of Directors, the Board of Directors may, for such time as the Board of
Directors determines, delegate powers and duties of such officer to any other
officer or to any director.
ARTICLE IV
----------
SHARES
------
SECTION 4.1. SHARE CERTIFICATES. Certificates for shares of the
Corporation shall be in such form and style as the Board of Directors may
determine, and each certificate shall set forth the following:
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<PAGE> 6
(a) the name of the Corporation and that the Corporation is
organized under the laws of the State of Ohio;
(b) the name of the holder of the shares represented by the
certificate;
(c) the number of shares represented by such certificate;
(d) a statement that such shares are without par value; and
(e) any restrictions upon transfer of the shares represented
by such certificate.
Certificates for shares of the Corporation shall be numbered serially as they
are issued, and shall be signed by any of the Chairman of the Board, the
President or a Vice President, and by any of the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer. When the certificate is
countersigned by an incorporated transfer agent or registrar, the signature of
any officer may be facsimile, engraved, stamped or printed.
SECTION 4.2. UNCERTIFICATED SHARES. The Board of Directors may provide
by resolution that some or all of the shares of the Corporation shall be
uncertificated shares, provided that such resolution shall not apply to shares
represented by a certificate until such certificate is surrendered to the
Corporation as provided in division (B) of Section 1308.43 of the Ohio Revised
Code, and that such resolution shall not apply to a certificated security issued
in exchange for an uncertificated security as provided in division (C) of
Section 1308.43 of the Ohio Revised Code. Within a reasonable time after the
issuance or transfer of uncertificated shares, the Corporation shall send to the
registered owner a written notice containing the information described in
Section 4.1 hereof. Except as otherwise expressly provided by law, the rights
and obligations of the holders of uncertificated shares and the rights and
obligations of the holders of certificates representing shares of the same class
shall be identical.
SECTION 4.3. LOST CERTIFICATE. Any shareholder claiming that a
certificate for shares has been lost, stolen or destroyed may make an affidavit
or affirmation of the fact. Subject to any requirement established by the
Board of Directors, a new certificate may be issued of the same tenor and
representing the same number of shares, or any combination thereof, as were
represented by the certificate alleged to have been lost, stolen or destroyed.
ARTICLE V
---------
INDEMNIFICATION
---------------
SECTION 5.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Any person who is
a party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of the fact
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<PAGE> 7
that he or she is or was a director or officer of the Corporation or, as a
director or officer of the Corporation, is or was serving at the request of the
Corporation as a director, officer, trustee, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (including
service with respect to employee benefit plans), whether the basis of such
Proceeding is alleged action in an official capacity as a director, officer,
trustee, employee or agent or in any other capacity (and whether or not he or
she continues as such director or officer), shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by law, as the
same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than such law permitted the Corporation
to provide prior to such amendment), against all expenses, liability and loss
(including attorneys' fees, and, in respect of claims not made by or in the
right of the Corporation, judgments, fines, ERISA excise taxes or penalties and
amounts paid in settlement) actually and reasonably incurred by such person in
connection with the Proceeding; PROVIDED, HOWEVER, that the Corporation shall
indemnify any person seeking indemnity in connection with a Proceeding
initiated by such person only if such Proceeding was authorized by the Board of
Directors.
SECTION 5.2. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation
may, to such extent and in such manner as is determined by the Board of
Directors, but in no event to an extent greater than is permitted by the General
Corporation Law of Ohio, indemnify any employees and agents of the Corporation
and any other persons permitted to be indemnified by the General Corporation Law
of Ohio, but whose right to indemnification is not covered by Section 5.1,
above.
SECTION 5.3. ADVANCEMENT OF EXPENSES. Unless the only liability asserted
against a director in an action, suit or proceeding governed by this Article V
or applicable law is pursuant to Section 1701.95 of the Ohio Revised Code,
expenses, including attorneys' fees, incurred by a director or officer in
defending the action, suit or proceeding shall be paid by the Corporation as
they are incurred, in advance of the final disposition of the action, suit or
proceeding, upon receipt of a written undertaking by which the director agrees
to do both of the following:
(i) repay the amount or amounts advanced if it is proved by clear
and convincing evidence in a court of competent jurisdiction that his
action or failure to act involved an act or omission undertaken with
deliberate intent to cause injury to the Corporation or undertaken
with reckless disregard for the best interests of the Corporation; and
(ii) reasonably cooperate with the Corporation concerning the
action, suit or proceeding.
Expenses, including attorneys' fees, incurred by a director, officer, employee
or agent in defending any action, suit or proceeding governed by this Article V
or applicable law may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding, as authorized by the Board of
Directors in the specific case, upon receipt of a written undertaking by which
the director, officer, employee or agent agrees to repay the amount or
- 7 -
<PAGE> 8
amounts if it is ultimately determined that he or she is not entitled to be
indemnified by the Corporation.
SECTION 5.4. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section
5.1 hereof is not paid in full by the Corporation within 30 days after a written
claim therefor has been received by the Corporation, the claimant may bring suit
against the Corporation to recover the unpaid amount of the claim. If the
claimant is successful in whole or in part, he or she also shall be entitled to
be paid the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in a Proceeding in advance of its final disposition where the required
undertaking has been tendered to the Corporation) that the claimant has not met
the standards of conduct which make it permissible under the applicable law for
the Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including the Board of Directors, independent legal counsel, or the
shareholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct, nor an actual
determination by the Corporation (including the Board of Directors, independent
legal counsel, or the shareholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
SECTION 5.5. CONTRACTUAL RIGHTS. The right to be indemnified under
Section 5.1 (but not Section 5.2), including any right to the reimbursement or
advancement of expenses pursuant thereto, (i) is a contract right based upon
good and valuable consideration, pursuant to which the person entitled thereto
may bring suit as if the provisions hereof were set forth in a separate written
contract between the Corporation and the director or officer, (ii) is intended
to be retroactive and shall be available with respect to events occurring prior
to the adoption hereof, and (iii) shall continue to exist after the rescission
or restrictive modification hereof with respect to events occurring prior
thereto.
SECTION 5.6. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person
by this Article V shall not be exclusive, and shall be in addition to, any other
right of indemnification or reimbursement which such person may have under any
statute, provision of the Articles of Incorporation of the Corporation,
agreement, vote of shareholders or disinterested directors or otherwise.
SECTION 5.7. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation against expenses, liability or loss incurred in respect of the
Proceeding, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the Ohio General
Corporation Law.
SECTION 5.8. DETERMINATIONS. Any determination to be made under this
Article V by the Board of Directors shall be made as follows:
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<PAGE> 9
(a) by a majority vote of a quorum consisting of directors
of the Corporation who were not and are not parties to or threatened with any
such action, suit, or proceeding;
(b) if the quorum described in paragraph (a) of this Section
5.7 is not obtainable or if a majority vote of a quorum of disinterested
directors so directs, in a written opinion by independent legal counsel other
than an attorney, or a firm having associated with it an attorney, who has been
retained by or who has performed services for the Corporation or any person to
be indemnified within the past five years;
(c) by the shareholders; or
(d) by the court of common pleas or the court in which such
action, suit, or proceeding was brought.
ARTICLE VI
----------
NOTICE
------
Whenever provisions of law, the Articles of Incorporation or these
Regulations require notice to be given to any director or shareholder, personal
or hand delivery of such notice shall not be required. Any such notice may be
given in writing, by mail (by deposit in a post office or letter box, in an
envelope with postage affixed), by courier, by overnight package delivery, by
telegraph or by telecopier, in any case addressed to such director or
shareholder at such address as appears on the records of the Corporation. Notice
given by any one of the above methods shall be sufficient, and the method of
giving notice to all directors or to all shareholders, as the case may be, need
not be uniform. If otherwise permitted by these Regulations, notice to
directors may also be given by telephone call. Such notice shall be deemed to
be given at the time when it is so mailed, or delivered to a courier, an
overnight package delivery company or a telegraph company, or, in the case of a
telecopy, when transmission has been confirmed. Notice given by telephone shall
be deemed to have been given only when communicated directly to the person to
whom such notice is to be given (and not when left by voice mail or other
recording device). In computing the period of time for the giving of notice,
the day on which notice is given shall be excluded, and the day when the act for
which notice is given is to be done is included, unless the instrument calling
for the notice otherwise provides.
ARTICLE VII
-----------
SEAL
----
A corporate seal shall not be required. If the Board of Directors elects
to provide a seal, failure to affix such seal to any document shall not affect
the validity thereof.
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<PAGE> 10
ARTICLE VIII
------------
AMENDMENT
---------
These Regulations may be altered, amended or repealed, or new Regulations
may be adopted, (i) at any annual or special meeting of the shareholders called
for that purpose, by the affirmative vote of the holders of shares entitling
them to exercise a majority of the voting power of the Corporation on the
proposal, or (ii) without a meeting by the written consent of the holders of the
Corporation's common shares entitling them to exercise two-thirds of the voting
power of the Corporation on such proposal.
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<PAGE> 1
Exhibit 99.T3C
EAGLE-PICHER INDUSTRIES, INC.
AND
[ ] TRUSTEE
____________________
INDENTURE
DATED AS OF
____________________
$50,000,000
[____]% SENIOR UNSECURED DIVESTITURE NOTES DUE __________, _____
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA SECTION INDENTURE SECTION
----------- -----------------
<S> <C>
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 10.03
(c) 10.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 10.02
(d) 7.06
314(a) 4.02; 10.02
(b) N.A.
(c)(1) 10.04
(c)(2) 10.04
(c)(3) N.A.
(d) N.A.
(e) 10.05
(f) N.A.
315(a) 7.01(b)
(b) 7.05; 10.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 10.01
</TABLE>
N.A. means not applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to
be a part of this Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Section Heading Page
- ------- ------- ------- ----
<S> <C> <C> <C>
1 DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.03. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2 THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.02. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.03. Registrar, Transfer Agent and Paying
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.05. Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.07. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.08. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.09. Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.10. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3 REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.02. Selection of Securities to be
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.06. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.07. Mandatory Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.08. Investment of Asset Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.02. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.03. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.04. Asset Sale Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.01. When Company May Merge, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.07. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
i
<PAGE> 4
<TABLE>
<CAPTION>
Article Section Heading Page
- ------- ------- ------- ----
<S> <C> <C> <C>
6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.09. Successor Trustee by Merger, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.11. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 18
8 DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.01. Termination of Company's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.03. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.03. Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.04. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.05. Notation on or Exchange of
Securities . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.06. Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.03. Communication by Holders and Other
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.04. Certificate and Opinion as to
Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.05. Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.06. Rules by Company and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.07. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.08. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.09. Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
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<TABLE>
<CAPTION>
Article Section Heading Page
- ------- ------- ------- ----
<S> <C> <C> <C>
10.10. Variable Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
iii
<PAGE> 6
INDENTURE, dated as of [ ], between EAGLE-PICHER INDUSTRIES,
INC., an Ohio corporation ("Company"), and [ ], a
_____________ corporation ("Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's [____]% Senior
Unsecured Divestiture Notes Due [three years from the Effective Date]
("Securities").
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
"Agent" means any Registrar, Transfer Agent or Paying Agent.
"Asset Sale" means any sale or other disposition, or series of related
sales or other dispositions, made after the Effective Date by the Company or
any Subsidiary to any Person of any divisions, subsidiaries, plants, or product
lines or other operating assets in excess of $1,000,000 of the Debtors.
"Asset Sale Account" means that trust account (account no.
_______________) maintained with, and under the sole dominion and control of,
the Trustee.
"Board of Directors" means the Board of Directors of the Company or
any authorized committee of the Board.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease" means, at the time any determination thereof is made,
any lease of property, real or personal, in respect of which the present value
of the minimum rental commitment would be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a Capital
Lease that would at such time be so required to be capitalized on the balance
sheet in accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated)
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<PAGE> 7
of corporate stock, including, without limitation, partnership interests.
"Company" means the party named as such above until a successor
replaces it, and thereafter means the successor.
"Debtors" means the Debtors as defined in the Plan.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Effective Date" means [the Effective Date under the Plan].
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect on the Issue Date.
"Holder" or "Securityholder" means a person in whose name a Security
is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit or similar instruments (or reimbursement agreements in respect thereof)
or representing the balance deferred and unpaid of the purchase price of any
property (including Capital Lease Obligations), except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of
the foregoing Indebtedness would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP, and also includes, to the extent
not otherwise included, all Indebtedness of others secured by a Lien on any
asset of such Person, whether or not the Indebtedness is assumed by such
Person.
"Indenture" means this Indenture as amended from time to time.
"Issue Date" means the date of first issuance of the Securities
hereunder.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement).
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<PAGE> 8
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any Subsidiary in respect of any Asset Sale, including, without
limitation, the aggregate cash proceeds from the sale of the real estate of the
Company's Orthane Division, net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any expenses related to the relocation of assets on
personnel incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that are the subject of such Asset
Sale and any other Indebtedness (other than the Securities) required to be
repaid in connection with such transaction and any reserve for adjustment in
respect of the sale price or representations, warranties and indemnities, if
any, made in connection with the sale, of such asset or assets. Net Proceeds
shall exclude any non-cash proceeds received from any Asset Sale until
converted by the Company or any Subsidiary to cash.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the President, the Treasurer or a Vice-President of the
Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Person" means any individual, corporation, partnership, joint
venture, entity, association, joint-stock company, trust or unincorporated
organization (including any subdivision or ongoing business of any such entity
or substantially all of the assets of any such entity, subdivision or
business).
"Plan" means the Third Amended Consolidated Plan of Reorganization in
the Chapter 11 cases of the Company and certain of its affiliates dated August
28, 1996.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under this
Indenture.
"Subsidiary" means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by the Company or one or more of the other
Subsidiaries of the Company or a combination thereof.
3
<PAGE> 9
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date shown above.
"Trustee" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
SECTION 1.02. OTHER DEFINITIONS.
Term Defined in Section
---- ------------------
"Bankruptcy Law" 6.01
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 10.07
"Officer" 10.10
"Paying Agent" 2.03
"Quoted Price" 10.10
"Registrar" 2.03
"Transfer Agent" 2.03
"U.S. Government Obligations" 8.01
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) All terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC
rule under the TIA have the meanings assigned to them by such
definition; and
(5) words in the singular include the plural, and in the
plural include the singular.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities shall be
substantially in the form of Exhibit A, which is part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Security shall be dated the date of its
authentication.
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall
sign the Securities for the Company by manual or facsimile
4
<PAGE> 10
signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of Exhibit A upon a written
order of the Company signed by two Officers. The aggregate principal amount of
Securities outstanding at any time may not exceed that amount except as
provided in Section 2.07 below.
SECTION 2.03. REGISTRAR, TRANSFER AGENT AND PAYING AGENT. The
Company shall maintain an office or agency where Securities may be
authenticated ("Registrar"), where Securities may be presented for registration
of transfer or for exchange ("Transfer Agent") and where Securities may be
presented for payment ("Paying Agent"). The Transfer Agent shall keep a
register of the Securities and of their transfer and exchange. The Company may
appoint more than one Registrars, Transfer Agents and Paying Agents. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. If the Company fails to maintain a Registrar,
Transfer Agent or Paying Agent, the Trustee shall act as such.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust for the benefit of Securityholders or the
Trustee all money held by the Paying Agent for the payment of principal or
interest on the Securities, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent shall have
no further liability for the money. The Company shall not serve as Paying
Agent.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Transfer Agent, the Company shall furnish to the Trustee semiannually and at
such other times as the Trustee may request in writing a list in such
5
<PAGE> 11
form and as of such date as the Trustee may reasonably require of the names and
addresses of the Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. Where Securities are
presented to the Transfer Agent with a request to register the transfer or to
exchange them for an equal principal amount of Securities of other
denominations, the Transfer Agent shall register the transfer or make the
exchange if its requirements for such transactions are met. The Transfer Agent
may require a Holder to pay a sum sufficient to cover any taxes imposed on a
transfer or exchange. To permit registrations of transfer and exchanges, the
Trustee shall authenticate Securities at the Transfer Agent's request. The
Company may charge a reasonable fee for any registration of transfer or
exchange but not for any exchange pursuant to Section 2.10, 3.06 and 9.05
hereof.
SECTION 2.07. REPLACEMENT SECURITIES. If the Holder of a Security
claims that the Security has been lost, destroyed or wrongfully taken, then, in
the absence of notice to the Company or the Trustee that the Security has been
acquired by a bona fide purchaser, the Company shall issue a replacement
Security if the Company and the Trustee receive:
(1) evidence satisfactory to them of the loss,
destruction or taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their expenses
and any taxes for replacing the Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. OUTSTANDING SECURITIES. The Securities outstanding
at any time are all the Securities authenticated by the Trustee except for
those cancelled by it, those delivered to it for cancellation, and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07 above, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01 hereof, they
cease to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
6
<PAGE> 12
SECTION 2.09. TREASURY SECURITIES. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or an Affiliate
shall be disregarded, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SECURITIES. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities.
SECTION 2.11. CANCELLATION. The Company at any time may deliver
Securities to the Registrar for cancellation. The Transfer Agent and Paying
Agent shall forward to the Registrar any Securities surrendered to them for
registration of transfer, exchange or payment. The Registrar shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and shall dispose of cancelled Securities as the Company directs.
The Company may not issue new Securities to replace Securities that it has paid
or delivered to the Registrar for cancellation.
SECTION 2.12. DEFAULTED INTEREST. If the Company defaults in a
payment of interest on the Securities, it shall pay the defaulted interest in
any lawful manner. It may pay the defaulted interest, plus any interest
payable on the defaulted interest, to the persons who are Securityholders on a
subsequent special record date. The Trustee shall fix the record date and
payment date. At least 15 days before the record date, the Trustee shall mail
to Securityholders a notice that states the record date, payment date and
amount of interest to be paid.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company wants to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee of the redemption date and the principal amount of Securities to be
redeemed. If the Company is required to redeem Securities pursuant to Section
3.07 below and paragraph 6 of the Securities, it shall notify the Trustee of
the principal amount of Securities to be redeemed. The Company's notice shall
7
<PAGE> 13
specify the paragraph of the Securities pursuant to which it wants to redeem
Securities.
The Company shall give each notice provided for in this Section at
least 75 days before the redemption date unless a shorter notice is
satisfactory to the Trustee.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed in the inverse order of aggregate principal amount of each
Security outstanding. In the event that some but not all Securities of equal
principal amount are to redeemed, such redemption shall be pro rata of all such
Securities of equal principal amount outstanding. The Trustee shall make the
selection not more than 75 days before the redemption date from Securities
outstanding not previously called for redemption. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more
than 60 days before a redemption date, the Trustee shall mail a notice of
redemption by first-class mail to each Holder whose Securities are to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price; and
(5) that interest on Securities called for redemption ceases
to accrue on and after the redemption date.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is given, Securities called for redemption become due and payable on
the redemption date at the redemption price.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or before the
redemption date, the Company shall deposit with the Paying Agent money
sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date. The
8
<PAGE> 14
Paying Agent shall return to the Company any money not required for that
purpose.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall deliver the Holder a new
Security equal in principal amount to the unredeemed portion of the Security
surrendered.
SECTION 3.07. MANDATORY REDEMPTION. If at any time the cumulative
amount on deposit in the Asset Sale Account and not to be used for the
redemption of the Securities pursuant to this Section 3.07 as specified in a
notice previously filed with the Trustee by the Company pursuant to Section
3.01 above, equals or exceeds $10 million, the Company shall redeem the maximum
principal amount of Securities that, together with accrued and unpaid interest
thereon, may be redeemed out of such Net Proceeds at an redemption price equal
to 100% of the outstanding principal amount thereof plus accrued and unpaid
interest, if any, to the date fixed for such redemption. Notice of such
redemption will be governed by Section 3.07 hereof.
SECTION 3.08. INVESTMENT OF ASSET ACCOUNT. Pending application
thereof to the redemption of the Securities, amounts in the Asset Sales Account
shall be invested in U.S. government obligations. At such time as there are no
Securities outstanding, the Trustee shall pay over to the Company any
remaining balances in the Asset Sale Account.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities. Principal and interest shall be considered paid on
the date due if the Paying Agent holds on that date money sufficient to pay all
principal and interest then due. The Company shall pay a default rate of
interest on overdue principal at the rate borne by the Securities plus 3%; it
shall pay interest on overdue installments of interest at the same rate to the
extent lawful.
SECTION 4.02. SEC REPORTS. The Company shall file with the Trustee
within 15 days after it files them with the SEC copies of the annual reports
and of the information, documents and other reports (or copies of such portions
of any of the foregoing as the SEC may by rules and regulations prescribe) that
the Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act"). The Company shall
provide to each Holder within 15 days after it files them with the SEC copies
of the annual reports and quarterly reports that the Company is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
9
<PAGE> 15
Company also shall comply with the other provisions of TIA Section 314(a).
SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
an Officers' Certificate stating whether or not the signers know of any Default
that occurred during the fiscal year. If they do, the certificate shall
describe the Default and its status. The certificate need not comply with
Section 10.05 hereof.
SECTION 4.04. ASSET SALE ACCOUNT. The Company shall deposit all
Net Proceeds in the Asset Sale Account within five (5) days after receipt of
same. In addition, the Company shall transfer to the Asset Sale Account any
cash proceeds held in Star Bank Account #19-0170A (if such account does not
become the Asset Sale Account) as of the Issue Date.
ARTICLE 5
SUCCESSORS
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC. The Company shall not
consolidate or merge into, or transfer or lease all or substantially all of its
assets to, any person unless:
(1) the person is a corporation;
(2) the person assumes by supplemental indenture all the
obligations of the Company under the Securities and this Indenture;
and
(3) immediately after the transaction no Default exists.
The successor shall be substituted for the Company, and thereafter all
obligations of the Company under this Indenture and the Securities and shall
terminate.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company fails to make a deposit for the payment of
interest on any Security when the same becomes due and payable and the
Default continues for a period of five (5) business days;
10
<PAGE> 16
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at maturity, upon
redemption, acceleration or otherwise, or the Company defaults in
payment of the Net Proceeds required by Section 4.04 hereof;
(3) the Company fails to comply with any of its other
agreements in the Securities or this Indenture and the Default
continues for 30 days after notice either from the Trustee or the
Holders of at least 25% in principal amount of the Securities, which
notice must specify the Default, demand that it be remedied, and state
that the notice is a "Notice of Default," and which notice, if sent by
the Holders, shall also be served on the Trustee;
(4) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors; or
(5) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case,
(B) appoints a Custodian of the Company or for all
or substantially all of its property, or
(C) orders the liquidation of the Company, and the
order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means title 11, U.S. Code, or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
SECTION 6.02. ACCELERATION. If an Event of Default occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least
25% in principal amount of the Securities by notice to the Company and the
Trustee, may declare the principal of and accrued interest on all the
Securities to be due and payable. Upon such declaration the principal and
interest shall be due and payable immediately. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except
11
<PAGE> 17
nonpayment of principal or interest that has become due solely
because of the acceleration.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority
in principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences, except a Default in the payment of the
principal of or interest on any Security or a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each
Securityholder affected.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture or is unduly
prejudicial to the rights of other Securityholders.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may pursue a
remedy with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee notice of a continuing
Event of Default;
(2) the Holders of at least 25% in principal amount of the
Securities make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
and
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity.
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<PAGE> 18
A Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Security to receive payment of principal and interest on the Security, on
or after the respective due dates expressed in the Security, or to bring suit
for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(1) or (2) above occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal and interest remaining unpaid.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property.
SECTION 6.10. PRIORITIES. If the Trustee collects any money
pursuant to this Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07
below;
Second: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by a
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Holder pursuant to Section 6.07 above, or a suit by Holders of more than 10% in
principal amount of the Securities.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own wilful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith and in accordance with
a direction received by it pursuant to Section 6.05 above.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) Subject to paragraph (c) of this Section, the Trustee may refuse
to perform any duty or exercise any right or power
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<PAGE> 20
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights
or powers.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or an Affiliate with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11 below.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement in the
Securities other than its authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to
Securityholders a notice of the Default within 90 days after it occurs. Except
in the case of a Default in payment on any Security, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
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SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Any report required
by TIA Section 313(a) to be mailed to Securityholders shall be mailed by the
Trustee on or before May 31 of each year. The Trustee also shall comply with
TIA Section 313(b)(2). A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange on which
the Securities are listed. The Company shall notify the Trustee when the
Securities are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred by it. Such
expenses shall include the reasonable compensation and out-of-pocket expenses
of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim, and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel,
and the Company shall pay the reasonable fees and expenses of such counsel.
The Company need not pay for any settlement made without its consent.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(4) or (5) above occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
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<PAGE> 22
(1) the Trustee fails to comply with TIA Section 310(a) or
Section 310(b) or with Section 7.10 below;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section 6.01(4) or (5)
occurs with respect to the Trustee.
The Company also may remove the Trustee with cause if the Company so
notifies the Trustee six months in advance and if no Default occurs during the
six-month period.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the Securities may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with TIA Section 310(a) or Section
310(b) or with Section 7.10, any Securityholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the
lien provided for in Section 7.07 above.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
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SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. This Indenture shall
always have a Trustee who satisfies the requirements of TIA Section 310(a)(1).
The Trustee shall always have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published report of condition.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed is subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS. The Company
may terminate all of its obligations under this Indenture if:
(1) the Securities mature within one year or all of them are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations sufficient to pay
principal and interest on the Securities to maturity or redemption, as
the case may be. The Company may make the deposit only during the
one-year period.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
4.01, 7.07, 7.08 and 8.03 hereof shall survive until the Securities are no
longer outstanding. Thereafter, the Company's obligations in Sections 7.07 and
8.03 hereof shall survive.
After a deposit the Trustee upon request shall acknowledge in writing
the discharge of the Company's obligations under this Indenture except for
those surviving obligations specified above.
In order to have money available on a payment date to pay principal or
interest on the Securities, the U.S. Government Obligations shall be payable as
to principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations shall not be
callable at the Company's option.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged.
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SECTION 8.02. APPLICATION OF TRUST MONEY. The Trustee shall hold
in trust money or U.S. Government Obligations deposited with it pursuant to
Section 8.01 above. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal and interest on the Securities.
SECTION 8.03. REPAYMENT TO COMPANY. The Trustee and the Paying
Agent shall promptly pay to the Company upon request any excess money or
securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest that remains
unclaimed for two years. After payment to the Company, Securityholders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the
Trustee may amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01 above;
(3) to provide for uncertificated Securities in addition to
certificated Securities; or
(4) to make any change that does not adversely affect the
rights of any Securityholder.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture or the Securities with the written consent of the
Holders of at least a majority in principal amount of the Securities. However,
without the consent of each Securityholder affected, an amendment under this
Section may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or change the fixed maturity of
any Security;
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(4) make any Security payable in money other than that stated
in the Security; or
(5) make any change in Section 3.02, 3.07, 4.04, 6.04, 6.07
or 9.02 (second sentence) hereof; or
(6) create a privilege or priority of any Security over
another Security.
After an amendment under this Section becomes effective, the Trustee
shall mail to Securityholders a notice briefly describing the amendment.
Securityholders need not consent to the exact text of a proposed
amendment or waiver; it is sufficient if they consent to the substance thereof.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment
to this Indenture or the Securities shall be set forth in a supplemental
indenture that complies with the TIA as then in effect.
If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision shall
be automatically amended to like effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an
amendment or waiver becomes effective, a consent to it by a Holder of a
Security is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
An amendment or waiver becomes effective in accordance with its terms and
thereafter binds every Securityholder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. The Trustee
may place an appropriate notation about an amendment or waiver on any Security
thereafter authenticated. The Company in exchange for all Securities may issue
and the Trustee shall authenticate new Securities that reflect the amendment or
waiver.
SECTION 9.06. TRUSTEE PROTECTED. The Trustee need not sign any
supplemental indenture that adversely affects its rights.
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ARTICLE 10
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS. The provisions of
TIA Section Sections 310 through 317 that impose duties on any Person
(including the provisions automatically deemed included herein unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein. If any provision of this Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Indenture by the TIA, the required provision shall control.
SECTION 10.02. NOTICES. Any notice or communication by the
Company or the Trustee to the other is duly given if in writing and delivered
in person, sent by facsimile transmission and confirmed by mail or mailed by
first-class mail to the other's address stated in Section 10.10 below. The
Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Transfer
Agent. Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a notice
required to be mailed or to publish a notice required to be published, the
Company may give such substitute notice as the Trustee approves. Failure to
publish a notice as required or any defect in it shall not affect the
sufficiency of any mailed notice.
All other notices or communications shall be in writing.
SECTION 10.03. COMMUNICATION BY HOLDERS AND OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Transfer Agent and
anyone else shall have the protection of TIA Section 312(c)
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SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT. Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 10.06. RULES BY COMPANY AND AGENTS. The Company may make
reasonable rules for action by or a meeting of Securityholders. Any Agent may
make reasonable rules and set reasonable requirements for its functions.
SECTION 10.07. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday,
a Sunday or a day on which banking institutions are not required to be open in
Cincinnati, Ohio. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a
Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 10.08. NO RECOURSE AGAINST OTHERS. All liability
described in the Securities of any director, officer, employee or stockholder,
as such, of the Company is waived and released.
SECTION 10.09. DUPLICATE ORIGINALS. The parties may sign any
number of copies of this Indenture. One signed copy is enough to prove this
Indenture.
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SECTION 10.10. VARIABLE PROVISIONS.
"Officer" means President, any Vice-President, the Treasurer, the
Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.
The Trustee initially appoints [ ] as
authenticating agent.
The Company initially appoints the Trustee as Paying Agent, Transfer
Agent and Registrar.
The first certificate pursuant to Section hereof 4.03 shall be for the
fiscal year ending on , 19 .
The Company's address is:
Eagle-Picher Industries, Inc., Attention: Treasurer
If by Hand or Overnight Delivery:
580 Building
580 Walnut Street
Suite 1300
Cincinnati, Ohio 45202
If by Mail:
Post Office Box 779
Cincinnati, Ohio 45201
The Trustee's address is:
[ ]
[ ]
[ ]
SECTION 10.11. GOVERNING LAW. The law of the State of New York
shall govern this Indenture and the Securities.
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<PAGE> 29
SIGNATURES
Dated: EAGLE-PICHER INDUSTRIES, INC.
By
Attest:
Secretary (SEAL)
Dated:
By
Trust Officer
Attest:
Assistant Secretary (SEAL)
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<PAGE> 30
EXHIBIT A
(Face of Security)
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED
FOR SALE, OR OTHERWISE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
No. $
EAGLE-PICHER INDUSTRIES, INC.
promises to pay to ,
or registered assigns, the principal sum of
Dollars on
[____]% Senior Unsecured Divestiture Notes Due _____
Interest Payment Dates:
Record Dates:
Dated:
Authenticated:
[ ] EAGLE-PICHER INDUSTRIES, INC.
as Trustee
By By
Authorized Officer
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<PAGE> 31
(Back of Security)
EAGLE-PICHER INDUSTRIES, INC.
[____]% Senior Unsecured Divestiture Notes Due _____
1. Interest. Eagle-Picher Industries, Inc. (the "Company"), an
Ohio corporation, promises to pay interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semiannually on and of each year, commencing at
least six months after the Effective Date or if any such day is not a Business
Day on the next succeeding Business Day (each an "Interest Payment Date") to
Holders of record of the Securities at the close of business on the immediately
preceding [ ] and [ ], whether or not a Business
Day. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from .
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment. The Paying Agent will pay interest on the
Securities (except defaulted interest) to the persons who are registered
holders of Securities at the close of business on the record date for the next
interest payment date even though Securities are cancelled after the record
date and on or before the interest payment date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Paying Agent
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. However,
the Paying Agent may pay principal and interest by check payable in such
money. It may mail an interest check to a holder's registered address;
provided however, the Paying Agent shall make payments to a registered holder
of Securities in the aggregate principal amount greater than $500,000.00 by
wire transfer if such registered holder has on or before the record date for
such payment provided the Paying Agent with wire transfer instructions.
3. Transfer Agent, Paying Agent and Registrar. Initially,
[ ] (the "Trustee"), will act as Transfer Agent,
Paying Agent and Registrar. The Company may change any Agent without notice.
The Company may act as Transfer Agent.
4. Indenture. The Company issued the Securities under an
Indenture dated as of [the Effective Date] (the "Indenture") between the
Company and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Section Sections 77aaa-77bbbb) as in effect
on the date of the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement
of such terms. The Securities are unsecured general
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<PAGE> 32
obligations of the Company limited to $50,000,000 in aggregate principal amount.
5. Optional Redemption. The Company may redeem all Securities at
any time or some of them from time to time upon not less than 30 nor more than
60 days' notice, at par plus accrued and unpaid interest thereon to the
applicable redemption date.
6. Mandatory Redemption. If at any time the cumulative amount of
Net Proceeds on deposit in the Asset Sale Account and not to be used for the
redemption of Securities pursuant to Section 3.07 of the Indenture equals or
exceeds $10 million, the Company shall redeem the maximum principal amount of
Securities that, together with accrued and unpaid interest thereon, may be
redeemed out of such Net Proceeds at 100% of the outstanding principal amount
thereof plus accrued and unpaid interest, if any, to the date fixed for such
redemption. Unless such Net Proceeds are sufficient to redeem all the
outstanding Securities, the aggregate principal amount of Securities to be
redeemed shall be selected by the Trustee in the inverse order of aggregate
principal amount of each Security outstanding. In the event that some but not
all Securities of equal principal amount are to redeemed, such redemption shall
be pro rata of all such Securities of equal principal amount outstanding.
7. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
holder of Securities to be redeemed at his registered address. On and after
the redemption date interest ceases to accrue on Securities or portions of them
called for redemption.
8. Transfer, Exchange. The transfer of Securities may be
registered, and Securities may be exchanged, as provided in the Indenture. The
Transfer Agent may require a holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Transfer Agent need not exchange or
register the transfer of any Security or portion of a Security selected for
redemption. Also, it need not exchange or register the transfer of any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
9. Persons Deemed Owners. The registered holder of a Security
may be treated as its owner for all purposes.
10. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Securities may be amended with the consent of the holders of
at least 51% in principal amount of the Securities, and any existing default
may be waived with the consent of the holders of a majority in principal amount
of the Securities. Without the consent of any Securityholder, the Indenture or
the Securities may be amended to cure any ambiguity, defect or inconsistency,
to provide for assumption of Company
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<PAGE> 33
obligations to Securityholders or to make any change that does not adversely
affect the rights of any Securityholder.
11. Defaults and Remedies. An Event of Default is: default for 5 business
days in payment of interest on the Securities; default in payment of principal
on them or in the payment of Net Proceeds required by Section 4.04 of the
Indenture; failure by the Company for 30 days after notice to it to comply with
any of its other agreements in the Indenture or the Securities; and certain
events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable
immediately. Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.
12. Trustee Dealings with Company. [ ], the
Trustee under the Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
13. No Recourse Against Others. A director, officer, employee or
a stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Securities.
14. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Registrar or an authenticating
agent.
15. Abbreviations. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE, WHICH HAS IN
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<PAGE> 34
IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
SECRETARY, EAGLE-PICHER INDUSTRIES, INC., POST OFFICE BOX 779, CINCINNATI, OHIO
45201.
29
<PAGE> 35
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I/we assign and transfer this Security to:
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
_________________________________________________________________________ agent
to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date: ____________________________
Your Signature: _______________________________________________________________
(Sign exactly as your name appears on the other side of
this Security)
30
<PAGE> 1
EXHIBIT 99.T3E.1
[EAGLE-PICHER LOGO]
To Parties in Interest:
We are transmitting to you with this letter the Debtors' Joint
Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code with
Respect to the Third Amended Consolidated Plan of Reorganization, dated August
28, 1996 (the "Disclosure Statement"), of Eagle-Picher Industries, Inc. and
certain of its affiliates (collectively, the "Debtors"). The Disclosure
Statement describes the provisions of the Third Amended Consolidated Plan of
Reorganization under Chapter 11 for the Debtors (the "Plan"), which has been
proposed jointly by the Debtors, the Official Injury Claimants' Committee (the
"Injury Claimants' Committee") and the Legal Representative for Future Personal
Injury Claimants (the "Future Claimants' Representative") (collectively, the
"Plan Proponents"). The Disclosure Statement has been approved for dissemination
to parties in interest. You should read the Disclosure Statement carefully. A
summary of the distributions that will be made under the Plan is included in
Sections II and V.A of the Disclosure Statement. If you are entitled to vote
on the Plan, a ballot is enclosed for you. WE URGE YOU TO VOTE TO ACCEPT THE
PLAN.
THE PLAN PROPONENTS BELIEVE THAT THE PLAN IS IN THE BEST INTERESTS OF
ALL CREDITORS AND WILL ALLOW THE DEBTORS TO EMERGE FROM CHAPTER 11 AS VIABLE
ONGOING BUSINESS ENTERPRISES. THE PLAN HAS THE SUPPORT OF THE INJURY CLAIMANTS'
COMMITTEE AND THE FUTURE CLAIMANTS' REPRESENTATIVE, WHICH COLLECTIVELY REPRESENT
ALL OF THE HOLDERS OF PRESENT AND FUTURE ASBESTOS-RELATED AND LEAD-RELATED
PERSONAL INJURY CLAIMS AGAINST THE DEBTORS.
AS A RESULT OF A SETTLEMENT REACHED BETWEEN THE PLAN PROPONENTS AND THE
OFFICIAL UNSECURED CREDITORS' COMMITTEE, THE OFFICIAL UNSECURED CREDITORS'
COMMITTEE ALSO SUPPORTS THE PLAN.
The Plan is attached to the Disclosure Statement as Exhibit "A." In
order for a class to accept the Plan, the holders of at least two-thirds in
dollar amount and more than one-half in number of claims voting must accept the
Plan. Moreover, the Plan requires that at least 75% of the holders of
asbestos-related and lead-related personal injury claims who vote on the Plan
vote in favor of the Plan. Your acceptance will facilitate and expedite the
emergence of the Debtors from chapter 11.
If you did not receive a ballot with the Disclosure Statement, please
see the summary of who may not vote on the Plan, on page of the Disclosure
Statement. STOCKHOLDERS ARE NOT ENTITLED TO VOTE ON THE PLAN AND ARE NOT
RECEIVING BALLOTS. If you believe that you are entitled to vote on the Plan, but
did not receive a ballot, received a damaged ballot, lost your ballot, or if you
have any other questions about the Plan or this Disclosure Statement, please
call Hill and Knowlton, Inc. at (212) 885-0555.
Please note that BALLOTS MUST BE RECEIVED NO LATER THAN 5:00 P.M.,
CINCINNATI, OHIO, TIME, ON NOVEMBER 4, 1996. If you are entitled to vote on the
Plan, a ballot and return envelope are enclosed for your convenience. IT IS OF
THE UTMOST IMPORTANCE TO THE DEBTORS, THE INJURY CLAIMANTS' COMMITTEE, THE
<PAGE> 2
FUTURE CLAIMANTS' REPRESENTATIVE, AND THE OFFICIAL UNSECURED CREDITORS'
COMMITTEE THAT YOU VOTE PROMPTLY TO ACCEPT THE PLAN.
Sincerely,
/s/ Thomas E. Petry
--------------------------------------
Thomas E. Petry
Chairman of the Board of Directors and Chief
Executive Officer of Eagle-Picher Industries, Inc.
/s/ James J.G. McMonagle
--------------------------------------
James J.G. McMonagle
Future Claimants' Representative
/s/ Robert E. Sweeney
--------------------------------------
Robert E. Sweeney
Chairperson of the Injury Claimants' Committee
/s/ Edward F. Crawford
--------------------------------------
Edward F. Crawford
Chairperson of the Official Unsecured Creditors'
Committee
<PAGE> 3
THE OFFICIAL UNSECURED CREDITORS' COMMITTEE
OF EAGLE-PICHER INDUSTRIES, INC. ET AL.
August 28, 1996
To: The General Unsecured Creditors
of Eagle-Picher Industries, Inc.
and affiliated Chapter 11 Debtors
Re: The Eagle-Picher Third Amended Consolidated Plan
of Reorganization
Dear Creditor:
I am writing this letter to you in my capacity as Chairman of the
Official Unsecured Creditors' Committee (the "Committee") of Eagle-Picher
Industries, Inc. and its affiliated debtors in Consolidated Bankruptcy Case No.
1-91-00100 pending in the United States Bankruptcy Court for the Southern
District of Ohio, Western Division (the "Bankruptcy Court").
At the beginning of the Eagle-Picher Chapter 11 cases, the
Committee was appointed to represent the interests of general unsecured
creditors. A separate committee was appointed to represent the interests of
creditors asserting claims for personal injury or property damage allegedly
caused by asbestos-containing and related products produced by Eagle-Picher
(the "Asbestos Creditors' Committee"). During the Eagle-Picher Chapter 11
cases, the Committee has retained legal and financial advisors and has taken an
active role in seeking to maximize the recovery for general unsecured creditors
of Eagle-Picher.
The Eagle-Picher Chapter 11 cases have now reached the culminating
phase of the bankruptcy reorganization process: the consideration of a proposed
plan of reorganization for the debtors. This letter accompanies materials
pertaining to the Eagle-Picher Third Amended Consolidated Plan of
Reorganization (the "Eagle-Picher Plan"). Included in these materials are the
Eagle-Picher Plan and the Disclosure Statement prepared by Eagle-Picher. The
Disclosure Statement summarizes the Eagle-Picher Plan and the treatment your
claim will receive, as well as providing background information on Eagle-Picher
and the Chapter 11 case. These are important documents, intended to assist you
in reaching a decision on how you will vote on the Eagle-Picher Plan. You should
consider them carefully in reaching your conclusion.
The Eagle-Picher Plan involves distributions of cash, debt
securities and equity securities in satisfaction of the various categories of
claims. The precise amounts and value of the consideration to be received will
be affected by the aggregate amount of general unsecured claims allowed and by
the subjective valuation of non-cash distributions. With respect to the value
of the debt securities to be provided to holders of general unsecured claims,
the Eagle-Picher Plan provides that the terms of the debt securities are to be
established in order to have the value of such securities equal their face
amount. Based on the information available to it, the Committee estimates that
allowed general unsecured claims will receive cash and securities
<PAGE> 4
General Unsecured Creditors
August 28, 1996
Page 2
having a value of approximately 33% of their respective allowed claims. This
amount compares to a projected distribution of approximately 27% under the
previous version of the Eagle-Picher plan.
Probably the most significant single feature in the Eagle-Picher Plan
is the valuation of present and future asbestos claims. This valuation
determines the proportionate share of plan value to be received by all general
unsecured creditors. The valuation of aggregate asbestos claims incorporated in
the Eagle-Picher Plan is $2 billion.
While the $2 billion total valuation of asbestos claims is an extremely
large amount, it represents only a fraction of the amount initially sought by
representatives of the asbestos creditors. The ultimate number arrived at is a
product of negotiations among Eagle-Picher, the Committee and the Asbestos
Creditors' Committee. Initial negotiations between Eagle-Picher and the
Asbestos Creditors' Committee resulted in a proposed value of $1.5 billion.
This amount was rejected by the Committee, resulting an a lengthy valuation
trial before the Bankruptcy Court. Although the Committee's experts presented
evidence to support a valuation less than $1.5 billion, the Bankruptcy Court
ultimately accepted higher values presented by experts for Eagle-Picher and the
Asbestos Creditors' Committee. As a result, the Bankruptcy Court's ruling found
the total value of asbestos claims to be slightly more than $2.5 billion. The
Committee appealed that decision, an appeal which is pending in the United
States District Court.
During the pendency of the Committee's appeal, settlement discussions
have resulted in the proposed $2 billion valuation reflected in the
Eagle-Picher Plan. AFTER LENGTHY AND THOROUGH DISCUSSION, THE COMMITTEE HAS
DECIDED TO RECOMMEND TO GENERAL UNSECURED CREDITORS THAT YOU VOTE TO ACCEPT THE
EAGLE-PICHER PLAN IN THE FORM CURRENTLY PRESENTED FOR YOUR APPROVAL.
This conclusion is a function of two primary factors. First, although
the views of the Committee's experts continue to support an aggregate asbestos
claim value less than the $2 billion value in the Eagle-Picher Plan, these
views were not accepted by the Bankruptcy Court, as the initial forum where
such value was determined. To pursue a value of less than $2.5 billion, the
Committee would have to overcome legal presumptions in favor of the Bankruptcy
Court's factual findings. There is no assurance that such appellate efforts by
the Committee would be successful.
Second, even if the Committee was successful in reversing the valuation
decision made by the Bankruptcy Court, the outcome of such a success is almost
surely to be further appeals and other litigation by the Asbestos Creditors'
Committee. Whatever the final result, such litigation would further extend a
bankruptcy case which has already lasted more than five years. Such delays
would likely reduce the real value of whatever distributions are ultimately
made to general unsecured creditors.
IT IS THE INTENTION OF EACH OFFICIAL MEMBER OF THE COMMITTEE (OTHER
THAN THE BAUPOST GROUP) WHICH IS ELIGIBLE TO VOTE ON THE EAGLE-PICHER PLAN TO
VOTE THEIR RESPECTIVE CLAIMS FOR ACCEPTANCE OF THE EAGLE-PICHER PLAN. IT IS
ALSO THE INTENTION OF THE COMMITTEE, SUBJECT TO ITS FIDUCIARY DUTIES TO GENERAL
UNSECURED CREDITORS, TO SUPPORT CONFIRMATION OF THE EAGLE-PICHER PLAN AND,
FOLLOWING CONFIRMATION OF THE EAGLE-PICHER PLAN, TO DISMISS THE VALUATION
APPEALS WHICH ARE CURRENTLY PENDING.
<PAGE> 5
General Unsecured Creditors
August 28, 1996
Page 3
Although the Committee believes in the factual and legal positions
taken in its pending appeal, the compromise reflected in the Eagle-Picher Plan
represents a settlement outcome which the Committee has concluded is a
reasonable result for general unsecured creditors. It avoids the risk of
further litigation and the considerable time and expense that such further
proceedings would entail. If you have any questions regarding the Committee's
recommendations, please address you inquiry to the Committee's legal counsel:
Squire, Sanders & Dempsey, 4900 Key Tower, 127 Public Square, Cleveland, Ohio
44114. Attention: Carolyn J. Buller.
Sincerely yours,
/s/ EDWARD F. CRAWFORD
----------------------
Edward F. Crawford
Chairman of the Committee
<PAGE> 6
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
- -----------------------------------
DEBTORS' JOINT DISCLOSURE STATEMENT PURSUANT
TO SECTION 1125 OF THE BANKRUPTCY CODE WITH RESPECT
TO THIRD AMENDED CONSOLIDATED PLAN OF REORGANIZATION
Dated: August 28, 1996 WEIL, GOTSHAL & MANGES LLP
Co-Attorneys for Eagle-Picher Industries, Inc.,
et al.
Chapter 11 Debtors in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
and
FROST & JACOBS
Co-Attorneys for Eagle-Picher Industries, Inc.,
et al.
Chapter 11 Debtors in Possession
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
(513) 651-6800
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
I. INTRODUCTION.................................................................................... 1
II. OVERVIEW OF THE PLAN........................................................................... 6
III. GENERAL INFORMATION...........................................................................13
A. Description and History of Business............................................13
B. Description of Business Segments...............................................13
1. The Industrial Group.................................................13
2. The Machinery Group..................................................13
3. The Automotive Group.................................................14
C. General Business Conditions....................................................14
D. Events Leading to the Commencement of the Chapter 11 Cases.....................15
IV. THE CHAPTER 11 CASES...........................................................................18
A. The Debtors' Attorneys and Advisers............................................18
B. Committees.....................................................................19
1. Unsecured Creditors' Committee.......................................19
2. Injury Claimants' Committee..........................................20
3. Equity Committee.....................................................21
4. Future Claimants' Representative.....................................22
5. Coordination Between the Debtors, the Committees and the Future
Claimants' Representative............................................23
C. Significant Events During the Chapter 11 Cases.................................23
1. Employee Related Matters.............................................23
2. Vendor and Customer Issues...........................................23
3. DIP Credit Facility..................................................24
4. The Bar Dates........................................................25
5. The Debtors' Exclusive Right to File and Confirm a Plan..............26
6. Sale of EDI, Inc. Assets.............................................27
7. Multidistrict Litigation.............................................27
8. Insurance Coverage Issues............................................28
9. Mediation............................................................31
10. The Agreement in Principle and the Original Plan.....................31
11. The Offsite Negotiations.............................................31
12. The Estimation Proceedings...........................................32
13. Resolution of Other Significant Claims...............................33
a. Lead-Related Property Damage Claims.......................33
b. Lead Personal Injury Claims...............................34
c. Asbestos Related Property Damage Claims...................35
d. The American Imaging Litigation...........................37
e. The Gates Energy Products Litigation......................38
f. The Blue Dove Litigation..................................39
g. Environmental Claims......................................39
h. Asbestos-Related Contribution Claims......................43
i. IBM Credit Corporation Adversary Proceeding...............43
j. The U.S. Department of Justice Claim......................44
k. A.D. Weiss/St. Ives Claims Objection......................45
</TABLE>
i
<PAGE> 8
<TABLE>
<CAPTION>
<S> <C>
l. Controlled Power Company Claims............................. 45
m. Tallman Pools Claims........................................ 46
14. Trading in Eagle-Picher's Existing Common Stock........................ 46
15. The Unsecured Creditors' Committee's Objections to Certain
Asbestos Personal Injury Claims........................................ 47
16. The 2004 Motions....................................................... 47
17. The Unsecured Creditors' Committee's Data Gathering
Motion................................................................. 48
18. The Hillsdale Substantive Consolidation Proceeding..................... 48
19. The Restructuring of Eagle-Picher's European Operations................ 48
V. THE PLAN OF REORGANIZATION........................................................................ 50
A. Classification and Treatment of Claims and Equity Interests...................... 50
1. Administrative Expenses................................................ 50
2. Tax Claims............................................................. 52
3. Class 1: Priority Claims............................................. 52
4. Class 2: Amplicon Lease Secured Claim................................ 53
5. Class 3: Connecticut Mutual Note Secured Claim....................... 54
6. Class 4: Designated Real Property Tax Claim.......................... 54
7. Class 5: First Fidelity Lease Secured Claim.......................... 55
8. Class 6: Fleet Credit Secured Claim.................................. 55
9. Class 7: GE Capital Secured Claim.................................... 56
10. Class 8: Grove IRB Claim............................................. 56
11. Class 9: IBM Credit Corporation Secured Claim........................ 56
12. Class 10: Inter-Market Note Secured Claim............................. 57
13. Class 11: Leesburg Secured Claim...................................... 58
14. Class 12: Northwestern Group Secured Claims........................... 58
15. Class 13: Vale EDBs Claims............................................ 59
16. Class 14: Other Secured Claims........................................ 59
17. Class 15: Convenience Claims.......................................... 59
18. Class 16: Asbestos Property Damage Claims............................. 60
a. Effect of Acceptance of the Plan by Class 16.................... 61
b. Effect of Rejection of the Plan by Class 16..................... 61
c. Voting on Plan by Holders of Asbestos Property
Damage Claims................................................... 62
19. Class 17: Asbestos Personal Injury Claims and Lead
Personal Injury Claims...................................... 62
20. Class 18: Other Product Liability Tort Claims......................... 64
21. Class 19: Environmental Claims........................................ 64
22. Class 20: Unsecured Claims other than Convenience
Claims and the Specified Treatment Claims................... 65
23. Class 21: Specified Treatment Claims.................................. 67
24. Class 22: Affiliate Claims and Interests.............................. 68
25. Class 23: Penalty Claims.............................................. 68
26. Class 24: Equity Interests............................................ 68
B. Conditions to Confirmation....................................................... 69
C. Conditions Precedent to the Effective Date under the Plan........................ 71
D. Description of the Plan Consideration............................................ 72
E. Executory Contracts and Unexpired Leases......................................... 74
</TABLE>
ii
<PAGE> 9
<TABLE>
<CAPTION>
<S> <C>
F. Fractional Shares or Other Distributions......................................... 75
G. Provisions for Treatment of Disputed Claims...................................... 75
H. Amendment and Restatement of the Debtors' Articles of Incorporation
and Code of Regulations.......................................................... 76
I. Discharge of the Debtors and the Asbestos and Lead PI Permanent
Channeling Injunction............................................................ 76
J. Amendment of the Plan............................................................ 78
K. Revocation of the Plan........................................................... 79
L. Indemnification.................................................................. 79
M. Vesting of Rights of Action...................................................... 79
N. Dissolution of the Committees.................................................... 80
O. Exculpation...................................................................... 80
P. Supplemental Documents........................................................... 80
VI. THE PI TRUST..................................................................................... 81
A. General Description of the PI Trust.............................................. 81
1. Purposes of the PI Trust............................................... 81
2. The Trustees........................................................... 81
3. The Trustees' Advisory Committee....................................... 82
4. Transfer of Certain Property to the PI Trust........................... 83
5. Ownership and Transfer of New Eagle-Picher Common Stock
by the PI Trust........................................................ 84
6. PI Trust Termination Provisions........................................ 84
7. Ability to Amend PI Trust Documents.................................... 85
B. Asbestos Personal Injury Claims Resolution Procedures............................ 85
1. Payment Percentage..................................................... 85
2. Claims Materials, Claims Evaluation, and Payment Procedures............ 86
a. Prepetition Liquidated Claims............................... 86
b. Discounted Election Claims.................................. 87
c. Individually Reviewed Claims................................ 87
d. Other Settlement Options.................................... 88
3. Alternative Procedures................................................. 88
a. Binding or Non-Binding Arbitration Procedures............... 88
b. Trial....................................................... 89
C. Separate Reserve for Future Claims............................................... 89
D. Lead Personal Injury Claims...................................................... 89
E. Co-Defendants' Procedures........................................................ 90
VII. THE ASBESTOS PD TRUST........................................................................... 91
A. The Purposes of the Asbestos PD Trust............................................ 91
B. The Trustees..................................................................... 91
C. Transfer of Certain Property to the Asbestos PD Trust............................ 91
D. Claims Resolution Procedures..................................................... 92
E. Asbestos PD Trust Termination Provisions......................................... 92
VIII. CONFIRMATION AND CONSUMMATION PROCEDURE........................................................ 93
A. Solicitation of Votes............................................................ 93
B. The Confirmation Hearing......................................................... 95
C. Confirmation..................................................................... 96
</TABLE>
iii
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C>
1. Acceptance............................................................. 96
2. Unfair Discrimination and Fair and Equitable Tests..................... 96
3. Feasibility............................................................ 97
4. Best Interests Test.................................................... 98
D. Consummation..................................................................... 99
IX. MANAGEMENT OF THE REORGANIZED DEBTORS............................................................100
A. Board of Directors and Management................................................100
1. Composition of the Board of Directors..................................100
2. Identity of Officers...................................................102
B. Compensation of Executive Officers...............................................103
C. Incentive Compensation Plans.....................................................103
D. Continuation of Existing Severance Plans.........................................103
E. Management Contracts.............................................................104
X. EXEMPTIONS FROM SECURITIES ACT REGISTRATION.......................................................107
XI. REORGANIZATION VALUE.............................................................................110
XII. RESTRICTIONS ON TRANSFERS OF CORPORATE SECURITIES AND
CERTAIN CLAIMS.............................................................................112
A. Restrictions on Corporate Securities.............................................112
1. Charter Restrictions...................................................112
2. Certain Transfers Void.................................................112
3. Recovery of Prohibited Transfers.......................................112
4. Treatment of Prohibited Transfers......................................113
5. Proceeds of Sale of Prohibited Securities..............................113
6. Legended Certificates..................................................113
7. Necessity of Restrictions..............................................113
B. Restrictions on Trading of Asbestos Personal Injury Claims, Lead
Personal Injury Claims...........................................................114
XIII. CERTAIN RISK FACTORS TO BE CONSIDERED..........................................................115
A. Overall Risks to Recovery by Holders of Claims...................................115
1. Ability to Refinance Certain Indebtedness..............................115
2. Ownership by the PI Trust..............................................115
3. Dividend Policies......................................................115
4. Projected Financial Information........................................116
5. Value of Consideration to Be Distributed under the Plan................116
6. Value of Asbestos Property Damage Claims...............................116
B. The Asbestos and Lead PI Permanent Channeling Injunction.........................116
C. Other Product Liability Tort Claims..............................................117
XIV. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN.............................................118
A. Consequences to Holders of Claims and Equity Interests...........................118
1. Realization and Recognition of Gain or Loss in General.................118
2. Holders of Allowed Priority Claims (Class 1)...........................119
3. Holders of Secured Claims (Classes 2, 3 and 5 through 14,
Inclusive).............................................................119
</TABLE>
iv
<PAGE> 11
<TABLE>
<CAPTION>
<S> <C>
a. Secured Claims that Will Be Reinstated or Paid in Full......119
b. Secured Claims that Will Be Satisfied by Cash, Notes,
or the Surrender of Collateral..............................120
4. Asbestos Personal Injury Claims and Lead Personal Injury
Claims (Class 17)......................................................121
5. Asbestos Property Damage Claims and Other Product Liability
Tort Claims (Classes 16 and 18)........................................121
6. Unsecured Claims (Classes 15, 20, and 21)..............................121
7. Equity Interests (Class 24)............................................122
8. Allocation of Consideration to Interest................................122
9. Market Discount........................................................122
B. Information Reporting and Backup Withholding.....................................123
C. Consequences to Debtors..........................................................123
1. Discharge-of-Indebtedness Income Generally.............................123
2. Attribute Reduction....................................................123
3. Stock-for-Debt Exception...............................................124
4. Deduction of Amounts Transferred to Satisfy Claims.....................125
a. Cash and New Eagle-Picher Common Stock......................125
b. Divestiture Notes, Senior Unsecured Sinking Fund
Debentures, and Tax Refund Notes............................125
5. Utilization of Net Operating Loss Carryovers...........................126
6. Consolidated Return Items..............................................127
7. Alternative Minimum Tax................................................127
D. Taxation of the PI Trust and the Asbestos PD Trust...............................127
XV. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE
PLAN.......................................................................................128
A. Liquidation under Chapter 7......................................................128
B. Alternative Plan of Reorganization...............................................128
XVI. CONCLUSION AND RECOMMENDATION...................................................................129
INDEX OF PERTINENT DEFINITIONS..........................................................................I
EXHIBIT A: Third Amended Consolidated Plan of Reorganization
EXHIBIT B: Order of the Bankruptcy Court, dated August 28, 1996, approving this
Disclosure
EXHIBIT C: Financial Appendix
EXHIBIT D: Ballot Tabulation and Solicitation Procedures, as approved by the
order of the Bankruptcy Court, dated July 23, 1996
EXHIBIT E: The Debtors' Liquidation Analysis
EXHIBIT F: The Debtors' Subsidiaries and Divisions
EXHIBIT G: The Directors and Officers of the Debtors (other than Eagle-Picher)
</TABLE>
v
<PAGE> 12
I. INTRODUCTION
Eagle-Picher Industries, Inc. ("Eagle-Picher"), Daisy Parts, Inc.,
Transicoil Inc. ("Transicoil"), Michigan Automotive Research Corporation
("MARCO"), EDI, Inc., Eagle-Picher Minerals, Inc. ("Minerals"), and Hillsdale
Tool & Manufacturing Co. ("Hillsdale") (collectively, the "Debtors") submit this
Joint Disclosure Statement pursuant to section 1125 of title 11 of the United
States Code (the "Bankruptcy Code"), to the holders of Claims (each, a
"Claimant" and all or some of them, "Claimants") and holders of the common stock
of Eagle-Picher (collectively, the "Stockholders") in connection with (i) the
solicitation of acceptances or rejections of the Third Amended Consolidated Plan
of Reorganization proposed by the Debtors, the Injury Claimants' Committee (as
defined on page hereof), and the Future Claimants' Representative (as defined on
page hereof) (the Debtors, the Injury Claimants' Committee, and the Future
Claimants' Representative being collectively referred to herein as the "Plan
Proponents"), dated August 28, 1996 (the "Plan"), and filed by the Plan
Proponents with the United States Bankruptcy Court for the Southern District of
Ohio, Western Division (the "Bankruptcy Court") and (ii) the hearing on
confirmation of the Plan (the "Confirmation Hearing") scheduled for November 13,
1996. Unless otherwise defined herein, all capitalized terms contained in this
Disclosure Statement shall have the meanings ascribed to them in the Plan.
Attached as Exhibits to this Disclosure Statement are the
following documents:
The Plan (Exhibit "A").
Order of the Bankruptcy Court, dated August 28, 1996,
approving this Disclosure Statement (Exhibit "B").
Financial Appendix (Exhibit "C").
Ballot Tabulation and Solicitation Procedures, as approved
by the order of the Bankruptcy Court, dated July 23, 1996
(the "Voting Procedures") (Exhibit "D").
The Debtors' Liquidation Analysis (Exhibit "E").
The Debtors' Subsidiaries and Divisions (Exhibit "F").
The Directors and Officers of the Debtors (other than
Eagle-Picher) (Exhibit "G").
In addition, the Ballot for acceptance or rejection of the Plan is enclosed with
this Disclosure Statement if you are entitled to vote to accept or reject the
Plan.
PLEASE BE ADVISED THAT ALL EXHIBITS TO THE PLAN WILL BE CONTAINED IN A
SEPARATE EXHIBIT VOLUME, WHICH WILL BE FILED WITH THE CLERK OF THE BANKRUPTCY
COURT NOT LESS THAN TWENTY (20) DAYS PRIOR TO THE HEARING ON CONFIRMATION OF THE
PLAN. SUCH EXHIBITS MAY BE INSPECTED IN THE OFFICE OF THE CLERK OF THE
BANKRUPTCY COURT DURING NORMAL COURT HOURS. CLAIMANTS AND STOCKHOLDERS MAY
OBTAIN A COPY
1
<PAGE> 13
OF THE EXHIBITS, ONCE FILED, UPON WRITTEN REQUEST AT THE FOLLOWING
ADDRESS:
Eagle-Picher Industries, Inc.
P.O. Box 1847
Cincinnati, Ohio 45201
On August 28, 1996, after notice and a hearing, the Bankruptcy Court
approved this Disclosure Statement as containing information of a kind and in
sufficient detail, adequate to enable hypothetical, reasonable investors typical
of the Claimants to make an informed judgment as to whether to accept or reject
the Plan. APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT, HOWEVER, CONSTITUTE A
DETERMINATION BY THE BANKRUPTCY COURT AS TO THE FAIRNESS OR THE MERITS OF THE
PLAN.
THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN.
On July 23, 1996, after notice and a hearing, the Bankruptcy Court
entered an order approving the Voting Procedures, which, inter alia, (i)
designate which Claimants are entitled to vote on the Plan and (ii) establish
other procedures governing the solicitation and tabulation of Ballots. A copy of
the Voting Procedures is attached to this Disclosure Statement as Exhibit "D."
Each Claimant entitled to vote to accept or reject the Plan should read
this Disclosure Statement and the Plan in their entirety before voting on the
Plan.
Pursuant to the provisions of the Bankruptcy Code, only classes of
claims or equity interests that are "impaired" are entitled to vote to accept or
reject the Plan. The claims in each of Classes 3, 4, 10, 12, 16, 17, 18, 19, 20,
and 21 of the Plan (see Section V.A, entitled, "THE PLAN OF REORGANIZATION -
Classification and Treatment of Claims and Equity Interests" for a description
of these classes) are impaired, and Claimants in such classes who, pursuant to
the Voting Procedures, are entitled to vote on the Plan may do so by completing
and mailing the enclosed Ballot to the address set forth on the Ballot so that
it is received by 5:00 p.m. Cincinnati, Ohio, time on November 4, 1996 (the
"Voting Deadline"). BENEFICIAL OWNERS OF DEBT SECURITIES OF THE DEBTORS THAT ARE
REGISTERED EITHER FULLY OR AS TO PRINCIPAL ONLY, BUT NOT REGISTERED TO "BEARER"
("REGISTERED DEBT SECURITIES") WHO HOLD SUCH SECURITIES THROUGH NOMINEES SHOULD
RETURN THEIR INDIVIDUAL BALLOTS TO THEIR NOMINEES IN SUFFICIENT TIME TO ALLOW
THEIR NOMINEES TO COMPLETE AND RETURN A MASTER BALLOT PRIOR TO THE VOTING
DEADLINE UNLESS SUCH BENEFICIAL OWNERS RECEIVE "PREVALIDATED" BALLOTS.
"PREVALIDATED" BALLOTS MAY BE SENT DIRECTLY TO THE ADDRESS SET FORTH ON THE
BALLOT. See the Voting Procedures, a copy of which is annexed hereto as Exhibit
"D," and Section VIII.A, entitled, "CONFIRMATION AND CONSUMMATION PROCEDURE -
Solicitation of Votes," for a more detailed description of the voting
procedures.
If you did not receive a Ballot, it is because the Plan Proponents
believe that, in accordance with the Voting Procedures, you are not entitled to
vote on the Plan.
2
<PAGE> 14
================================================================================
The following are NOT entitled to vote on the Plan and, therefore, have not
received Ballots with this Disclosure Statement:
- ADMINISTRATIVE EXPENSE CLAIMANTS
- HOLDERS OF TAX CLAIMS
- HOLDERS OF UNIMPAIRED CLAIMS: the Amplicon Lease Secured Claim,
the First Fidelity Lease Secured Claim, the Fleet Credit Secured
Claim, the GE Capital Secured Claim, the Grove IRB Secured Claim,
the IBM Credit Corporation Secured Claim, the Leesburg Secured
Claim, the Vale EDBs Claims, Other Secured Claims, Convenience
Claims, and the Affiliate Claims and Interests
- HOLDERS OF PENALTY CLAIMS
- STOCKHOLDERS
- CLAIMANTS WHOSE CLAIMS HAVE BEEN FULLY DISALLOWED
- CLAIMANTS WHOSE CLAIMS ARE THE SUBJECT OF PENDING OBJECTIONS AND
HAVE NOT BEEN ALLOWED FOR VOTING PURPOSES
================================================================================
If you are not listed above and you did not receive a Ballot, received a damaged
Ballot, or lost your Ballot, please call Hill and Knowlton, Inc. at (212)
885-0555.
If you are not entitled to vote solely because your Claim is the
subject of a pending objection, you may apply to the Bankruptcy Court for an
order allowing your Claim for voting purposes only.
The Claims in Class 23 (Penalty Claims) and the Equity Interests in
Class 24 of the Plan are impaired, but, under the Bankruptcy Code, are deemed to
have rejected the Plan because they are not receiving or retaining any property
under the Plan. Therefore, holders of Penalty Claims and Stockholders are not
receiving Ballots with this Disclosure Statement.
The Bankruptcy Code defines "acceptance" of a plan by a class of
claimants as acceptance by holders of two-thirds in dollar amount and more than
one-half in number of the claims of that class that cast ballots for acceptance
or rejection of the plan. The Debtors are seeking acceptance of the Plan by
Claimants in Classes 3, 4, 10, 12, 16, 17, 18, 19, 20, and 21. For a complete
description of the requirements for acceptance of the Plan, see Section VIII,
entitled, "CONFIRMATION AND CONSUMMATION PROCEDURE." Moreover, the Plan requires
that at least 75% of the holders of Asbestos Personal Injury Claims and Lead
Personal Injury Claims who vote on the Plan vote to accept the Plan.
Because the holders of Claims in Class 23 and the Stockholders in Class
24 are deemed to have rejected the Plan, the Plan Proponents intend to request
that the Bankruptcy Court confirm the Plan pursuant to section 1129(b) of the
Bankruptcy Code. Section 1129(b) permits the confirmation of the Plan
notwithstanding the nonacceptance of the Plan by one or more impaired classes of
claims or interests. Under that section, the Plan may be confirmed by the
Bankruptcy Court if it does not
3
<PAGE> 15
"discriminate unfairly" and is "fair and equitable" with respect to the
nonaccepting class. For a more detailed description of the requirements for
confirmation of a nonconsensual plan, see Section VIII.C, entitled,
"CONFIRMATION AND CONSUMMATION PROCEDURE - Confirmation."
The record date for determining which holders of Registered Debt
Securities in impaired classes under the Plan are entitled to vote on the Plan
is September 5, 1996. With respect to debt securities of the Debtors that are
not Registered Debt Securities or are registered to "bearer" ("Bearer Debt
Securities"), the Ballot should be cast by the holder of such Bearer Debt
Securities as of the Voting Deadline. THE TRUSTEES FOR THE REGISTERED DEBT
SECURITIES AND THE BEARER DEBT SECURITIES ARE NOT ENTITLED TO VOTE ON BEHALF OF
THE HOLDERS OF SUCH SECURITIES, AND, CONSEQUENTLY, SUCH HOLDERS MUST SUBMIT
THEIR OWN BALLOTS. Please see the Voting Procedures, a copy of which is annexed
to this Disclosure Statement as Exhibit "D," for further information regarding
voting procedures that have been established for holders of Registered Debt
Securities and Bearer Debt Securities.
After carefully reviewing this Disclosure Statement, including the
Exhibits, each Claimant in an impaired class that is entitled to vote should
vote on the enclosed Ballot and return the Ballot in the envelope provided so
that it is received by the Voting Deadline - 5:00 p.m. Cincinnati, Ohio, time on
November 4, 1996. If you have a Claim in more than one class and you are
entitled to vote Claims in more than one class, you will receive separate
Ballots for each Claim.
All creditors other than holders of Registered Debt Securities or
Bearer Debt Securities should vote and return their Ballot(s) to the following
address:
EAGLE-PICHER BALLOT TABULATION CENTER
C/O FEDERATED CLAIMS SERVICES GROUP
P.O. BOX 8041
9111 DUKE BLVD.
MASON, OHIO 45040
Holders of Registered Debt Securities
and Bearer Debt Securities should not
return their ballots to the Eagle-Picher Ballot
Tabulation Center, but should follow the
instructions for returning ballots that are
included with their ballots.
DO NOT RETURN YOUR SECURITIES
WITH YOUR BALLOT.
IF YOU HAVE ANY QUESTIONS ABOUT THE PLAN, THIS DISCLOSURE STATEMENT, OR THE
PROCEDURES FOR VOTING, PLEASE CALL HILL AND KNOWLTON, INC. AT (212) 885-0555.
4
<PAGE> 16
TO BE COUNTED, YOUR BALLOT MUST BE ACTUALLY RECEIVED AT THE APPROPRIATE
ADDRESS BY THE VOTING DEADLINE - 5:00 P.M. CINCINNATI, OHIO, TIME ON NOVEMBER 4,
1996. BALLOTS MUST BE DELIVERED BY MAIL, COURIER, OR DELIVERY SERVICE. FACSIMILE
BALLOTS WILL NOT BE ACCEPTED. ANY COMPLETED BALLOTS RECEIVED THAT DO NOT
INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE PLAN SHALL BE DEEMED TO
CONSTITUTE AN ACCEPTANCE OF THE PLAN.
Pursuant to section 1128 of the Bankruptcy Code, the Confirmation
Hearing will be held on November 13, 1996, at 9:30 a.m., before the Honorable
Burton J. Perlman, United States Bankruptcy Judge, Room 817, 221 East 4th
Street, Atrium Two, Cincinnati, Ohio 45202. The Bankruptcy Court has directed
that objections, if any, to confirmation of the Plan be served and filed on or
before November 4, 1996, at 4:00 p.m., in the manner described under Section ,
entitled, "CONFIRMATION AND CONSUMMATION PROCEDURE - Confirmation Hearing." The
Confirmation Hearing may be adjourned from time to time by the Bankruptcy Court
without further notice except for the announcement of the adjournment date made
at the Confirmation Hearing or at any subsequent adjourned date of the
Confirmation Hearing.
THE PLAN PROPONENTS BELIEVE THAT THE PLAN PROVIDES THE BEST POSSIBLE
RECOVERIES TO THE CLAIMANTS. THE PLAN PROPONENTS, THEREFORE, BELIEVE THAT
ACCEPTANCE OF THE PLAN IS IN THE BEST INTERESTS OF EACH AND EVERY CLASS OF
CLAIMANTS AND RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN.
AS A RESULT OF A SETTLEMENT BETWEEN THE PLAN PROPONENTS
AND THE UNSECURED CREDITORS' COMMITTEE, THE UNSECURED CREDITORS' COMMITTEE
SUPPORTS THE PLAN AND RECOMMENDS THAT YOU VOTE TO ACCEPT THE PLAN.
5
<PAGE> 17
II. OVERVIEW OF THE PLAN
The following is a brief overview of the provisions of the Plan. This
overview is qualified in its entirety by reference to the provisions of the
Plan, a copy of which is annexed hereto as Exhibit "A." In addition, for a more
detailed description of the terms and provisions of the Plan, see Section V,
entitled, "THE PLAN OF REORGANIZATION."
The Plan accomplishes the three primary objectives of the Plan
Proponents, which they believe are essential components of a successful
reorganization:
1. The Plan treats all liabilities of the Debtors relating to the
operations and other actions of the Debtors in the period
preceding the Petition Date.
2. The Plan permits Eagle-Picher to emerge from chapter 11 with a
capital structure appropriate for an industrial products
company and which will allow it access to financial markets.
3. The Plan provides the Debtors with an equity ownership
composition that will allow them to serve appropriately the
needs of their customers, suppliers, employees, and the
communities in which they operate.
The Plan designates twenty-four classes - twenty-two classes of Claims,
one combined class of Affiliate Claims and Interests, and one class of Equity
Interests. These classes take into account the differing nature and priority
under the Bankruptcy Code of the various Claims and Equity Interests.
The Plan accomplishes, and is premised on, a resolution of the Debtors'
liability for all Asbestos Personal Injury Claims (as defined on page ) and Lead
Personal Injury Claims (as defined on page ) by channeling them to a trust (the
"PI Trust"). By an order dated December 4, 1995 (as amended by order dated
December 14, 1995, the "Estimation Order"), the Bankruptcy Court estimated the
aggregate value of all Asbestos Personal Injury Claims to be $2,502,511,000. The
Second Amended Consolidated Plan of Reorganization proposed by the Plan
Proponents, dated July 15, 1996 (the "Second Amended Plan"), used the amount of
$2,502,511,000 to determine the PI Trust's share of the value of the
consideration to be distributed under the Second Amended Plan. The Unsecured
Creditors' Committee, two holders of Unsecured Claims, and the Equity Committee
appealed from the Estimation Order, arguing, inter alia, that the Bankruptcy
Court's estimate of the aggregate value of all Asbestos Personal Injury Claims
in the Estimation Order is too high. Subsequent to the filing of the Second
Amended Plan, the Plan Proponents and the Unsecured Creditors' Committee agreed
to resolve the issues raised in the appeal of the Estimation Order by agreeing
to use the amount of $2,000,000,000 (the "PI Trust Share") to determine the PI
Trust's share of the value of the consideration to be distributed under a plan.
The Plan reflects such compromise and settlement.
Based upon the PI Trust Share, the PI Trust and the holders of Allowed
Environmental Claims and Allowed Unsecured Claims will receive their Pro Rata
Share of the aggregate value of the following (the "Distribution Value"): (i)
Available Cash (estimated to equal $89.0 million as of the Effective Date); (ii)
the Tax Refund Notes (estimated to have an aggregate principal amount of $71.0
million); (iii) the Divestiture Notes (in the aggregate principal amount of $50
million); (iv) the Senior Unsecured Sinking Fund Debentures (in the aggregate
principal amount of $250 million); and (v) the residual equity value of
Reorganized Eagle-Picher (estimated to be $254.8 million). For a more thorough
description of the consideration to be distributed under the Plan, see Section
V,D, entitled, "THE PLAN OF REORGANIZATION - Description of the Plan
Consideration." ALTHOUGH THE
6
<PAGE> 18
VARIOUS CLASSES OF CLAIMS UNDER THE PLAN MAY RECEIVE DIFFERENT TYPES OF
CONSIDERATION UNDER THE PLAN, THE DEBTORS ESTIMATE THAT EACH HOLDER OF AN
ALLOWED ENVIRONMENTAL CLAIM AND ALLOWED UNSECURED CLAIM ULTIMATELY WILL RECEIVE
CONSIDERATION HAVING A VALUE EQUAL TO APPROXIMATELY 33% OF ITS ALLOWED CLAIM.
This value is based upon, among other things, the Debtors' estimate of the
ultimate amount of Allowed Claims and New Eagle-Picher Common Stock having a
value equal to its projected book value as of the Effective Date. For a more
complete discussion of the factors that may affect a Claimant's recovery, see
Section XIII, entitled, "CERTAIN RISK FACTORS TO BE CONSIDERED."
In exchange for the Pro Rata Share of the Distribution Value being
distributed to the PI Trust, the PI Trust will assume and be responsible for all
liability for Asbestos Personal Injury Claims and Lead Personal Injury Claims.
In addition to the procedures and guidelines contained in the Asbestos and Lead
PI Trust Agreement, the Trustees of the PI Trust will develop procedures
designed to assure that the holders of all such Claims, whether presently known
or unknown, are treated in substantially the same manner. Moreover, as fully
described in Section V.I, entitled, "THE PLAN OF REORGANIZATION - Discharge of
the Debtors and the Asbestos and Lead PI Permanent Channeling Injunction," such
Claimants will be permanently enjoined from pursuing their claims against the
Reorganized Debtors and certain other parties.
Under the Plan, all Asbestos Property Damage Claims will be channeled
to a separate trust established for the purpose of administering such claims
(the "Asbestos PD Trust"). The funding of the Asbestos PD Trust will depend upon
whether the class of Asbestos Property Damage Claims (Class 16) votes to accept
or reject the Plan. If Class 16 votes to accept the Plan, then, on the Effective
Date, the Asbestos PD Trust will be funded with $3 million cash. If Class 16
votes to reject the Plan, however, then the Reorganized Debtors will request the
Bankruptcy Court to estimate the aggregate value of Asbestos Property Damage
Claims (such estimated value being the "Asbestos PD Trust Share"), and the
Asbestos PD Trust will be funded with its Pro Rata Share of the Distribution
Value, based upon such estimated value. BECAUSE THE DEBTORS BELIEVE THEY HAVE NO
MATERIAL LIABILITY ON ACCOUNT OF ASBESTOS PROPERTY DAMAGE CLAIMS, THE DEBTORS
BELIEVE THAT HOLDERS OF ASBESTOS PROPERTY DAMAGE CLAIMS WILL RECEIVE A GREATER
RECOVERY IF THEY VOTE TO ACCEPT THE PLAN. Moreover, it is a condition to the
occurrence of the Effective Date that the Asbestos PD Trust Share be no greater
than $15 million.
Under the Plan, each "Convenience Claim" (i.e., a general Unsecured
Claim held by one holder in an amount of $500.00 or less or, if higher, whose
holder elects to receive $500.00 in full satisfaction of such Unsecured Claim)
will be paid in full, in cash. In addition, the Debtors have entered into an
agreement relating to environmental-related liabilities with the United States
Environmental Protection Agency (the "EPA"), the United States Department of the
Interior, and certain state environmental regulatory agencies. Under this
agreement, any future liabilities of the Debtors with respect to prepetition
environmental contamination, which may not yet be apparent, will be satisfied by
paying the holder of such claim at such future date on which liability is
established against any of the Debtors substantially the same consideration that
such holder would have received if such claim constituted an Allowed Unsecured
Claim as of the Effective Date. The Debtors also may enter into agreements with
other parties pursuant to which the Debtors agree to treat certain environmental
liabilities in a similar manner. If so, such claims will be considered
"Environmental Claims" under the Plan. "Other Product Liability Tort Claims"
(i.e., latent or other "future" personal injury claims relating to certain
prepetition activities of the Debtors, other than Asbestos Personal Injury
Claims and Lead Personal Injury Claims) will be treated in a manner similar to
that provided for unknown Environmental Claims, as and when any such Other
Product Liability Claims arise.
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<PAGE> 19
No distributions will be made to the holders of Penalty Claims or to
Stockholders under the Plan, and the Existing Eagle-Picher Common Stock will be
canceled and extinguished.
The following table briefly summarizes the classification and treatment
of Claims and Equity Interests under the Plan:
SUMMARY OF CLASSIFICATION AND
TREATMENT UNDER THE PLAN(1)
CLASS CLASSIFICATION AND TREATMENT
----- ----------------------------
-- ADMINISTRATIVE EXPENSES
- Paid in full in cash on the Effective Date or on
such other terms to which the parties agree.
-- TAX CLAIMS
- Paid in full in cash on the Effective Date or on
such other terms to which the parties agree.
1 PRIORITY CLAIMS
- Paid in full in cash on the Effective Date.
- Unimpaired - not entitled to vote.
2 AMPLICON LEASE SECURED CLAIM
- Treated as unimpaired under section 1124 of the
Bankruptcy Code.
- Unimpaired - not entitled to vote.
3 CONNECTICUT MUTUAL NOTE SECURED CLAIM
- Issued secured note on the Effective Date in
principal amount equal to Connecticut Mutual Note
Secured Claim, with interest at 10.0% and maturity
date of June 1, 2001.
- Impaired - entitled to vote.
4 DESIGNATED REAL PROPERTY TAX CLAIM
- Satisfied by the transfer of the property securing
such Claim to the holder of such Claim.
- Impaired - entitled to vote.
5 FIRST FIDELITY LEASE SECURED CLAIM
- Paid in full in cash on the Effective Date.
- Unimpaired - not entitled to vote.
- --------
(1)This table is only a summary of the classification and treatment of Claims
and Equity Interests under the Plan. Reference should be made to the entire
Disclosure Statement and the Plan for a complete description of such
classification and treatment.
8
<PAGE> 20
6 FLEET CREDIT SECURED CLAIM
- Paid in full in cash on the Effective Date.
- Unimpaired - not entitled to vote.
7 GE CAPITAL SECURED CLAIM
- Paid in full in cash on the Effective Date.
- Unimpaired - not entitled to vote.
8 GROVE IRB SECURED CLAIM
- Paid in full in cash on the Effective Date.
- Unimpaired - not entitled to vote.
9 IBM CREDIT CORPORATION SECURED CLAIM
- Paid in full in cash on the Effective Date.
- Unimpaired - not entitled to vote.
10 INTER-MARKET NOTE SECURED CLAIM
- Issued secured note on the Effective Date in
principal amount equal to Inter-Market Note Secured
Claim, with interest at 10.0% and maturity date of
June 1, 2001.
- Impaired - entitled to vote.
11 LEESBURG SECURED CLAIM
- Paid in full in cash on the Effective Date.
- Unimpaired - not entitled to vote.
12 NORTHWESTERN GROUP SECURED CLAIMS
- Issued secured notes on the Effective Date in
aggregate principal amount equal to Northwestern
Group Secured Claims, with interest at 10.0% and
maturity date of May 1, 2001.
- Impaired - entitled to vote.
13 VALE EDBS CLAIMS
- Reinstated on the Effective Date pursuant to
Bankruptcy Code section 1124(2).
- Unimpaired - not entitled to vote.
14 OTHER SECURED CLAIMS
- Treated as unimpaired under section 1124 of the
Bankruptcy Code.
- Unimpaired - not entitled to vote.
15 CONVENIENCE CLAIMS
- Paid in full in cash on the Effective Date.
- Unimpaired - not entitled to vote.
9
<PAGE> 21
16 ASBESTOS PROPERTY DAMAGE CLAIMS
- Asbestos PD Trust funded with either $3 million in
cash (if Class 16 votes to ACCEPT the Plan) or Senior
Unsecured Sinking Fund Debentures equal to its Pro
Rata Share of Distribution Value based upon the
Bankruptcy Court's estimate of the aggregate value of
Asbestos Property Damage Claims (if Class 16 votes to
REJECT the Plan); Asbestos Property Damage Claims are
channeled to the Asbestos PD Trust and paid pursuant
to the procedures of the Asbestos PD Trust. -
Impaired - entitled to vote.
17 ASBESTOS PERSONAL INJURY CLAIMS AND LEAD PERSONAL INJURY
CLAIMS
- PI Trust paid Pro Rata Share of Distribution Value,
with consideration consisting of (i) the Tax Refund
Notes and the New Eagle-Picher Common Stock, (ii)
that portion of the Available Cash and Divestiture
Notes not distributed to Claimants in Classes 19, 20,
and 21, and (iii) that portion of Senior Unsecured
Sinking Fund Debentures not distributed to the
Asbestos PD Trust; Asbestos Personal Injury Claims
and Lead Personal Injury Claims are channeled to the
PI Trust and paid pursuant to the procedures of the
PI Trust. - Impaired - entitled to vote.
18 OTHER PRODUCT LIABILITY TORT CLAIMS
- Paid consideration of a value equal to value of
Pro Rata Share of Distribution Value on Final
Distribution Date.
- Impaired - entitled to vote.
19 ENVIRONMENTAL CLAIMS
- Paid in accordance with the settlement agreement
applicable to each Environmental Claim.
- Impaired - entitled to vote.
20 UNSECURED CLAIMS
- Paid Pro Rata Share of Distribution Value.
- Impaired - entitled to vote.
21 SPECIFIED TREATMENT CLAIMS
- Paid Pro Rata Share of Distribution Value, but not
less than the minimum distribution and not greater
than the maximum distribution set forth in settlement
agreement applicable to each Specified Treatment
Claim.
- Impaired - entitled to vote.
22 AFFILIATE CLAIMS AND INTERESTS
- Treated as unimpaired under section 1124 of the
Bankruptcy Code.
- Unimpaired - not entitled to vote.
10
<PAGE> 22
23 PENALTY CLAIMS
- No distributions under the Plan.
- Impaired - deemed to have rejected the Plan.
24 EQUITY INTERESTS
- No distributions under the Plan; Equity Interests are
canceled.
- Impaired - deemed to have rejected the Plan.
The "Pro Rata Share" is the proportionate share of the Distribution
Value allocated based upon the PI Trust Share, the Asbestos PD Trust Share, and
the amount of each Allowed Claim in Classes 19, 20, and 21. The "Asbestos PD
Trust Share" will either be $0.00 (if Class 16 votes to accept the Plan, and the
Asbestos PD Trust is funded solely with cash) or the estimated aggregate value
of Asbestos Property Damage Claims determined by the Bankruptcy Court (if Class
16 votes to reject the Plan, and the Asbestos PD Trust is funded solely with
Senior Unsecured Sinking Fund Debentures). On the Initial Distribution Date, the
Pro Rata Share will be the amount obtained by dividing the Allowed Amount of an
Allowed Claim by the sum of (a) the PI Trust Share (i.e., $2,000,000,000), the
Asbestos PD Trust Share, and all Allowed Unsecured Claims (other than Allowed
Convenience Claims) and Allowed Environmental Claims and (b) the Disputed Amount
(either the Estimated Amount established by Bankruptcy Court order or,
otherwise, the liquidated amount set forth in the proof of claim for a Disputed
Claim) of all Disputed Unsecured Claims (other than Disputed Convenience
Claims). On the Final Distribution Date, the Pro Rata Share will be determined
by dividing the Allowed Amount of an Allowed Claim by the sum of the PI Trust
Share, the Asbestos PD Trust Share, and all Allowed Unsecured Claims (other than
Allowed Convenience Claims) and Allowed Environmental Claims.
As a separate condition to confirmation of the Plan, at least 75% of
the holders of Asbestos Personal Injury Claims and Lead Personal Injury Claims,
collectively, who vote on the Plan must vote to ACCEPT the Plan. Moreover, in
order for confirmation of the Plan to occur, the Plan specifies that the
Confirmation Order must contain findings that are consistent with or required by
section 524(g) of the Bankruptcy Code in order to satisfy the requirements for a
"channeling injunction" of the type that is provided under the Plan (see Section
V.B, entitled, "THE PLAN OF REORGANIZATION - Conditions to Confirmation" and
Section V.I, entitled, "THE PLAN OF REORGANIZATION - Discharge of the Debtors
and the Asbestos and Lead PI Permanent Channeling Injunction"). Only the Plan
Proponents may waive the satisfaction of these conditions to confirmation of the
Plan.
Following confirmation of the Plan, the Plan will not become effective
(as such term is used in section 1129 of the Bankruptcy Code) until the first
Business Day after which certain other conditions have been satisfied or waived
or, if a stay of the Confirmation Order is in effect on such date, the first
Business Day after the dissolution, lifting, or expiration of such stay. These
conditions are described in Section V.C, entitled, "THE PLAN OF REORGANIZATION -
Conditions Precedent to the Effective Date under the Plan." For purposes of this
Disclosure Statement, the Debtors have assumed that the Effective Date will be
December 1, 1996. Of course, there can be no certainty that the Effective Date
will occur by such date, and the satisfaction of many of the conditions to the
occurrence of the Effective Date is beyond the control of the Plan Proponents.
Distributions on account of Allowed Claims other than Asbestos Property
Damage Claims, Asbestos Personal Injury Claims, Lead Personal Injury Claims,
Other Product Liability Tort Claims, Environmental Claims, and Unsecured Claims
(other than Convenience Claims) will be made
11
<PAGE> 23
on the Effective Date or as soon as practicable thereafter, but in no event more
than ten (10) days after the Effective Date.
If Class 16 (Asbestos Property Damage Claims) votes to ACCEPT the Plan,
distribution of the Asbestos PD Trust Funding Obligation (i.e., $3 million in
cash) also will be made on the Effective Date, or as soon thereafter as is
practicable. Distributions with respect to Environmental Claims and Unsecured
Claims (other than Convenience Claims), as well as the distribution to the PI
Trust, will be made on two dates: the Initial Distribution Date (a date selected
by Reorganized Eagle-Picher that is within thirty (30) days after the Effective
Date) and the Final Distribution Date (a date selected by Reorganized
Eagle-Picher after all Disputed Claims (other than Asbestos Personal Injury
Claims, Lead Personal Injury Claims, and Asbestos Property Damage Claims) have
become either Allowed Claims or Disallowed Claims). The Reorganized Debtors may
request the Bankruptcy Court to extend the Initial Distribution Date or the
Final Distribution Date for "cause."
If Class 16 (Asbestos Property Damage Claims) votes to REJECT the Plan,
distribution of the Asbestos PD Trust Funding Obligation (i.e., Senior Unsecured
Sinking Fund Debentures in an aggregate amount equal to the Asbestos PD Trust's
Pro Rata Share of the Distribution Value) will not be made until the Asbestos PD
Trust Share is determined by the Bankruptcy Court. The timing of distributions
to holders of Allowed Asbestos Property Damage Claims will be established by the
trustees of the Asbestos PD Trust in accordance with the claims resolution
procedures made applicable to the Asbestos PD Trust. BECAUSE ACCEPTANCE OF THE
PLAN BY CLASS 16 (ASBESTOS PROPERTY DAMAGE CLAIMS) WILL RESULT IN AN EARLIER
FUNDING OF THE ASBESTOS PD TRUST ENTIRELY IN CASH, THE DEBTORS BELIEVE THAT
HOLDERS OF ASBESTOS PROPERTY DAMAGE CLAIMS ARE LIKELY TO RECEIVE DISTRIBUTIONS
SOONER IF THEY VOTE TO ACCEPT THE PLAN.
The timing of distributions to holders of Allowed Asbestos Personal
Injury Claims and Allowed Lead Personal Injury Claims will be established by the
Trustees pursuant to the Asbestos and Lead PI Trust Agreement and the claims
resolution procedures adopted in connection with such agreement. It is not
expected that any Other Product Liability Tort Claims will arise prior to the
Final Distribution Date. If they do, they will be treated as Unsecured Claims.
Notwithstanding the foregoing, a payment will only be made on account
of a Disputed Claim when, and to the extent that, such Disputed Claim becomes
Allowed. All payments to be made in cash under the Plan will be made by check or
wire transfer. No fractional shares of New Eagle-Picher Common Stock will be
issued. No notes in fractions of cents will be issued, and no cash in fractions
of cents will be paid. All such fractions will be rounded to the nearest share
or cent, as applicable (with .5 or less being rounded down).
12
<PAGE> 24
III. GENERAL INFORMATION
A. DESCRIPTION AND HISTORY OF BUSINESS.
Eagle-Picher was incorporated in 1867 under the laws of the State of
Ohio as an outgrowth of a business enterprise founded in Cincinnati in 1843.
Eagle-Picher has three major industry segments: (1) Industrial; (2) Machinery;
and (3) Automotive.
B. DESCRIPTION OF BUSINESS SEGMENTS.
1. THE INDUSTRIAL GROUP.
The Industrial Group, which is composed of two divisions,
produces a variety of products for industrial markets, principally manufacturers
of consumer products. Minerals mines and refines diatomaceous earth products
used for high purity filtration primarily by the food and beverage industry and
also for general industrial applications. The Fabricon Products Division
produces printed packaging materials for the dairy and confectionery industries.
The Industrial Group also includes a large portion of the Technologies Division,
which refines rare metals, such as high purity germanium and gallium compounds,
and is a major source of boron isotopes for nuclear applications. The
Technologies Division also produces a wide range of super-clean containers,
which meet strict EPA protocols, for environmental sampling. Other products
manufactured in the Industrial Group segment include custom designed cast
plastic parts and injection molded rubber parts, and industrial chemicals.
The methods of distribution and competitive positions of the
Industrial Group's divisions vary widely. For example, Minerals is second to the
Alleghany Corporation in the sale of certain filter aid products, which are sold
both directly and through distributors to many large and small customers. By
contrast, the Fabricon Products Division conducts its sales through sales
personnel and competes against many other firms in a highly price-sensitive
market. Other products are sold under competitive conditions that vary widely
from plant to plant.
2. THE MACHINERY GROUP.
The Machinery Group consists of five divisions, which are
involved in manufacturing products for various industrial markets. The
Construction Equipment Division produces earthmoving equipment for Caterpillar
Inc. and a line of heavy-duty industrial forklift trucks. The Technologies
Division is a leading supplier of sophisticated special purpose batteries for
aerospace and defense applications. The Cincinnati Industrial Machinery Division
produces specialized high-volume metal cleaning and finishing systems. The Ross
Aluminum Foundries Division manufactures complex aluminum castings in sand and
plaster. Transicoil manufactures sophisticated electronic components for
aerospace, shipboard, ground-based, and industrial applications.
The principal products manufactured by the Machinery Group are
distributed through various methods and in a variety of competitive
environments. The Technologies Division bids competitively for numerous fixed
price government contracts for special purpose batteries. The Technologies
Division is a recognized leader in this business and has a few competitors for
some highly technological products, but many large and small competitors for
other products. The Construction Equipment Division is the sole supplier of its
earthmoving equipment products to its longstanding largest customer, Caterpillar
Inc. The forklifts are distributed through a dealer network.
13
<PAGE> 25
3. THE AUTOMOTIVE GROUP.
The Automotive Group consists of nine divisions, which are
involved largely in the production and sale of mechanical, structural, and trim
parts for passenger cars, trucks, vans, and recreational and utility vehicles.
Hillsdale specializes in the manufacture of precision-machined aluminum and
steel parts. Typical machined products include torsional vibration dampers and a
variety of castings and forgings. Hillsdale also produces the entire front pump
assembly for the Ford Motor Co.'s electronic four-speed overdrive transmission,
which is primarily used on one-half and three-quarter ton pick-up trucks, vans,
and sport utility vehicles. The Plastics Division is a major supplier of
fiberglass reinforced molded plastic parts to automotive and other customers.
The Wolverine Gasket Division coats steel and aluminum with elastomeric
compounds and produces materials that are particularly suitable for high
compression applications. Eagle-Picher's international operations include
Eagle-Picher Industries Europe GmbH, with responsibility over three plants in
Europe, which manufacture sealing and insulating products, elastomeric
extrusions, and injection molded parts for the European automotive market. The
international operations also include a sales and engineering office in Japan
that serves the Asian market. The Trim Division manufactures automotive interior
trim, including headliners, rear package trays, spare tire covers, and door
panels. MARCO offers vehicle and vehicle system manufacturers a comprehensive
range of testing programs for engines, powertrains, and powertrain components.
The Rubber Molding Division manufactures small precision-molded parts. The
Suspension Systems Division, which formerly was part of the Rubber Molding
Division, manufactures engineered rubber and rubber-to-metal products. The
Orthane Division formerly produced injection-molded plastic parts for automotive
and industrial applications. On January 31, 1996, Eagle-Picher sold the molding
business of the Orthane Division. Certain assets of the Orthane Division related
to the elastomeric extrusion process were transferred into a new subsidiary,
Eagle-Picher Fluid Systems, Inc.
The Automotive Group distributes its products primarily to the
"Big Three" automotive manufacturers, or to other suppliers to those
manufacturers, directly through internal sales personnel. With respect to the
hundreds of products manufactured by the Automotive Group, competition varies
widely as to the number and type of competitors, the methods of competition, and
the Automotive Group's competitive positions. Divisions producing
precision-machined parts, such as Hillsdale, tend to have a few strong
competitors (including, among others, the automotive manufacturers themselves)
and compete on the basis of quality and price. Divisions such as the Trim and
Wolverine Gasket Divisions tend to have many competitors of varying sizes and
compete primarily on the basis of price. Generally, competitive conditions for
the Automotive Group are characterized by a decreasing number of competitors, an
increasing amount of foreign competition (particularly from the Far East), an
increased emphasis on quality, and intense pricing pressures from major
customers.
C. GENERAL BUSINESS CONDITIONS.
Due to its diversification, Eagle-Picher is not dependent upon
any particular product or customer. No product accounted for more than 7%, and
no customer accounted for more than 10%, of total sales of Eagle-Picher for
fiscal 1993 through fiscal 1995, except the Ford Motor Co., for which sales were
$166.8 million in 1995, $165.3 million in 1994, and $148.0 million in 1993, and
General Motors Corporation in 1994 and 1993, when sales were $81.4 million and
$73.1 million, respectively. In addition, due to its diversification,
Eagle-Picher is not dependent upon any individual raw material source for a
substantial part of its business and believes that its sources of raw materials
are adequate.
In the Machinery Group, order backlog was approximately $182.5
million as of November 30, 1995, $190.1 million as of November 30, 1994, and
$148.1 million as of November 30, 1993. A substantial portion of the order
backlog outstanding at November 30, 1995, is expected
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to be filled within the current fiscal year. In no other segment is order
backlog of significance, except in the Specialty Materials Division, which had
order backlogs of $34.4 million as of November 30, 1995, and $25.1 million and
$19.9 million as of November 30, 1994 and 1993, respectively.
In fiscal 1995, Eagle-Picher spent approximately $19.9 million
for research and development and related activities, primarily for the
development of new products or the improvement of existing products. Comparable
costs were $21.1 million and $17.1 million for 1994 and 1993, respectively.
Eagle-Picher owns or is licensed under patents relating to
methods and products in several areas of its business. Although these have been
of value and are expected to be of value in the future, the loss of any
individual patent or group of patents would not materially affect the conduct of
Eagle-Picher's business.
In the fiscal years 1995, 1994, and 1993, for current
operations Eagle-Picher spent approximately $10.9 million, $9.6 million, and
$8.6 million, respectively, to comply with federal, state, and local regulatory
provisions relating to the protection of the environment. This level of
expenditures has had no material effect on the earnings or competitive position
of Eagle-Picher or its operations during the period described. Eagle-Picher
expects these expenditures to be approximately $12.3 million in fiscal 1996.
As of November 30, 1995, Eagle-Picher employed approximately
7,500 persons in its operations, of whom approximately 1,900 were salaried
employees and approximately 5,600 were hourly employees. Approximately 20% of
Eagle-Picher's hourly employees are represented by eight labor organizations
under thirteen separate contracts. Eagle-Picher believes that its relations with
its employees generally are good.
Export sales totaled approximately $92.5 million, $76.9
million, and $73.2 million in fiscal 1995, 1994, and 1993, respectively. The
revenues generated by foreign operations do not exceed 10% of consolidated
revenues, nor do their identifiable assets exceed 10% of consolidated total
assets.
D. EVENTS LEADING TO THE COMMENCEMENT OF THE CHAPTER 11 CASES.
Prior to its chapter 11 filing, Eagle-Picher had been named as
a co-defendant in a substantial number of lawsuits alleging personal injury and
wrongful death from exposure to asbestos-containing insulation products. The
lawsuits, which were pending in 48 states, British Columbia, Guam, the Virgin
Islands, and the District of Columbia, alleged, in general, that Eagle-Picher
and other defendant manufacturers of asbestos and asbestos-containing products
failed to warn of the potential hazard to health from the inhalation of asbestos
fibers contained in their products. From 1966 (the date the first asbestos case
was filed) until its chapter 11 filing, Eagle-Picher disposed of approximately
73,500 claims through trial, dismissal, or settlement. On average, Eagle-Picher
spent approximately $7,800 per claim, including attorneys' fees and defense
costs, to dispose of these claims.
Eagle-Picher and numerous other companies also were sued in
both state and federal courts by various entities that own or operate commercial
properties and public buildings, such as school districts, counties, cities,
states, libraries, and hospitals, based on allegations that asbestos or
asbestos-containing products are or may be in the buildings. The typical demand
in these suits is that the defendants compensate the plaintiffs for any costs
incurred in identifying, repairing, encapsulating, or removing the
asbestos-containing products, or that the defendants perform such remedial
action. Many suits seek an injunction requiring abatement and punitive damages
on the basis that the defendants allegedly knew of the hazards and, in concert
with one another, concealed and
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misrepresented the dangers of asbestos. Many such suits also seek
indemnification from the defendants for all claims for personal injury brought
against plaintiffs resulting from the presence of asbestos-containing products
in plaintiffs' buildings. One hundred forty-nine such lawsuits were instituted
against Eagle-Picher prior to the filing of its chapter 11 petition, including
two of which had been certified as class actions prior to the filing. One
hundred lawsuits were disposed of through dismissals by the court following
rulings on pre-trial motions, or voluntarily by the plaintiffs. Eagle-Picher
settled seven of these cases for less than $22,000 in the aggregate prior to
filing its chapter 11 petition.
On July 23, 1990, Eagle-Picher moved in the United States
District Court for the Eastern and Southern Districts of New York (the "New York
District Court") by order to show cause for certification of a class (the
"23(b)(1)(B) Class") pursuant to Rule 23(b)(1)(B) of the Federal Rules of Civil
Procedure, of all persons who presently, or will in the future, assert
asbestos-related personal injury and wrongful death claims against Eagle-Picher.
Eagle-Picher sought certification because of the substantial risk that
adjudications with respect to individual members of the 23(b)(1)(B) Class would
substantially impair or impede other 23(b)(1)(B) Class members' ability to
protect their interests. Eagle-Picher believed that resolving in one forum the
present and future asbestos-related personal injury claims against Eagle-Picher
would significantly reduce the transaction costs associated with the individual
adjudication of such claims, thereby maximizing the funds available for
compensation of deserving claimants and eliminating unnecessary expenditures by
Eagle-Picher.
In response to Eagle-Picher's motion, in August 1990 the New
York District Court appointed Special Masters to examine Eagle-Picher's
asbestos-related liability, insurance coverage, and finances. After extensive
proceedings, including evidentiary hearings, and the issuance of the Special
Masters' Reports, the New York District Court appointed class representative
counsel and a Special Settlement Master to facilitate settlement negotiations
with Eagle-Picher, which negotiations ensued during the Fall of 1990. The New
York District Court held hearings and heard argument on certification and
related matters on December 7 and 10, 1990, during which the New York District
Court was presented with a proposed settlement reached between certain class
representative counsel and Eagle-Picher, the terms of which included
Eagle-Picher's payment of certain moneys to a claimants' trust over a 20-year
period and the commencement of a class action lawsuit by plaintiffs seeking
certification of the 23(b)(1)(B) Class.
On December 10, 1990, various attorneys representing
plaintiffs in asbestos-related personal injury and wrongful death actions
against Eagle-Picher caused an involuntary bankruptcy case to be commenced
against Eagle-Picher, which would have terminated the jurisdiction of the New
York District Court over the 23(b)(1)(B) proceeding. The involuntary case was
dismissed the next day, after Eagle-Picher demonstrated the falsity of the
allegations underlying the involuntary petition commencing the case.
On December 11, 1990, the New York District Court issued three
orders which, inter alia, (i) conditionally certified the 23(b)(1)(B) Class for
settlement purposes, subject to a final memorandum and order following the
conclusion of fairness hearings on the adequacy of the proposed settlement and
the propriety of class certification (the "Certification Order"); (ii) stayed
all asbestos-related personal injury and wrongful death litigation against
Eagle-Picher pending a decision on final certification (the "Stay Order"); and
(iii) appointed a Special Master to determine whether the amount that members of
the 23(b)(1)(B) Class would receive under the proposed settlement would be
greater than what they would receive in a bankruptcy case involving
Eagle-Picher. On December 17 and 19, 1990, respectively, two petitions seeking
writs of mandamus directing the New York District Court to vacate the
Certification Order and the Stay Order were filed in the United States Court of
Appeals for the Second Circuit on behalf of certain members of the 23(b)(1)(B)
Class who objected to the proposed settlement. The petitioners essentially
argued that the New York District Court exceeded its authority in issuing the
Certification Order and the Stay Order.
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IV. THE CHAPTER 11 CASES
On January 7, 1991 (the "Petition Date"), while the
23(b)(1)(B) proceeding was pending, the Debtors each filed a voluntary petition
for relief under chapter 11 of the Bankruptcy Code with the Bankruptcy Court.
The very large costs of the asbestos-related personal injury litigation, not any
fundamental problems with Eagle-Picher's operations, precipitated the Debtors'
chapter 11 filing. Given the mounting asbestos litigation costs, Eagle-Picher
could only satisfy such costs through the sale of operating assets. When the
buyers that had agreed to purchase Eagle-Picher's Mat Division failed to
fulfill the contract, a cash shortfall ensued, which necessitated the
commencement of the Debtors' chapter 11 cases.
As of the Petition Date, approximately 67,800 asbestos-related
personal injury and wrongful death lawsuits and approximately 41
asbestos-related property damage lawsuits (two of which had been certified as
class actions, and four others of which had applications for class certification
pending) were outstanding against Eagle-Picher. By order dated January 7, 1991,
the Debtors' chapter 11 cases (the "Chapter 11 Cases") were consolidated for
procedural purposes only. Throughout their pendency, the Chapter 11 Cases have
been jointly administered pursuant to Bankruptcy Rule 1015(b). Since the
Petition Date, each of the Debtors has continued to operate its businesses and
manage its properties as a debtor in possession pursuant to sections 1107(a) and
1108 of the Bankruptcy Code.
A. THE DEBTORS' ATTORNEYS AND ADVISERS:
The attorneys and advisers that have been retained by the
Debtors to assist them in the conduct of their Chapter 11 Cases are set forth
below:
ATTORNEYS
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
FROST & JACOBS
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4183
ACCOUNTANTS
KPMG PEAT MARWICK LLP
1600 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
FINANCIAL ADVISERS
MCDONALD & COMPANY SECURITIES, INC.
Suite 2100
800 Superior Avenue
Cleveland, Ohio 44114-2603
ASBESTOS CLAIMS CONSULTANT
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RESOURCE PLANNING CONSULTANTS
(A Division of KPMG Peat Marwick LLP)
2001 M Street
Washington, D.C. 20037
B. COMMITTEES.
1. UNSECURED CREDITORS' COMMITTEE.
On January 14, 1991, the United States Trustee filed with the
Bankruptcy Court a Notice of Appointment of Unsecured Creditors' Committee (as
thereafter amended or reconstituted, the "Unsecured Creditors' Committee"). The
Unsecured Creditors' Committee represents general unsecured creditors of the
Debtors, primarily trade creditors, bondholders, and holders of environmental
claims. The current members of, and attorneys and advisers retained by, the
Unsecured Creditors' Committee are set forth below:
UNSECURED CREDITORS' COMMITTEE MEMBERS
Edward F. Crawford,
Chairperson
PARK-OHIO INDUSTRIES, INC.
600 Tower East
20600 Chagrin Boulevard
Cleveland, Ohio 44122
Robert Johnson
PROVIDENT MUTUAL LIFE
INSURANCE COMPANY
1600 Market Street
Philadelphia, Pennsylvania 19103
Charles S. Hodges
TRUST COMPANY BANK
P.O. Box 4625
58 Edgewood Avenue, Room 235
Atlanta, Georgia 30302
Helmut Brandt
LUNT MANUFACTURING CO., INC.
601-605 Lunt Avenue
Schaumburg, Illinois 60193
David C. Abrams
THE BAUPOST GROUP, INC.
44 Brattle Street
P.O. Box 389125
Cambridge, Massachusetts 02238-9125
Sharon F. Manewitz
TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF
AMERICA
730 Third Avenue, 2nd Floor
New York, New York 10017
John T. Neiger
AUBURN FOUNDRY, INC.
635 W. Eleventh Street
Auburn, Indiana 46706
Robert O'Malley
MAGNESIUM ALUMINUM
CORPORATION
3425 Service Road
Cleveland, Ohio 44111
Gerald Hellerman
U.S. DEPARTMENT OF JUSTICE
Environment and Natural Resource
Division
Environmental Enforcement Section
Benjamin Franklin Station
P.O. Box 7611
Washington, D.C. 20044-7611
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ATTORNEYS
SQUIRE, SANDERS & DEMPSEY
4900 Society Center
127 Public Square
Cleveland, Ohio 44114-1304
FINANCIAL ADVISERS
HOULIHAN, LOKEY, HOWARD & ZUKIN CAPITAL
787 Seventh Avenue
30th Floor
New York, New York 10019
2. INJURY CLAIMANTS' COMMITTEE.
On January 14, 1991, the United States Trustee also filed with
the Bankruptcy Court a Notice of Appointment of Injury Claimants' Committee (as
thereafter amended or reconstituted, the "Injury Claimants' Committee"). The
Injury Claimants' Committee represents persons alleging injury due to exposure
to products manufactured by the Debtors prior to the Petition Date. The single
largest class of persons represented by the Injury Claimants' Committee consists
of those persons alleging asbestos-related personal injuries due to exposure to
products manufactured by Eagle-Picher from 1934 to 1971. The current members of,
and attorneys and advisers retained by, the Injury Claimants' Committee are set
forth below:
INJURY CLAIMANTS' COMMITTEE
ROBERT E. SWEENEY, ESQ., PAUL T. GILLENWATER, ESQ.
Chairperson Gillenwater, Nichol & Ames
Robert E. Sweeney Co., L.P.A. Bearden Commercial Park
Suite 1500, Illuminating Building 6401 Baum Drive
55 Public Square Knoxville, Tennessee 37919
Cleveland, Ohio 44113
ROBERT B. STEINBERG, ESQ.
LEONARD C. JACQUES, ESQ. Rose, Klein & Marias
The Maritime Asbestos Legal Clinic 801 South Grand Avenue
1570 Penobscot Building 18th Floor
Detroit, Michigan 48226 Los Angeles, California 90017-4645
GENE LOCKS, ESQ. CHARLES F. VIHON, ESQ.
Greitzer & Locks Much, Shelist, Freed, Denenberg &
1500 Walnut Street Ament, P.C.
Philadelphia, Pennsylvania 19102 200 North LaSalle Street
Suite 2100
RICHARD S. GLASSER, ESQ. Chicago, Illinois 60601-1095
HARRY F. WARTNICK, ESQ.
Wartnick, Chaber, Harowitz,
Smith & Tigerman
101 California Street, 26th Floor
San Francisco, California 94111
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Glasser & Glasser
600 Dominion Tower
999 Waterside Drive
Norfolk, Virginia 23510-3300
MICHAEL P. THORNTON, ESQ.
Thornton, Early & Naumes
60 State Street, 6th Floor
Boston, Massachusetts 02109
ATTORNEYS
KEATING, MUETHING & KLEKAMP
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
ACCOUNTANTS
ALTSCHULER, MELVOIN & GLASSER
30 South Wacker Drive
Chicago, Illinois 60606
FINANCIAL ADVISERS
MEADOWCROFT ASSOCIATES
9 Burr Road
Westport, Connecticut 06880-4220
ASBESTOS CLAIMS CONSULTANT
LEGAL ANALYSIS SYSTEMS, INC.
970 Calle Arroyo
Thousand Oaks, California 91360
3. EQUITY COMMITTEE.
In late April, 1991, certain shareholders of Eagle-Picher
filed a motion seeking the appointment of a Committee of Equity Security
Holders. By order entered on or about June 24, 1991, the Bankruptcy Court
directed the United States Trustee to appoint an equity committee. On July 26,
1991, the United States Trustee filed a Notice of Appointment of Equity Security
Holders' Committee (as thereafter amended or reconstituted, the "Equity
Committee"). On December 15, 1995, following the entry of the Estimation Order
and the estimation of the aggregate value of the Asbestos Personal Injury Claims
at over $2.5 billion, Eagle-Picher filed a motion with the Bankruptcy Court
requesting that the Bankruptcy Court direct the United States Trustee to disband
the Equity Committee. After a hearing held on January 24, 1996, the Bankruptcy
Court ordered that the Equity Committee would remain in place only for the
purpose of pursuing the Equity Committee's appeal of the Estimation Order to the
District Court. See Section IV.C.12, entitled, "THE CHAPTER 11 CASES -
Significant Events During the Chapter 11 Cases - The Estimation Proceeding."
Moreover, the Bankruptcy Court revoked the Equity Committee's authority to
retain Pacholder Associates as the financial adviser for
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the Equity Committee. The current members of, and attorneys and advisers
retained by, the Equity Committee are set forth below:
EQUITY COMMITTEE
THOMAS G. GLASER
2150 Gilbert Avenue
Cincinnati, Ohio 45206
LLOYD I. MILLER, III
4550 Gordon Drive
Naples, Florida 33940
RICHARD H. STEINER
4044 Rose Hill Avenue
Cincinnati, Ohio
ATTORNEYS
MARCUS MONTGOMERY P.C.
53 Wall Street
New York, New York 10005-2815
HARRIS, HARRIS & FIELD
2211 Carew Tower
441 Vine Street
Cincinnati, Ohio 45202-2912
FORMER FINANCIAL ADVISERS
PACHOLDER ASSOCIATES, INC.
Towers of Kenwood
8044 Montgomery Road
Suite 382
Cincinnati, Ohio 45236
4. FUTURE CLAIMANTS' REPRESENTATIVE.
On or about May 3, 1991, John A. Lloyd, Jr., filed a motion
with the Bankruptcy Court seeking the appointment of himself as the "Special
Representative for yet to be identified future claimants." The Debtors and other
parties objected to the appointment of John A. Lloyd, Jr., to such position.
Thereafter, on or about October 1, 1991, the United States Trustee filed a
motion with the Bankruptcy Court requesting that the Bankruptcy Court appoint
James J.G. McMonagle "as legal representative for future personal injury and
property damage claimants" (the "Future Claimants' Representative"). On or about
October 31, 1991, the Bankruptcy Court entered an order approving such
appointment, which order was modified by the Bankruptcy Court by order entered
on or about March 17, 1992. The name and address of the Future Claimants'
Representative and the advisers retained by him are set forth below:
FUTURE CLAIMANTS' REPRESENTATIVE
JAMES J.G. MCMONAGLE, ESQ.
24 Walnut
Chagrin Falls, Ohio 44022
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ATTORNEYS
MCCARTHY, LEBIT, CRYSTAL & HAIMAN, CO., L.P.A.
1800 Midland Building
101 Prospect Avenue,West
Cleveland, Ohio 44115
FINANCIAL ADVISERS
BURKE ROSEN & ASSOCIATES
2800 Euclid Avenue, Suite 300
Cleveland, Ohio 44115
ASBESTOS CLAIMS CONSULTANT
WILLIAM J. NICHOLSON, PH.D.
4-02 Kenneth Avenue
Fairlawn, New Jersey 07410
5. COORDINATION BETWEEN THE DEBTORS, THE COMMITTEES AND THE
FUTURE CLAIMANTS' REPRESENTATIVE.
Since their formation, the Committees and the Future
Claimants' Representative have consulted with the Debtors concerning the
administration of the Chapter 11 Cases. The Debtors have kept the Committees and
the Future Claimants' Representative informed concerning their operations and
have sought the concurrence of the Committees and the Future Claimants'
Representative for transactions outside the ordinary course of business. The
Future Claimants' Representative, the Injury Claimants' Committee, and the
Unsecured Creditors' Committee have participated actively, together with the
Debtors' management, in the negotiation and formulation of the Plan.
C. SIGNIFICANT EVENTS DURING THE CHAPTER 11 CASES.
1. EMPLOYEE RELATED MATTERS.
The Debtors consider their approximately 7,500 employees to be
among their most valuable assets. To maintain the continued support,
cooperation, and morale of the Debtors' employees and to minimize any salary,
wage, and employee benefit disruptions that might have been occasioned by the
commencement of the Chapter 11 Cases, the Debtors took certain actions in the
Bankruptcy Court. These actions included obtaining orders of the Bankruptcy
Court that authorized the Debtors to (i) pay employees for prepetition wages,
salaries, and other compensation, (ii) continue their employee benefit programs,
including maintenance of self-insured workers' compensation programs, (iii)
adopt a key employee retention program and a supplemental severance program, and
(iv) modify certain of their employee retirement benefits programs to provide
limited enhancement to those programs as well as bring them into compliance with
certain provisions of the Tax Reform Act of 1986.
2. VENDOR AND CUSTOMER ISSUES.
Immediately following the commencement of the Chapter 11
Cases, the Debtors were deluged with inquiries from their vendors, customers,
and other parties providing services to the Debtors regarding issues such as the
Debtors' ability to satisfy prepetition debts and continuing commitments. The
maintenance of relationships and goodwill with the Debtors' major business
partners has been a critical factor in the continued viability of the Debtors'
ongoing business operations and the ultimate success of their rehabilitation
effort. To alleviate certain complications that developed
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between the Debtors and certain of their vendors and customers as a result of
the commencement of the Chapter 11 Cases, the Debtors took certain actions in
the Bankruptcy Court, including obtaining orders of the Bankruptcy Court that
authorized the Debtors to (i) pay all costs associated with specialized tooling
and machinery that the Debtors use to meet the product specifications of certain
of their customers, (ii) establish an inventory return policy for defective
inventory and raw materials received by the Debtors prepetition but not returned
prior to the Petition Date, (iii) honor certain warranty claims and claims for
credit on returned goods in connection with goods sold prior to the Petition
Date, and (iv) treat valid reclamation claims as Administrative Expenses.
3. DIP CREDIT FACILITY.
In order to fund their ongoing business operations during the
pendency of the Chapter 11 Cases, the Debtors negotiated a debtor in possession
financing facility (as subsequently amended and restated, the "DIP Credit
Facility") with their prepetition bank lenders: NBD Bank, N.A. (for itself and
as agent, "NBD"); The Bank of Nova Scotia ("BNS"); The Fifth Third Bank;
Pittsburgh National Bank; PNC Bank, Ohio, N.A. f/k/a The Central Trust Company,
N.A. ("PNC"); National City Bank; and Star Bank, N.A. Cincinnati ("Star Bank")
(collectively, the "Prepetition Banks"). Under the Debtors' prepetition
financing arrangements with the Prepetition Banks, the Prepetition Banks had
been granted liens on and security interests in substantially all of the
Debtors' accounts receivable and inventory. As of the Petition Date, the value
of this collateral substantially exceeded the amount of the Prepetition Banks'
claims.
As of the Petition Date, the Prepetition Banks were owed
approximately $40.9 million in principal (exclusive of outstanding letters of
credit) on account of loans made to the Debtors, and approximately $38.0 million
in face amount of letters of credit were issued by the Prepetition Banks and
outstanding on behalf of the Debtors. In addition, as of the Petition Date,
MARCO and EDI, Inc. were parties to various agreements with First American Bank
- - Ann Arbor ("FAB") pursuant to which FAB made loans and advances to MARCO (the
"FAB Loans"). As of the Petition Date, the outstanding principal amount of the
FAB Loans aggregated approximately $2.25 million. The FAB Loans were secured by
liens on and security interests in all or substantially all of the assets of
MARCO and EDI, Inc., including all of their respective accounts receivable,
inventory, machinery, and equipment.
The following are the major elements of the original DIP
Credit Facility:
- The DIP Credit Facility, subject to various
limitations and conditions, originally provided for a
total "Commitment" of $42 million for all "Revolving
Credit Loans" and "Letters of Credit," with a
sublimit of $25 million for Letters of Credit.
- Obligations under the DIP Credit Facility are secured
by the Debtors' prepetition and postpetition accounts
receivable, instruments, general intangibles,
inventory, and funds in a certain cash collateral
account, together with the books and records relating
to, substitutions and replacements for, and proceeds
and products of such collateral. Additionally, the
DIP Credit Facility contemplates that the
"Obligations" (defined to include obligations arising
under the DIP Credit Facility and all prepetition
credit obligations) will constitute superpriority
obligations with priority over any and all
administrative expenses of the kind specified in
section 503(b) or 507(b) of the Bankruptcy Code,
except with respect to an aggregate of $4 million of
the unpaid fees and expenses of professionals engaged
pursuant to sections 327
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and 1103 of the Bankruptcy Code and except as
otherwise provided in the DIP Credit Facility.
- The Available Borrowing Base is based upon a
Borrowing Base equal to 80% of the value of the
applicable Debtors' Eligible Accounts Receivable,
plus the lesser of 40% of the value of the applicable
Debtors' Eligible Inventory or 50% of the Commitment,
minus $2 million, minus the principal amount of
certain loans and reimbursement obligations
outstanding under and the face amount of the letters
of credit issued pursuant to certain other credit
facilities.
- On the effective date of the DIP Credit Facility,
Eagle-Picher delivered to NBD approximately $34.9
million in cash, which represented the proceeds of
the prepetition collateral and of the collateral
granted to the Banks as adequate protection pursuant
to orders of the Bankruptcy Court. This cash was
applied to reduce the prepetition obligations owed to
the Prepetition Lenders and certain other items. The
FAB Loans also were repaid at such time.
In 1992, the Debtors negotiated certain amendments to the
existing DIP Credit Facility, primarily to enable the Debtors to renew existing
letters of credit. Under the DIP Credit Facility, as amended and restated in
1992, only four of the Prepetition Banks remain lenders: NBD, BNS, Star Bank,
and PNC (the "DIP Lenders"). The Commitment under the DIP Credit Facility was
reduced from $42 million to $40 million, but the original $25 million sublimit
for letters of credit was eliminated. Additionally, at that time, the Debtors
repaid the remaining prepetition obligations owed to the Prepetition Lenders. In
1994, the Debtors negotiated another amendment to the DIP Credit Facility, which
extends the automatic termination date under the DIP Credit Facility (i.e., the
outside date by which the DIP Credit Facility automatically terminates unless an
earlier event giving rise to termination occurs) to December 31, 1996. Over the
objection of the Unsecured Creditors' Committee, at the conclusion of a hearing
held on August 26, 1994, the Bankruptcy Court authorized the Debtors to enter
into such amendment.
The Debtors have negotiated a further amendment to the DIP
Credit Facility, which extends the automatic termination date to December 31,
1998, and which reduces NBD's agent fee from $12,500 a month to $8,500 a month.
On or about August 21, 1996, the Bankruptcy Court entered an order approving and
authorizing the Debtors to enter into such amendment.
4. THE BAR DATES.
On June 17, 1991, the Debtors filed a motion seeking an order
fixing a bar date for the filing of proofs of claims against the Debtors'
respective estates. The Injury Claimants' Committee objected to the
establishment of a bar date for asbestos-related claims, and, by order dated
July 19, 1991, the Bankruptcy Court established October 31, 1991, as the bar
date for filing all claims except asbestos-related claims (the "General Bar
Date"). Asbestos-related claims for contribution, indemnity, reimbursement, or
subrogation, however, were subject to the General Bar Date.
By the General Bar Date, approximately 5,600 claims were filed
against the Debtors' estates. Of these, approximately 2,675 represented general
claims (e.g., vendor, noteholder, and other miscellaneous claims), 1,325
represented litigation-related and environmental claims, and 1,600 were
asbestos-related claims. Substantially all of the general claims have been
reconciled by the Debtors. The principal disputed claims remaining concern
litigation matters that were pending as of the Petition Date, environmental
claims, and certain tax claims.
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On January 14, 1992, the Bankruptcy Court directed that a bar
date for the filing of all asbestos-related claims be established. The
Bankruptcy Court, however, deferred setting such a bar date until such time as
the Bankruptcy Court conducted a hearing on the Debtors' proposal to obtain
information on asbestos-related personal injury claims. The Debtors had
requested that they be permitted to conduct a sampling and analysis of a
specified number of asbestos-related claims in order to evaluate the Debtors'
aggregate liability for both present and future asbestos-related personal injury
claims. Both the Injury Claimants' Committee and the Future Claimants'
Representative objected to such request. After substantial litigation and
several hearings before the Bankruptcy Court, on June 11, 1992, the Bankruptcy
Court (i) established September 30, 1992, as the bar date for the filing of
asbestos-related proofs of claims (the "Asbestos Bar Date"), (ii) approved a
notice program designed by the Debtors to inform all potential claimants of the
Asbestos Bar Date, and (iii) defined those claimants who were subject to the
Asbestos Bar Date. At that time, the Bankruptcy Court, in light of its
appointment of the Mediator, also deferred rendering any decision with respect
to the Debtors' request to conduct a sampling of asbestos-related personal
injury claims. See Section IV.C.9, entitled, "THE CHAPTER 11 CASES - Significant
Events During Reorganization Mediation."
Pursuant to the Court-approved notice plan, Eagle-Picher sent
out approximately 187,000 proof of claim forms to known claimants and their
attorneys, published notice of the Asbestos Bar Date twice in approximately 88
newspapers and other periodicals, and provided visual and/or audio messages
concerning the Asbestos Bar Date to approximately 400 radio and 300 television
stations to be used in public service announcements. Approximately 161,000
asbestos-related claims were filed pursuant to the Asbestos Bar Date,
approximately 1,000 of which sought recovery on account of alleged
asbestos-related property damage. Under the Plan, the 1,600 asbestos-related
claims that were filed by the General Bar Date will be treated the same as those
filed by the Asbestos Bar Date.
5. THE DEBTORS' EXCLUSIVE RIGHT TO FILE AND CONFIRM A PLAN.
The Bankruptcy Court has approved five extensions of the
periods during which the Debtors have the exclusive right to file and confirm a
chapter 11 plan under section 1121(a) of the Bankruptcy Code (the "Exclusive
Periods"). The most recent order of the Bankruptcy Court, entered on May 23,
1995, provides that the Exclusive Periods are extended until further order of
the Bankruptcy Court.
Prior to the entry of the Bankruptcy Court's most recent order
relating to the Exclusive Periods, the Bankruptcy Court had extended the
Exclusive Periods until sixty days after notification by the Mediator that
mediation had reached an impasse. See Section IV.C.9, entitled, "THE CHAPTER 11
CASES - Significant Events During Reorganization - Mediation." On or about June
1, 1994, the Unsecured Creditors' Committee filed with the Bankruptcy Court a
motion for an order terminating or modifying the Exclusive Periods so as to
permit the filing of an alternative reorganization plan on the basis, inter
alia, that the mediation had reached an impasse. Alternatively, even if
mediation had not reached an impasse, the Unsecured Creditors' Committee
requested that the Bankruptcy Court nevertheless modify the Exclusive Periods to
permit the filing of a plan proposed by the Unsecured Creditors' Committee,
either alone or jointly with the Equity Committee. On or about June 6, 1994, the
Equity Committee also filed with the Bankruptcy Court a motion to declare a
mediation impasse and terminate the Exclusive Periods. The Debtors, the Injury
Claimants' Committee, and the Future Claimants' Representative each filed an
objection to the motions of the Unsecured Creditors' Committee and the Equity
Committee. On July 27, 1994, after a hearing held before the Bankruptcy Court,
the Bankruptcy Court denied such motions in their entirety.
By motion dated October 18, 1994, Smith Factors, Inc., BDS
Special Opportunities Fund, L.P., and Ross Investment Partners, entities that
had purchased prepetition claims against Hillsdale during the Chapter 11 Cases,
filed a motion for an order terminating the Exclusive Periods
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of Hillsdale or, in the alternative, dismissing Hillsdale's chapter 11 case (the
"Hillsdale Exclusivity Motion"). The Debtors, the Injury Claimants' Committee,
and the Future Claimants' Representative each filed a response in opposition to
the Hillsdale Exclusivity Motion. The Unsecured Creditors' Committee filed a
combined response and motion, which renewed the Unsecured Creditors' Committee's
request to terminate the Exclusive Periods as to all the Debtors (the "Renewed
UCC Exclusivity Motion"). After a hearing held on December 7, 1994, by order
entered on December 21, 1994, the Bankruptcy Court denied the Hillsdale
Exclusivity Motion and deferred consideration of the Renewed UCC Exclusivity
Motion.
A hearing on the Renewed UCC Exclusivity Motion was held by
the Bankruptcy Court on January 18, 1995, at which time the Bankruptcy Court
denied the Renewed UCC Exclusivity Motion, but indicated that it was likely to
terminate the Exclusive Periods if a plan and disclosure statement were not
filed on or before March 1, 1995. On February 28, 1995, the Debtors filed with
the Bankruptcy Court a Consolidated Plan of Reorganization (the "Original
Plan"), which also was proposed jointly with the Future Claimants'
Representative and the Injury Claimants' Committee.
Although the Injury Claimants' Committee and the Future
Claimants' Representative are also proponents of the Plan, both the Injury
Claimants' Committee and the Future Claimants' Representative have explicitly
agreed that the Debtors' consent to their participation in proposing and
confirming a plan in no way waives the Debtors' exclusive right to file and
confirm a chapter 11 plan. All parties, however, have reserved their other
rights and arguments with respect to the Exclusive Periods and the support of,
or opposition to, the termination thereof.
6. SALE OF EDI, INC. ASSETS.
On November 30, 1991, substantially all of the assets of EDI,
Inc. were sold pursuant to an order of the Bankruptcy Court. Pursuant to the
Plan, EDI, Inc. will be dissolved.
7. MULTIDISTRICT LITIGATION.
Shortly after the Petition Date, Eagle-Picher was served with
an Order to Show Cause by the Judicial Panel on Multidistrict Litigation (the
"MDL Panel"), in an action styled In re Asbestos Product Liability Litigation
(No. VI). The order directed Eagle-Picher and other parties involved in
asbestos-related personal injury litigation to show cause before the MDL Panel
why all asbestos-related personal injury suits should not be consolidated before
a single court. In response, Eagle-Picher took the position that the MDL Panel
lacked the authority to transfer the Chapter 11 Cases. In July, 1991, the MDL
Panel ordered a transfer of approximately 26,000 asbestos-related personal
injury actions pending in federal courts to the United States District Court for
the Eastern District of Pennsylvania (the "Pennsylvania District Court") and
assigned those actions to United States District Judge Charles R. Weiner for
coordinated or consolidated pretrial proceedings. The MDL Panel, however,
excluded debtors that had sought relief under the Bankruptcy Code from the
purview of such consolidation.
On August 21, 1992, the MDL Panel, at the request of Judge
Weiner, issued another order to show cause with respect to certain debtors that
were the subject of cases pending under the Bankruptcy Code. Pursuant to this
second Order to Show Cause, Eagle-Picher and twelve other chapter 11 debtors
were directed to show cause before the MDL Panel why all the bankruptcy cases of
manufacturers of asbestos-containing products, including that of Eagle-Picher,
should not be transferred to the Pennsylvania District Court. Eagle-Picher filed
a response in opposition to such proposed transfer, and, by a decision entered
on December 9, 1992, the MDL Panel declined to transfer the Chapter 11 Cases and
the other asbestos-related cases currently pending under the Bankruptcy Code.
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8. INSURANCE COVERAGE ISSUES.
Throughout the Chapter 11 Cases, the Debtors have been
involved in litigation and negotiations addressing the scope of liability
insurance coverage available to satisfy the various claims against the Debtors.
In 1991, Eagle-Picher commenced an action against A.I.G. Insurance and Lexington
Insurance Companies (the "Insurance Companies") seeking the recovery of amounts
due Eagle-Picher for reimbursement of Eagle-Picher's damages and expenses
incurred with respect to certain asbestos-related personal injury claims. The
Insurance Companies agreed to pay Eagle-Picher $4,600,933.00, which they paid
pursuant to an order of the Bankruptcy Court dated on or about August 21, 1991,
but they refused to pay (i) claims totalling $853,074.00 that Eagle-Picher
submitted to the Insurance Companies based upon a complaint diagnosis date, (ii)
service fees paid by Eagle- Picher to Liberty Mutual Insurance Company ("Liberty
Mutual") in the amount of $1,937,206.00, and (iii) surcharges imposed against
Eagle-Picher by the Asbestos Claims Facility (the "ACF") for Eagle-Picher's
share of costs incurred by the ACF in administering, defending, and diagnosing
asbestos-related claims. By order entered on or about November 25, 1991, the
Bankruptcy Court ordered the Insurance Companies to pay to Eagle-Picher the
Liberty Mutual service fees and the ACF surcharges, with interest on both
amounts from April 16, 1991, at 10% per annum. The Bankruptcy Court, however,
refused to order the Insurance Companies to pay to Eagle-Picher the $853,074.00
relating to the complaint diagnosis date issue. Subsequent to the Bankruptcy
Court's decision, Eagle-Picher was able to provide the Insurance Companies with
sufficient information to permit the payment by the Insurance Companies of
$539,074.00 of such amount.
The Debtors essentially have exhausted all of their liability
insurance coverage for asbestos-related personal injury claims. Eagle-Picher
believes, however, that certain of the policies of general liability insurance
that it purchased from time to time prior to the Petition Date may provide
coverage to reimburse the Debtors for payments with respect to certain claims
filed against them in the Chapter 11 Cases. Eagle-Picher purchased such coverage
from at least 1931 through the Petition Date and continued to purchase insurance
coverage thereafter. While these policies share a broad common scope of
coverage, the amounts of coverage vary from year to year, and they include
various exclusions and exceptions that may be material to the Debtors' ability
to collect on claims, depending upon the year of coverage.
Eagle-Picher has maintained primary coverage with General
Accident Insurance Company of America or Liberty Mutual throughout the relevant
period. In general, the primary insurer is the first required to respond to
claims. Eagle-Picher's primary coverage policies typically have limits on the
amount that may be paid with respect to any one claim or in the aggregate for
numerous claims. They also frequently provide separate limits of coverage for
separate types of claims such as bodily injury, property damage, and others. If
the losses suffered by the insured exceed any of these limits, excess policies
are usually required to respond if the insured has obtained them. Eagle-Picher
has contracted for excess coverage continuously since 1964 to the present in
amounts that vary from year to year.
Some of the excess policies purchased by Eagle-Picher and
certain of the specific types of primary coverage may have been exhausted due to
payment by the insurer of the full policy limits for certain policies or types
of claims over the relevant period of years. Eagle-Picher, however, purchased
tens of millions of dollars of coverage, and certain of those policies have
remaining insurance coverage. Certain of the primary policies have associated
with them contracts requiring Eagle-Picher to pay additional premium amounts if
the policy is required to pay losses or losses above a certain threshold amount
("retrospective premium adjustments"). Certain of the primary policies also have
deductible amounts or self-insured retentions, which require Eagle-Picher to pay
certain amounts of each loss insured under the policy before the insurer has a
duty to pay anything.
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Eagle-Picher has notified its insurers of the claims asserted
against the Debtors as to which Eagle-Picher believes it has coverage under any
of the policies of insurance (including asbestos property damage claims, lead
claims, and environmental claims). Eagle-Picher has been negotiating for the
acceptance of coverage with certain of its insurers, and it intends at the
appropriate time to make demand on and negotiate for payments with certain
others that it believes should reimburse it for certain claims.
Eagle-Picher believes that it purchased primary liability
insurance coverage from General Accident Insurance Company of America ("General
Accident") from 1931 to 1964. General Accident, however, has denied that such
coverage existed for that entire period. Eagle-Picher's investigation has thus
far produced circumstantial evidence of this coverage, but copies of insurance
policies have been recovered only for a six-year period (1952 to 1958). The
indemnity limits for the available policies are, for bodily injury, $50,000 each
person/$500,000 each occurrence and aggregate products and, for property damage,
$5,000 each accident/$25,000 aggregate. These policies covered only certain
operations and units of Eagle-Picher, however, and are subject to significant
exclusions, such as an exclusion limiting products-completed operations
coverage, and full utilization of such policies will require proof that
insurance triggering events occurred while these policies were in effect.
Eagle-Picher is not able to determine at this time how much coverage to which it
is entitled from General Accident.
Liberty Mutual has provided Eagle-Picher with primary level
liability insurance coverage continuously since 1964. Before 1968, the Liberty
Mutual policies contained endorsements limiting coverage of the
products-completed operations hazard. All of the Liberty Mutual policies
insuring for Asbestos Personal Injury Claims have been exhausted. If Asbestos
Property Damage Claims are found to trigger Liberty Mutual's policies, there is
potential asbestos property damage indemnity coverage of $100,000 per
occurrence/$300,000 aggregate from 1968 through 1975, $500,000/$500,000 from
1976 through 1979, and $1,000,000/$1,000,000 from 1979 through 1981.
Liberty Mutual's coverage is also applicable to environmental
property damage claims. Such coverages have been available from 1964 to the
present. After 1970, however, the Liberty Mutual policies contained various
pollution exclusions. Eagle-Picher does not concede the efficacy of these
exclusions. The cumulative aggregate indemnity limit of such coverage without
such exclusions is approximately $4,900,000. Further, after 1990, the Liberty
Mutual policies featured $500,000 self-insured retentions for each loss, which
are Eagle-Picher's responsibility.
All of Liberty Mutual's liability coverage is subject to
various exclusions, and some policies were subject to retrospective premium
adjustments. Further, Liberty Mutual has reserved all of its defenses with
respect to its policies. Eagle-Picher is not able to determine at this time how
much coverage to which it is entitled from Liberty Mutual.
Eagle-Picher also has maintained excess liability coverage, in
varying amounts, since 1967. Substantially all such coverage from 1967 to 1979
has been exhausted or otherwise is unavailable with respect to Asbestos Personal
Injury Claims, and all such coverage has contained an asbestos bodily injury
exclusion from 1979 to date. With respect to Asbestos Property Damage Claims,
substantially all excess coverage from 1967 to 1979 has been exhausted (due to
payments on Asbestos Personal Injury Claims), and all such coverage has
contained an asbestos property damage exclusion from 1982 to date. With the
exception of a policy issued by American Employers' Insurance Company ("American
Employers") for the period 1967 to 1970, all excess coverage also contains some
form of pollution exclusion. Eagle-Picher does not concede the efficacy of these
exclusions. The indemnity limits of the referenced American Employers policy are
$5,000,000 per occurrence and $5,000,000 aggregate products and occupational
disease. Eagle-Picher is not able to determine at this time how much coverage to
which it is entitled from American Employers or other excess insurers.
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The Debtors have reached a tentative agreement with Liberty
Mutual to resolve the coverage disputes between Liberty Mutual and the Debtors
(the "Liberty Mutual Settlement"). The Liberty Mutual Settlement, however,
remains subject to the completion of final documentation, and several issues
have arisen during the course of such documentation on which the parties, to
date, have failed to reach agreement. Moreover, the Liberty Mutual Settlement
requires the approval by the Bankruptcy Court. If the Liberty Mutual Settlement
is completed, the Debtors would expect the basic terms of the Liberty Mutual
Settlement to be as follows:
- Liberty Mutual will release all claims against the
Debtors, other than certain claims relating to
workers' compensation coverages provided by Liberty
Mutual to the Debtors, which coverages will continue
and will withdraw all proofs of claim filed in the
Chapter 11 Cases.
- By the later of (i) ten business days after the
Bankruptcy Court's order approving the Liberty Mutual
Settlement has become a final order or (ii) February
28, 1997, Liberty Mutual shall remit to Eagle-Picher
the sum of $13.8 million. It is a condition to the
effectiveness of the Liberty Mutual Settlement that
the Bankruptcy Court's order approving the Liberty
Mutual Settlement becomes a final order on or before
the date on which the Confirmation Order becomes a
final order.
- After Eagle-Picher's receipt of the $13.8 million
from Liberty Mutual, the Debtors shall be deemed to
have released Liberty Mutual from all claims under
certain listed policies (essentially, all policies
issued by Liberty Mutual in favor of one or more of
the Debtors prior to the Petition Date), other than
claims relating to the continued workers'
compensation plans.
- Liberty Mutual will be permitted to retain the
amounts paid by Eagle-Picher to Liberty Mutual under
the Interim Agreement, dated as of January 15, 1988,
between Eagle-Picher and Liberty Mutual.
If other insurers that Eagle-Picher believes are responsible
do not agree to pay Eagle-Picher, Eagle-Picher may elect to initiate litigation
against such insurers to compel payment. Any such litigation, of course, will be
very complex. The court must determine which, if any, claims are covered, and
from which policy or policies the covered claims will be paid. Eagle-Picher also
expects that the insurers would assert defenses to any coverage action relating
to, inter alia, the terms and conditions of the policies, specific and general
policy exclusions, and exhaustion of certain policies through other payments.
Certain of the claims may be resolved within the deductible amount so that no
coverage is available. In addition, certain of Eagle-Picher's excess insurers
have become insolvent and are being reorganized pursuant to applicable law.
Therefore, some of Eagle-Picher's apparent insurance may not be available due to
such defenses or insolvencies.
9. MEDIATION.
On June 5, 1992, the Bankruptcy Court appointed Jerry Lawson
(the "Mediator") as a mediator to assist in the negotiation of a consensual plan
of reorganization in the Chapter 11 Cases. Early in 1993, the Mediator focused
the discussions among the Debtors, the Injury Claimants' Committee, and the
Future Claimants' Representative because, in the aggregate, the Injury
Claimants' Committee and the Future Claimants' Representative represent the
holders of the most significant claims that must be addressed in the Chapter 11
Cases. On November 10, 1993, the Debtors announced that, under the auspices of
the Mediator, the Debtors, the Injury Claimants' Committee, and the Future
Claimants' Representative reached an agreement on the principal elements of a
plan of
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reorganization (the "Agreement in Principle"). See Section IV.C.10, entitled,
"THE CHAPTER 11 CASES - Significant Events During the Chapter 11 Cases - The
Agreement in Principle and the Original Plan."
10. THE AGREEMENT IN PRINCIPLE AND THE ORIGINAL PLAN.
As a result of the Agreement in Principle, Eagle-Picher
recorded a provision in the fourth quarter of 1993 of $1.135 billion to increase
the asbestos liability subject to compromise on its books to $1.5 billion.
Eagle-Picher viewed the $1.5 billion value as a compromise and settlement of its
liability on account of Asbestos Personal Injury Claims and Lead Personal Injury
Claims.
The Original Plan was modeled on the essential elements of the
Agreement in Principle. As with this Plan, the Original Plan proposed to channel
all Asbestos Personal Injury Claims and Lead Personal Injury Claims to the PI
Trust for allowance and distribution. Under the Original Plan, the Plan
Proponents proposed to use the $1.5 billion value assigned to Eagle-Picher's
aggregate liability on account of Asbestos Personal Injury Claims and Lead
Personal Injury Claims to determine the extent to which the PI Trust would share
in the Distribution Value. The Debtors estimated that holders of Unsecured
Claims and Environmental Claims would have received a recovery under the
Original Plan equal to approximately 42.56% of their Allowed Claims.
Both the Unsecured Creditors' Committee and the Equity
Committee objected to the use of the $1.5 billion value in the Original Plan on
the ground that such figure placed too high an estimate on the value of Asbestos
Personal Injury Claims.
11. THE OFFSITE NEGOTIATIONS.
In June of 1995, the Mediator convened a two-day offsite
mediation (the "Offsite Negotiations") with representatives of the Debtors, the
Unsecured Creditors' Committee, the Injury Claimants' Committee, the Future
Claimants' Representative, the Equity Committee, and their respective attorneys
in an effort to reach a consensual resolution of the outstanding issues relating
to the Original Plan and the Agreement in Principle. The focus of the
discussions during the Offsite Negotiations was on reaching a consensus among
the Injury Claimants' Committee, the Future Claimants' Representative, and the
Unsecured Creditors' Committee. Despite the extensive negotiations between the
parties, the parties were unable to reach agreement regarding the respective
treatment of Unsecured Claims and Asbestos Personal Injury Claims under a plan
of reorganization. Following the Offsite Negotiations, the Bankruptcy Court
presided over a status conference involving all parties in interest to discuss,
inter alia, how to resolve the dispute among the parties over the value of
Asbestos Personal Injury Claims.
12. THE ESTIMATION PROCEEDINGS.
To resolve such dispute, on July 12, 1995, the Debtors filed
with the Bankruptcy Court a motion requesting that the Bankruptcy Court estimate
the value of the Asbestos Personal Injury Claims, in the aggregate, for purposes
of determining the relative distributions of value under the Original Plan, as
it may be modified (the "Estimation Motion"). Subsequent to the filing of the
Estimation Motion, various discovery took place among the parties. This
discovery primarily consisted of the production of certain documents as well as
depositions of the various experts retained by the Debtors, the Official
Committees and the Future Claimants' Representative who intended to testify at
the hearing on the Estimation Motion.
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In response to the Estimation Motion, the Unsecured Creditors'
Committee filed a motion to withdraw the reference so that the District Court,
not the Bankruptcy Court, would preside over the proceeding relating to the
Estimation Motion (the "Estimation Proceeding"). The Unsecured Creditors'
Committee argued, inter alia, that the Bankruptcy Court should not preside over
the Estimation Proceeding because the Estimation Proceeding was not a "core"
proceeding within the meaning of 28 U.S.C. Section 157(b). In addition, the
Unsecured Creditors' Committee requested the Bankruptcy Court to adjourn the
Estimation Proceeding until the District Court ruled on the Unsecured Creditors'
Committee's request to withdraw the reference. The Debtors objected to the
proposal to delay the Estimation Proceeding and further requested that the
Bankruptcy Court rule that the Estimation Proceeding was, in fact, a core
proceeding. By order dated September 13, 1995, the Bankruptcy Court denied the
Unsecured Creditors' Committee's request to delay the Estimation Proceeding and
ruled that the Estimation Proceeding constituted a core proceeding within the
meaning of 28 U.S.C.Section 157(b).
In September and October of 1995, the Bankruptcy Court held
hearings on the Estimation Proceeding. At the Estimation Proceeding, the Court
heard testimony from Dr. John F. Burke, Jr. (the expert witness for the Future
Claimants' Representative), Dr. B. Thomas Florence (the expert witness for the
Debtors), Dr. Mark A. Peterson (the expert witness for the Injury Claimants'
Committee), Scott Beiser (the expert witness for the Unsecured Creditors'
Committee), and Dr. Roman L. Weil (the expert witness for the Equity Committee).
On December 4, 1995, the Bankruptcy Court entered the
Estimation Order. In estimating the aggregate value of Asbestos Personal Injury
Claims as of the Petition Date, the Bankruptcy Court accepted the testimony of
Dr. Peterson with respect to the value of unliquidated claims lodged against
Eagle-Picher prior to the Petition Date ("open claims"), who placed a value of
$492 million on the open claims as of mid-1991. The Bankruptcy Court then, using
a present value formula, calculated the value of open claims as of the Petition
Date to be $478 million. In calculating the value of "future claims" (defined by
the Bankruptcy Court, for the purposes of the Estimation Proceeding, as all
claims filed and expected to be filed against Eagle-Picher after the Petition
Date), the Bankruptcy Court accepted the testimony of Dr. Florence, who placed a
value of $2,631,458,688 on such claims as of 1995. The Bankruptcy Court also
"present valued" such figure to arrive at a value of $2,024,511,000 for future
claims as of the Petition Date. Accordingly, the Bankruptcy Court estimated the
aggregate value of all Asbestos Personal Injury Claims as of the Petition Date
to be $2,502,511,000.
Following the entry of the Estimation Order, notices of appeal
from the Estimation Order were filed by the Unsecured Creditors' Committee, the
Equity Committee, and Teachers Insurance and Annuity Association and The Baupost
Group, Inc. (two members of the Unsecured Creditors' Committee that had filed an
objection to the estimation proceeding with the Bankruptcy Court).
In such appeals, the appellants argue, inter alia, that (i)
the Bankruptcy Court made a mistake in present valuing future claims by only
discounting such claims back four and one-half years, and (ii) the Bankruptcy
Court used the incorrect discount rate in calculating the present values of
claims. If the appellants are correct under the first claim of error, then the
aggregate value of Asbestos Personal Injury Claims as of the Petition Date would
be reduced by approximately $500 million. The Unsecured Creditors' Committee has
alleged that, if the appellants are correct under the second claim of error,
then the aggregate value of all Asbestos Personal Injury Claims as of the
Petition Date also would be reduced by approximately $500 million. The Plan
Proponents believe that the Bankruptcy Court acted correctly in valuing the
Asbestos Personal Injury Claims at approximately $2.5 billion and believe that
the Estimation Order will be affirmed on appeal.
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On June 14, 1996, the District Court heard oral argument with
respect to the appeals of the Estimation Order. At the conclusion of such
hearing, the District Court reserved decision. To date, no decision has been
rendered by the District Court in such appeals.
As a result of the Estimation Order, the Plan Proponents
revised the Original Plan to take into account the Bankruptcy Court's estimate
of the aggregate value of Asbestos Personal Injury Claims. The Second Amended
Plan used the value of $2,502,511,000, not the $1.5 billion used in the Original
Plan, to determine the PI Trust's allocable share of the Distribution Value.
Subsequent to the filing of the Second Amended Plan, the Plan
Proponents and the Unsecured Creditors' Committee engaged in further
negotiations in an effort to resolve the issues raised by the appeals of the
Estimation Order. As a result of these negotiations, the parties have reached a
compromise and settlement with respect to the issues raised in such appeals.
Pursuant to such compromise and settlement, the parties have agreed to (i) fix
the PI Trust Share at $2,000,000,000, (ii) deem the appeal of the Estimation
Order by the Unsecured Creditors' Committee dismissed with prejudice upon the
Effective Date, and (iii) allow the financial advisers to the Unsecured
Creditors' Committee to consult with the Debtors' financial advisers in
determining the interest rate on the Divestiture Notes.
13. RESOLUTION OF OTHER SIGNIFICANT CLAIMS.
a. LEAD-RELATED PROPERTY DAMAGE CLAIMS.
In November, 1990, Eagle-Picher was served with a suit by the
City of Philadelphia (the "Philadelphia Action"), which sought certification of
a class action on behalf of all cities in the United States with a population
over 100,000 and their affiliated housing authorities. The Philadelphia Action
sought monetary damages for inspection, testing, monitoring, or abatement costs
related to the presence of lead paint in buildings located in the cities. It
also sought to recover costs incurred to screen, test, diagnose, and treat
residents in connection with the alleged hazards of lead paint. Eagle-Picher was
alleged to be liable because it manufactured lead chemicals used as pigment by
the manufacturers of the paint. This suit and an amended complaint filed by the
same plaintiffs were dismissed in their entirety, and the dismissal was affirmed
by the United States Court of Appeals for the Third Circuit. A proof of claim
filed in the Chapter 11 Cases asserting a claim with respect to the Philadelphia
Action by the City of Philadelphia, and similar proofs of claim filed on behalf
of the Philadelphia Housing Authority and the City of Dallas, Texas, were
withdrawn in their entirety.
The Philadelphia Action is similar to one served on
Eagle-Picher and other manufacturers of lead chemicals used as pigment by paint
manufacturers in June, 1989 by the City of New York, which sought indemnity for
costs that New York had incurred and would incur because residents of housing
owned by the City of New York were allegedly injured by ingesting paint in that
housing. Counts in this suit alleging negligence and strict product liability
have been dismissed. Certain other counts are still pending. The City of New
York did not file a claim in the Chapter 11 Cases by the General Bar Date, but,
in November, 1993, it filed three proofs of claim with respect to the
litigation, each seeking $50 million in damages. Eagle-Picher filed an objection
in the Bankruptcy Court seeking to have such claims disallowed on the basis that
they were filed after the General Bar Date. The City of New York responded that
it had not received notice of the General Bar Date, and therefore, should be
permitted to file late-filed claims. By a decision and judgment entered on
November 22, 1994, the Bankruptcy Court accepted Eagle-Picher's argument and
refused to permit the City of New York to file its three late-filed proofs of
claim.
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As a result of these actions in the Bankruptcy Court, no
lead-related property damage claims currently exist against the Debtors'
estates.
b. LEAD PERSONAL INJURY CLAIMS.
In late 1987, litigation was initiated in Massachusetts
against Eagle-Picher and numerous other defendants, in which the plaintiffs
alleged personal injuries resulting from ingestion of lead-containing paint. In
these cases, the plaintiffs sued Eagle-Picher, four other manufacturers of lead
paint, and a trade association, The Lead Industries Association. By virtue of
the commencement of the Chapter 11 Cases, these actions were stayed against
Eagle-Picher.
In one of the cases, however, the remaining defendants moved
for summary judgment in their favor. On July 2, 1992, the United States District
Court for the District of Massachusetts (the "Massachusetts District Court")
granted summary judgment in favor of such defendants because the plaintiff could
not identify which defendant had supplied the lead pigment for the allegedly
injury- causing paint. The Massachusetts District Court refused to apply
collective liability theories to allow the plaintiff to assert a claim against
all of the lead chemical manufacturers and the trade association to which they
belonged. On September 10, 1993, the United States Court of Appeals for the
First Circuit affirmed the granting of summary judgment in favor of defendants.
Santiago v. Sherwin Williams Company, 782 F. Supp. 186 (D. Mass. 1992), aff'd, 3
F.3d 546 (1st Cir. 1993).
In its affirmance of the Massachusetts District Court's
opinion, the First Circuit held that Massachusetts courts have not accepted, and
would not accept, as a matter of law, the collective liability theories,
including market share liability, pursued in Santiago. Even accepting the
plaintiff's assertions, for the sake of argument, that the Massachusetts Supreme
Judicial Court (the "SJC") would in some circumstances allow a plaintiff to
recover under a market share theory, the First Circuit found that those
circumstances were not present in the Santiago case:
Simply put, allowing plaintiff's market share claim to proceed
despite plaintiff's inability to pinpoint with any degree of
precision the time the injury-causing paint was applied to the
house on Leston Street would significantly undermine both of
the articulated reasons for the identification requirement.
The record before us reflects that the layers of lead paint
were applied to the house's walls at various indeterminable
points in time between 1917 and 1970. It also indicates that
defendants' contributions to the lead paint market varied
significantly during the time period. Given these facts, it is
difficult to discern the basis upon which any market share
determination would be premised. At any rate, it is evident
that the adoption of plaintiff's theory would not be
consistent with the SJC's admonition that wrongdoers be held
liable only for the harm they have caused.
3 F.3d at 550.
More recently, the trial court in Alvin Wright, et al. v. Lead
Industries Association, Inc., et al., Case No. 94363042/CL190487, pending in the
Circuit Court for Baltimore City, dismissed certain claims against certain
manufacturers of lead chemicals and lead paint on the ground that the plaintiffs
had failed to produce any evidence linking such manufacturers to their injuries.
The court also dismissed the plaintiffs' conspiracy claims as to all defendants
on the ground that there were no facts that indicated that the defendants had
conspired with each other to conceal the knowledge of the dangers of lead paint.
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As of the General Bar Date, 128 non-duplicative proofs of
claim were filed in the Chapter 11 Cases asserting liability for personal
injuries against Eagle-Picher on account of lead chemicals allegedly
manufactured and sold by Eagle-Picher. Four of such claims have been withdrawn
voluntarily at Eagle-Picher's request. In the wake of the Santiago decision,
Eagle-Picher objected to the claims of eight plaintiffs in the Massachusetts
actions in their entirety on the ground that the Santiago decision and the
resolutions of the other actions were dispositive of such claims. One of these
claims was disallowed after the plaintiff failed to file a response. By order
dated June 9, 1995, the Bankruptcy Court granted Eagle-Picher's motion for
summary judgment with respect to the remaining seven claims and disallowed such
claims in their entirety.
In December 1994, the Eighth District Court of Appeals,
Cleveland, Ohio, ruled that a plaintiff in a lawsuit alleging personal injuries
resulting from ingestion of lead-containing paint, pending as Renita Jackson, et
al. v. The Glidden Co., et al., in state court in Cuyahoga County, Ohio, may
pursue claims against defendants who manufactured lead pigment. The trial court
had dismissed the plaintiff's enterprise liability, market share, and
alternative liability theories pursuant to a defense motion to dismiss. The Ohio
Appeals Court, however, upheld the dismissal of the enterprise liability count,
but reversed as to the market share and alternative liability counts.
In light of the Santiago and Wright decisions and
notwithstanding the Ohio Appeals Court decision, the Debtors believe that, under
current law, holders of Lead Personal Injury Claims do not have any theory of
law on which they can prevail in obtaining a recovery on such Claims. The Plan
defines a "Lead Personal Injury Claim" as, generally speaking, any right, claim,
remedy, Demand, or liability, whether known or unknown, for death, bodily
injury, or other personal damages (whether physical, emotional, or otherwise) to
the extent caused or allegedly caused, directly or indirectly, by exposure to
products that contained lead chemicals that were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date. The term "Lead Personal Injury Claim" includes presently known
Claims as well as Claims and Demands that become known after the Confirmation
Date. Such term also includes any right, claim, remedy, Demand, or liability for
contribution, reimbursement, or indemnification on account of a Lead Personal
Injury Claim.
Under the Plan, the Lead Personal Injury Claims are being
channeled to the PI Trust. If, when, and to the extent that the Lead Personal
Injury Claims constitute cognizable claims, the sole recourse for the holders of
Lead Personal Injury Claims will be the PI Trust, in accordance with the
procedures developed by the Trustees of the PI Trust and consistent with the
terms of the Asbestos and Lead PI Trust Agreement. The holders of such Claims
will not be permitted to assert their Claims against the Reorganized Debtors.
For a description of the PI Trust and the Asbestos and Lead PI Trust Agreement,
see Section , entitled, "THE PI TRUST."
c. ASBESTOS RELATED PROPERTY DAMAGE CLAIMS.
As discussed above, prior to the Petition Date, Eagle-Picher
and numerous other companies also were sued in both state and federal courts by
various entities that own or operate commercial properties and public buildings,
such as school districts, counties, cities, states, libraries, and hospitals,
based on allegations that asbestos or asbestos-containing products are or may be
in the buildings. One hundred forty-nine such lawsuits were instituted against
Eagle-Picher prior to the filing of its chapter 11 petition, including two that
had been certified as class actions prior to the filing. One hundred lawsuits
were disposed of through dismissals by the court following rulings on pre-trial
motions, or voluntarily by the plaintiffs. Eagle-Picher settled seven of these
cases for less than $22,000 in the aggregate prior to filing its chapter 11
petition.
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"Asbestos Property Damage Claims" are those Claims against any
of the Debtors for damages arising from the presence in buildings or other
structures of asbestos or asbestos-containing products that was or were
manufactured, sold, supplied, produced, distributed, or in any way marketed by
any of the Debtors. The term, however, does not include Claims for
reimbursement, contribution, indemnification, or subrogation on account of
Asbestos Property Damage Claims, which Claims are treated as Unsecured Claims in
Class 20.
Asbestos Property Damage Claims in the aggregate amount of
approximately $11.5 billion were filed against the Debtors by the Asbestos Bar
Date. The Debtors do not believe, however, that they have any material liability
on account of Asbestos Property Damage Claims, and their estimates of
Distributions to Claimants under the Plan have assumed that the Asbestos PD
Trust, which the Debtors propose to establish pursuant to the Plan, will be
funded with consideration (whether cash or Senior Unsecured Sinking Fund
Debentures) having a value of no more than $3 million.
Of the proofs of claim still pending against the Debtors that
assert Asbestos Property Damage Claims, five purport to be class proofs of
claims. Four of the purported class proofs of claims were filed on behalf of
classes that have been certified or conditionally certified in lawsuits that
were pending against Eagle-Picher as of the Petition Date: (i) the National
School Class Action, which was commenced in the United States District Court for
the Eastern District of Pennsylvania in 1983, on behalf of all elementary and
secondary public school districts and private schools in the United States; (ii)
the Michigan School Class Action, which was commenced in Michigan state court in
October of 1984 by the Detroit Board of Education on behalf of itself and the
several hundred other public school districts and private schools located in
Michigan; (iii) the University Class Action, which was commenced in the United
States District Court for the District of South Carolina in 1987 by Central
Wesleyan College on behalf of itself and all public or private colleges and
universities in the United States, and (iv) the Prince George Class Action,
which was commenced in Pennsylvania state court in 1990 on behalf of all private
owners of buildings within the United States that were leased or subleased to
the federal government or any agency, department, or unit thereof, on or after
May 30, 1986, in which buildings asbestos-containing materials were or are
present. The other purported class proof of claim purports to have been filed on
behalf of the "American Hospital Association Class," a group of hospitals that
did not have any action pending against any of the Debtors prior to the Petition
Date and that has not been certified (conditionally or otherwise) in any
existing action.
On or about February 7, 1996, the American Hospital
Association filed a motion with the Bankruptcy Court, in which it requested the
Bankruptcy Court to estimate Asbestos Property Damage Claims and/or temporarily
allow Asbestos Property Damage Claims for voting purposes. Both the Debtors and
the Future Claimants' Representative filed objections to such motion on the
grounds that it is premature because the Bankruptcy Court will not have to
estimate Asbestos Property Damage Claims if Class 16 votes to accept the Plan
and unnecessary because the Debtors intend to provide procedures by which
holders of Asbestos Property Damage Claims can vote on the Plan. After a hearing
on such motion, the Bankruptcy Court denied such motion.
On or about February 15, 1996, the Debtors filed with the
Bankruptcy Court an objection to certain Asbestos Property Damage Claims (the
"First Omnibus PD Claims Objection"). The First Omnibus PD Claims Objection
related only to Asbestos Property Damage Claims that were not the subject of a
pending lawsuit against Eagle-Picher as of the Petition Date and asserted that
the claims objected to are barred (i) by virtue of the applicable state statute
of repose or statute of limitations and/or (ii) because the claimant failed to
identify adequately on its proof of claim any information on which Eagle-Picher
could determine when such claim arose. Responses to the First Omnibus PD Claims
Objection were filed by certain holders of Asbestos Property Damage Claims,
including Concordia College, the members of the American Hospital Association,
and the states of Kansas, Wyoming, Illinois, Tennessee, Delaware, Texas,
Pennsylvania, Colorado, and Virginia. On
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or about April 25, 1996, the Bankruptcy Court entered an order disallowing 123
Asbestos Property Damage Claims that had been the subject of the First Omnibus
PD Claims Objection, but as to which a timely response or request for an
extension of time within which to file a response was not filed.
On or about May 15, 1996, the Debtors filed with the
Bankruptcy Court their Second Omnibus PD Claims Objection. Although certain
holders of Asbestos Property Damage Claims (including all the states whose
claims were the subject of the Second Omnibus PD Claims Objection) filed
responses to the Second Omnibus PD Claims Objection, the holders of
approximately 216 Asbestos Property Damage Claims failed to file timely
responses to the Second Omnibus PD Claims Objection or seek an extension of time
within which to answer. On or about July 12, 1996, the Bankruptcy Court entered
an order disallowing such claims.
d. THE AMERICAN IMAGING LITIGATION.
Since the beginning of the Chapter 11 Cases, American Imaging
Services, Inc. and William J. Opincar (collectively, the "American Imaging
Litigants") attempted to pursue a lawsuit against Eagle-Picher and certain of
its key officers that was commenced prior to the Petition Date in the United
States District Court for the Northern District of Texas (the "Texas District
Court"). Shortly after the Petition Date, the Bankruptcy Court denied a motion
by the American Imaging Litigants to modify the automatic stay to continue the
litigation in the Texas District Court. In response to an action brought by
Eagle-Picher, the Bankruptcy Court also enjoined the American Imaging Litigants
from continuing their litigation against the key officers. This order was
appealed by the American Imaging Litigants and ultimately was affirmed by the
United States Court of Appeals for the Sixth Circuit.
Although the complaint filed with the Texas District Court
alleged that the American Imaging Litigants were seeking approximately $185
million in damages against the defendants, on or before the General Bar Date
each of the American Imaging Litigants filed a proof of claim in the Chapter 11
Cases for damages of $500 million.
The claims that were asserted in the American Imaging
Litigants' proofs of claim were based upon those asserted in the litigation
before the Texas District Court. The claims in such litigation rested on a
theory that Eagle-Picher, which was the majority shareholder of American Imaging
Services, Inc., and certain of Eagle-Picher's officers engaged in a complex
conspiracy and committed numerous breaches of their so-called fiduciary duty to
the American Imaging Litigants in order "to misappropriate the assets, and the
proprietary software and technology of American Imaging for the private gain of"
Eagle-Picher and certain American Imaging employees who are unrelated to
Eagle-Picher and the officer defendants.
Given the magnitude of the American Imaging Litigants'
asserted claims, in August 1993, Eagle-Picher concluded that an effective
reorganization plan could not be confirmed until the claims of the American
Imaging Litigants were resolved. At that time, Eagle-Picher filed with the
Bankruptcy Court an objection to the American Imaging Litigants' claims and
requested that the Bankruptcy Court consolidate the claims against the officers
in the Texas District Court with resolution of the objection in the Bankruptcy
Court.
By order entered on or about January 24, 1994, the Bankruptcy
Court denied Eagle- Picher's motion and ordered that all claims asserted by the
parties be resolved in the Texas District Court. The Bankruptcy Court further
lifted the automatic stay as against Eagle-Picher and vacated the injunction
with respect to the officers so as to permit the litigation to proceed. The
Bankruptcy Court, however, left open the possibility of a transfer of venue to
the United States District Court for the Southern District of Ohio (the
"District Court") if Eagle-Picher could satisfy the venue transfer requirements
under general federal law. On or about May 3, 1994, Eagle-Picher filed with the
Texas
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District Court a motion to transfer venue to the District Court, which motion
was denied by the Texas District Court on or about June 30, 1994.
In November of 1994, after engaging in extensive discovery and
filing cross-motions for summary judgment, both Eagle-Picher and the American
Imaging Litigants had sufficient knowledge of the underlying facts and
applicable law such that they either needed to try to reach a settlement or
fully prepare the case for a jury trial. Therefore, the parties agreed to
participate in nonbinding mediation to determine whether a settlement could be
reached.
As a result of these mediation efforts, on or about December
9, 1994, the parties agreed to a settlement, pursuant to which the American
Imaging Litigants agreed to release all claims against Eagle-Picher and the
officer defendants in exchange for Eagle-Picher's cash payment to William J.
Opincar in the amount of $525,000.00 and the assignment of all Eagle-Picher's
claims under a certain promissory note previously issued by American Imaging to
Eagle-Picher, as well as all Eagle-Picher's shares in American Imaging. The
underwriters of Eagle-Picher's Directors and Officers Liability Insurance agreed
to fund 50% of the settlement payment, making the actual out-of-pocket cost to
Eagle-Picher of the settlement $262,500.00.
On or about December 19, 1994, Eagle-Picher filed with the
Bankruptcy Court a motion seeking approval of its settlement with the American
Imaging Litigants. No objections to such motion were filed, and on January 20,
1995, the Bankruptcy Court entered an order approving such settlement.
e. THE GATES ENERGY PRODUCTS LITIGATION.
On or about January 6, 1992, Gates Energy Products, Inc.
("Gates") commenced an action against Eagle-Picher in the Bankruptcy Court. In
such action, Gates alleged that, both before and after the Petition Date,
Eagle-Picher "willfully and deliberately" infringed patents owned by Gates by
making, using, offering to sell, and selling the patented inventions without
authority.
By motion filed on May 8, 1992, Gates requested that the
reference from the District Court to the Bankruptcy Court be withdrawn so that
the litigation could be heard by the District Court. By order entered on
February 26, 1993, the District Court granted such motion and presided over the
litigation.
After a jury trial conducted before the District Court, on or
about March 15, 1994, the jury returned a verdict in favor of Eagle-Picher, and
the District Court entered an amended final judgment (the "Gates Judgment") on
or about March 18, 1994. On or about March 29, 1994, Gates filed a motion with
the District Court for judgment as a matter of law or, in the alternative, for a
new trial pursuant to Fed R. Civ. P. 50(b) and 59. By order dated June 20, 1994,
such motion was denied by the District Court (the "JNOV Order"). On or about
July 20, 1994, Gates appealed the Gates Judgment and the JNOV Order to the
United States Court of Appeals for the Federal Circuit.
Eagle-Picher filed a cross-appeal with respect to the District
Court's denial of Eagle- Picher's request that Gates be ordered to pay
Eagle-Picher's fees in such action. In June of 1995, after oral argument before
the Federal Circuit, the Federal Circuit denied both appeals. The deadline for
seeking further review of such appeals expired in November of 1995 without
either party having sought further review of the Federal Circuit's decision.
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f. THE BLUE DOVE LITIGATION.
Pursuant to a complaint dated June 18, 1993, Eagle-Picher and
Transicoil commenced a multi-count adversary proceeding against Blue Dove
Development Associates Limited Partnership ("Blue Dove") and K-JEM, Inc., Blue
Dove's general partner, relating to the lease (the "Blue Dove Lease") governing
Transicoil's office and manufacturing facility (the "Transicoil Leased
Premises"). Eagle-Picher is the guarantor of Transicoil's obligations under the
Blue Dove Lease, and Blue Dove is the landlord thereunder. It is the position of
Eagle-Picher and Transicoil that Blue Dove, as a result of its failure to obtain
permanent financing for the Transicoil Leased Premises, has overcharged
Transicoil several hundreds of thousands of dollars in base rent and advance
rent. Additionally, Transicoil and Eagle-Picher have contended that Blue Dove
fraudulently compelled Transicoil to assume the Blue Dove Lease in the Chapter
11 Cases based upon Blue Dove's representation that it was actively seeking
permanent financing for the Transicoil Leased Premises, but that it could not
obtain such financing unless the Blue Dove Lease was assumed. In a letter to the
Bankruptcy Court dated November 15, 1994, Transicoil and Eagle-Picher advised
the Bankruptcy Court that they were prepared to withdraw the claims that are
based upon this theory.
Subsequent to the filing of the complaint, Blue Dove alleged
that Transicoil was in default under the Blue Dove Lease by failing to pay
certain rents under the Blue Dove Lease. As a result, Blue Dove filed a
counterclaim against Transicoil and Eagle-Picher alleging that Transicoil has
breached the Blue Dove Lease and therefore is liable for damages in the form of
past due base rent, past due advance rent, interest, and accelerated rents
through June 30, 2005 in the total amount of approximately $12 million.
Transicoil and Eagle-Picher filed two joint motions for
partial summary judgment on November 15, 1994. Blue Dove responded and filed a
cross-motion for summary judgment. On or about December 21, 1995, the Bankruptcy
Court entered decisions denying all three summary judgment motions. Eagle-Picher
and Transicoil are seeking leave of the District Court to appeal the Bankruptcy
Court's denial of their motion for summary judgment with respect to the original
relief sought in the adversary proceeding, based upon the assertion that the
Bankruptcy Court misread the Blue Dove Lease in denying the summary judgment
motion of Eagle-Picher and Transicoil. The motion for leave to appeal is sub
judice.
g. ENVIRONMENTAL CLAIMS.
In view of the Debtors' 152-year history as industrial and
manufacturing companies, a significant number of environmental issues and claims
have had to be addressed in the Chapter 11 Cases. To address the broadest
possible range of claims in the Chapter 11 Cases, the Debtors sent special
notices of the General Bar Date to entities associated with facilities that any
of the Debtors or their predecessors in interest formerly owned or operated,
federal and state regulatory agencies, and to entities that were identified as
potentially responsible parties ("PRPs") at Superfund sites as to which any of
the Debtors also was identified as a PRP.
Among the most significant claims asserted against the
Debtors' estates were the claims of the EPA and the Department of the Interior
("DOI") and certain state regulatory agencies with respect to alleged liability
of the Debtors for environmental cleanup costs. On March 23, 1995, the Debtors
lodged with the Bankruptcy Court a settlement agreement with the EPA, DOI, and
certain state regulatory agencies (the "Environmental Settlement Agreement").
Pursuant to the Environmental Settlement Agreement, the Debtors have agreed to
resolve the environmental-related claims of the EPA, DOI, and the states of
Arizona, Michigan, and Oklahoma (the "State Parties") in the following manner:
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- For cleanup of 23 specified Superfund sites to which
the Debtors allegedly sent waste prior to the
Petition Date and which are not owned by the Debtors
and one site resolved with respect to a state (the
"Liquidated Sites"), the EPA, DOI, and the State
Parties collectively will have an allowed, general
unsecured claim in the Chapter 11 Cases in the
aggregate amount of $42,572,500. In addition, the EPA
will have an Allowed Administrative Expense in the
amount of $150,000 for certain expenses incurred in
connection with the Superfund site commonly referred
to as the Cherokee County Site, in Cherokee County,
Kansas. The EPA also will have an allowed, general
unsecured claim in the amount of $1,126,500 (75% of
which is to be subordinated) relating to certain
prepetition civil penalties for alleged violations of
the Clean Water Act at Eagle-Picher's Joplin,
Missouri, facility.
- Certain liabilities that arose after the Petition
Date or with respect to "Debtor-Owned Sites" (defined
to mean properties or sites owned by any of the
Debtors at or at any time after the Effective Date of
the Plan) will not be discharged in the Chapter 11
Cases.
- Claims with respect to "Additional Sites" (i.e.,
sites other than the Liquidated Sites and the
Debtor-Owned Sites) will not be discharged, but will
be satisfied as and when they arise; however, they
will be satisfied in substantially the same manner
and with the same value as such claims would have
been satisfied if they had been Unsecured Claims
under Class 20 of the Plan as of the Effective Date
of the Plan. The Debtors have reserved all of their
arguments and defenses under applicable environmental
laws with respect to any claims that may be asserted
against them at any of the Additional Sites. The
Environmental Settlement Agreement, thus, would allow
the Debtors to deal with as yet unknown claims under
the Plan substantially on the same terms with which
they would have been treated if they were currently
known and liquidated, thereby permitting the Debtors
to avoid potentially costly litigation over whether
such claims constitute dischargeable "claims" in the
Chapter 11 Cases.
- Upon approval by the Bankruptcy Court of the
Environmental Settlement Agreement, contribution
claims relating to the Liquidated Sites, which were
filed by over 96 co-liable PRPs in an aggregate
amount of $1.754 billion, would be barred by
operation of section 113(f) of the Comprehensive
Environmental Response, Compensation and Liability
Act ("CERCLA"), 42 U.S.C. Section 9613(f).
On April 17, 1995, the Debtors filed a motion with the
Bankruptcy Court requesting approval of the Environmental Settlement Agreement.
Objections to the Environmental Settlement Agreement were filed by the following
parties:
- Unsecured Creditors' Committee, which objected on the
ground that the Environmental Settlement Agreement
does not take into account the possibility that
CERCLA's liability scheme may, at some time in the
future, be changed to be more favorable to
potentially responsible parties such as the Debtors;
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- HON Industries, Inc., which objected to the
allocation of a $45,000 claim in favor of the EPA
with respect to the Cedartown Municipal Landfill
Site;
- Morfontaine Properties, which objected to the
disallowance of claims sought by the Debtors in
connection with the Environmental Settlement
Agreement on the basis that the contribution
protection provided by CERCLA allegedly does not bar
contractual indemnification claims; and
- Certain potentially responsible parties at the Jasper
County and Cherokee County Superfund sites
(collectively, the "Jasper and Cherokee PRPs"), which
argued that the claim in favor of the EPA with
respect to such sites did not reflect Eagle-Picher's
allocable share of the present and future cleanup
costs relating to such sites, that the Jasper and
Cherokee PRPs' contribution claims against
Eagle-Picher were not barred by CERCLA's contribution
protections, and that the Jasper and Cherokee PRPs'
contingent contribution claims should not be
disallowed under section 502(e)(1)(B) of the
Bankruptcy Code.
On September 11, 1995, the United States formally requested
that the Bankruptcy Court enter and approve the Environmental Settlement
Agreement.
On or about November 8, 1995, the Jasper and Cherokee PRPs
filed a motion to withdraw the reference of the hearing on the approval of the
Environmental Settlement Agreement from the Bankruptcy Court to the District
Court. The Jasper and Cherokee PRPs further requested that the Bankruptcy Court
stay the hearing on the approval of the Environmental Settlement Agreement,
which request was denied by the Bankruptcy Court.
The Bankruptcy Court conducted a hearing on the approval of
the Environmental Settlement Agreement on November 15, 1995. Prior to such
hearing, Morfontaine Properties and HON Industries, Inc. withdrew their
objections to the Environmental Settlement Agreement. At the conclusion of such
hearing, the Bankruptcy Court reserved ruling. On or about June 6, 1996, the
Bankruptcy Court issued a decision and order in which it approved the
Environmental Settlement Agreement. The Jasper and Cherokee PRPs have appealed
from such decision, however. The District Court has not yet established a
briefing schedule for such appeal.
It is a condition to confirmation of the plan that the
Environmental Settlement Agreement be approved by a Final Order of the
Bankruptcy Court. See Section , entitled, "THE PLAN OF REORGANIZATION -
Conditions to Confirmation."
On or about March 14, 1992, the Debtors filed two motions,
pursuant to section 502(e)(1)(B) of the Bankruptcy Code, seeking the
disallowance of certain contingent contribution claims that relate to alleged
environmental liabilities. The claims were filed against the Debtors by several
PRPs in connection with the Springfield Township Superfund Site in Oakland
County, Michigan, and the Rasmussen Dump Superfund Site in Livingston County,
Michigan (the "Springfield and Rasmussen Claims"). By decision and order entered
on or about September 16, 1992 (the "502(e)(1)(B) Decision"), the Bankruptcy
Court approved the Debtors' motions and disallowed the Springfield and Rasmussen
Claims. The holders of the Springfield and Rasmussen Claims appealed the
502(e)(1)(B) Decision to the District Court, which affirmed the 502(e)(1)(B)
Decision in its entirety on or about February 28, 1994.
On or about March 18, 1994, the holders of the Springfield and
Rasmussen Claims appealed the affirmance of the 502(e)(1)(B) Decision to the
United States Court of Appeals for the Sixth
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Circuit. In light of the pendency of the Environmental Settlement Agreement,
which, if it becomes effective, will act as a bar to contribution claims such as
the Springfield and Rasmussen Claims, such appeal has been adjourned
indefinitely.
On or about March 17, 1993, Eagle-Picher filed another motion,
pursuant to section 502(e)(1)(B) of the Bankruptcy Code, seeking the
disallowance of certain other contingent environmental Claims. An order
disallowing some of such Claims was entered on or about May 3, 1993, after the
holders of such Claims failed to respond to the motion. The Bankruptcy Court, by
order dated January 9, 1995, disallowed the claim of the Norpak Corporation
("Norpak"), which is the current owner of property located in Newark, New Jersey
that was previously owned and operated by Eagle-Picher. Norpak appealed such
decision to the District Court, which, on September 13, 1995, entered a decision
that affirmed the Bankruptcy Court's order. Norpak has further appealed to the
United States Court of Appeals for the Sixth Circuit. Settlement discussions are
pending between Eagle-Picher and Norpak with respect to this matter. The
prosecution of the appeals is being held in abeyance pending the outcome of
these discussions. As to other Claimants who filed responses, Eagle-Picher has
been attempting to resolve their Claims through settlement. If acceptable
settlements cannot be negotiated, however, Eagle-Picher intends to continue to
seek disallowance of such Claims pursuant to section 502(e)(1)(B) or otherwise.
Other environmental claims resolved during the Chapter 11
Cases included certain administrative claims filed against Eagle-Picher's estate
by the Natural Resources and Environmental Protection Cabinet of the
Commonwealth of Kentucky regarding alleged contamination at a former
Eagle-Picher site. Eagle-Picher also settled a prepetition lawsuit commenced by
the EPA pursuant to which the EPA alleged that the Technologies Division at its
Colorado Springs plant committed violations of the Clean Water Act. In exchange
for Eagle-Picher granting the EPA an allowed unsecured claim of $150,000.00
against Eagle-Picher's estate and agreeing to implement certain corrective
measures involving the monitoring and discharge of certain hazardous substances,
the EPA released potential penalty claims of up to $40 million against
Eagle-Picher.
In December 1993, Eagle-Picher was advised by the United
States Attorney's Office in Denver, Colorado, that an ongoing investigation was
being conducted by the United States Attorney's Office concerning the allegedly
unlawful treatment, storage, or disposal of hazardous wastes and allegedly false
statements relating to such activities by personnel at Eagle-Picher's plant in
Colorado Springs, Colorado. In March 1994, Eagle-Picher was served with an
Administrative Complaint by EPA Region VIII in Denver based on some, but not
all, of the same allegations.
After the commencement of such investigation, Eagle-Picher
engaged in negotiations with the United States Attorney and officials from
Region VIII of the EPA in an effort to resolve the criminal and civil claims
asserted with respect to the Colorado Springs Plant, which eventually led to a
settlement (the "Colorado Springs Settlement"). Pursuant to the Colorado Springs
Settlement, Eagle-Picher agreed with the United States Attorney to plead guilty
to two criminal misdemeanors for its alleged failure to report discharges of
hazardous substances to a navigable waterway. Eagle- Picher also agreed to the
allowance of a prepetition general unsecured claim in the amount of $300,000 in
favor of the United States and a $200,000 prepetition general unsecured claim in
favor of the EPA's Region VIII. Eagle-Picher also agreed with the EPA that it
would implement certain programs, including, among others, publication of
environmental ethics and non-reprisal policies and adoption of pollution
prevention, environmental training, and compliance reporting programs.
Eagle-Picher also requested, in its motion seeking approval of
the Environmental Settlement Agreement, that the Bankruptcy Court approve the
Colorado Springs Settlement. No objections to the Colorado Springs Settlement
were filed, and on or about June 21, 1995, the Bankruptcy Court entered an order
approving the Colorado Springs Settlement.
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On or about October 18, 1994, Dow Corning Corporation and the
steering committee for the clean-up of the Hawkins Drive Landfill, located in
Elizabethtown, Kentucky, filed motions with the Bankruptcy Court seeking (i)
leave to file late proofs of claim against Eagle-Picher (as another PRP) and
(ii) to file a late surrogate proof of claim against Eagle-Picher on behalf of
the Natural Resources and Environmental Protection Cabinet of the Commonwealth
of Kentucky. Eagle-Picher filed pleadings in opposition to the motions. After
an evidentiary hearing, the Bankruptcy Court, on or about May 9, 1996, issued a
decision in which it permitted the steering committee to file a late proof of
claim against Eagle-Picher on its own behalf, but not on behalf of the Natural
Resources and Environmental Protection Cabinet of the Commonwealth of Kentucky.
Eagle-Picher has appealed from such decision to the extent that it permits the
filing of a late proof of claim against Eagle-Picher. The District Court has not
scheduled briefing on such appeal yet.
h. ASBESTOS-RELATED CONTRIBUTION CLAIMS.
By the General Bar Date, over 400 proofs of claim were filed
against the Debtors by parties seeking contribution or indemnification for
payments made or to be made in the future by such parties to plaintiffs in
asbestos-related personal injury and property damage actions (collectively, the
"Asbestos-Related Contribution Claims"). On or about August 19, 1994, the
Debtors filed a motion with the Bankruptcy Court that sought to disallow the
Asbestos-Related Contribution Claims on the grounds that (i) such claims are
subject to disallowance pursuant to section 502(e)(1)(B) of the Bankruptcy Code
as contingent contribution claims, and (ii) the holders of such claims have
failed to allege with the requisite amount of specificity the facts and law
relating to the Claimants' asserted amount for which the Debtors are liable.
Extensions of time within which to respond were granted to
those holders of Asbestos-Related Contribution Claims that requested such
extensions. A significant number of such holders neither responded nor requested
an extension, and, on or about October 27, 1994, the Bankruptcy Court entered an
order disallowing such Claims. On or about July 15, 1996, the Debtors filed with
the Bankruptcy Court a Withdrawal of Objection Without Prejudice, pursuant to
which the Debtors withdrew their objection to the remaining Asbestos-Related
Contribution Claims, without prejudice to the Debtors' right to assert such
objection in the future.
i. IBM CREDIT CORPORATION ADVERSARY PROCEEDING.
On or about April 29, 1994, Eagle-Picher filed with the
Bankruptcy Court a first amended complaint against IBM Credit Corporation ("IBM
Credit"), which sought to avoid, pursuant to section 549 of the Bankruptcy Code,
certain transfers of property of Eagle-Picher's estate made after the Petition
Date (the "IBM Credit Adversary Proceeding").
The IBM Credit Adversary Proceeding related to a series of
transactions occurring prior to the Petition Date between IBM Credit and two
divisions of Eagle-Picher - the Plastics Division and the Technologies Division
(formerly known as the Electronics Division). In the IBM Credit Adversary
Proceeding, Eagle-Picher contended that these transactions, as a whole and as to
each item of equipment and software, constituted financing arrangements pursuant
to which IBM Credit financed Eagle-Picher's purchase of computer equipment
manufactured by IBM Corporation, together with certain add-ons, accessories, and
software relating thereto (the "Computer Equipment"). Eagle-Picher further
contended that, given the nature of the transactions, IBM Credit's interest in
the Computer Equipment was limited to, at best, a security interest. IBM Credit,
however, did not file appropriate financing statements with respect to many
items of the Computer Equipment and, therefore, Eagle-Picher asserted, IBM
Credit had, at most, an Unsecured Claim against Eagle-Picher with respect to
such Computer Equipment.
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<PAGE> 55
Subsequent to the Petition Date, IBM Credit continued to bill
the Plastics and the Technologies Divisions for monthly amounts due with respect
to such transactions. The Plastics Division continued to pay such bills until
February 19, 1993, by which time it had already made an aggregate of $491,959.23
in postpetition payments to IBM Credit. The Technologies Division continued to
pay such bills until March 21, 1994, by which time it had already made an
aggregate of $225,620.71 in postpetition payments to IBM Credit. Eagle-Picher,
in the IBM Credit Adversary Proceeding, sought to recover such payments from IBM
Credit on the grounds that such payments were not authorized by the Bankruptcy
Code or by the Bankruptcy Court.
In its Answer in the Adversary Proceeding, which was filed on
or about May 24, 1994, IBM Credit contended that the transactions that were the
subject of the IBM Credit Adversary Proceeding constitute true leases under
section 365 of the Bankruptcy Code. Consequently, IBM Credit contended (i) that
Eagle-Picher was authorized to continue making payments from and after the
Petition Date in the ordinary course of Eagle-Picher's business, (ii) that
Eagle-Picher was liable for all amounts due under such leases for the
postpetition period in which Eagle-Picher had been using the Computer Equipment,
and (iii) that if Eagle-Picher wished to retain the Computer Equipment, it would
have to assume the leases under section 365(a) of the Bankruptcy Code and pay
all prepetition and remaining postpetition amounts due thereunder.
After conducting certain discovery and engaging in extensive
negotiations, Eagle-Picher and IBM Credit agreed to resolve the IBM Credit
Adversary Proceeding. Pursuant to the settlement agreement into which
Eagle-Picher and IBM Credit entered, in full and complete satisfaction of the
agreements between Plastics and Technologies and IBM Credit (including any
buyout obligations owed by Eagle-Picher as to any "true" leases and satisfaction
of any secured claims relating to properly perfected financing leases), IBM
Credit agreed to pay Eagle-Picher the amount of $200,000, and IBM Credit was
permitted to have an Allowed Unsecured Claim with respect to such agreements in
the amount of $470,000. By order entered on or about December 21, 1994, the
Bankruptcy Court authorized Eagle-Picher to enter into such agreement. IBM
Credit has made the required $200,000 payment to Eagle-Picher.
j. THE U.S. DEPARTMENT OF JUSTICE CLAIM.
On or about July 20, 1988, the United States Department of
Justice filed a complaint against Eagle-Picher in the United States District
Court for the District of New Jersey. In its suit, the United States alleged
that Eagle-Picher overstated the amount of silver required to manufacture
certain silver-zinc batteries and requested money damages in the amount of $28
million. Subsequent to the Petition Date, the Government filed a proof of claim
with the Bankruptcy Court in the amount of $28.7 million. On April 16, 1992,
Eagle-Picher moved for an order approving a settlement reached between the
parties. Pursuant to that settlement, the parties agreed that the government's
claim would be reduced to $4 million as a general unsecured claim. An order
approving that settlement was entered on or about May 21, 1992. Pursuant to the
terms of such settlement, the United States Department of Justice filed an
amended proof of claim on July 13, 1992, in the amount of $4 million.
k. A.D. WEISS/ST. IVES CLAIMS OBJECTION.
By the General Bar Date, St. Ives, Inc. (now known as St. Ives
(USA), Inc.; hereinafter, "St. Ives") and A.D. Weiss Lithograph Company, Inc.
("A.D. Weiss") each filed proofs of claim against Eagle-Picher and certain other
of the Debtors (collectively, the "A.D. Weiss Proofs of Claim"). The A.D. Weiss
Proofs of Claim sought recovery for certain amounts alleged to be due and owing
as a result of Eagle-Picher's sale of the capital stock of A.D. Weiss to St.
Ives on October 2, 1989. Among the various claims asserted was a claim in the
amount of $628,384.00 for
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<PAGE> 56
reimbursement for amounts incurred in connection with the installation of a new
roof on A.D. Weiss's facility in the spring of 1991. A.D. Weiss and St. Ives
each claimed that Eagle-Picher was liable for the full cost of the new roof
because Eagle-Picher allegedly had breached certain representations contained in
its purchase agreement with St. Ives. Moreover, St. Ives and A.D. Weiss asserted
that their claims were secured by a General Escrow Account that was established
in connection with such sale, in the original amount of $4 million.
On or about December 16, 1992, Eagle-Picher and certain other
of the Debtors filed with the Bankruptcy Court an objection to the A.D. Weiss
Proofs of Claim. While discovery was proceeding and certain motions concerning
disputes between the parties regarding the conduct of the litigation were
pending, the parties engaged in extensive negotiations in an attempt to resolve
all the claims of A.D. Weiss and St. Ives in the Chapter 11 Cases. This led to a
compromise and settlement, which was approved by the Bankruptcy Court on or
about July 30, 1993, pursuant to which A.D. Weiss and St. Ives agreed to release
all claims against the Debtors and the General Escrow Account for a payment from
the General Escrow Account in the amount of $250,000 and the continuation of a
certain Environmental Stipulation into which the parties had entered after the
commencement of the Chapter 11 Cases.
l. CONTROLLED POWER COMPANY CLAIMS.
On November 15, 1990, Controlled Power Company ("CPC") filed a
complaint in the United States District Court for the Eastern District of
Michigan alleging that certain batteries that Eagle-Picher provided to it for
use in its uninterrupted power supply systems were defective. The complaint
purported to state causes of action for breach of warranty, breach of contract,
and misrepresentation and sought recovery of alleged damages in the amount of $7
million. Eagle-Picher had not answered the complaint prior to the Petition Date.
Subsequently, on September 30, 1991, CPC filed its proof of claim with the
Bankruptcy Court, asserting a general unsecured claim in the amount of $7
million and attaching a copy of the previously-filed complaint. On June 22,
1993, Eagle-Picher objected to such claim on the grounds that Eagle-Picher's
Limited Warranty governed; that Eagle-Picher had complied in all respects with
the Limited Warranty; that any problems CPC may have experienced with the
batteries were a result of its own misuse and abuse of the batteries; that CPC
had failed to provide Eagle-Picher with a reasonable opportunity to cure any
alleged defects; that CPC's alleged damages were grossly inflated, and that any
claim CPC might have must be offset by the amount owed by it to Eagle-Picher. At
the same time, Eagle-Picher filed a Complaint to Compel Turnover seeking
recovery of $87,556.50 due from CPC.
On August 11, 1993, CPC filed what was styled a "Motion to
Withdraw Reference; to Transfer to the United States District for the Eastern
District of Michigan, Southern Division; and for Relief from Stay." Following
briefing and oral argument, the District Court denied CPC's motion.
The parties agreed to bifurcate the issue of the applicability
and effect of Eagle-Picher's Limited Warranty. Following a period of discovery
limited to this issue, Eagle-Picher filed with the Bankruptcy Court a motion for
summary judgment on the Limited Warranty issue on September 8, 1994. By a
decision and order dated April 27, 1995, the Bankruptcy Court denied such
motion.
In March of 1996, Eagle-Picher and CPC agreed to resolve their
respective claims against each other in exchange for Eagle-Picher granting CPC
an Allowed Unsecured Claim in the Chapter 11 Cases in the amount of $275,000. By
order entered on or about July 30, 1996, such proposed settlement was approved
by the Bankruptcy Court.
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<PAGE> 57
m. TALLMAN POOLS CLAIMS.
The claim of Tallman Pools of Georgia, Inc. ("Tallman Pools")
represented one of the oldest claims outstanding as of the Petition Date. In
September 1978, Eagle-Picher filed a complaint in the Superior Court of Clayton
County, Georgia, against Tallman Pools seeking judgment in the amount of
$36,877.75 for failure to pay for certain materials delivered by Eagle-Picher to
Tallman Pools. On August 26, 1980, Tallman Pools amended its previously-filed
answer and counterclaim, setting forth seven separate causes of action against
Eagle-Picher, ranging from failure of consideration to conspiracy to commit
fraud and seeking judgment against Eagle-Picher in the amount of $7.6 million.
Tallman Pools filed an original claim on October 25, 1991, prior to the General
Claims Bar Date. Tallman Pools again filed a claim on July 10, 1992, more than
eight months after the General Claims Bar Date, increasing the amount of the
claim to the $7.6 million previously sought in the Georgia state litigation. The
debtors initially objected to this subsequent claim as being untimely filed. The
Bankruptcy Court denied the Debtors' motion for summary judgment with respect to
this objection, finding that the July 1992 claim was, in fact, a proper
amendment of the previously-filed timely claim.
On June 24, 1993, Eagle-Picher filed a second objection to
Tallman Pools' claim on the basis that Eagle-Picher had no liability to Tallman
Pools. At the same time it filed this objection, Eagle-Picher commenced an
adversary proceeding against Tallman Pools, seeking recovery of the $36,877.75
due and owing from Tallman Pools for the products purchased by it, which were
never paid for. On August 27, 1993, Tallman Pools filed its response to the
objection and at the same time filed a motion for relief from the automatic
stay. Following extensive motion practice and negotiations between the parties,
Tallman Pools ultimately agreed to withdraw with prejudice its $7.6 million
claim and dismiss the underlying Georgia state court litigation, in
consideration for Eagle-Picher's agreement to dismiss its adversary proceeding
and withdraw its objection to the claim.
14. TRADING IN EAGLE-PICHER'S EXISTING COMMON STOCK.
After Eagle-Picher's announcement on November 10, 1993, of the
Agreement in Principle, the New York Stock Exchange (the "NYSE") suspended
trading in Eagle-Picher's common stock. On November 15, 1993, the NYSE announced
that it would make application to the Securities and Exchange Commission (the
"SEC") to delist the issue. The NYSE indicated that the action was taken because
Eagle-Picher does not meet the NYSE's listing criteria. Since November 30, 1993,
Eagle-Picher's Existing Common Stock has been traded on the Over-the-Counter
market under the symbol "EPIH.U" On June 9, 1994, the NYSE's application to
delist Eagle-Picher's common stock became effective.
15. THE UNSECURED CREDITORS' COMMITTEE'S OBJECTIONS TO CERTAIN
ASBESTOS PERSONAL INJURY CLAIMS.
On or about May 4, 1994, the Unsecured Creditors' Committee
filed objections to approximately 100 asbestos-related personal injury claims
filed against Eagle-Picher (the "UCC's 100 Claims Objections"). In connection
with the UCC's 100 Claims Objections, the Unsecured Creditors' Committee also
sought discovery regarding such claims.
On or about May 13, 1994, the Injury Claimants' Committee
filed a motion with the Bankruptcy Court seeking a stay of the UCC's 100 Claims
Objections (the "Stay Motion"). In the Stay Motion, the Injury Claimants'
Committee requested that the Bankruptcy Court, pursuant to its inherent powers
to control the disposition of cases on its docket and, alternatively, pursuant
to the equitable powers granted it under section 105(a) of the Bankruptcy Code,
stay any and all proceedings on the UCC's 100 Claims Objections and any related
discovery. The Debtors filed a response in support of
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the Stay Motion, and each of the Equity Committee and the Unsecured Creditors'
Committee filed a response in opposition to the Stay Motion.
The Bankruptcy Court conducted a hearing on the Stay Motion on
June 10, 1994. By order dated June 22, 1994, the Bankruptcy Court granted the
Stay Motion (the "Bankruptcy Court Stay Order"). On or about June 30, 1994, the
Unsecured Creditors' Committee filed a Notice of Appeal of the Bankruptcy Court
Stay Order. On or about August 10, 1995, the District Court dismissed the
appeal.
On or about September 19, 1994, the Unsecured Creditors'
Committee filed a motion with the Bankruptcy Court seeking authorization to
object to certain Asbestos Personal Injury Claims on the ground that such Claims
were filed after the Asbestos Bar Date (the "UCC's Late Claims Motion"). The
Equity Committee filed a response in support of the UCC's Late Claims Motion,
while the Debtors, the Injury Claimants' Committee, and the Future Claimants'
Representative each filed a response in opposition thereto. After a hearing on
November 16, 1994, the Bankruptcy Court, by order entered on or about December
21, 1994, denied the UCC's Late Claims Motion.
16. THE 2004 MOTIONS.
On or about May 6, 1994, the Unsecured Creditors' Committee
filed a motion with the Bankruptcy Court seeking permission to conduct certain
examinations under Bankruptcy Rule 2004 (the "UCC's 2004 Motion"). On or about
May 27, 1994, the Equity Committee filed a motion with the Bankruptcy Court
seeking relief similar to that requested in the UCC's 2004 Motion (together with
the UCC's 2004 Motion, collectively referred to as the "Committees' 2004
Motions"). In the Committees' 2004 Motions, the Unsecured Creditors' Committee
and the Equity Committee requested that they be permitted to examine (i.e.,
depose and obtain documents from) every member of Eagle-Picher's board of
directors, certain top officers of Eagle-Picher, and B. Thomas Florence, Ph.D.
(Eagle-Picher's asbestos claims expert) on a wide range of topics, including all
information relating to Asbestos Personal Injury Claims, the Agreement in
Principle, the financial condition of Eagle-Picher, and the Environmental
Settlement Agreement.
On or about June 1, 1994, Eagle-Picher filed a response in
opposition to the Committees' 2004 Motions, in which Eagle-Picher argued that
the Committees' 2004 Motions merely constituted an attempt to harass and
intimidate Eagle-Picher and its officers and directors in an effort to extract
more favorable treatment under a plan of reorganization. On or about June 2,
1994, and June 6, 1994, respectively, the Injury Claimants' Committee and the
Future Claimants' Representative also filed responses in opposition to the
Committees' 2004 Motions.
The Bankruptcy Court conducted a hearing on the Committees'
2004 Motions on June 10, 1994. By order dated June 22, 1994, the Bankruptcy
Court denied the Committees' 2004 Motions (the "Committees' 2004 Order"). Both
the Unsecured Creditors' Committee and the Equity Committee appealed the
Committees' 2004 Order to the District Court, which, at the oral argument on May
25, 1995, issued a ruling from the bench that affirmed the Committees' 2004
Order.
17. THE UNSECURED CREDITORS' COMMITTEE'S DATA GATHERING MOTION.
On or about September 19, 1994, the Unsecured Creditors'
Committee filed a motion with the Bankruptcy Court seeking authorization from
the Bankruptcy Court to initiate data gathering procedures in order to estimate
the Debtors' liability on account of Asbestos Personal Injury Claims (the "UCC's
Data Gathering Motion"). The Equity Committee supported the UCC's Data Gathering
Motion, and the Debtors, the Injury Claimants' Committee, and the Future
Claimants' Representative
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each filed papers in opposition to the UCC's Data Gathering Motion. After a
hearing before the Bankruptcy Court on November 16, 1994, the Bankruptcy Court,
by a decision entered on or about December 1, 1994, deferred the UCC's Data
Gathering Motion and continued the UCC's Data Gathering Motion to the January
18, 1995, hearing before the Bankruptcy Court, at which time the Bankruptcy
Court further deferred consideration of the UCC's Data Gathering Motion.
In the Estimation Order, the Bankruptcy Court ruled that,
because of the depth of information provided by the Debtors' database on
Asbestos Personal Injury Claims that had been liquidated prior to the Petition
Date, reliable information for the valuation of Asbestos Personal Injury Claims
is available without the need for further information. Accordingly, the
Bankruptcy Court denied the UCC's Data Gathering Motion.
18. THE HILLSDALE SUBSTANTIVE CONSOLIDATION PROCEEDING.
On or about August 23, 1995, Smith Factors, Inc., BDS Special
Opportunities Fund, L.P., and Ross Investment Partners, entities that had,
during the Chapter 11 Cases, purchased claims held by certain trade creditors of
Hillsdale, filed with the Bankruptcy Court a complaint seeking declaratory or
injunctive relief that would preclude the use of substantive consolidation as an
element of any plan of reorganization of the Debtors (the "Substantive
Consolidation Complaint"). Under the principles of substantive consolidation,
the assets of all the Debtors are used to satisfy the claims against all the
Debtors. The Plan, in essence, effects a substantive consolidation of the
Debtors' estates.
In their answer to the Substantive Consolidation Complaint,
the Debtors denied the essential allegations of the Substantive Consolidation
Complaint. The Debtors believe that, given the manner in which the Debtors have
conducted their business and in light of the equities, substantive consolidation
is warranted in the Chapter 11 Cases.
The Bankruptcy Court conducted a trial on the Substantive
Consolidation Complaint on March 4, 1996, at the conclusion of which the
Bankruptcy Court reserved ruling. On or about March 15, 1996, the Bankruptcy
Court issued an order and decision, in which the Bankruptcy Court ruled that the
Debtors had met their burden of proving that the substantive consolidation of
Hillsdale and Eagle-Picher was appropriate.
19. THE RESTRUCTURING OF EAGLE-PICHER'S EUROPEAN OPERATIONS.
After extensive consultation with experts in the field of
European taxation issues, in 1996, Eagle-Picher concluded that it could achieve
overall tax savings and could facilitate the efficient movement of capital among
Eagle-Picher's European affiliates by consolidating Eagle-Picher's European
operations (with the exception of Minerals' European operations) under a single
holding company organized under the laws of the Netherlands and 100% owned
directly by Eagle-Picher. As part of such restructuring, Eagle-Picher would
dissolve Eagle-Picher Europe, Inc. (a debtor in the Chapter 11 Cases), transfer
the sole asset of Eagle-Picher Europe, Inc. (its stock in a British company,
Eagle-Picher Fluid Systems Ltd) to Eagle-Picher, and transfer any claims against
Eagle-Picher Europe, Inc. to Eagle-Picher to be satisfied under the Plan. On or
about April 15, 1996, Eagle-Picher filed a motion with the Bankruptcy Court
seeking approval of such restructuring. No objections to such motion were filed,
and, on or about May 14, 1996, the Bankruptcy Court entered an order approving
and authorizing the proposed restructuring. Once the dissolution of Eagle-Picher
Europe, Inc. is effected, Eagle-Picher intends to file a motion with the
Bankruptcy Court seeking the dismissal of the chapter 11 case of Eagle-Picher
Europe, Inc.
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V. THE PLAN OF REORGANIZATION
The Plan Proponents believe that (i) through the Plan,
Claimants will obtain a substantially greater recovery from the estates of the
Debtors than the recovery that would be available if the assets of the Debtors
were liquidated under chapter 7 of the Bankruptcy Code, and (ii) the Plan will
afford the Debtors the opportunity and ability to continue in business as viable
going concerns and thereby preserve ongoing employment for the Debtors'
employees.
The Plan is annexed hereto as Exhibit "A" and forms a part of
this Disclosure Statement. The summary of the Plan set forth below is qualified
in its entirety by the more detailed provisions set forth in the Plan.
A. CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS.
The Plan classifies Claims and Equity Interests separately and
provides different treatment for different classes of Claims and Equity
Interests in accordance with the Bankruptcy Code. As described more fully below,
the Plan provides, separately for each class, either that Claims are unimpaired
or that holders of Claims and Equity Interests will receive various types of
consideration (e.g., cash, recourse to the PI Trust or the Asbestos PD Trust,
notes, and/or New Eagle-Picher Common Stock) or no distribution, thereby giving
effect to the different rights of the holders of Claims and Equity Interests of
each class.
1. ADMINISTRATIVE EXPENSES.
"Administrative Expenses" are Claims constituting a cost or
expense of administration of the Chapter 11 Cases allowed under section 503(b)
of the Bankruptcy Code. Such Claims include any actual and necessary costs and
expenses of preserving the estates of the Debtors, any actual and necessary
costs and expenses of operating the businesses of the Debtors in Possession, any
indebtedness or obligations incurred or assumed by the Debtors in Possession in
connection with the conduct of their business, the acquisition or lease of
property, or the rendition of services, any allowance of compensation and
reimbursement of expenses to the extent allowed by a Final Order under section
330 of the Bankruptcy Code, and fees or charges assessed against the estates of
the Debtors under section 1930 of title 28 of the United States Code.
Pursuant to the Plan, an Administrative Expense will be paid
in full, in cash, on the later of the Effective Date and the date such
Administrative Expense becomes Allowed, or as soon thereafter as is practicable.
Allowed Administrative Expenses representing obligations incurred in the
ordinary course of business by the Debtors in Possession (including amounts owed
to vendors and suppliers that have sold goods or furnished services to the
Debtors in Possession since the Petition Date) will be assumed and paid by the
Reorganized Debtors in accordance with the terms and conditions of the
particular transactions and any agreements relating thereto.
Aside from those Administrative Expenses that will be paid in
the ordinary course of business, the Debtors estimate that, on the Effective
Date, they will have Allowed Administrative Expenses in the following
approximate amounts:
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<TABLE>
<CAPTION>
NATURE OF CLAIMS ESTIMATED AMOUNT
---------------- ----------------
<S> <C>
Reclamation claims of
prepetition vendors $ 252,000.00
Unpaid fees and expenses
of professionals retained
in the Chapter 11 Cases $3,000,000.00
Costs relating to
post-reorganization
financing $ 200,000.00
DIP Credit Facility Claim(2)
Loan Principal $ 0.00
Cash posted to
secure repayment of
letters of credit $ 0.00
Miscellaneous Administrative
Expenses $ 200,000.00
=============
TOTAL $3,652,000.00
</TABLE>
All payments to professionals for compensation and
reimbursement of expenses and all payments to reimburse expenses of members of
the Committees and the Future Claimants' Representative will be made in
accordance with the procedures established by the Bankruptcy Code, the
Bankruptcy Rules, and the Bankruptcy Court relating to the payment of interim
and final compensation and expenses. The Bankruptcy Court will review and
determine all requests for compensation and reimbursement of expenses.
In addition to the foregoing, section 503(b) of the Bankruptcy
Code provides for payment of compensation to creditors, indenture trustees, and
other persons making a "substantial contribution" to a reorganization case and
to attorneys for and other professional advisers to such persons. The amounts,
if any, that may be sought by entities for such compensation are not known by
the Plan Proponents at this time. Requests for compensation must be approved by
the Bankruptcy Court after a hearing on notice at which the Debtors and other
parties in interest may participate and, if appropriate, object to the allowance
of any compensation and reimbursement of expenses.
2. TAX CLAIMS.
- --------
(2) Under the terms of the DIP Credit Facility, the DIP Credit Facility
terminates upon the earlier to occur of (i) an event of termination and (ii)
December 31, 1998. The occurrence of the Effective Date of the Plan will give
rise to an event of termination. Upon termination, the DIP Credit Facility Claim
must be paid in full, in cash. As of the date hereof, no loans have been
advanced to the Debtors under the DIP Credit Facility. In addition, upon
termination, the Debtors are required to pay to NBD, as the agent bank, cash in
an amount equal to the face amount of any letters of credit issued pursuant to
the DIP Credit Facility and outstanding as of such date, which cash will be held
by NBD for the repayment of all amounts that may become due in respect of such
letters of credit. As of May 31, 1996, letters of credit in the aggregate face
amount of approximately $31.1 million are issued and outstanding. It is a
condition to the occurrence of the Effective Date, however, that the Reorganized
Debtors shall have entered into a reorganized credit facility to provide the
Reorganized Debtors with working capital (including letters of credit) in an
amount sufficient to meet the needs of the Reorganized Debtors, as determined by
the Reorganized Debtors. Whether such reorganized credit facility is with the
DIP Lenders or other lenders, the Reorganized Debtors intend to have the letters
of credit issued under the DIP Credit Facility replaced so that the Debtors will
not have to post any cash with NBD.
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"Tax Claims" are those Claims for taxes entitled to priority
in payment under section 507(a)(8) of the Bankruptcy Code. The Debtors estimate
that the amount of Allowed Tax Claims is approximately $2,944,700.00. The
following summarizes the types of Allowed Tax Claims that comprise the Debtors'
estimate:
<TABLE>
<CAPTION>
ESTIMATED
TYPE AMOUNT
---- ---------
<S> <C>
Income taxes $ 71,900.00
Real and personal property taxes $2,394,800.00
Employment and other taxes $ 478,000.00
============
TOTAL $2,944,700.00
</TABLE>
Under the Plan, each holder of an Allowed Tax Claim will be
paid (a) the Allowed Amount of its Allowed Tax Claim in full, in cash, on the
later of the Effective Date and the date such Tax Claim becomes an Allowed
Claim, or as soon thereafter as is practicable, or (b) upon such other terms as
may be mutually agreed upon between each holder of a Tax Claim and the
Reorganized Debtor.
3. CLASS 1: PRIORITY CLAIMS.
The "Priority Claims" consist of those Claims that are
entitled to priority in accordance with section 507(a) of the Bankruptcy Code,
other than Administrative Expenses and Tax Claims. Such Claims include (i)
unsecured claims for accrued employee compensation earned within ninety (90)
days prior to the Petition Date to the extent of $2,000 for each employee and
(ii) contributions to employee benefit plans arising from services rendered
within one hundred eighty (180) days prior to the Petition Date, but only for
each such plan to the extent of (x) the number of employees covered by such plan
multiplied by $2,000, less (y) the aggregate amount paid to such employees from
the estates for wages, salaries, or commissions.(3) On or before the General Bar
Date, Metropolitan Life Insurance Company filed a proof of claim based upon its
provision of employee benefits to the Debtors' employees. Such proof of claim,
as amended, sought treatment as a Priority Claim for $61,438.00 of the total of
$523,240.00 claimed therein. The Debtors have agreed to treat such portion of
the Claim as an Allowed Priority Claim. Other than such Claim, because the
Debtors obtained orders from the Bankruptcy Court that allowed the Debtors to
satisfy their employee benefit obligations during the pendency of the Chapter 11
Cases, the Debtors believe that no unpaid Priority Claims exist.
Pursuant to the Plan, the holder of an Allowed Priority Claim
will be paid in full, in cash, on the later of the Effective Date and the date
such Priority Claim becomes an Allowed Claim, or as soon thereafter as is
practicable. Priority Claims are unimpaired under the Plan.
4. CLASS 2: AMPLICON LEASE SECURED CLAIM.
The "Amplicon Lease Secured Claim" is the Claim under (a) a
Lease Agreement, dated February 2, 1990, between Transicoil and Amplicon, Inc.
("Amplicon") and Schedule No. 1
- --------
(3) Amendments to the Bankruptcy Code in 1994, inter alia, increased this
amount to $4,000; because the Chapter 11 Cases already were pending at the time
of such amendments, the increased amount does not apply in the Chapter 11 Cases.
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thereto and (b) a Lease Guaranty, dated February 2, 1990, by Eagle-Picher, as
guarantor, in the original principal amount of $239,087.00. On or about April 9,
1990, Amplicon assigned all of its rights under such transaction to Societe
Generale Financial Corporation ("Societe Generale").
The Amplicon Lease Secured Claim is secured by certain assets
of Transicoil. On or about October 21, 1992, the Bankruptcy Court approved a
Stipulation and Order for Adequate Protection between Transicoil, Eagle-Picher,
and Societe Generale (the "Societe Generale Stipulation"). Pursuant to the
Societe Generale Stipulation, the value of the Amplicon Lease Secured Claim was
fixed at $200,633.51 (which was the balance owed on the Amplicon Lease Secured
Claim as of the Petition Date) for all purposes in the Chapter 11 Cases.
Effective June 1, 1992, Eagle-Picher has been making quarterly adequate
protection payments to Societe Generale on account of the Amplicon Lease Secured
Claim in the amount of $5,015.00, which payments have been applied, dollar for
dollar, to reduce the Amplicon Lease Secured Claim. As of May 31, 1996, the
Amplicon Lease Secured Claim totalled $115,378.51, and no Unsecured Claim was
owing with respect to any deficiency thereunder.
Under the Plan, the Amplicon Lease Secured Claim will be
unimpaired in accordance with the provisions of section 1124 of the Bankruptcy
Code. Under that provision, a Claim is unimpaired if the Plan provides for one
of the following three treatments:(4)
(1) The legal, equitable, and contractual rights to
which the holder of a Claim is entitled are unaltered.
or
(2) Notwithstanding any contractual provision or
applicable law that entitles the holder of a Claim to demand
or receive payment of such Claim prior to the stated maturity
of such Claim from and after the occurrence of a default under
the agreements governing or instruments evidencing the Claim,
the Claim is reinstated, and (i) all defaults that occurred
before or from and after the Petition Date (other than
defaults of a kind specified in section 365(b)(2) of the
Bankruptcy Code) are cured, (ii) the maturity of the Claim is
reinstated as such maturity existed prior to the occurrence of
such default, (iii) the holder of such Claim is compensated
for any damages incurred as a consequence of any reasonable
reliance by such holder on such contractual provision or such
applicable law, and (iv) the legal, equitable, or contractual
rights to which the holder of the Claim is entitled are
unaltered.
or
(3) On the Effective Date of the Plan, the holder of
the Claim is paid the Allowed Amount of the Claim, in full, in
cash.
The Debtors may, in their sole discretion, elect one of the foregoing methods of
treatment for the Amplicon Lease Secured Claim. As of the date hereof, they
intend to elect the third option and pay the Amplicon Lease Secured Claim in
full, in cash, on the Effective Date. Based upon an assumed
- --------
(4) Amendments to the Bankruptcy Code in 1994, inter alia, eliminated the
third method as a means of leaving a Claim unimpaired; because the Chapter 11
Cases already were pending at the time of such amendments, this amendment does
not apply to the Chapter 11 Cases.
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Effective Date of December 1, 1996, the Debtors estimate that the Amplicon Lease
Secured Claim will equal $105,348.51 as of the Effective Date.
5. CLASS 3: CONNECTICUT MUTUAL NOTE SECURED CLAIM.
The "Connecticut Mutual Note Secured Claim" is the Claim under
(a) a Note in the original principal amount of $6,114,559.00 issued by Hillsdale
to Connecticut Mutual Life Insurance Company ("Connecticut Mutual") on or about
July 29, 1988, (b) an Agreement, dated July 29, 1988, between Hillsdale and
Connecticut Mutual, and (c) a Security Agreement, dated July 29, 1988, made by
Hillsdale in favor of Connecticut Mutual.
The Connecticut Mutual Note Secured Claim is secured by
certain assets of Hillsdale. On or about November 25, 1991, the Bankruptcy Court
approved a Stipulation and Order for Adequate Protection between Hillsdale and
Connecticut Mutual (the "Connecticut Mutual Stipulation"). Pursuant to the
Connecticut Mutual Stipulation, the Connecticut Mutual Note Secured Claim was
fixed at $4,200,000.00 for all purposes in the Chapter 11 Cases. The Connecticut
Mutual Note Secured Claim, however, has been reduced by monthly adequate
protection payments made by Eagle-Picher under the Connecticut Mutual
Stipulation, commencing as of July 1, 1991, in the amount of $35,000.00 each. As
of May 31, 1996, the Connecticut Mutual Note Secured Claim totalled
$2,135,000.00, and Connecticut Mutual held an Unsecured Claim against Hillsdale
on account of its deficiency claim in the amount of $927,100.60.
Under the Plan, the holder of the Connecticut Mutual Note
Secured Claim will retain the liens securing the Connecticut Mutual Note Secured
Claim and, on the Effective Date, will receive a note, with a maturity date of
June 1, 2001, that will bear interest at the rate of 10.0% per annum, will have
a principal amount equal to the full amount of the Connecticut Mutual Note
Secured Claim as of the Effective Date, and that will provide for equal monthly
payments of principal and interest in an amount sufficient to fully amortize the
principal amount of the note over the term of such note. Based upon an assumed
Effective Date of December 1, 1996, the Debtors estimate that the Connecticut
Mutual Note Secured Claim will equal $1,925,000.00 as of the Effective Date. The
Connecticut Mutual Note Secured Claim is impaired under the Plan. The Unsecured
Claim for the deficiency amount will be treated under Class 20.
6. CLASS 4: DESIGNATED REAL PROPERTY TAX CLAIM.
The "Designated Real Property Tax Claim" consists of the in
rem tax obligations to the county taxing authorities in connection with the
parcel of property located in Lake County, Ohio, and referred to as Parcel No.
27-B-040-0-00-001-0. All prepetition real estate taxes were satisfied in
connection with Eagle-Picher's sale of certain assets of its now-defunct Mat
Division, but additional obligations may remain as a result of postpetition
taxes accruing.
Under the Plan, the Designated Real Property Tax Claim will be
satisfied by giving the holder of such Claim the collateral securing such Claim.
If, however, Eagle-Picher sells the collateral securing the Designated Real
Property Tax Claim prior to the Effective Date, the Designated Real Property Tax
Claim will be paid in full, in cash, on the date of such sale. Such collateral -
the real property parcel as to which the taxes are owed - is contaminated with
hazardous substances. As a result, Eagle-Picher believes that such property has
no value to Eagle-Picher's estate.
The Designated Real Property Tax Claim is impaired under the
Plan.
7. CLASS 5: FIRST FIDELITY LEASE SECURED CLAIM.
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The "First Fidelity Lease Secured Claim" is the secured
portion of the Claim under a certain Master Lease Finance Agreement, dated
October 31, 1990, between Eagle-Picher and the First Fidelity Leasing Group,
Inc. (the "First Fidelity Group") in the original principal amount of
$156,869.86.
The First Fidelity Lease Secured Claim is secured by certain
equipment owned by Transicoil. On or about March 16, 1992, the Bankruptcy Court
approved a Stipulation and Order Settling Motions of First Fidelity Group (the
"First Fidelity Stipulation"). In the First Fidelity Stipulation, Eagle-Picher
and the First Fidelity Group agreed that the value of the collateral securing
the First Fidelity Lease Secured Claim, solely for the purposes of determining
adequate protection payments, was $80,000.00 as of November 1, 1991. Commencing
as of November 1, 1991, Eagle-Picher has been making adequate protection
payments of $1,333.33 a month with respect to the First Fidelity Lease Secured
Claim. As of May 31, 1996, after deducting such adequate protection payments,
the aggregate Claim of the First Fidelity Group was $77,599.82, of which, in
Eagle-Picher's view, $6,666.83 constitutes the First Fidelity Lease Secured
Claim, and $70,932.99 constitutes an Unsecured Claim with respect to the
deficiency thereon.
Based upon an assumed Effective Date of December 1, 1996, the
Debtors estimate that the First Fidelity Lease Secured Claim will have been
repaid in full as of the Effective Date. Therefore, the First Fidelity Lease
Secured Claim is not impaired under the Plan. The Unsecured Claim for the
deficiency amount will be treated under Class 20.
8. CLASS 6: FLEET CREDIT SECURED CLAIM.
The "Fleet Credit Secured Claim" is the secured portion of the
Claim under certain equipment schedules, dated January 25, 1988, May 19, 1988,
and May 24, 1988, respectively, between MARCO and Fleet Credit Corporation
("Fleet") in the original principal amount of $707,877.00.
On or about July 20, 1992, the Bankruptcy Court approved a
Stipulation and Order between MARCO and Fleet (the "Fleet Stipulation"). In the
Fleet Stipulation, MARCO and Fleet agreed to fix the Fleet Credit Secured Claim
at $225,000.00 for all purposes in the Chapter 11 Cases. The Fleet Credit
Secured Claim, however, is reduced by monthly adequate protection payments in
the amount of $4,687.50 made by Eagle-Picher to Fleet under the Fleet
Stipulation, effective as of September 1, 1991. As of May 31, 1996, the Fleet
Credit Secured Claim had been repaid in full, and an Unsecured Claim in the
amount of $152,280.03 existed with respect to the deficiency.
Because the Fleet Credit Secured Claim had been repaid in
full, the Fleet Credit Secured Claim is not impaired under the Plan. The
Unsecured Claim for the deficiency amount will be treated under Class 20.
9. CLASS 7: GE CAPITAL SECURED CLAIM.
The "GE Capital Secured Claim" is equal to $22,454.89. The
claim arises from the secured financing by General Electric Capital Corporation
("GECC") of a forklift acquired by Eagle-Picher's Plastics Division. As of the
Petition Date, the balance owed by Eagle-Picher to GECC on account of such
financing was approximately $85,000. Subsequent to the Petition Date,
Eagle-Picher continued to make payments to GECC on account of such financing,
with such payments totalling $52,545.11.
On or about March 22, 1993, Eagle-Picher commenced an action
against GECC to recover, inter alia, the payments made to GECC subsequent to the
Petition Date pursuant to section
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549 of the Bankruptcy Code. On or about January 18, 1994, the Bankruptcy Court
approved a Stipulation and Order of Dismissal between Eagle-Picher and GECC,
pursuant to which (i) the parties agreed that the fair market value of the
equipment securing the GE Capital Secured Claim was $75,000 on the Petition Date
and represented the entire amount of the GE Capital Secured Claim, (ii) the
aggregate postpetition payments made by Eagle-Picher to GECC were credited
dollar for dollar against the GE Capital Secured Claim, and (iii) GECC waived
any right to seek any fees, interests, or other charges under section 506(b) of
the Bankruptcy Code.
Under the Plan, the GE Capital Secured Claim will be paid in
full, in cash, on the Effective Date. The GE Capital Secured Claim, therefore,
is unimpaired.
10. CLASS 8: GROVE IRB CLAIM.
The "Grove IRB Claim" is the Claim under a Note, dated August
8, 1989, from Eagle-Picher to the Industrial Development Authority of Grove,
Oklahoma (the "Grove IDA"), in the original principal amount of $450,000.00,
which relates to the financing by the Grove IDA of the acquisition of a
manufacturing facility for the Commercial Products Department of the
Technologies Division in Grove, Oklahoma (the "Grove Plant"). The repayment of
the Grove IRB Claim is secured by the Grove Plant, pursuant to a Mortgage, dated
August 3, 1989, from Eagle-Picher to the Grove IDA.
As of May 31, 1996, the Grove IRB Claim totalled $408,612.80,
plus accrued interest. Under the Plan, the Grove IRB Claim will be paid in full,
in cash, on the Effective Date. Therefore, the Grove IRB Claim is unimpaired
under section 1124 of the Bankruptcy Code.
11. CLASS 9: IBM CREDIT CORPORATION SECURED CLAIM.
The "IBM Credit Corporation Secured Claim" represents the
secured portion of the Claim under that certain Term Lease Master Agreement No.
2HOAO43 between The Ohio Rubber Co., a former division of Eagle-Picher, and IBM
Credit, dated May 16, 1989, and the related Term Lease Supplements thereto (the
"Mat Leases").
On or about January 15, 1992, the Bankruptcy Court approved a
Stipulation and Order between Eagle-Picher and IBM Credit with respect to the
Mat Leases (the "Mat Stipulation"), pursuant to which Eagle-Picher, commencing
November 1, 1991, has been making monthly adequate protection payments of
$1,545.45. Eagle-Picher and IBM Credit agreed in the Mat Stipulation that the
value of the collateral under the Mat Leases, as of November 1, 1991, was
$68,000.00, but solely for the purposes of the Mat Stipulation. As of May 31,
1996, after deducting the adequate protection payments made by Eagle-Picher to
IBM Credit, the aggregate Claim with respect to the Mat Leases was $446,230.87,
of which, for purposes of the Plan, the Plan Proponents are treating the IBM
Credit Secured Claim as having been fully repaid, and $446,230.87 as an
Unsecured Claim for the deficiency amount.
Because the IBM Credit Corporation Secured Claim has been
repaid in full, the IBM Credit Corporation Secured Claim is not impaired under
the Plan. The Unsecured Claim for the deficiency amount will be treated under
Class 20.
12. CLASS 10: INTER-MARKET NOTE SECURED CLAIM.
The "Inter-Market Note Secured Claim" represents the secured
portion of the claim under that certain (a) Note Agreement, dated July 7, 1988,
between Inter-Market Capital Corporation and Eagle-Picher, (b) 9.8820%
Promissory Note issued by Eagle-Picher to New England Mutual Life
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Insurance Company ("New England Mutual") on or about July 7, 1988, in the
original principal amount of $4,050,018.26, and (c) Security Agreement, dated
September 14, 1989, between Hillsdale, as grantor and guarantor, and New England
Mutual, as lender and secured party.
The Inter-Market Note Secured Claim is secured by certain
assets of Hillsdale. On or about April 7, 1992, the Bankruptcy Court approved a
Stipulation and Order with respect to the foregoing agreements and instruments
(the "New England Mutual Stipulation"), pursuant to which the parties agreed to
fix the Inter-Market Note Secured Claim at $2,286,500.00 for all purposes in the
Chapter 11 Cases. The Inter-Market Note Secured Claim, however, is reduced by
monthly adequate protection payments in the amount of $19,054.17 made by
Eagle-Picher under the New England Mutual Stipulation, effective as of July 1,
1991. Pursuant to the New England Mutual Stipulation, such adequate protection
payments terminated as of April 1, 1994.
Pursuant to an Assignment Agreement dated as of January 31,
1994, New England Mutual assigned to B.R. Stickle & Co. all of its rights with
respect to the Inter-Market Note Secured Claim and the Unsecured Claim relating
to the deficiency. Pursuant to a second Assignment Agreement dated as of January
31, 1994, these Claims were assigned to certain affiliates of Morgens,
Waterfall, Vintiadis & Company, Inc. (the "MWV Affiliates").
By letter dated October 31, 1994, the MWV Affiliates sought
from Hillsdale and Eagle-Picher additional adequate protection payments.
Pursuant to a Stipulation Providing Adequate Protection of Interests of Certain
Affiliates of Morgens, Waterfall, Vintiadis & Company, Inc., which was approved
by the Bankruptcy Court by order entered on or about February 14, 1995 (the "MWV
Affiliates Stipulation"), Hillsdale and Eagle-Picher are required to make
monthly adequate protection payments to the MWV Affiliates in the amount of
$20,230.35, retroactive to October 1, 1994. As of May 31, 1996 (and after taking
into account the retroactive payments under the MWV Affiliates' Stipulation),
the Inter-Market Note Secured Claim was equal to $1,234,051.22, and the
deficiency claim constituted an Unsecured Claim in the amount of $891,723.30.
Under the Plan, the holder of the Inter-Market Note Secured
Claim will retain the liens securing the Inter-Market Note Secured Claim and, on
the Effective Date, will receive a note, with a maturity date of June 1, 2001,
that will have a principal amount equal to the full amount of the Inter-Market
Note Secured Claim as of the Effective Date, will bear interest at the rate of
10.0% per annum, and will provide for equal monthly payments of principal and
interest in an amount sufficient to fully amortize the principal amount of the
note over the term of such note. Based upon an assumed Effective Date of
December 1, 1996, the Debtors estimate that the Inter-Market Note Secured Claim
will equal $1,112,669.12 as of the Effective Date. The Inter-Market Note Secured
Claim is impaired under the Plan. The Unsecured Claim for the deficiency amount
will be treated under Class 20.
13. CLASS 11: LEESBURG SECURED CLAIM.
The "Leesburg Secured Claim" represents the claim under (a)
that certain note, dated as of October 4, 1977, from William Robert Jacobsen to
Sun First National Bank of Leesburg, as Trustee of the J.D. Manly Construction
Company, and (b) mortgage, dated October 4, 1977 (as amended), which note and
mortgage were assumed by Eagle-Picher pursuant to a certain Real Estate
Agreement, dated as of May 18, 1979, between Eagle-Picher and William R.
Jacobsen. The manufacturing facility for the Wolverine Gasket Division's plant
in Leesburg, Florida (to the extent it constitutes real property) is the
collateral for the Leesburg Secured Claim.
As of May 31, 1996, the Leesburg Secured Claim totalled
$98,382.90 plus accrued interest. Under the Plan, the Leesburg Secured Claim
will be paid in full, in cash, on the Effective Date. Therefore, the Leesburg
Secured Claim is unimpaired under the Plan.
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14. CLASS 12: NORTHWESTERN GROUP SECURED CLAIMS.
The "Northwestern Group Secured Claims" represent the secured
portion of the claims under that certain (a) Note Purchase Agreement, dated
April 21, 1989, between Eagle-Picher and the Northwestern Group and (b) Security
Agreement, dated April 21, 1989, executed by Eagle-Picher in favor of the
Northwestern Group.
The Northwestern Group Secured Claims are secured by certain
assets of the Plastics Division and the Wolverine Gasket Division. On or about
May 9, 1991, the Bankruptcy Court approved a Stipulation and Order (the
"Northwestern Stipulation"), pursuant to which the value of the collateral
securing the Northwestern Group Secured Claims, as of March 12, 1991, was set at
$7,411,088, but solely for the purposes of the Northwestern Stipulation.
Pursuant to the Northwestern Stipulation, Eagle-Picher agreed to make monthly
adequate protection payments over a period of 120 months based upon a formula
set forth in the Northwestern Stipulation. As of May 31, 1996, after deducting
the adequate protection payments made by Eagle-Picher under the Northwestern
Stipulation, the Northwestern Group Secured Claims, in Eagle-Picher's view,
totalled $3,378,290.00, and deficiency claims on account thereof in the
aggregate amount of $1,546,907.11 constituted Unsecured Claims.
The current holders of the Northwestern Group Secured Claims
have advised Eagle-Picher that they dispute Eagle-Picher's view of the value of
the collateral securing the Northwestern Group Secured Claims. In the view of
the current holders, the value of the collateral exceeds the total outstanding
amount of debt owed to such holders on account of such claims. In their view,
the Northwestern Group Secured Claims are fully secured and there is no
deficiency claim. The current holders of the Northwestern Group Secured Claims
and Eagle-Picher are currently engaged in discussions to attempt to resolve the
valuation dispute as well as the treatment of the Northwestern Group Secured
Claims under the Plan. While the parties hope to resolve these disputes without
resort to the Bankruptcy Court, in the event that the parties are unable to
reach a resolution, the Bankruptcy Court will be required to determine the value
of the Northwestern Group Secured Claims.
Under the Plan, the holders of the Northwestern Group Secured
Claims will retain the liens securing the Northwestern Group Secured Claims and
will receive notes, with a maturity date of May 1, 2001, that will have an
aggregate principal amount equal to the full amount of the Northwestern Group
Secured Claims as of the Effective Date, will bear interest at the rate of 10.0%
per annum, and will provide for equal monthly payments of principal and interest
in an amount sufficient to fully amortize the principal amount of the notes over
the term of such notes. Based upon an assumed Effective Date of December 1,
1996, the Debtors estimate that the Northwestern Group Secured Claims will equal
$3,006,722.00, in the aggregate, as of the Effective Date. The Northwestern
Group Secured Claims are impaired under the Plan. The Unsecured Claims for the
deficiency amounts will be treated under Class 20.
15. CLASS 13: VALE EDBS CLAIMS.
The "Vale EDBs Claims" represent the Secured Claims arising
under those certain $10,000,000 in original principal amount of Economic
Development Bonds, Series XCVI, issued by the State of Oregon Economic
Development Commission to finance the construction in Harney and Malheur
Counties of Oregon of certain Minerals facilities (the "Vale EDBs").
The Vale EDBs Claims are secured, inter alia, by a letter of
credit in the amount of $11,166,666.67. On or about February 26, 1991, the
Bankruptcy Court entered an order authorizing Eagle-Picher to continue making
payments on the Vale EDBs in order to prevent a draw on such letter
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of credit. As of the date hereof, the aggregate principal amount of the Vale
EDBs Claims totalled $10,000,000.
Under the Plan, the Vale EDBs will be reinstated under section
1124(2) of the Bankruptcy Code. Therefore, the Vale EDBs Claims are unimpaired
under the Plan. Moreover, because Eagle-Picher has remained current on its
obligations under the Vale EDBs, no amounts are payable by Eagle-Picher to cure
any defaults under the Vale EDBs.
16. CLASS 14: OTHER SECURED CLAIMS.
"Other Secured Claims" are the Claims against any of the
Debtors to the extent of the value of any interest in property of the estate of
such Debtor securing such Claim, except for the DIP Credit Facility Claim and
the Claims treated in Classes 3 through 13, inclusive. The class of Other
Secured Claims includes the Secured Claims of governmental taxing authorities
for real and personal property taxes, the aggregate amount of which totalled
$983,000.00 as of the Petition Date. It also includes certain miscellaneous
Secured Claims for items such as utilities and mechanic's liens, the aggregate
amount of which totalled $83,586.00 as of the Petition Date. The Debtors intend
to pay these Other Secured Claims, in full, in cash, on the Effective Date, with
any interest accruing after the Petition Date accruing at the rate of 8% per
annum.
As of the date hereof, the Debtors are not aware of any
additional Other Secured Claims. Therefore, if any additional Other Secured
Claims are determined to exist, the Debtors believe that the value of such Other
Secured Claims will be de minimis.
The Other Secured Claims will be rendered unimpaired under the
Plan pursuant to section 1124 of the Bankruptcy Code.
Although the Other Secured Claims are placed in one category
for purposes of convenience, each Other Secured Claim shall be treated as though
in a separate class for purposes of voting and receiving distributions under a
Plan.
17. CLASS 15: CONVENIENCE CLAIMS.
"Convenience Claims" are those Unsecured Claims that otherwise
would be classified in Class 20, but which are either (i) in an amount less than
or equal to $500.00 or (ii) on the Ballot, have been reduced to $500.00 by the
holders of such Claims.
The Debtors estimate that the Allowed Convenience Claims will
aggregate $980,083.00. The Debtors estimate that Allowed Unsecured Claims of
$500.00 or less total $402,083.00. Moreover, the Debtors estimate that 739
Claimants hold Allowed Unsecured Claims between $501.00 to $1,000.00, and 417
Claimants hold Allowed Unsecured Claims between $1,001.00 to $1,500.00. In their
estimate, the Debtors have assumed that all such Claimants will elect to have
their Unsecured Claims treated as Convenience Claims. Moreover, Claimants
holding Allowed Unsecured Claims in excess of $1,500.00 may elect to have their
Allowed Unsecured Claims treated as Convenience Claims. The Debtors cannot
estimate how many of these Claimants will elect to have their Allowed Unsecured
Claims treated as Convenience Claims and have not included any of such Claims in
their estimate.
Pursuant to the Plan, each holder of an Allowed Convenience
Claim shall be paid the Allowed Amount of its Allowed Convenience Claim in cash
on the later of the Effective Date and the date such Claim becomes an Allowed
Claim, or as soon thereafter as is practicable.
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18. CLASS 16: ASBESTOS PROPERTY DAMAGE CLAIMS.
"Asbestos Property Damage Claims" are those Claims against any
of the Debtors for damages arising from the presence in buildings or other
structures of asbestos or asbestos-containing products that was or were
manufactured, sold, supplied, produced, distributed, or in any way marketed by
any of the Debtors. The term, however, does not include Claims for
reimbursement, contribution, indemnification, or subrogation on account of
Asbestos Property Damage Claims, which Claims are treated as Unsecured Claims in
Class 20.
Under the Plan, all Asbestos Property Damage Claims will be
channeled to the Asbestos PD Trust, which will be established pursuant to the
Asbestos PD Trust Agreement. The allowance and payment of individual Asbestos
Property Damage Claims will be handled by the Asbestos PD Trust, subject to the
terms and conditions imposed on the Asbestos PD Trust by the Plan. The time and
manner of funding the Asbestos PD Trust, the means by which trustees for the
Asbestos PD Trust will be selected, and the procedures that will determine the
allowance of individual Asbestos Property Damage Claims will depend upon whether
Class 16 votes to accept the Plan or whether Class 16 votes to reject the Plan.
The sole recourse of the holder of an Asbestos Property Damage
Claim shall be the Asbestos PD Trust, and, as a result of the general discharge
provided for the Debtors under section 524 of the Bankruptcy Code, all entities
shall be permanently and forever enjoined from taking any actions for the
purpose of, directly or indirectly, collecting, recovering, or receiving payment
of, on, or with respect to any Asbestos Property Damage Claims from the
Reorganized Debtors (or their assets and properties), other than actions brought
to enforce any right or obligation under the Plan, any Exhibits to the Plan, or
any other agreement or instrument between any of the Debtors or the Reorganized
Debtors and the Asbestos PD Trust.
Moreover, the Confirmation Order will contain the Claims
Trading Injunction, which will prohibit the trading (and any other form of
assignment, pledge, or transfer) of, inter alia, Asbestos Property Damage Claims
after the Effective Date. Any action taken in violation of the Claims Trading
Injunction will be void ab initio. The Claims Trading Injunction will not,
however, prohibit the transfer of an Asbestos Property Damage Claim (i) to the
holder of an Asbestos Property Damage Contribution Claim solely as a result of
such holder's satisfaction of such Asbestos Property Damage Claim or (ii) by
will or under the laws of descent and distribution.
a. EFFECT OF ACCEPTANCE OF THE PLAN BY CLASS 16.
If Class 16 votes to accept the Plan, then, on the Effective
Date, the Reorganized Debtors will satisfy the Asbestos PD Trust Funding
Obligation by distributing $3 million in cash to the Asbestos PD Trust.
Moreover, if Class 16 votes to accept the Plan, the trustees of the Asbestos PD
Trust will be selected by the representatives of the largest groups of holders
of Asbestos Property Damage Claims themselves - the class representative for
each group that purported to file a class proof of claim with respect to
Asbestos Property Damage Claims so long as such class claim is still outstanding
as of the Effective Date. Each of these class representatives will select one
trustee for the Asbestos PD Trust. These trustees, in turn, will devise claims
resolution procedures to determine the allowance and payment of Asbestos
Property Damage Claims.
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b. EFFECT OF REJECTION OF THE PLAN BY CLASS 16.
If, on the other hand, Class 16 votes to reject the Plan, then
the Asbestos PD Trust Funding Obligation will consist of Senior Unsecured
Sinking Fund Debentures in an aggregate amount equal to the Asbestos PD Trust's
Pro Rata Share of the Distribution Value, based upon the estimation by the
Bankruptcy Court of the aggregate value of Asbestos Property Damage Claims
against the Debtors as of the Petition Date. THE DEBTORS BELIEVE THEY HAVE NO
MATERIAL LIABILITY FOR ASBESTOS PROPERTY DAMAGE CLAIMS AND INTEND TO REQUEST THE
BANKRUPTCY COURT TO ESTIMATE THE AGGREGATE VALUE OF ASBESTOS PROPERTY DAMAGE
CLAIMS AT $0 IF CLASS 16 VOTES TO REJECT THE PLAN. It is a condition to the
occurrence of the Effective Date, however, that the Bankruptcy Court determines
the aggregate value of Asbestos Property Damage Claims to be no greater than $15
million. If a greater value is determined, then, unless such condition is waived
or modified by the unanimous consent of the Plan Proponents and the Unsecured
Creditors' Committee, the Plan Proponents may declare the Plan to be null and
void. After the determination by the Bankruptcy Court of the Asbestos PD Trust
Share and assuming the occurrence of the Effective Date, the Asbestos PD Trust
Funding Obligation will be distributed to the Asbestos PD Trust on the Initial
Distribution Date and, to the extent not distributed on the Initial Distribution
Date, the Final Distribution Date.
Moreover, if Class 16 votes to reject the Plan, then
Eagle-Picher will select one or more trustees for the Asbestos PD Trust, which
may be Reorganized Eagle-Picher, by notice filed with the Bankruptcy Court on or
before ten (10) days before the Confirmation Hearing.
If Class 16 votes to reject the Plan, then the trustees for
the Asbestos PD Trust will be bound to use the claims resolution procedures set
forth in Exhibit "1.1.6.5" to the Plan (the "Asbestos PD Claims Procedures").
The Asbestos PD Claims Procedures are designed to compensate the holders of
Asbestos Property Damage Claims for the costs of removing asbestos or asbestos-
containing products manufactured or marketed by Eagle-Picher from the buildings
or other structures containing such products so long as such holders can meet
certain proof requirements designed to ensure that the asbestos or
asbestos-containing product was, in fact, manufactured or marketed by
Eagle-Picher. To ensure fair treatment of the holders of all Asbestos Property
Damage Claims, such procedures establish objective criteria by which to
liquidate Asbestos Property Damage Claims and do not allow recovery for alleged
damages such as punitive damages and consequential damages.
Pursuant to the Asbestos PD Claims Procedures, each holder of
an Asbestos Property Damage Claim, including each individual member of a class
that has filed a class proof of claim, must complete and return to the Asbestos
PD Trust within the time provided a "Claim Information Form," which will require
information relating to, inter alia, the building in which asbestos-containing
building materials ("ACBM") are alleged to be present, the condition of the
ACBM, and the quantity of the ACBM. Each Claimant also will be required to
return with its Claim Information Form, inter alia, an Approved Laboratory
Report and an Accredited Inspector Report, which will assist in determining
whether an Eagle-Picher product is the ACBM that forms the basis of the asserted
Asbestos Property Damage Claim.
Depending upon the weight and sufficiency of the evidence
provided by the Claimant showing that an Eagle-Picher product was installed and
not previously removed or replaced otherwise than pursuant to an Asbestos
Abatement Program (as defined in the Asbestos PD Claims Procedures), an Asbestos
Property Damage Claim will be awarded "proof points," and the value of such
Asbestos Property Damage Claim adjusted accordingly. Moreover, if the evidence
demonstrates that the ACBM is not in a position in which it is likely to be
disturbed (and, therefore, no present need to remove it exists), the value of
such Asbestos Property Damage Claim will be adjusted further downward by 75%.
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Claimants that dispute Eagle-Picher's determination of the value of their
Asbestos Property Damage Claims may request binding arbitration of such dispute.
C. VOTING ON PLAN BY HOLDERS OF ASBESTOS PROPERTY DAMAGE
CLAIMS.
Asbestos Property Damage Claims are impaired under the Plan.
Pursuant to the Voting Procedures, each holder of an Asbestos Property Damage
Claim as to which an objection is not pending (or, if pending, is allowed for
voting purposes only) shall vote such Claim in the amount of $1.00. If a class
proof of claim was filed by the representative of a class that has been
certified or conditionally certified in a pending federal or state court action,
100 randomly selected members of each class will be entitled to cast votes on
behalf of their respective class equal to the number of class members divided by
100. The votes of individual class members shall not be solicited (except to the
extent that such members filed individual proofs of claim).
19. CLASS 17: ASBESTOS PERSONAL INJURY CLAIMS AND LEAD
PERSONAL INJURY CLAIMS.
"Asbestos Personal Injury Claims" are any present or future
right to payment, claim, remedy, Demand, or liability for death, bodily injury,
or other personal damages (whether physical, emotional, or otherwise) to the
extent caused or allegedly caused, directly or indirectly, by exposure to
asbestos or asbestos-containing products that were manufactured, sold, supplied,
produced, distributed, released, or in any way marketed by any of the Debtors
prior to the Petition Date. Claims for contribution, reimbursement,
indemnification, or subrogation are also included in Asbestos Personal Injury
Claims.
"Lead Personal Injury Claims" are any present or future right
to payment, claim, remedy, Demand, or liability for death, bodily injury, or
other personal damages (whether physical, emotional, or otherwise) to the extent
caused or allegedly caused, directly or indirectly, by exposure to products that
contained lead chemicals that were manufactured, sold, supplied, produced,
distributed, or in any way marketed by any of the Debtors prior to the Petition
Date. Claims for contribution, reimbursement, indemnification, or subrogation
are also included in Lead Personal Injury Claims.
As of the Petition Date, approximately 67,800 lawsuits on
account of Asbestos Personal Injury Claims were outstanding against
Eagle-Picher, and, prior to the Petition Date, Eagle- Picher had disposed of
approximately 73,500 through trial, dismissal, or settlement at an average cost
(including attorneys' fees and defense costs) of $7,800 per claim. By the
Asbestos Bar Date, approximately 162,000 Asbestos Personal Injury Claims were
filed in the Chapter 11 Cases. By the General Bar Date, 128 non-duplicative Lead
Personal Injury Claims were filed in the Chapter 11 Cases, four of which
subsequently were withdrawn and one of which was dismissed. Except for defense
costs, Eagle-Picher has never incurred any liability, whether pursuant to
settlement or a judgment, on account of any Lead Personal Injury Claims.
Under the Plan, all Asbestos Personal Injury Claims and Lead
Personal Injury Claims will be channeled to the PI Trust established pursuant to
the Asbestos and Lead PI Trust Agreement and paid pursuant to the terms,
provisions, and procedures of the PI Trust and the Asbestos and Lead PI Trust
Agreement. The sole recourse of the holder of an Asbestos Personal Injury Claim
or Lead Personal Injury Claim shall be the PI Trust, and, pursuant to the
Asbestos and Lead PI Permanent Channeling Injunction, all entities shall be
permanently and forever enjoined from taking any actions for the purpose of,
directly or indirectly, collecting, recovering, or receiving payment of, on, or
with respect to any Asbestos Personal Injury Claims or Lead Personal Injury
Claims from, among others, the Reorganized Debtors (or their assets and
properties), other than actions brought to enforce any right
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or obligation under the Plan, any Exhibits to the Plan, or any other agreement
or instrument between any of the Debtors or the Reorganized Debtors and the PI
Trust. For a description of the Asbestos and Lead PI Permanent Channeling
Injunction, see Section , entitled, "THE PLAN OF REORGANIZATION - Discharge of
the Debtors and the Asbestos and Lead PI Permanent Channeling Injunction." For a
more detailed explanation of the PI Trust, the Asbestos and Lead PI Trust
Agreement, and the claims resolution and payment procedures provided for
therein, see Section , entitled, "THE PI TRUST."
Moreover, the Confirmation Order will contain the Claims
Trading Injunction, which will prohibit the trading (and any other form of
assignment, pledge, or transfer) of, inter alia, Asbestos Personal Injury Claims
and Lead Personal Injury Claims after the Effective Date. Any action taken in
violation of the Claims Trading Injunction will be void ab initio. It will not,
however, prohibit the holder of an Asbestos or Lead Contribution Claim from
being subrogated to an Asbestos Personal Injury Claim or Lead Personal Injury
Claim as a result of satisfaction of such underlying Asbestos Personal Injury
Claim or Lead Personal Injury Claim. The Claims Trading Injunction also will not
prohibit the transfer of an Asbestos Personal Injury Claim or Lead Personal
Injury Claim by will or under the laws of descent and distribution.
Under the Plan, the PI Trust will be funded, on the Initial
Distribution Date and the Final Distribution Date, with the PI Trust's Pro Rata
Share of the Distribution Value. This Pro Rata Share will be determined based
upon the PI Trust Share in the amount of $2,000,000,000 and will be funded with
consideration consisting of (i) all the Tax Refund Notes, (ii) all the New
Eagle-Picher Common Stock, (iii) the portion of the Senior Unsecured Sinking
Fund Debentures remaining after the funding of the Asbestos PD Trust, and (iv)
the portion of the Available Cash and Divestiture Notes remaining after making
Distributions (or, in the case of the Initial Distribution Date, making
allowance for potential Distributions) to the holders of Claims in Classes 19,
20, and 21.
Based upon the Debtors' best estimate of the ultimate amount
of Allowed Claims, if Class 16 (Asbestos Property Damage Claims) votes to accept
the Plan, then the Debtors estimate that the PI Trust ultimately will receive
100% of the Tax Refund Notes, 100% of the Senior Unsecured Sinking Fund
Debentures, 100% of the New Eagle-Picher Common Stock, 50% of the Divestiture
Notes, and 72% of the Available Cash. See Section , entitled, "THE PLAN OF
REORGANIZATION - Plan Consideration," for a description of the different types
of consideration being distributed under the Plan.
Asbestos Personal Injury Claims and Lead Personal Injury
Claims are impaired under the Plan. Pursuant to the Voting Procedures, each
holder of an Asbestos Personal Injury Claim or a Lead Personal Injury Claim that
filed a proof of claim by the Asbestos Bar Date shall vote such Claim in the
amount of $1.00. In addition to the conditions to confirmation that are required
by the Bankruptcy Code, the Plan imposes other conditions to confirmation that
are required to preserve the effectiveness of the Asbestos and Lead PI Permanent
Channeling Injunction. See Section , entitled, "THE PLAN OF REORGANIZATION -
Discharge of the Debtors and the Asbestos and Lead PI Permanent Channeling
Injunction." Among those Plan-imposed conditions to confirmation is the
requirement that at least 75% of the Class 17 Claimants that vote on the Plan
vote in favor of the Plan.
20. CLASS 18: OTHER PRODUCT LIABILITY TORT CLAIMS.
"Other Product Liability Tort Claims" are any future right to
payment, claim, remedy, or liability for death, bodily injury, or other personal
damages (whether physical, emotional, or otherwise) to the extent caused or
allegedly caused, directly or indirectly, by exposure to or injuries caused by
any products or byproducts that were manufactured, sold, supplied, produced,
distributed,
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released, or in any way marketed by any of the Debtors prior to the Confirmation
Date, other than Asbestos Personal Injury Claims and Lead Personal Injury
Claims. This definition is only intended to include Product Liability Tort
Claims (other than Asbestos Personal Injury Claims and Lead Personal Injury
Claims) that have not manifested themselves prior to the Confirmation Date.
At present, the Debtors know of no Other Product Liability
Tort Claims. If any of such Claims are asserted, they will either (i) be treated
as Unsecured Claims in Class 20 if they are asserted prior to the Final
Distribution Date or (ii) otherwise, be paid consideration having a value equal
to the value such Claimant would have received if it were holding an Allowed
Unsecured Claim in such amount as of the Effective Date. The Debtors believe
that this treatment may avoid potentially expensive litigation over whether the
holders of Other Product Liability Tort Claims had Claims that were discharged
by the confirmation of the Plan, while providing such Claimants with the same
treatment they would have received (or its equivalent value) if their Claims had
been known during the pendency of the Chapter 11 Cases.
21. CLASS 19: ENVIRONMENTAL CLAIMS.
"Environmental Claims" consist of (i) Claims against the
Debtors by the state and federal governmental agencies that are parties to the
Environmental Settlement Agreement as to which the treatment thereof is
specified in the Environmental Settlement Agreement and (ii) Claims by other
parties asserting liability for environmental damages, e.g., potentially
responsible parties or present owners of sites formerly owned or operated by one
of the Debtors) if such Claims are the subject of a settlement agreement with
one or more of the Debtors.
Pursuant to the Environmental Settlement Agreement, the
Debtors have agreed to give (i) the EPA and the DOI an Allowed Claim in the
amount of $41,026,000 with respect to the Liquidated Sites, (ii) the EPA an
Allowed Claim in the amount of $1,126,500 with respect to certain civil
penalties (75% of which is to be subordinated), (iii) the EPA an Allowed
Administrative Expense in the amount of $150,000, and (iv) the State Parties
Allowed Claims with respect to the Liquidated Sites in the aggregate amount of
$1,546,500. With the exception of the subordinated portion of the civil
penalties claim (which will be treated as a Class 23 Penalty Claim) and the
EPA's Administrative Expense, these Allowed Claims will receive the same
treatment provided for Allowed Unsecured Claims in Class 20 of the Plan, viz.
payment of their Pro Rata Share of the Distribution Value (the "Distribution
Amount") on the Initial Distribution Date and the Final Distribution Date.
The holders of the Environmental Claims will receive the
Distribution Amount in consideration consisting of Available Cash in an amount
equal to one-half (1/2) of the Distribution Amount and Divestiture Notes in an
aggregate principal amount equal to one-half (1/2) of the Distribution Amount.
In addition, pursuant to the Environmental Settlement
Agreement, the Debtors have agreed to satisfy any claim asserted after the
Effective Date by the state and federal agencies that are parties to the
Environmental Settlement Agreement so long as the claim arises from the
prepetition activities of the Debtors and relates to the cleanup of a site that
is not owned by the Debtors (other than a Liquidated Site or property owned by
the Debtors within the boundaries of a Liquidated Site). If and to the extent
that any of the Debtors is determined to have liability in the future on account
of any such activities, a claim of the state or federal agency will receive
substantially the same treatment that an Allowed Environmental Claim would have
received if it had been an Allowed Unsecured Claim in Class 20 on the Effective
Date.
By order and decision dated June 6, 1996, the Bankruptcy Court
approved the Environmental Settlement Agreement. Certain PRPs, however, have
appealed such decision to the
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District Court, which has not established a briefing schedule for such appeal
yet. For a more detailed discussion of the Environmental Settlement Agreement,
see Section , entitled, "THE CHAPTER 11 CASES - Significant Events During the
Chapter 11 Cases - Resolution of Other Significant Claims - Environmental
Claims."
On or about January 15, 1996, Eagle-Picher filed with the
Bankruptcy Court a motion for approval of a settlement agreement with 715
Spencer Corp., an entity that had purchased a facility from Eagle-Picher prior
to the Petition Date. In the Chapter 11 Cases, 715 Spencer Corp. asserted claims
against Eagle-Picher for environmental cleanup costs that might be incurred in
the future by 715 Spencer Corp. with respect to such facility. Pursuant to such
settlement agreement, Eagle-Picher agreed to allow 715 Spencer Corp. to assert
claims for environmental cleanup against Eagle-Picher for up to five years from
the entry of the Bankruptcy Court order approving such settlement, up to an
aggregate claim of $500,000, with such claims, if Eagle-Picher ultimately is
determined to have liability thereon, to be paid as if they had been an Allowed
Unsecured Claim in Class 20 on the Effective Date. The Bankruptcy Court's order
approving the settlement was entered on March 1, 1996.
The claims of 715 Spencer Corp. under such settlement
agreement will constitute "Environmental Claims." The Debtors may enter into
other settlement agreements relating to alleged environmental liability of the
Debtors pursuant to which the Debtors agree to pay claims that are liquidated in
the future in "plan dollars," i.e., substantially the same consideration that
such claims would have been paid if they had been Allowed Unsecured Claims in
Class 20 on the Effective Date. Any claims governed by such settlement
agreements are considered "Environmental Claims" under the Plan.
Under the Plan, the treatment of the Environmental Claims is
the treatment as it is set forth in the Environmental Settlement Agreement or
other settlement agreement relating to the Environmental Claims. The
Environmental Claims are impaired under the Plan and are entitled to vote on the
Plan.
22. CLASS 20: UNSECURED CLAIMS OTHER THAN CONVENIENCE
CLAIMS AND THE SPECIFIED TREATMENT CLAIMS.
"Unsecured Claims" are any Claims that are not Administrative
Expenses, Tax Claims, Priority Claims, Asbestos Property Damage Claims,
Environmental Claims, Product Liability Tort Claims, the Designated Real
Property Tax Claim, Affiliate Claims, Penalty Claims, or Secured Claims. Class
20 consists of all Unsecured Claims other than Convenience Claims and the
Specified Treatment Claims. After taking into account Unsecured Claims that may
elect to be treated as Convenience Claims, the Debtors estimate that the total
amount of Allowed Unsecured Claims in Class 20 will be approximately
$107,654,342.00.(5) The following summarizes the types of Unsecured Claims that
comprise the Debtors' estimate:
- -----------
(5) As discussed in Section , entitled, "THE PLAN OF REORGANIZATION -
Classification and Treatment of Claims and Equity Interests - Class 15:
Convenience Claims," the Debtors estimate that the Allowed Convenience Claims
will aggregate approximately $980,083.00.
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<TABLE>
<CAPTION>
DEBTORS' CLAIMANTS'
ESTIMATED ASSERTED
VALUE(6) VALUE(7)
--------------- ---------------
<S> <C> <C>
Debt Securities $ 57,703,331.00 $ 57,703,331.00
Undersecured Debt Related to Equipment 4,300,007.00 4,300,007.00
Miscellaneous Environmental Claims 1,825,151.00 2,709,408.00
Trade Payables 29,726,355.00 30,010,076.00
Prepetition Professional Fees and Expenses 5,780,623.00 5,780,623.00
Utilities 2,231,688.00 2,231,688.00
Litigation 6,087,187.00 6,079,687.00
Insurance 0.00 19,261,692.00
=============== ===============
TOTAL $107,654,342.00 $128,076,512.00
</TABLE>
Pursuant to the Plan, each holder of an Allowed Unsecured
Claim in Class 20 will receive on the Initial Distribution Date and the Final
Distribution Date consideration equal to its Pro Rata Share of the Distribution
Value (less, in the case of the Final Distribution Date, the value of
consideration distributed on the Initial Distribution Date) (the "Distribution
Amount"). Based upon the Debtor's existing estimate of the aggregate amount of
Claims against their estates and assuming the aggregate Distribution Value is
$714.8 million(8) and either that Class 16 (Asbestos Property Damage Claims)
votes to accept the Plan or that the Bankruptcy Court estimates the aggregate
amount of Asbestos Property Damage Claims to be no greater than approximately $9
million, the Debtors expect that each holder of an Allowed Unsecured Claim in
Class 20 should ultimately receive consideration under the Plan having a value
equal to approximately 33% of its Allowed Claim.
The Distribution Amount will be payable in consideration
consisting of Available Cash in an amount equal to one-half (1/2) of the
Distribution Amount and Divestiture Notes having an aggregate principal amount
equal to one-half (1/2) of the Distribution Amount.
The Unsecured Claims are impaired under the Plan.
The Plan provides certain provisions relating to the treatment
of existing debt securities. Specifically, as of the Effective Date, all notes,
agreements, and other securities evidencing Unsecured Claims will be canceled,
and the rights of the holders of Allowed Unsecured Claims will be governed by
the Plan. Holders of Bearer Unsecured Debt Securities will be required to
surrender their Bearer Unsecured Debt Securities to their respective Unsecured
Debt Securities Trustee in order
- --------
(6) This column takes into account the Allowed Amount of Unsecured Claims
that have become Allowed during the Chapter 11 Cases, the disallowance of
certain Unsecured Claims during the Chapter 11 Cases, and the Debtors' estimate
of the ultimate Allowed Amount of certain unresolved Unsecured Claims.
(7) This column takes into account the Allowed Amount of Unsecured Claims
that have become Allowed during the Chapter 11 Cases, elimination of duplicative
Claims, the disallowance of certain Unsecured Claims during the Chapter 11
Cases, and the amount claimed as liquidated in proofs of claim filed by the
holders of certain unresolved Unsecured Claims. Moreover, the Debtors have
assumed that the lenders under equipment financing transactions, if they have
not already done so, will agree to use the unsecured deficiency claim set forth
in such lenders' adequate protection stipulation as the lenders' Allowed
Unsecured Claims in the Chapter 11 Cases.
(8) This assumes the cash and New Debt Securities to be issued as part of
the Plan Consideration have a value equal to their face amount and that the New
Eagle-Picher Common Stock will have an aggregate value of $254.8 million. Of
course, there is no assurance that such assumed values can be obtained.
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to receive any Distribution. Such Unsecured Debt Securities Trustee will
thereafter maintain a register in order to make the appropriate Distributions
under the Plan.
The Record Date for Registered Unsecured Debt Securities will
be the first Business Day that is five (5) days from and after the Confirmation
Date. As at the close of business on the Record Date, the transfer ledgers will
be closed, and no further changes in the record holders of any Registered
Unsecured Debt Securities will be made. Although holders of Registered Unsecured
Debt Securities are not required to surrender their Registered Unsecured Debt
Securities in order to receive any Distributions, the Plan does permit the
Debtors to impose such a requirement.
23. CLASS 21: SPECIFIED TREATMENT CLAIMS.
Class 21 consists of Allowed Specified Treatment Claims, which
are comprised of the Kalkaska Claim, the TLG Associates Claim, and any other
Unsecured Claim that is (a) Allowed in connection with a settlement with one or
more of the Debtors and (b) for which a minimum and maximum distribution under
the Plan are specified as part of such settlement.
The "Kalkaska Claim" is the Unsecured Claim of Kalkaska
Industries, Inc. ("Kalkaska") (or any successor in interest thereto) in the
amount of $2,000,000.00. Kalkaska had filed a timely proof of claim against
Eagle-Picher's estate in the amount of $16,492,301.00, but, pursuant to a
settlement that was approved by the Bankruptcy Court by order entered on or
about November 24, 1993, Kalkaska agreed to a reduced Allowed Unsecured Claim in
the amount of $2,000,000.00. Kalkaska and Eagle-Picher further agreed, however,
that the holder of the Kalkaska Claim would receive no less than a "guaranteed
minimum distribution" having a value equal to $100,000.00, but no more than a
"maximum distribution" having a value equal to $250,000.00.
The "TLG Associates Claim" is the Allowed Unsecured Claim of
TLG Associates, Inc. ("TLG Associates") (or any successor in interest thereto)
in the amount of $215,835.00. The Longwood Group, Inc., the predecessor in
interest to TLG Associates, had filed a timely proof of claim against
Eagle-Picher's estate in the amount of $215,835.00, and Eagle-Picher had
objected to such claim. Pursuant to a settlement that was approved by the
Bankruptcy Court by order entered on or about January 4, 1996, Eagle-Picher
agreed to give TLG Associates an Allowed Unsecured Claim in the amount of
$215,835.00. TLG Associates and Eagle-Picher further agreed, however, that the
holder of the TLG Associates Claim would receive no less than a "guaranteed
minimum distribution" having a value equal to $30,000, but no more than a
"maximum distribution" having a value equal to $60,000.
If other Unsecured Claims are settled in the same manner as
the Kalkaska Claim and the TLG Associates Claim, they will be considered
"Specified Treatment Claims" and will be classified in Class 21.
Subject to the restrictions imposed by its particular
settlement agreement, each holder of a Specified Treatment Claim will receive on
the Initial Distribution Date and the Final Distribution Date under the Plan its
Pro Rata Share of the Distribution Value (less, in the case of the Final
Distribution Date, the value of consideration distributed on the Initial
Distribution Date) (the "Distribution Amount").
The Distribution Amount will be payable in consideration
consisting of Available Cash in an amount equal to one-half (1/2) of the
Distribution Amount and Divestiture Notes having an aggregate principal amount
equal to one-half (1/2) of the Distribution Amount.
The Specified Treatment Claims are impaired under the Plan,
and the holders thereof are entitled to vote to accept or reject the Plan.
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24. CLASS 22: AFFILIATE CLAIMS AND INTERESTS.
Class 22 consists of all "Affiliate Claims and Interests,"
viz. Claims and interests held among Eagle-Picher and its subsidiaries
(excluding (i) American Imaging, which, pursuant to the settlement of the
American Imaging Litigants' action against Eagle-Picher, is no longer a
subsidiary of Eagle-Picher and (ii) Tri-Sigma Corporation, a now-defunct,
partially-owned subsidiary of Eagle-Picher). The Affiliate Claims and Interests
consist principally of intercompany book entries and the equity interests in the
Debtors other than Eagle-Picher, all of which are preserved by the Plan.
Accordingly, the Affiliate Claims and Interests are unimpaired under the Plan.
25. CLASS 23: PENALTY CLAIMS.
"Penalty Claims" consist of any Claims (i) for any fine,
penalty, collection fee, or forfeiture, or for multiple, exemplary, or punitive
damages to the extent that they are not compensation for actual pecuniary loss
suffered by such Claimant, or (ii) that, pursuant to an order of the Bankruptcy
Court, are subordinated for purposes of distribution to all Allowed Unsecured
Claims. In some instances, the Debtors have agreed to treat certain Claims that
otherwise would be considered Penalty Claims as Unsecured Claims, and such
Claims are excluded from the definition of Penalty Claims.
On or about December 9, 1992, the Bankruptcy Court entered an
Order Subordinating Claim No. 000850, which subordinated the claim of certain
securities class action claimants to the claims of all unsecured creditors and
which ordered that such claim would have the same priority as Stockholders.
Moreover, pursuant to the Environmental Settlement Agreement, the EPA, inter
alia, will have an allowed, general unsecured claim in the amount of $1,126,500
on account of certain prepetition civil penalties for alleged violations of the
Clean Water Act at Eagle-Picher's Joplin, Missouri, facility, of which 75% is
to be subordinated. Certain taxing authorities also have asserted Penalty Claims
against the Debtors, most of which have been resolved without the imposition of
any penalties pursuant to settlements with such authorities. Other than all such
Claims, the Debtors currently are not aware of any Penalty Claims. Penalty
Claims will receive no Distribution under the Plan. Thus, Class 23 is impaired,
and the holders of Penalty Claims are deemed to have rejected the Plan.
26. CLASS 24: EQUITY INTERESTS.
Class 24 consists of the Equity Interests of the Stockholders,
who will receive no Distribution under the Plan. On the Effective Date, all
certificates that evidence the ownership of Existing Eagle-Picher Common Stock
will be canceled and, thereafter, shall be null and void. The Equity Interests
are impaired, and the Stockholders are deemed to have rejected the Plan.
B. CONDITIONS TO CONFIRMATION.
The Plan shall not be confirmed, and the Confirmation Order
shall not be entered until and unless certain specified "Confirmation
Conditions" have been satisfied or waived by the Plan Proponents. These
Confirmation Conditions, which are designed inter alia, to ensure that the
Asbestos and Lead PI Permanent Channeling Injunction will be effective, binding,
and enforceable, are as follows:
1. The Bankruptcy Court makes the following findings, each of
which shall be contained in the Confirmation Order:
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- The Asbestos and Lead PI Permanent
Channeling Injunction is to be implemented
in connection with the PI Trust.
- At the time of the order for relief with
respect to Eagle-Picher, Eagle-Picher had
been named as a defendant in personal
injury, wrongful death, and property damage
actions seeking recovery for damages
allegedly caused by the presence of, or
exposure to, asbestos or asbestos-containing
products.
- At the time of the order for relief with
respect to Eagle-Picher, Eagle-Picher had
been named as a defendant in personal
injury, wrongful death, and property damage
actions seeking recovery for damages
allegedly caused by the presence of, or
exposure to, lead-containing chemicals.
- The PI Trust, as of the Effective Date, will
assume the liabilities of the Debtors with
respect to Asbestos Personal Injury Claims
and Lead Personal Injury Claims.
- The PI Trust is to be funded in whole or in
part by securities of one or more of the
Debtors and by the obligations of such of
the Debtors to make future payments,
including dividends.
- The PI Trust is to own, or by the exercise
of rights granted under the Plan would be
entitled to own if specified contingencies
occur, a majority of the voting shares of
Eagle-Picher, the direct or indirect parent
corporation of each of the Debtors.
- The Debtors are likely to be subject to
substantial future Demands for payment
arising out of the same or similar conduct
or events that gave rise to the Claims that
are addressed by the Asbestos and Lead PI
Permanent Channeling Injunction.
- The actual amounts, numbers, and timing of
such future Demands cannot be determined.
- Pursuit of such Demands outside the
procedures prescribed by the Plan is likely
to threaten the Plan's purpose to deal
equitably with Claims and future Demands.
- The terms of the Asbestos and Lead PI
Permanent Channeling Injunction, including
any provisions barring actions against third
parties pursuant to section 524(g)(4)(A),
are set out in the Plan and in any
disclosure statement supporting the Plan.
- The Plan establishes, in Class 17 (Asbestos
Personal Injury Claims and Lead Personal
Injury Claims), a separate class of the
claimants whose Claims are to be addressed
by the PI Trust.
- Class 17 (Asbestos Personal Injury Claims
and Lead Personal Injury Claims) has voted,
by at least 75 percent (75%) of those
voting, in favor of the Plan.
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- Pursuant to court orders or otherwise, the
PI Trust will operate through mechanisms
such as structured, periodic, or
supplemental payments, pro rata
distributions, matrices, or periodic review
of estimates of the numbers and values of
present Claims and future Demands, or other
comparable mechanisms, that provide
reasonable assurance that the PI Trust will
value, and be in a financial position to
pay, present Claims and future Demands that
involve similar Claims in the same manner.
- The Future Claimants' Representative was
appointed as part of the proceedings leading
to the issuance of the Asbestos and Lead PI
Permanent Channeling Injunction for the
purpose of protecting the rights of persons
that might subsequently assert Demands of
the kind that are addressed in the Asbestos
and Lead PI Permanent Channeling Injunction
and transferred to the PI Trust.
- Identifying each PI Protected Party in the
Asbestos and Lead PI Permanent Channeling
Injunction is fair and equitable with
respect to persons that might subsequently
assert Demands against each such PI
Protected Party, in light of the benefits
provided, or to be provided, to the PI Trust
by or on behalf of any such PI Protected
Party.
2. Class 17 (Asbestos Personal Injury Claims and Lead Personal
Injury Claims) votes, by at least 75 percent (75%) of those
voting, in favor of the Plan.
3. The Bankruptcy Court has entered an order approving the
Environmental Settlement Agreement, which shall be reasonably
acceptable to the Plan Proponents, and such order has become a
Final Order.
4. The Confirmation Order shall be, in form and substance,
acceptable to the Plan Proponents.
The Plan Proponents may seek to have the Confirmation Order
and the Asbestos and Lead PI Permanent Channeling Injunction either entered or
affirmed by the District Court. In addition, if the Confirmation Date does not
occur within one hundred fifty (150) days after the filing of the Plan, any of
the Plan Proponents may revoke the Plan in its entirety. In such an event, the
Debtors may, in the exercise of their continuing exclusive rights to file and
confirm a chapter 11 plan, re-file the Plan and request confirmation thereof.
The Debtors shall have no obligation to do so, however. Moreover, the Injury
Claimants' Committee and the Future Claimants' Representative have reserved
their right to seek a termination of the Exclusive Periods under such
circumstances, and the Debtors have reserved their rights to oppose any such
attempt to terminate the Exclusive Periods.
C. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE UNDER THE PLAN.
The "effective date of the plan," as used in section 1129 of
the Bankruptcy Code, will not occur, and the Plan will be of no force and
effect, until the Effective Date. The "Effective Date" will occur on the first
Business Day after the following conditions precedent are satisfied or waived:
- The Confirmation Order has become a Final Order, or,
if not, then at least thirty (30) days have elapsed
since the Confirmation Date.
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- The Bankruptcy Court and/or the District Court, as
required, shall have entered the Asbestos and Lead PI
Permanent Channeling Injunction, which shall contain
terms satisfactory to the Plan Proponents.
- The Confirmation Order and the Asbestos and Lead PI
Permanent Channeling Injunction shall be in full
force and effect.
- No proceedings to estimate any Claims are pending.
- If Class 16 votes to accept the Plan, the trustees
for the Asbestos PD Trust have been selected and have
executed the Asbestos PD Trust Agreement.
- All Trustees have been selected in accordance with
that certain letter, dated November 9, 1993, from
Eagle-Picher to the Injury Claimants' Committee and
the Future Claimants' Representative.
- All Trustees have executed the Asbestos and Lead PI
Trust Agreement.
- Certain favorable rulings have been obtained from the
IRS with respect to the qualification of the PI Trust
as a "qualified settlement fund" within the meaning
of Treasury Regulation section 1.468B-1. By letter
dated September 25, 1995, the IRS issued such
rulings. Thus, this condition has been satisfied.
- Certain favorable rulings have been obtained from the
IRS with respect to the application of section 382 of
the Internal Revenue Code. By letter dated February
8, 1996, the IRS issued such rulings. Thus, this
condition has been satisfied.
- The Reorganized Debtors shall have entered into and
shall have credit availability under a credit
facility to provide the Reorganized Debtors with
working capital (including letters of credit) in an
amount sufficient to meet the needs of the
Reorganized Debtors, as determined by the Reorganized
Debtors.
- The Asbestos PD Trust Share has been determined to be
no greater than $15 million.
The unanimous written consent of the Plan Proponents is needed to waive the
occurrence of any of these conditions precedent or to modify any of such
conditions precedent, other than the condition precedent relating to the
determination of the Asbestos PD Trust Share. Any modification or waiver of the
condition precedent relating to the determination of the Asbestos PD Trust Share
will require the unanimous consent of the Plan Proponents and the Unsecured
Creditors' Committee. If a stay of the Confirmation Order is in effect on the
date on which the Effective Date otherwise would occur, the Effective Date will
be the first Business Day after the expiration, dissolution, or lifting of such
stay. The Debtors, for purposes of the analyses contained in this Disclosure
Statement, have assumed that the Effective Date will occur on December 1, 1996.
If the Plan Proponents unanimously decide that one of the foregoing conditions
cannot be satisfied and the occurrence of such condition is not waived by the
Plan Proponents, then the Plan Proponents shall file a notice of failure of
effective date with the Bankruptcy Court, at which time the Plan and the
Confirmation Order shall be deemed null and void.
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D. DESCRIPTION OF THE PLAN CONSIDERATION.
The consideration to be distributed in connection with Classes
16 through 21 of the Plan consists of (i) the Available Cash, (ii) the Tax
Refund Notes, (iii) the Divestiture Notes, (iv) the Senior Unsecured Sinking
Fund Debentures, and (v) 10,000,000 shares of New Eagle-Picher Common Stock.
Available Cash will be calculated on the last day of the month
in which the Effective Date occurs. Based upon the assumption that the Effective
Date will occur on December 1, 1996, the Debtors, after retaining $15 million
for operating purposes, expect to have approximately $102.0 million in cash on
such date. Of this, the Debtors estimate that $13.0 million will be used to pay
Allowed Administrative Expenses, Allowed Tax Claims, the Amplicon Lease Secured
Claim, the First Fidelity Lease Secured Claim, the GE Capital Secured Claim, the
Grove IRB Secured Claim, the Leesburg Secured Claim, Other Secured Claims,
Convenience Claims, any cure amounts payable with respect to assumed executory
contracts and unexpired leases, and the $3 million Asbestos PD Trust Funding
Obligation (if Class 16 votes to accept the Plan). The estimated balance of
$89.0 million will constitute the Available Cash.
The Tax Refund Notes will bear interest at a rate that is
determined by the Debtors' financial advisers, McDonald & Company Securities,
Inc. ("McDonald & Co."), on the Effective Date as the rate the Tax Refund Notes
should bear in order to have a market value of one hundred percent (100%) of
their principal amount on the Effective Date. The Debtors have conferred with
McDonald & Co. and, based upon the advice of McDonald & Co., the Debtors have
assumed that such interest rate will be 8% per annum. The Tax Refund Notes will
be in an aggregate principal amount equal to the Debtors' expected federal
income tax refund, which Eagle-Picher will estimate as of the Effective Date.
The Tax Refund Notes will mature on the 1st day of June following the end of the
Eagle-Picher fiscal year in which the Final Distribution Date occurs. Based upon
the assumption that the Final Distribution Date will occur no later than
November 30, 1997, Eagle-Picher currently estimates that the Tax Refund Notes
will be in the aggregate principal amount of $71.0 million. Based upon the same
assumption, Eagle-Picher expects that the Tax Refund Notes will have a maturity
date of June 1, 1998, even though a later Final Distribution Date will result in
a later maturity date. Eagle-Picher may prepay the Tax Refund Notes at any time,
without premium, and will redeem the Tax Refund Notes as soon as practicable
after Eagle-Picher's receipt of its federal income tax refunds (in the aggregate
principal amount of such tax refunds). Other than such mandatory redemption, no
principal is required to be paid prior to maturity. The Tax Refund Notes will
not contain any significant affirmative or negative covenants, other than any
covenants relating to the mandatory redemption rights.
The Divestiture Notes will be in an aggregate principal amount
of $50 million and will bear interest at a rate that is determined by McDonald &
Co. on the Effective Date as the rate the Divestiture Notes should bear in order
to have a market value of one hundred percent (100%) of their principal amount
on the Effective Date. In determining the interest rate, McDonald & Co. is
required to consult with Houlihan, Lokey, Howard & Zukin Capital, the financial
advisers to the Unsecured Creditors' Committee. The Debtors have conferred with
McDonald & Co. and, based upon the advice of McDonald & Co., the Debtors have
assumed that such interest rate will be 9.5% per annum. The Divestiture Notes
will mature on the third anniversary of the Effective Date and may be prepaid at
any time, without premium. If divisions, subsidiaries, plants, or other
significant operating assets of the Debtors are sold, the net proceeds will be
placed in a separate account. In connection with the sale of the molding
business of the Orthane Division, Eagle-Picher established an account in which
it deposited the net proceeds received from such sale, in the approximate amount
of $4.047 million. When Eagle-Picher completes the sale of the real estate of
the Orthane Division, it will deposit such proceeds in such account as well.
Whenever funds in such account equal or exceed $10 million, an equivalent amount
of Divestiture Notes will be called for redemption at one hundred percent (100%)
of their
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principal amount plus accrued interest to the redemption date, which will occur
as soon as practicable after funds in the account equal or exceed $10 million.
Other than such mandatory redemption, no principal is required to be paid prior
to maturity. The Divestiture Notes will not contain any significant covenants,
other than any covenants relating to the mandatory redemption rights.
The Senior Unsecured Sinking Fund Debentures will be in an
aggregate principal amount of $250 million and will bear interest at a rate that
is determined by McDonald & Co. on the Effective Date as the rate the Senior
Unsecured Sinking Fund Debentures should bear in order to have a market value of
one hundred percent (100%) of their principal amount on the Effective Date. The
Debtors have conferred with McDonald & Co. and, based upon the advice of
McDonald & Co., the Debtors have assumed that such interest rate will be 10.5%
per annum. The Senior Unsecured Sinking Fund Debentures will mature on the tenth
anniversary of the Effective Date. The Senior Unsecured Sinking Fund Debentures
will have a mandatory sinking fund of $20 million a year on each of the third
through the ninth anniversaries of the Effective Date, with a final payment at
maturity of $110 million. Eagle-Picher will have the right in any year in which
it is required to make a payment to retire up to an additional $20 million in
principal amount of the Senior Unsecured Sinking Fund Debentures at the sinking
fund redemption price of 100% of principal amount plus accrued interest. With
the exception of Eagle-Picher's option to retire an additional $20 million in
principal amount of Senior Unsecured Sinking Fund Debentures each year,
beginning on the third anniversary of the Effective Date Eagle-Picher may prepay
the Senior Unsecured Sinking Fund Debentures at a premium equal to one-half of
the interest rate payable on the Senior Unsecured Sinking Fund Debentures, such
premium declining by 1% a year each year thereafter. Any Senior Unsecured
Sinking Fund Debentures retired through optional sinking fund redemptions will
be applied to subsequent mandatory sinking fund obligations in reverse
chronological order. The Senior Unsecured Sinking Fund Debentures will not
contain any significant affirmative or negative covenants, other than any
covenants relating to the sinking fund requirements.
The Divestiture Notes will be in registered form and will be
issued pursuant to an indenture. Interest on the Tax Refund Notes, the
Divestiture Notes, and the Senior Unsecured Sinking Fund Debentures
(collectively, the "New Debt Securities") will be paid in arrears semiannually,
commencing on the date that is six (6) months after the Effective Date, and
continuing every six (6) months thereafter.
Eagle-Picher believes that the residual value of the equity of
Reorganized Eagle-Picher (i.e., the value of Reorganized Eagle-Picher exclusive
of cash and debt to be distributed under the Plan) will be $254.8 (the "Equity
Value"). Thus, it expects that the 10 million shares of New Eagle-Picher Common
Stock that will be issued under the Plan will have a value of $25.48 a share.
See Section , entitled, "REORGANIZATION VALUE." The Equity Value will be
determined by McDonald & Co. after consultation with the Unsecured Creditors'
Committee's financial advisers.
E. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
The Bankruptcy Code gives the Debtors the power, subject to
the approval of the Bankruptcy Court, to assume or reject executory contracts
and unexpired leases. If an executory contract or unexpired lease is rejected,
the other party to the agreement may file a claim for damages incurred by reason
of the rejection. In the case of rejection of leases of real property, such
damage claims are subject to certain limitations imposed by the Bankruptcy Code.
Exhibit "8.1" to the Plan sets forth a list of executory contracts and unexpired
leases to be assumed under the Plan pursuant to the Confirmation Order, together
with the amount, if any, required to cure any defaults under each such executory
contract or unexpired lease pursuant to section 365 of the Bankruptcy Code.
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In the beginning of the Chapter 11 Cases, the Debtors were
required to file the Schedules, which, among other things, purported to list the
Debtors' executory contracts and unexpired leases. In the interest of making the
most complete disclosure possible, the Debtors listed certain agreements,
without making final determinations regarding whether such agreements were, in
fact, executory contracts. Exhibit "8.4" to the Plan sets forth a list of
agreements that were included on the Schedules, but which the Debtors now do not
believe constituted executory contracts as of the Petition Date. Under the Plan,
the Debtors have reserved their right to seek assumption or rejection of such
agreements if such agreements ultimately are determined, by a Final Order, to be
executory contracts, and the time within which the Debtors or the Reorganized
Debtors, as the case may be, must seek assumption or rejection of any such
agreements that are determined to be executory contracts is tolled until ten
(10) business days after an order making such determination becomes a Final
Order. The Debtors have listed, next to each agreement on Exhibit "8.4," the
amount that the Debtors intend to treat as an Allowed Unsecured Claim. Such
amount and the treatment of each such agreement shall be binding unless, on or
before ten (10) days after the Confirmation Date, the other party to any such
agreement either (i) files a proof of claim (which proof of claim shall be
deemed timely filed) or (ii) files a motion seeking to compel assumption or
rejection of such agreement.
Any other executory contracts or unexpired leases of any of
the Debtors are rejected pursuant to the Plan unless they previously were
assumed by any of the Debtors by order of the Bankruptcy Court or are the
subject of pending motions to assume at the Confirmation Date. Claims created by
the rejection, expiration, or termination of executory contracts and unexpired
leases prior to the Confirmation Date must be filed and served no later than
thirty (30) days after (i) in the case of an executory contract or unexpired
lease that was terminated or expired by its terms prior to the Confirmation Date
or that is deemed rejected pursuant to the Plan, the Confirmation Date, or (ii)
in the case of an executory contract or unexpired lease that was rejected by the
Debtors prior to the Confirmation Date, the date on which the order authorizing
such rejection was entered.
The Plan provides specified treatment concerning the Debtors'
prepetition insurance policies and related agreements. Although the Debtors do
not believe that these insurance policies and agreements constitute executory
contracts (either because, in the case of the insurance policies themselves, the
Debtors have fully performed their obligations or, in the case of any
retrospective premium adjustment agreements, the Debtors' only obligation is the
payment of money), the Debtors have provided treatment for these insurance
agreements in the event it is determined that they do constitute executory
contracts. Specifically, the Debtors have provided that they will assume the
insurance agreements listed on Exhibit "8.5.1" to the Plan (the underlying
policies) and will reject the insurance agreements listed on Exhibit "8.5.2" to
the Plan (the retrospective premium adjustment agreements). If the proposed
settlement between the Debtors and Liberty Mutual is finalized and approved by
the Bankruptcy Court, however, the Debtors' agreements with Liberty Mutual will
be treated in accordance with the terms of the Liberty Mutual Settlement.
The Plan also provides that all employment and severance
practices and policies, and all compensation and benefit plans, policies, and
programs of the Debtors for their present and former employees, officers, or
directors, including, without limitation, all savings plans, retirement plans,
health care plans, severance benefit plans, incentive plans, and life, workers'
compensation, disability, and other insurance plans, will be deemed to be, and
will be treated as, executory contracts assumed under the Plan. The Debtors'
obligations under such agreements, plans, policies, and programs will be assumed
pursuant to section 365(a) of the Bankruptcy Code, survive confirmation of the
Plan, remain unaffected thereby, and not be discharged in accordance with
section 1141 of the Bankruptcy Code. Notwithstanding the foregoing, as of the
Effective Date, the Eagle-Picher Industries, Inc. Stock Option Plan of 1983, as
amended, and the Eagle-Picher Industries, Inc. Stock Option Plan of 1990 will be
deemed terminated, canceled, and of no further force and effect, and the
participants thereunder shall have no further rights thereunder.
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F. FRACTIONAL SHARES OR OTHER DISTRIBUTIONS.
No fractional shares of New Eagle-Picher Common Stock will be
issued. No notes in fractions of cents will be issued, and no cash in fractions
of cents will be paid. All such fractions will be rounded to the nearest share
or cent, as applicable (with .5 and below to be rounded down).
G. PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS.
Unless otherwise ordered by the Bankruptcy Court, the Debtors
will have the exclusive right, except with respect to the applications for the
allowance of compensation and reimbursement of expenses of professionals under
section 330 of the Bankruptcy Code and except with respect to Asbestos Personal
Injury Claims, Lead Personal Injury Claims, and Asbestos Property Damage Claims
(other than Lead Personal Injury Claims and Asbestos Property Damage Claims as
to which objections by the Debtors were pending as of the Effective Date and
which the Debtors elect to continue to prosecute), to object to the allowance of
Claims filed with the Bankruptcy Court with respect to which the liability is
disputed in whole or in part.
The Debtors may compromise and settle any objections to Claims
in accordance with the Claims Settlement Guidelines approved by the Bankruptcy
Court on December 1, 1991. These Claims Settlement Guidelines provide a
graduated scale of review by the Bankruptcy Court, the Future Claimants'
Representative, and the Committees of proposed settlements, depending upon the
size of the Allowed Claim or the difference between the scheduled amount of the
Claim and the Allowed Amount of the Claim:
- $150,000 or less, no review or approval is
required.
- Between $150,000 and $1 million, review by
the Committees and the Future Claimants'
Representative is required, but no
Bankruptcy Court approval is required unless
the Debtors receive a timely written
objection from any of the Committees or the
Future Claimants' Representative.
- Over $1 million, settlements are submitted
to the Bankruptcy Court for approval.
Under the Plan, the Claims Settlement Guidelines will be modified to eliminate
the need for review by the Committees or the Future Claimants' Representative of
settlements where the Allowed Amount of the Claim, or the difference between the
scheduled amount of the Claim and the Allowed Amount of the Claim, is $1 million
or less. All other settlements, including settlements with any "insiders," will
be subject to Bankruptcy Court approval.
In the event that a Disputed Claim becomes Allowed, whether by
a Final Order or by a compromise and settlement, the holder of such Disputed
Claim will receive the distributions to which such holder is then entitled under
the Plan. No interest shall be paid on account of Disputed Claims that later
become Allowed, except to the extent that payment of interest is required under
section 506(b) of the Bankruptcy Code, and no Distribution shall be made with
respect to all or any portion of any Disputed Claim pending the entire
resolution of such Claim.
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H. AMENDMENT AND RESTATEMENT OF THE DEBTORS' ARTICLES OF INCORPORATION AND
CODE OF REGULATIONS.
The Articles of Incorporation and Code of Regulations of
Eagle-Picher will be amended and restated as of the Effective Date substantially
in the forms attached as Exhibits "1.1.8" and "1.1.9" to the Plan, respectively.
The Amended and Restated Articles of Incorporation will (a)
prohibit the issuance of nonvoting equity securities in accordance with section
1123(a)(6) of the Bankruptcy Code, subject to further amendment of such Amended
and Restated Articles of Incorporation as permitted by applicable law, (b)
authorize the cancellation of the Existing Eagle-Picher Common Stock and the
creation of 20,000,000 shares of New Eagle-Picher Common Stock, (i) of which
10,000,000 shares shall be issued as the Stock Distribution Pool and (ii) of
which 10,000,000 shares shall be reserved for future issuance, (c) provide
certain restrictions on the transfer of New Eagle-Picher Common Stock, as more
fully described in Section , entitled, "RESTRICTIONS ON TRADING OF NEW
EAGLE-PICHER COMMON STOCK," and (d) effectuate the provisions of the Plan.
I. DISCHARGE OF THE DEBTORS AND THE ASBESTOS AND LEAD PI PERMANENT
CHANNELING INJUNCTION.
The rights afforded in the Plan and the treatment of the
Claims and Equity Interests therein will be in exchange for and in complete
satisfaction, discharge, and release of all Claims and Equity Interests of any
nature whatsoever, including any interest accrued thereon from and after the
Petition Date, against the Debtors, or their estates, properties, or interests
in property. Except as otherwise provided in the Plan, upon the Effective Date,
all such Claims and Equity Interests in the Debtors will be deemed satisfied,
discharged, and released in full. Pursuant to the Plan and the Confirmation
Order, all parties will be precluded from asserting against the Reorganized
Debtors, their successors, or their assets, properties, or interests in property
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.
In addition, the Confirmation Order will contain, inter alia,
the Asbestos and Lead PI Permanent Channeling Injunction. Pursuant to the
Asbestos and Lead PI Permanent Channeling Injunction, any Entity will be forever
stayed, restrained, and enjoined from taking certain actions for the purpose of,
directly or indirectly, collecting, recovering, or receiving payment of, on, or
with respect to any Asbestos Personal Injury Claims or Lead Personal Injury
Claims (other than pursuant to the provisions of the Asbestos and Lead PI Trust
Agreement or to enforce the provisions of the Plan) against any "PI Protected
Party" or his, her, or its property.
A "PI Protected Party" is any of the following: the Debtors;
the Reorganized Debtors; any Affiliates; any Entity that, pursuant to the Plan
or after the Effective Date becomes a direct or indirect transferee of, or
successor to, any assets of any of the Debtors, the Reorganized Debtors, or the
PI Trust (but only to the extent that liability is asserted to exist by reason
of its becoming or being such a transferee or successor); any Entity that,
pursuant to the Plan or after the Effective Date, makes a loan to any of the
Reorganized Debtors or the PI Trust or to a successor to, or transferee of, any
assets of any of the Debtors, the Reorganized Debtors, or the PI Trust (but only
to the extent that liability is asserted to exist by reason of its becoming or
being such a lender or to the extent any pledge of assets made in connection
with such a loan is sought to be upset or impaired); any Entity to the extent
he, she, or it is alleged to be directly or indirectly liable for the conduct
of, Claims against, or Demands on any of the Debtors, the Reorganized Debtors,
or the PI Trust on account of Asbestos
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Personal Injury Claims or Lead Personal Injury Claims by reason of one or more
of the following: (i) such Entity's ownership of a financial interest in any of
the Debtors or the Reorganized Debtors, a past or present affiliate of any of
the Debtors or the Reorganized Debtors, or predecessor in interest of any of the
Debtors or the Reorganized Debtors, (ii) such Entity's involvement in the
management of any of the Debtors or the Reorganized Debtors or any predecessor
in interest of any of the Debtors or the Reorganized Debtors, (iii) such
Entity's service as an officer, director, or employee of any of the Debtors or
the Reorganized Debtors, any past or present affiliate of any of the Debtors or
the Reorganized Debtors, any predecessor in interest of any of the Debtors or
the Reorganized Debtors, or any Entity that owned a financial interest in any of
the Debtors or the Reorganized Debtors, any past or present affiliate of any of
the Debtors or the Reorganized Debtors, or any predecessor in interest of any of
the Debtors or the Reorganized Debtors (the "Related Parties"), (iv) such
Entity's provision of insurance to any of the Debtors, the Reorganized Debtors,
or the Related Parties, or (v) such Entity's involvement in a transaction
changing the corporate structure, or in a loan or other financial transaction
affecting the financial condition, of any of the Debtors, the Reorganized
Debtors, or any of the Related Parties.
The following actions, if taken for the purpose of, directly
or indirectly, collecting, recovering, or receiving payment of, on, or with
respect to any Asbestos Personal Injury Claim or Lead Personal Injury Claim
(other than pursuant to the provisions of the Asbestos and Lead PI Trust
Agreement or to enforce the provisions of the Plan) are enjoined pursuant to the
Asbestos and Lead PI Permanent Channeling Injunction:
- commencing, conducting, or continuing in any manner,
directly or indirectly, any action or proceeding
against or affecting any PI Protected Party, or any
property or interests in property of any PI Protected
Party;
- enforcing or in any way seeking to recover any
judgment, award, decree, or other order against any
PI Protected Party or any property or interests in
property of any PI Protected Party;
- creating, perfecting, or in any way enforcing any
Encumbrance against any PI Protected Party or any
property or interests in property of any PI Protected
Party;
- in any way seeking to offset, recoup, or recover any
amount against any liability owed to any PI Protected
Party; and
- proceeding in any manner in any place with regard to
any matter that is subject to resolution pursuant to
the PI Trust, except in conformity and compliance
therewith.
Nothing contained in the Asbestos and Lead PI Permanent Channeling Injunction
shall be deemed a waiver of any claim, right, or cause of action that the
Debtors, the Reorganized Debtors, or the PI Trust may have against any Entity in
connection with or arising out of an Asbestos Personal Injury Claim or Lead
Personal Injury Claim.
In 1994, the Bankruptcy Code was amended to add, inter alia,
new subsections (g) and (h) to section 524, which validate existing injunctions
similar to the Asbestos and Lead PI Permanent Channeling Injunction (such as
those used in the chapter 11 cases of Johns-Manville Corporation and UNR
Corporation) and codify a court's authority to issue a permanent injunction to
supplement the existing injunctive relief afforded by section 524 of the
Bankruptcy Code in asbestos-related reorganizations under chapter 11. The
section provides that, if certain defined conditions are
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satisfied, a court may issue a supplemental permanent injunction, such as the
Asbestos and Lead PI Permanent Channeling Injunction, barring claims and demands
against the reorganized company and channeling those claims and demands to an
independent trust. To qualify under the statute, a trust must have certain
characteristics, which are specified in section 524(g). The Debtors will seek
the issuance of the Asbestos and Lead PI Permanent Channeling Injunction
pursuant to section 524(g) and any other applicable provision of the Bankruptcy
Code.
To ensure that the PI Trust meets the standards of section
524(g) of the Bankruptcy Code, the Debtors have made compliance with these
conditions a condition precedent to confirmation of the Plan. See Section V.B,
entitled, "THE PLAN OF REORGANIZATION - Conditions to Confirmation." For a
description of the PI Trust, the Asbestos and Lead PI Trust Agreement, and the
claims resolution and payment procedures provided therein, see Section VI,
entitled, "THE PI TRUST." Although section 524(g) of the Bankruptcy Code only
addresses asbestos-related claims, the Debtors believe that the Asbestos and
Lead PI Permanent Channeling Injunction may be extended to cover Lead Personal
Injury Claims so long as they are part of the PI Trust and the requirements of
section 524(g) are met. Notably, section 524(g)(2)(B)(ii) only requires that a
trust such as the PI Trust "assume the liabilities of a debtor which at the time
of entry of the order for relief has been named as a defendant in personal
injury, wrongful death, or property damage actions seeking recovery for damages
allegedly caused by the presence of, or exposure to, asbestos or
asbestos-containing products." Such condition is undeniably satisfied under the
Plan, and nowhere in section 524(g) is there a requirement that a trust
established under section 524(g) deal exclusively with asbestos-related claims.
The Debtors are not seeking an injunction under section 524(g)
of the Bankruptcy Code with respect to Asbestos Property Damage Claims. Instead,
the Debtors will rely upon the general discharge and injunction against the
assertion of preconfirmation claims that the Bankruptcy Code makes applicable to
all Claims, whatever their nature.
J. AMENDMENT OF THE PLAN.
Upon unanimous written consent of the Plan Proponents, the
Plan Proponents may alter, amend, or modify the Plan under section 1127(a) of
the Bankruptcy Code, which requires that the Plan, as modified, comply with
sections 1122 and 1123 of the Bankruptcy Code (governing classification of
claims and interests and the contents of a plan, respectively). After the
Confirmation Date and prior to the Effective Date, the Plan Proponents may, upon
their unanimous consent, modify the Plan so long as (i) the Plan, as modified,
complies with sections 1122 and 1123 of the Bankruptcy Code, (ii) circumstances
warrant such modification, and (iii) the Bankruptcy Court, after notice and a
hearing, confirms the modified Plan under section 1129 of the Bankruptcy Code.
For all modifications, the Plan Proponents must comply with the disclosure and
solicitation requirements of section 1125 of the Bankruptcy Code.
K. REVOCATION OF THE PLAN.
Upon unanimous written consent of the Plan Proponents, the
Plan Proponents may revoke or withdraw the Plan at any time prior to the
Confirmation Date. If the Confirmation Date does not occur within one hundred
fifty (150) days after the Plan is filed with the Bankruptcy Court, then any
Plan Proponent may revoke or withdraw the Plan in its entirety. In such event,
the Debtors have reserved the right, in the exercise of their exclusive rights
under section 1121(a) of the Bankruptcy Code, to file and confirm a different
plan or to re-file the Plan. The Injury Claimants' Committee and the Future
Claimants' Representative have reserved their rights to seek the termination of
the Exclusive Periods, and the Debtors have reserved their rights to oppose any
such attempt to terminate the Exclusive Periods or to limit the Debtors'
exclusive rights in any way.
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L. INDEMNIFICATION.
The Plan provides that the obligations of the Debtors to
indemnify, reimburse, or limit the liability of certain officers and directors
of the Debtors will remain unaffected by the Plan and will not be discharged.
Specifically, the indemnification, reimbursement, and limitation of liability
obligations of the Debtors will continue as to any officer, director, or
employee who was an officer, director, or employee of the Debtors on the
Petition Date or who became an officer, director, or employee of the Debtors
after the Petition Date. Under applicable law, the Debtors' ability to indemnify
their officers, directors, and employees typically is limited to situations that
do not involve gross negligence or willful misconduct. The officers, directors,
and employees of the Debtors who continued or commenced their service with the
Debtors after the Petition Date have contributed to the successful
reorganization of the Debtors. Because the Debtors have limited the continuation
of such benefits to officers, directors, and employees of the Debtors that
either continued or commenced their employment after the Petition Date, the
Debtors believe that the continuation of such benefits is consistent with
applicable legal precedent. The continuation of such obligations as to such
persons applies to any event occurring before or after the Petition Date.
M. VESTING OF RIGHTS OF ACTION.
Under sections 544, 545, 547, 548, 549, 550, 551, and 553 of
the Bankruptcy Code, a debtor in possession has certain powers to recover money
or other assets for the benefit of the debtor's estate, eliminate security
interests in estate property, or eliminate debt incurred by the estate. Under
the Plan, all claims, rights, causes of action, avoiding powers, suits
(including any rights to, claims, or causes of action for recovery under any
policies of insurance issued to or on behalf of any of the Debtors or Debtors in
Possession), and proceedings under the avoiding power provisions shall remain
assets of the Debtors' estates and, on the Effective Date, shall be transferred
to the Reorganized Debtors.
On or about April 24, 1992, Eagle-Picher commenced an action
against Stanley Levy, trustee beneficiary under irrevocable letters of credit
nos. S113864 and S113868 established by NBD (the "Appeal Letters of Credit");
Martha DeChiaro, individually, and as executrix of the Estate of Joseph
DeChiaro; and Rosario DiNardo and Vincent DiNardo (collectively, the
"DeChiaro/DiNardo Defendants"), which action currently is pending in the
Bankruptcy Court as Adversary Proceeding No. 1-92-0131 (the "DeChiaro/DiNardo
Adversary Proceeding"). In the DeChiaro/DiNardo Adversary Proceeding,
Eagle-Picher is seeking to recover from the DeChiaro/DiNardo Defendants the
value of the Appeal Letters of Credit (in excess of $650,000.00), which were
issued within the 90-day period before the Petition Date. The basis of
Eagle-Picher's claim is, in essence, that the net result of the transfers made
in connection with the issuance of the Appeal Letters of Credit was to "secure"
the claims of the DeChiaro/DiNardo Defendants, to the detriment of
Eagle-Picher's estate.
After the DeChiaro/DiNardo Defendants filed their Answer, on
or about June 12, 1992, the Bankruptcy Court indefinitely adjourned the
DeChiaro/DiNardo Adversary Proceeding pending resolution of certain issues that
have importance in the overall context of the Chapter 11 Cases, such as whether
Eagle-Picher was insolvent prior to the Petition Date. Eagle-Picher believes
that such issues have now been resolved, and therefore, Eagle-Picher intends to
request the Bankruptcy Court to proceed with a determination of the issues
raised in the DeChiaro/DiNardo Adversary Proceeding. To the extent that a
determination is not reached prior to the Effective Date, Eagle-Picher intends
to prosecute the DeChiaro/DiNardo Adversary Proceeding thereafter.
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N. DISSOLUTION OF THE COMMITTEES.
On the Effective Date, all the Committees and the Future
Claimants' Representative shall be released and discharged of and from all
further duties and authority relating to the Chapter 11 Cases, all Committees
shall be deemed dissolved, and the Future Claimants' Representative's
appointment shall be terminated. If, however, the Effective Date occurs prior to
the Confirmation Order becoming a Final Order, then the Unsecured Creditors'
Committee, Future Claimants' Representative, and the Injury Claimants' Committee
may, at their option, continue to serve and function for the sole purpose of
participating in any appeal of the Confirmation Order until such time as the
Confirmation Order becomes a Final Order.
O. EXCULPATION.
In accordance with the Plan, neither the Plan Proponents nor
any of their respective members, officers, directors, employees, advisers, or
agents will have or incur any liability to any holder of a Claim or Equity
Interest for any act or omission in connection with, or arising out of, 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
Reorganized Debtors, the other Plan Proponents, and each of their respective
members, officers, directors, employees, advisers, and agents shall be entitled
to rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan.
P. SUPPLEMENTAL DOCUMENTS.
Forms of the documents relating to the PI Trust, the Asbestos
PD Trust, and other exhibits to the Plan will be contained in a separate exhibit
volume and will be filed with the Clerk of the Bankruptcy Court at least twenty
(20) days prior to the Confirmation Hearing. Such exhibit volume may be
inspected in the office of the Clerk of the Bankruptcy Court during normal court
hours. In addition, holders of Claims and Equity Interests may obtain a copy of
the exhibit volume, once filed, from the Debtors upon written request to the
following address:
Eagle-Picher Industries, Inc.
P.O. Box 1847
Cincinnati, Ohio 45202
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VI. THE PI TRUST
The following summarizes the terms of the Asbestos and Lead PI
Trust Agreement and the Asbestos PI Claims Procedures (as hereinafter defined).
It is intended only to be a summary, and interested parties should review the
Asbestos and Lead PI Trust Agreement and the Asbestos PI Claims Procedures. The
following summary is qualified in its entirety by such documents.
A. GENERAL DESCRIPTION OF THE PI TRUST.
1. PURPOSES OF THE PI TRUST.
The PI Trust will be established pursuant to the Eagle-Picher
Industries, Inc. Personal Injury Settlement Trust Agreement (the "Asbestos and
Lead PI Trust Agreement"), a copy of which is attached to the Plan as Exhibit
"1.1.12." The purposes of the PI Trust are (a) to assume any and all liabilities
of the Debtors, their successors in interest, or their affiliates with respect
to Asbestos Personal Injury Claims and Lead Personal Injury Claims
(collectively, "Toxic Personal Injury Claims"); (b) to use its assets and income
to promptly pay holders of valid Toxic Personal Injury Claims in substantially
the same manner; and (c) to comply in all respects with the requirements for the
PI Trust that are described in section 524(g)(2)(B)(i) of the Bankruptcy Code.
2. THE TRUSTEES.
The following five individuals will serve as the initial
Trustees under the Asbestos and Lead PI Trust Agreement (the "Trustees"): Darius
W. Gaskins, Jr., Kevin O'Donnell, Daniel M. Phillips, William J. Williams, and
Marshall Wright. Two of the Trustees, Messrs. Phillips and Wright, shall serve
for three years from the effective date of the Trust Agreement (the "Three Year
Service Period"). At the end of the Three Year Service Period, these two
positions will automatically terminate, and the PI Trust will operate with only
three Trustees until the PI Trust terminates.
Mr. Gaskins has been a partner in the firm of High Street
Associates, Inc., in Boston, Massachusetts, since 1991. From 1989 to 1991, he
was a Visiting Professor at the Center for Business and Government at Harvard
University's John F. Kennedy School of Government. From 1982 to 1989, Mr.
Gaskins was employed by Burlington Northern Railroad, where he was the Senior
Vice President of Marketing and Sales from 1982 to 1985 and the President and
Chief Executive Officer from 1985 to 1989. Mr. Gaskins is a member of the Board
of Directors of UNR Industries, Inc. He attended the United States Military
Academy, where he received his B.S. in 1961. In 1963, he received an M.S.E. in
Astronautical Engineering and an M.S.E. in Instrumentation Engineering from the
University of Michigan. In 1970, Mr. Gaskins receive a Ph.D. in Economics from
the University of Michigan.
Mr. O'Donnell currently is a member of the Board of Directors
of SIFCO Industries, Inc. and has served as the Chairman of the Executive
Committee since July of 1990. Prior to that time, Mr. O'Donnell was the Chief
Executive Officer (October, 1989-June, 1990), President and Chief Executive
Officer (February 1983-September, 1989), President and Chief Operating Officer
(January 1976-January 1983), and Executive Vice President (July, 1972-December,
1975) of such company. Mr. O'Donnell received his A.B. in 1947 from Kenyon
College, an M.B.A. from the Harvard Business School in 1947, and honorary
degrees from Pusan National University, Korea (Economics, 1970), and Ohio
Wesleyan University (Humanities, 1972).
Mr. Phillips has been a consultant to the UNR Asbestos-Disease
Trust since 1990. Mr. Phillips also has worked with the Asbestos Claims
Facility, in Princeton, New Jersey, where he
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has served as a Consultant to the Board in 1986, Director of Administration from
1987 to 1988, and President from 1989 to the present. Mr. Phillips received his
B.S. in Accounting from Ohio State University in 1958 and his J.D. from Ohio
State University in 1961.
Mr. Williams is the former Chairman and Chief Executive
Officer of Huntington National Bank, in Cleveland, Ohio. He currently is a
member of the Board of Directors of UNR Industries, Inc. He received his J.D.
from the University of Richmond in 1955.
Mr. Wright has been the Vice-President-Corporate Affairs for
the Eaton Corporation in Cleveland, Ohio, since 1980. Prior to that time, he
served as the Vice President-Government Affairs for Eaton Corporation from 1974
to 1976 and the Vice President-Public Affairs for Eaton Corporation from 1976 to
1980. Mr. Wright has received degrees from Georgetown University's Foreign
Service School, the University of Arkansas, and Cornell University, and was a
Senior Fellow at the National War College.
Each Trustee shall serve until the Trustee's death,
resignation, removal, or the termination of the PI Trust. Any Trustee may be
removed for cause, including certain conflicts of interest, with the unanimous
consent of the other Trustees. In the event of a vacancy in a Trustee position,
the vacancy will be filled by a majority vote of the remaining Trustees. If the
vacancy occurs during the Three Year Service Period, the Trustees have the
discretion not to appoint a successor trustee as long as the remaining Trustees
number no less than three.
Each Trustee will be entitled to receive initial compensation
of $35,000.00 per annum plus a per diem allowance for meetings attended of
$1,000.00, as well as out-of-pocket costs and expenses. The Trustees' per annum
compensation may only be increased annually at the rate of the Consumer Price
Index - All Cities. Any increase in excess of such an adjustment based on the
Consumer Price Index may be made only with the Bankruptcy Court's approval.
The Trustees may sit on the Board of Directors of Reorganized
Eagle-Picher, but they will not receive additional compensation for their
service on such board over and above the compensation received as Trustees. The
Trustees shall receive from the PI Trust, however, the same per diem allowance
as Reorganized Eagle-Picher pays its directors for attendance at meetings.
Subject to a number of limitations set forth in the Asbestos and Lead PI Trust
Agreement, the Trustees have the power to take any and all actions that are
necessary to fulfill the purposes of the PI Trust and need not obtain Bankruptcy
Court approval to do so.
3. THE TRUSTEES' ADVISORY COMMITTEE.
The Asbestos and Lead PI Trust Agreement provides for the
establishment of a Trustees' Advisory Committee (the "TAC"). Robert E. Sweeney,
Robert B. Steinberg, and James J.G. McMonagle (the Future Claimants'
Representative) will be the initial TAC members. The Future Claimants'
Representative shall serve as Chairperson of the TAC for as long as he is a
member.
Mr. McMonagle, 52, is the Future Claimants' Representative in
the Chapter 11 Cases. Mr. McMonagle is currently general counsel for University
Hospital in Cleveland, Ohio, and is a Trustee of the UNR Industries, Inc. Injury
Claimants' Trust. Prior to holding these positions, Mr. McMonagle was a Judge of
the Ohio Common Pleas Court for Cuyahoga County.
Mr. Sweeney, 72, is a member of the law firm of Robert E.
Sweeney Co., L.P.A., in Cleveland, Ohio. Mr. Sweeney is the Chairperson of the
Injury Claimants' Committee and is a nationally prominent asbestos personal
injury attorney.
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Mr. Steinberg, 68, is a member of the law firm of Rose, Klein
& Marias in Los Angeles, California, and is a member of the Injury Claimants'
Committee. Mr. Steinberg is a nationally prominent asbestos personal injury
attorney.
Each member of the TAC shall serve for the duration of the PI
Trust or until death, resignation, or removal. Removal of a TAC member requires
the unanimous consent of the remaining TAC members. In the event of a vacancy
caused by resignation, the vacancy will be filled by an individual nominated by
the resigning TAC member and approved by the unanimous vote of all TAC members.
In the event of a vacancy other than one caused by resignation, the vacancy
shall be filled by the unanimous vote of the remaining TAC members. The Future
Claimants' Representative shall have the exclusive right to pre-designate his
successor following the termination of his service for any reason, subject to
unanimous approval of the remaining members.
The Trustees are required to consult with the TAC on the
appointment of successor Trustees, the expenditure of PI Trust funds on
lead-related research (see section , entitled, "THE PI TRUST - Lead Personal
Injury Claims"), the implementation and administration of the Asbestos PI Claims
Procedures (as hereinafter defined), and the adoption and administration of the
EPI Lead Claims Procedures (as defined in the Asbestos and Lead PI Trust
Agreement). The Trustees must obtain the consent of a majority of TAC members to
make material amendments to the Asbestos PI Claims Procedures, to merge or
participate with other claims resolution facilities, to amend the PI Trust's TAC
provisions, and to terminate the PI Trust under certain conditions specified in
the Asbestos and Lead PI Trust Agreement.
Each TAC member will be entitled to receive as initial
compensation $2,500.00 per meeting plus out-of-pocket costs and expenses. The
Chairperson, however, may receive compensation in addition to the per diem
meeting allowance if the Trustees deem it appropriate. Such additional
compensation will be paid at the hourly rate previously approved for the Future
Claimants' Representative by the Bankruptcy Court.
4. TRANSFER OF CERTAIN PROPERTY TO THE PI TRUST.
On the Effective Date or as soon thereafter as is practicable,
the Reorganized Debtors will transfer and assign, or cause to be transferred and
assigned, to the PI Trust all books and records of the Debtors that pertain
directly to Asbestos Personal Injury Claims or Lead Personal Injury Claims that
have been asserted against the Debtors (except, in the case of Lead Personal
Injury Claims, to the extent that any such Lead Personal Injury Claims are the
subject of an objection brought by any of the Debtors and which the Debtors
prosecute in accordance with section 5.1 of the Plan, in which case the books
and records pertaining to such Lead Personal Injury Claims will be transferred
to the PI Trust as soon as practicable after such objection has been resolved by
a Final Order or the Reorganized Debtors elect not to pursue such objection).
The Plan Proponents will request that the Bankruptcy Court, in the Confirmation
Order, rule that such transfer does not result in the destruction or waiver of
any applicable privileges pertaining to such books and records. If the
Bankruptcy Court does not so rule, at the option of the Plan Proponents, the
Reorganized Debtors will retain the books and records and enter into
arrangements to permit the PI Trust to have access to such books and records.
Certain rights to insurance, to be agreed upon by the Plan Proponents (each in
its sole discretion), also will be transferred to the PI Trust on the Effective
Date. On the Initial Distribution Date and the Final Distribution Date, the
Reorganized Debtors shall transfer and assign to the PI Trust its Pro Rata Share
of the Distribution Value (less, in the case of the Final Distribution Date, the
value of the consideration transferred to the PI Trust on the Initial
Distribution Date). Such Pro Rata Share will be funded with consideration
consisting of (i) all the Tax Refund Notes, (ii) all the New Eagle-Picher Common
Stock, (iii) the portion of the Senior Unsecured Sinking Fund Debentures
remaining after the funding of the Asbestos PD Trust, and (iv) the portion of
the Available Cash and Divestiture Notes remaining after
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making Distributions (and, in the case of the Initial Distribution Date, making
allowance for potential Distributions) to the holders of Claims in Classes 19,
20, and 21.
Based upon the Debtors' best estimate of the ultimate amount
of Allowed Claims, if Class 16 (Asbestos Property Damage Claims) votes to accept
the Plan, then the Debtors estimate that the PI Trust ultimately will receive
100% of the Tax Refund Notes, 100% of the Senior Unsecured Sinking Fund
Debentures, 100% of the New Eagle-Picher Common Stock, 50% of the Divestiture
Notes, and 72% of the Available Cash.
5. OWNERSHIP AND TRANSFER OF NEW EAGLE-PICHER COMMON STOCK BY THE
PI TRUST.
The PI Trust is to own all the outstanding voting shares of
Reorganized Eagle-Picher. In exercising their duty to fulfill the purpose of the
PI Trust, the Trustees may, without limitation, vote the New Eagle-Picher Common
Stock, exercise all rights with respect thereto, and sell any securities issued
by Reorganized Eagle-Picher that are included in the Trust Assets (as defined in
the Asbestos and Lead PI Trust Agreement). Pursuant to the Amended and Restated
Articles of Incorporation, however, the Trustees shall not be permitted to sell,
exchange, transfer, distribute in satisfaction of Allowed Toxic Personal Injury
Claims, or otherwise dispose of any New Eagle-Picher Common Stock, or any other
interest in Reorganized Eagle-Picher that is treated as "stock" for purposes of
section 382 of the Internal Revenue Code, for a period of at least twenty-five
(25) months from the Effective Date. See Section , entitled, "RESTRICTIONS ON
TRANSFERS OF CORPORATE SECURITIES AND CERTAIN CLAIMS."
6. PI TRUST TERMINATION PROVISIONS.
The PI Trust is irrevocable, but will terminate ninety (90)
days after the first of any of the following events occurs:
- the Trustees, in their sole discretion, decide to
terminate the PI Trust because (i) all duly filed
Toxic Personal Injury Claims have been liquidated and
satisfied, (ii) twelve (12) consecutive months have
elapsed during which no such claims have been filed
with the PI Trust, (iii) the Trustees determine that
it is unlikely that any new claims will be filed
against the PI Trust;
- a final order of the Bankruptcy Court is obtained
approving the Trustees' procurement of irrevocable
insurance policies and establishment of claim
handling agreements with suitable third parties
adequate to discharge all expected remaining PI Trust
obligations;
- in the judgment of two-thirds of the Trustees, with
the consent of the TAC, the continued administration
of the PI Trust is uneconomic or inimical to the best
interests of the persons holding Toxic Personal
Injury Claims, and the termination will not expose
Reorganized Eagle-Picher or any successor to any
increased or undue risk of having claims asserted
against it or them or in any way jeopardize the
validity or the enforceability of the Asbestos and
Lead PI Permanent Channeling Injunction; or
- 21 years less 91 days pass after the death of the
last survivor of all of the descendants of Joseph P.
Kennedy, Sr., of Massachusetts, living on the date of
the establishment of the PI Trust.
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After payment of all the PI Trust's liabilities have been
provided for, and after the PI Trust terminates, all monies remaining in the PI
Trust shall be transferred to charitable organizations exempt from federal
income tax under section 501(c)(3) of the Internal Revenue Code. These
tax-exempt organizations shall be selected by the Trustees, but shall be
unrelated to Reorganized Eagle-Picher and, if practicable, shall be related to
the treatment of asbestos- or lead-caused disorders. The Plan Proponents
believe that the likelihood of any monies remaining in the PI Trust after the PI
Trust terminates is extremely remote.
7. ABILITY TO AMEND PI TRUST DOCUMENTS.
The Trustees, subject to the TAC's consent, may modify or
amend certain provisions of the Asbestos and Lead PI Trust Agreement or any
document annexed thereto. Certain PI Trust provisions, however, are not subject
to amendment under any conditions.
B. ASBESTOS PERSONAL INJURY CLAIMS RESOLUTION PROCEDURES.
The Trustees will implement and administer the Eagle-Picher
Industries, Inc. Asbestos Personal Injury Claims Resolution Procedures (the
"Asbestos PI Claims Procedures"), which are attached to the Asbestos and Lead PI
Trust Agreement as Annex "B." The Asbestos PI Claims Procedures are designed to
provide prompt payment to similar Asbestos Personal Injury Claims in
substantially the same manner. Claims will be processed and paid in an order
that the Trustees will devise based on a first-in, first-out ("FIFO") principle.
In order to reduce transaction costs, however, the Trustees may process,
liquidate, and pay valid Asbestos Personal Injury Claims in groups of claims or
otherwise, provided that such payment is consistent with section
524(g)(2)(B)(ii)(V) of the Bankruptcy Code.
1. PAYMENT PERCENTAGE.
There is inherent uncertainty regarding the Debtors' total
liability to holders of Asbestos Personal Injury Claims as well as the total
value of the assets available to pay valid Asbestos Personal Injury Claims.
Consequently, there is inherent uncertainty regarding the amounts that holders
of valid Asbestos Personal Injury Claims will receive. To ensure substantially
equivalent treatment of all present and future valid Asbestos Personal Injury
Claims, prior to making distributions to claimants, other than those who have
elected the discounted cash payments (discussed below), the Trustees must
determine the percentage of full liquidated value that valid Asbestos Personal
Injury Claims would likely receive (the "Payment Percentage"). The Trustees must
base this determination, on the one hand, on estimates of the number, types, and
values of present and future Asbestos Personal Injury Claims and, on the other
hand, on the value of the PI Trust's assets, the liquidity of those assets, the
PI Trust's expected future expenses for administration and legal defense, and
other material matters that are reasonable and likely to affect the sufficiency
of funds to pay a comparable percentage of full value to all holders of Asbestos
Personal Injury Claims. At present, based upon the facts known to date, the Plan
Proponents believe that it is likely that the Payment Percentage will be less
than the estimated 33% distribution that holders of Allowed Claims in Classes
19, 20, and 21 are expected to receive under the Plan. Periodically, but no less
frequently than once every two (2) years, the Trustees must reconsider their
determination of the Payment Percentage to assure that it is based on accurate,
current information, and the Trustees may change the Payment Percentage after
such reconsideration.
In light of the present absence of any court judgment imposing
personal injury liability upon any lead pigment manufacturer such as
Eagle-Picher and the difficult, expensive, and inherently uncertain task of
estimating the amount of valid Lead Personal Injury Claims, if any, that the PI
Trust may be required to pay some time in the future, the Trustees shall not be
required to estimate the PI
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Trust's possible liability for, or decide whether to reserve funds or otherwise
maintain sufficient resources for the payment of, Lead Personal Injury Claims
until the latest of the following events:
- four (4) years have passed after the
Effective Date;
- the PI Trust has paid $1,000,000.00 in
indemnity costs, as opposed to claim defense
costs, for Lead Personal Injury Claims in
one calendar year; and
- holders of Lead Personal Injury Claims have
obtained final, nonappealable liability
judgments against lead pigment manufacturers
in more than one state.
2. CLAIMS MATERIALS, CLAIMS EVALUATION, AND PAYMENT PROCEDURES.
As soon as reasonably practical, but not later than six (6)
months following the Effective Date, the PI Trust will mail Claims Materials (as
such term is defined in the Asbestos PI Claims Procedures) to each person who
has filed a proof of claim with the Bankruptcy Court, or who has a pending
lawsuit against Eagle-Picher, or who otherwise has been identified to the
Trustees, except that the PI Trust need not provide Claims Materials to holders
of Prepetition Liquidated Claims or Discounted Election Claims (as those terms
are defined in the Asbestos PI Claims Procedures). Each Claimant must return
completed Claims Materials within six (6) months after receipt. Failure to
return completed Claims Materials will result in automatic disallowance of an
Asbestos Personal Injury Claim unless the Claimant can show that failure to
complete the materials should be excused.
To establish a valid Asbestos Personal Injury Claim, a
Claimant must make a conclusive demonstration of exposure to an Eagle-Picher
asbestos-containing product and submit a medical report from a qualified
physician containing a diagnosis of an asbestos-related injury. The medical
report must result from a physical examination of the Claimant. Also, the
Claimant must have complied with the Asbestos Bar Date to receive compensation
unless the non-complying claimant can show the Trustees that failure to comply
resulted from excusable neglect, or that the Asbestos Personal Injury Claim
first manifested itself after the Asbestos Bar Date.
The Procedures establish four claims categories:
a. PREPETITION LIQUIDATED CLAIMS.
"Prepetition Liquidated Claims" are Asbestos Personal
Injury Claims that were liquidated either by settlement agreement entered into
prior to January 7, 1991, or by judgment that became final and non-appealable
prior to January 7, 1991. The Debtors estimate that Prepetition Liquidated
Claims total approximately $40 million. Unless not feasible after every
reasonable effort, these claims will be paid no later than 60 days after the
Effective Date. These Claims will be paid based on FIFO principles and should
not require any processing other than verification of the holder's identity,
payment of the Claim, and release of the PI Trust. The liquidated value of such
Claims, subject to adjustment by the Payment Percentage, is the amount awarded
in the prepetition settlement or judgment. If, however, the Prepetition
Liquidated Claim is secured by letters of credit, appeal bonds, or other
security, the holder must first exhaust his or her rights against the security
for full payment. Any deficiency will be paid as a Prepetition Liquidated Claim.
b. DISCOUNTED ELECTION CLAIMS.
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At the time the holders of Asbestos Personal Injury Claims
vote on the Plan, they may elect to receive a discounted cash payment. The
holder of a valid Asbestos Personal Injury Claim can elect to make a full and
final settlement with the PI Trust in exchange for a single cash payment.
However, holders of valid Asbestos Personal Injury Claims based on a
non-malignant injury who elect this payment option may file a new Asbestos
Personal Injury Claim for a subsequently diagnosed asbestos-related malignancy,
and any additional payments to which such claimant may be entitled shall not be
reduced by the amount of the discounted cash payment received.
Holders of Asbestos Personal Injury Claims choosing a
discounted cash payment will receive compensation in the following amounts:
<TABLE>
<S> <C>
Mesothelioma $6,500.00
Lung Cancer 2,000.00
Other Cancers 1,000.00
Non-Malignancy 400.00
</TABLE>
The Trustees will use their best efforts to pay holders of Asbestos Personal
Injury Claims who elect to receive a discounted cash payment no later than 60
days after the Effective Date, based upon FIFO principles.
It is impossible to determine at this date how many holders of
Asbestos Personal Injury Claims will elect to treat their claims as discounted
election claims.
c. INDIVIDUALLY REVIEWED CLAIMS.
A Claimant who does not choose to receive a discounted cash
payment or whose Asbestos Personal Injury Claim was rejected by the Trustees for
discounted cash payment and who elects individualized review shall have his or
her Claim reviewed by the Trustees based upon an evaluation of exposure, loss,
damages, injury and other factors determinative of claim value according to
applicable tort law. The PI Trust will categorize Asbestos Personal Injury
Claims by injury, may further subcategorize Asbestos Personal Injury Claims by
occupation, medical criteria, or other factors, and shall determine a limited
range of liquidated values for each category and subcategory. Offers of payments
to Claimants shall be determined by assigning to their Asbestos Personal Injury
Claims an appropriate value within the applicable range and multiplying that
value by the Payment Percentage. The PI Trust, however, will reduce the value of
less serious, non-fatal Asbestos Personal Injury Claims that did not elect to
receive discounted cash payments to reflect the PI Trust's increased costs of
individualized review. The values chosen shall represent Eagle-Picher's average
historical payments for similar Asbestos Personal Injury Claims but shall not
include punitive damages or any type of interest.
Individually reviewed claims will be processed and liquidated
in the following order:
(i) substantially all Asbestos Personal Injury Claims
filed in lawsuits against Eagle-Picher prior to January 7, 1991, shall
be processed and liquidated no later than eighteen (18) months after
the Effective Date;
(ii) substantially all Asbestos Personal Injury
Claims not filed in lawsuits against Eagle-Picher prior to January 7,
1991, but whose holders filed timely proofs of claim in the Chapter 11
Cases, shall be processed and liquidated no later than thirty-six (36)
months after the Effective Date;
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(iii) substantially all Asbestos Personal Injury
Claims not filed in lawsuits against Eagle-Picher prior to January 7,
1991, and whose holders did not file timely proofs of claim in the
Chapter 11 Cases, but whose holders at any time prior to the
Confirmation Date (A) had filed lawsuits in the tort system against
asbestos manufacturers other than Eagle-Picher, (B) had filed a proof
of claim with any other asbestos victims' trust or claims processing
facility, or (C) had filed a registration of any asbestos claims on any
inactive docket or similar asbestos claims registry; and
(iv) Asbestos Personal Injury Claims not described in
subsections (i) through (iii) above, shall be processed and liquidated
as soon as possible but not before the Claims described in subsections
(i) through (iii) above.
The Trustees, however, retain discretion to determine the
timing and appropriate payment method for making individual payments to
Claimants holding valid Asbestos Personal Injury Claims under the individualized
review process. Nothing contained in the Asbestos PI Claims Procedures regarding
the processing and payment of Asbestos Personal Injury Claims will affect the PI
Trust's right to enforce the Asbestos Bar Date.
d. OTHER SETTLEMENT OPTIONS.
At any time the Trustees may individually evaluate and pay
Exigent Health Claims and Extreme Hardship Claims outside the established order.
An "Exigent Health Claim" is an Asbestos Personal Injury Claim as to which the
Claimant provides a medical opinion that there is substantial medical doubt that
the Claimant will survive beyond six (6) months. An "Extreme Hardship Claim" is
an Asbestos Personal Injury Claim as to which the Claimant needs immediate
financial assistance.
An "Extraordinary Asbestos Personal Injury Claim," one where a
Claimant's economic damages are exceptionally larger than the normal range, may
be paid in excess of the range of values for the specific disease.
3. ALTERNATIVE PROCEDURES.
A Claimant may elect binding or non-binding arbitration, and
then resort to the tort system, for all claims not resolved by the discounted
cash payment procedure or the individualized review procedure described above.
A. BINDING OR NON-BINDING ARBITRATION PROCEDURES.
Holders of Asbestos Personal Injury Claims may elect
to submit their Claims to binding or non-binding arbitration only after other
alternative dispute resolution procedures established by the Trustees have
failed. If arbitration becomes necessary, the arbitrator must return an award
within the range of the Trustees' injury category value limits for the injury
category in which the Asbestos Personal Injury Claim properly falls. In cases
involving Extraordinary Asbestos Personal Injury Claims, the arbitrator may
return awards in excess of the category limits. An award from binding
arbitration, and a non-binding arbitration award accepted by the Claimant, will
be multiplied by the Payment Percentage to determine the Claimants' payment
amount.
B. TRIAL.
Only Claimants who opt for non-binding arbitration
and then reject their awards retain the right to a jury trial. The statute of
limitations will be tolled as of the earlier of the
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date the Claim was filed with the PI Trust or the date the Claimant filed a
complaint against Eagle-Picher. If a Claimant obtains a final judgment in
excess of the highest amount in the range of values for his or her injury
category, he or she will be paid when funds are available the appropriate
Payment Percentage of the highest amount in such range. The appropriate Payment
Percentage for the excess of the judgment above the foregoing amount will be
paid by the PI Trust no later than five (5) years after the date the final
judgment is entered, or in five (5) annual installments beginning five (5) years
after the date of the final judgment, if the Trustees determine that immediate
payment will adversely affect payments to other Claimants.
C. SEPARATE RESERVE FOR FUTURE CLAIMS.
The first $50 million of all payments received by the PI Trust
with respect to the Divestiture Notes and the Senior Unsecured Sinking Fund
Debentures will be segregated and held in a separate account as a reserve for
the payment of Toxic Personal Injury Claims whose holders first manifest a
disease after the Effective Date. The segregation and holding of such funds,
however, shall not in any way alter the duties of the Trustees to pay similar
present and future Toxic Personal Injury Claims in substantially the same
manner.
D. LEAD PERSONAL INJURY CLAIMS.
The Trustees shall administer the processing and payment of
Lead Personal Injury Claims pursuant to EPI Lead Claims Procedures to be adopted
by the Trustees. These procedures shall be similar to the Asbestos PI Claims
Procedures, except that the PI Trust shall not process a Lead Personal Injury
Claim unless the holder can demonstrate that either the holder or a similarly
situated Claimant has obtained a final, nonappealable judgment against a lead
pigment manufacturer under the state law applicable to the holder's claim. Due
to the absence of any court judgment imposing liability on a lead pigment
manufacturer and the difficulty in estimating the value of Lead Personal Injury
Claims, the Trustees are not required to set aside a reserve for these claims
unless certain events occur which are specified in the Trust Agreement. See
Section , entitled, "THE PI TRUST - Asbestos Personal Injury Claims Resolution
Procedures - Payment Percentage."
Pursuant to the Asbestos and Lead PI Trust Agreement, the
Trustees are required to promptly educate and inform themselves as to the Lead
Personal Injury Claims that may be asserted against the PI Trust. To do so, the
Trustees shall expend no more than $2.5 million of PI Trust funds, in total, for
medical, scientific, and other research into diseases and conditions allegedly
caused by exposure to lead pigment-containing products. The Trustees shall be
required to consult with the TAC regarding the expenditure of such funds for
research.
E. CO-DEFENDANTS' PROCEDURES.
Asbestos or Lead Contribution Claims that have not been
disallowed, discharged, or otherwise resolved by prior order of the Bankruptcy
Court shall be processed, allowed or disallowed, liquidated, paid, and satisfied
in accordance with procedures to be developed and implemented by the Trustees
consistent with the standards established by section 502(e) of the Bankruptcy
Code. These procedures shall determine the validity of the Claims and require
binding arbitration for the resolution of all disputes, thereby foreclosing
resort to the tort system. Also, these procedures must provide the same
processing and payment to holders of such Asbestos or Lead Contribution Claims
that are allowed as the PI Trust would have afforded the underlying Claimant.
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VII. THE ASBESTOS PD TRUST
The following summarizes the terms of the Asbestos PD Trust
Agreement (as hereinafter defined). It is intended only to be a summary, and
interested parties should review the Asbestos PD Trust Agreement. The following
summary is qualified in its entirety by such document.
A. THE PURPOSES OF THE ASBESTOS PD TRUST.
The Asbestos PD Trust will be established pursuant to the
Eagle-Picher Industries, Inc. Asbestos Property Damage Settlement Trust
Agreement (the "Asbestos PD Trust Agreement"), a copy of which is attached to
the Plan as Exhibit "1.1.16." The purposes of the Asbestos PD Trust are (a) to
assume any and all liabilities of the Debtors, their successors in interest, or
their affiliates with respect to Asbestos Property Damage Claims and (b) to use
its assets and income to satisfy valid Asbestos Property Damage Claims in
substantially the same manner.
B. THE TRUSTEES.
If Class 16 votes to accept the Plan, then the number of
trustees under the Asbestos PD Trust Agreement will be equal to the number of
purported class proofs of claim relating to Asbestos Property Damage Claims that
are outstanding as of the Effective Date. These trustees will be selected by the
class representative for each of the classes that purported to file, and has
outstanding as of the Effective Date, a class proof of claim with respect to
Asbestos Property Damage Claims, with each of such class representatives
selecting one trustee. The terms of the trustees' compensation and service will
be determined at the time of their selection pursuant to an amendment to the
Asbestos PD Trust Agreement.
If Class 16 votes to reject the Plan, then Eagle-Picher will
select one or more trustees for the Asbestos PD Trust, which may be Reorganized
Eagle-Picher, by notice filed with the Bankruptcy Court on or before ten (10)
days before the Confirmation Hearing.
C. TRANSFER OF CERTAIN PROPERTY TO THE ASBESTOS PD TRUST.
On the Effective Date or as soon thereafter as is practicable,
the Reorganized Debtors will transfer and assign, or cause to be transferred and
assigned, to the Asbestos PD Trust all books and records of the Debtors that
pertain directly to Asbestos Property Damage Claims (except to the extent that
any such Asbestos Property Damage Claims are the subject of an objection brought
by any of the Debtors and which the Debtors prosecute in accordance with section
5.1 of the Plan, in which case the books and records pertaining to such Asbestos
Property Damage Claims will be transferred to the Asbestos PD Trust as soon as
practicable after such objection has been resolved by a Final Order or the
Reorganized Debtors elect not to pursue such objection). The Plan Proponents
will request that the Bankruptcy Court, in the Confirmation Order, rule that
such transfer does not result in the destruction or waiver of any applicable
privileges pertaining to such books and records. If the Bankruptcy Court does
not so rule, at the option of the Plan Proponents, the Reorganized Debtors will
retain the books and records and enter into arrangements to permit the Asbestos
PD Trust to have access to such books and records.
If Class 16 votes to accept the Plan, on the Effective Date or
as soon thereafter as is practicable, the Reorganized Debtors shall transfer and
assign to the Asbestos PD Trust $3 million in cash.
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If, on the other hand, Class 16 votes to reject the Plan, then
the Reorganized Debtors will seek in the Bankruptcy Court an estimation of the
aggregate value of the Asbestos Property Damage Claims. This estimated value,
which the Debtors believe is $0, will be the Asbestos PD Trust Share and will be
used to determine the Asbestos PD Trust's Pro Rata Share of the Distribution
Value, and the Asbestos PD Trust will be funded with Senior Unsecured Sinking
Fund Debentures in an aggregate principal amount equal to such Pro Rata Share.
D. CLAIMS RESOLUTION PROCEDURES.
If Class 16 votes to accept the Plan, the trustees of the
Asbestos PD Trust will develop procedures governing the allowance and payment of
Asbestos Property Damage Claims. If Class 16 votes to reject the Plan, then the
claims resolution procedures that are attached as Exhibit "1.1.6.5" to the Plan
will govern the allowance and payment of Asbestos Property Damage Claims. For a
more detailed discussion of such claims resolution procedures, see Section ,
entitled, "THE PLAN OF REORGANIZATION - Classification and Treatment of Claims
and Equity Interests - Class 16: Asbestos Property Damage Claims."
E. ASBESTOS PD TRUST TERMINATION PROVISIONS.
The Asbestos PD Trust is irrevocable, but will terminate
ninety (90) days after the first of any of the following event occurs:
- the trustees of the Asbestos PD Trust, in their sole
discretion, decide to terminate the Asbestos PD Trust
because all duly filed Asbestos Property Damage
Claims have been liquidated and satisfied;
- a final order of the Bankruptcy Court is obtained
approving the procurement of irrevocable insurance
policies and establishment of claim handling
agreements with suitable third parties adequate to
discharge all expected remaining obligations of the
Asbestos PD Trust;
- 21 years less 91 days pass after the death of the
last survivor of all of the descendants of Joseph P.
Kennedy Sr., of Massachusetts, living on the date of
the establishment of the Asbestos PD Trust.
After payment of all the Asbestos PD Trust's liabilities have
been provided for, and after the Asbestos PD Trust terminates, all monies
remaining in the Asbestos PD Trust shall be transferred to charitable
organizations exempt from federal income tax under section 501(c)(3) of the
Internal Revenue Code. These tax-exempt organizations shall be selected by the
trustees of the Asbestos PD Trust, but shall be unrelated to Reorganized
Eagle-Picher.
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VIII. CONFIRMATION AND CONSUMMATION PROCEDURE
Under the Bankruptcy Code, the following steps must be taken
to confirm the Plan:
A. SOLICITATION OF VOTES.
In accordance with sections 1126 and 1129 of the Bankruptcy
Code, the Claims in each of Classes 3, 4, 10, 12, 16, 17, 18, 19, 20, and 21 of
the Plan are impaired, and the holders of Claims in each of such Classes are
entitled to vote to accept or reject the Plan in the manner and to the extent
set forth in the Voting Procedures. Pursuant to the Voting Procedures, any
Claimant holding a Claim in an impaired class under the Plan may vote on the
Plan so long as such Claim has not been disallowed and is not the subject of an
objection pending as of the Voting Record Date (the date that is five business
days after the entry of the order approving this Disclosure Statement by the
Bankruptcy Court - September 5, 1996). Nevertheless, if a Claim is the subject
of such an objection, the holder thereof may vote if, prior to the Voting
Deadline (November 4, 1996), such holder obtains an order of the Bankruptcy
Court, or the Bankruptcy Court approves a stipulation between the Debtors and
such holder fully or partially allowing such Claim, whether for all purposes or
for voting purposes only.
Claims and interests in each of Classes 1, 2, 5, 6, 7, 8, 9,
11, 13, 14, 15, and 22 are unimpaired. The holders of Allowed Claims and
interests in each of such classes are conclusively presumed to have accepted the
Plan, and the solicitation of acceptances with respect to each such Class is not
required under section 1126(f) of the Bankruptcy Code. The Plan provides that
the holders of Penalty Claims in Class 23 and Equity Interests in Class 24 will
not receive any distributions of property or retain any interest in the Debtors.
In accordance with section 1126(g) of the Bankruptcy Code, such classes of
Penalty Claims and Equity Interests are conclusively presumed to have rejected
the Plan.
As to classes of claims entitled to vote on a plan, the
Bankruptcy Code defines acceptance of a plan by a class of creditors as
acceptance by holders of at least two-thirds in dollar amount and more than
one-half in number of the claims of that class that have timely voted to accept
or reject a plan. The Voting Procedures provide certain special rules concerning
the calculation of the amount of Claims voting in a Class of Claims:
- BEARER DEBT SECURITIES. The amount that will be used
to tabulate acceptance or rejection of the Plan by
the holders of Bearer Debt Securities will be the
amount shown on the ballot, except as follows: (i) to
the extent that the aggregate amount of Bearer Debt
Securities voted exceeds the amount outstanding, Hill
& Knowlton will attempt to resolve such overvote;
(ii) in the event that blocked Bearer Debt Securities
are "unblocked" (i.e., withdrawn, moved, or otherwise
transferred) prior to the Voting Deadline, the
Depositary with which such Bearer Debt Securities
were deposited shall not include any ballots received
with respect to such Bearer Debt Securities prior to
the date such Bearer Debt Securities became
unblocked; (iii) each holder of Bearer Debt
Securities will be deemed to have voted the full
amount of its holdings of Bearer Debt Securities, and
(iv) to the extent that ballots are received from
different holders of Bearer Debt Securities with
respect to Bearer Debt Securities having the same
certificate numbers, Hill & Knowlton shall attempt to
determine which holder held such Bearer Debt
Securities as of the Voting Deadline, and, in the
absence of contrary information, the latest dated
ballot shall be deemed to have been cast by the
holder of such Bearer Debt Securities as of the
Voting Deadline.
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- REGISTERED DEBT SECURITIES. The amount that will be
used to tabulate acceptance or rejection of the Plan
by the holders of Registered Debt Securities will be
the amount shown on the records of the Registered
Debt Securities Trustees and the Debt Nominees (as
confirmed by record and depositary listings) as of
the Voting Record Date. Certain additional rules will
apply to the tabulation of ballots cast by record
holders and beneficial owners of Registered Debt
Securities to prevent or resolve "overvotes" and to
reconcile multiple, inconsistent ballots.
- CLAIMS OTHER THAN DEBT SECURITIES, ASBESTOS PROPERTY
DAMAGE CLAIMS, ASBESTOS PERSONAL INJURY CLAIMS,
ENVIRONMENTAL CLAIMS, AND LEAD PERSONAL INJURY
CLAIMS. With respect to the tabulation of ballots for
all Claims other than Registered Debt Securities,
Bearer Debt Securities, Asbestos Property Damage
Claims, Asbestos Personal Injury Claims, and Lead
Personal Injury Claims, for purposes of voting, the
amount to be used to tabulate acceptance or rejection
of the Plan is as follows (in order of priority): (i)
if prior to the Voting Deadline, the Bankruptcy Court
enters an order or approves a stipulation between the
Debtors and the Claimant fully or partially allowing
a Claim, whether for all purposes or for voting
purposes only, the amount allowed thereunder; (ii)
the liquidated amount specified in a proof of claim
filed on or before the General Bar Date so long as
such proof of claim has not been disallowed by the
Bankruptcy Court and is not the subject of an
objection pending as of the Voting Record Date; (iii)
the Claim amount listed in the Schedules as
liquidated, undisputed, and not contingent; and (iv)
if a proof of claim has been filed on or before the
General Bar Date, and such Claim is wholly contingent
or unliquidated, the Claim amount, for voting
purposes only, shall be $1.00 so long as such proof
of claim has not been disallowed by the Bankruptcy
Court and is not the subject of an objection pending
as of the Voting Record Date.
- ASBESTOS PROPERTY DAMAGE CLAIMS, ASBESTOS PERSONAL
INJURY CLAIMS, AND LEAD PERSONAL INJURY CLAIMS. For
voting purposes only, the amount to be used to
tabulate acceptance or rejection of the Plan by the
holders of Asbestos Property Damage Claims, Asbestos
Personal Injury Claims, and Lead Personal Injury
Claims will be $1.00 for each Asbestos Property
Damage Claim, Asbestos Personal Injury Claim, and
Lead Personal Injury Claim proof of which was timely
filed. If a class proof of claim was filed by the
representative of a class of Asbestos Property Damage
Claims that has been certified or conditionally
certified in a pending federal or state court action,
100 randomly selected members of each class will be
entitled to cast votes on the Plan, with the number
of votes to be determined by the number of members of
such class divided by 100. Each of such votes will be
in the amount of $1.00.
- ENVIRONMENTAL CLAIMS. For voting purposes only, the
amount to be used to tabulate acceptance or rejection
of the Plan by the holders of Environmental Claims
will be (i) with respect to the parties to the
Environmental Settlement Agreement, the amount
allowed to the EPA and each of the State Parties on
account of the Liquidated Sites and (ii) with respect
to the other holders of Environmental Claims, the
amount of any liquidated claim allowed to such holder
under its applicable settlement agreement plus the
maximum amount
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of future claims such holder is entitled to assert
against any of the Debtors pursuant to such
settlement agreement.
A ballot will not be counted if a Claim has been disallowed or
an objection is pending to the Claim as of the Voting Record Date, and the
Claimant has not obtained, on or before the Voting Deadline, a Bankruptcy Court
order allowing such Claim, either in whole or in part, for all purposes or for
voting purposes only. A BALLOT WILL NOT BE COUNTED IF IT IS NOT RECEIVED AT THE
APPROPRIATE ADDRESS BY THE VOTING DEADLINE - 5:00 P.M. CINCINNATI, OHIO, TIME ON
NOVEMBER 4, 1996. PLEASE FOLLOW THE INSTRUCTIONS ON YOUR BALLOT FOR RETURNING
THE BALLOT. In addition, a vote may be disregarded if the Bankruptcy Court
determines, after notice and a hearing, that such acceptance or rejection was
not solicited or procured in good faith or in accordance with the provisions of
the Bankruptcy Code.
All creditors other than holders of Registered Debt Securities
or Bearer Debt Securities should vote and return their Ballot(s) to the
following address:
EAGLE-PICHER BALLOT TABULATION CENTER
C/O FEDERATED CLAIMS SERVICES GROUP
P.O. BOX 8041
9111 DUKE BLVD.
MASON, OHIO 45040
Holders of Registered Debt Securities
and Bearer Debt Securities should not
return their ballots to the Eagle-Picher
Ballot Tabulation Center, but should
follow the instructions for returning
ballots that are included with their
ballots.
DO NOT RETURN YOUR
SECURITIES WITH YOUR BALLOT.
IF YOU HAVE ANY QUESTIONS ABOUT THESE INSTRUCTIONS, PLEASE
CALL HILL AND KNOWLTON, INC. AT (212) 885-0555.
B. THE CONFIRMATION HEARING.
The Bankruptcy Code requires the Bankruptcy Court, after
notice, to hold a confirmation hearing. The Confirmation Hearing in respect of
the Plan has been scheduled for November 13, 1996, at 9:30 a.m., before the
Honorable Burton J. Perlman, United States Bankruptcy Judge, at Room 817, 221
East 4th Street, Atrium Two, Cincinnati, Ohio 45202. The Confirmation
Hearing may be adjourned from time to time by the Bankruptcy Court without
further notice, except for an announcement of the adjourned date made at the
Confirmation Hearing.
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<PAGE> 105
Any objection to confirmation must be made in writing and must
specify in detail the name and address of the objector, all grounds of the
objection, and the amount and class of the Claim or number of shares of Existing
Eagle-Picher Common Stock held by the objector. Any such objection must be filed
with the Bankruptcy Court and served so that it is received by the Bankruptcy
Court and the persons on the Primary Recipients' List on or before November 4,
1996, at 4:00 p.m., Cincinnati, Ohio time. Objections to confirmation of the
Plan are governed by Bankruptcy Rule 9014.
C. CONFIRMATION.
At the Confirmation Hearing, the Bankruptcy Court will confirm
the Plan only if all of the requirements of section 1129 of the Bankruptcy Code
are met. Among the requirements for confirmation of the Plan are that the Plan
is (i) accepted by all impaired classes of claims and equity interests or, if
rejected by an impaired class, that the Plan "does not discriminate unfairly"
and is "fair and equitable" as to such class, (ii) feasible, and (iii) in the
"best interests" of creditors and stockholders that are impaired under the Plan.
1. ACCEPTANCE.
Classes 3, 4, 10, 12, 16, 17, 18, 19, 20, and 21 of the Plan
are impaired under the Plan and are entitled to vote to accept or reject the
Plan. Classes 1, 2, 5, 6, 7, 8, 9, 11, 13, 14, 15, and 22 are unimpaired and are
conclusively deemed to have voted to accept the Plan. Classes 23 and 24 are
conclusively deemed to have voted to reject the Plan. As to Classes 23 and 24,
the Plan Proponents intend to seek nonconsensual confirmation of the Plan under
section 1129(b) of the Bankruptcy Code. In addition, the Plan Proponents reserve
the right to seek nonconsensual confirmation of the Plan with respect to any
class of Claims that is entitled to vote to accept or reject the Plan if such
class rejects the Plan.
2. UNFAIR DISCRIMINATION AND FAIR AND EQUITABLE TESTS.
To obtain nonconsensual confirmation of the Plan, it must be
demonstrated to the Bankruptcy Court that the Plan "does not discriminate
unfairly" and is "fair and equitable" with respect to each impaired,
nonaccepting Class. The Bankruptcy Code provides the following non- exclusive
definition of the phrase "fair and equitable," as it applies to secured
creditors, unsecured creditors, and equity holders:
(a) Secured Creditors. Either (i) each impaired
secured creditor retains its liens securing its secured claim
and receives on account of its secured claim deferred cash
payments having a present value equal to the amount of its
allowed secured claim, (ii) each impaired secured creditor
realizes the "indubitable equivalent" of its allowed secured
claim, or (iii) the property securing the claim is sold free
and clear of liens with such liens to attach to the proceeds
of the sale and the treatment of such liens on proceeds is
provided in clause (i) or (ii) of this subparagraph.
(b) Unsecured Creditors. Either (i) each impaired
unsecured creditor receives or retains under the plan property
of a value equal to the amount of its allowed claim, or (ii)
the holders of claims and interests that are junior to the
claims of the rejecting class of unsecured creditors will not
receive or retain any property under the plan.
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(c) Equity Interests. Either (i) each holder of an
equity interest will receive or retain under the plan property
of a value equal to the greatest of the fixed liquidation
preference to which such holder is entitled, the fixed
redemption price to which such holder is entitled, or the
value of the interest, or (ii) the holder of an interest that
is junior to the nonaccepting class will not receive or retain
any property under the plan.
The Plan Proponents believe that the Plan and the treatment of
all Classes of Claims and Equity Interests under the Plan satisfy the foregoing
requirements for nonconsensual confirmation of the Plan. Specifically, no class
that is junior to Class 23 (Penalty Claims) or Class 24 (Equity Interests) is
receiving or retaining any property under the Plan.
3. FEASIBILITY.
The Bankruptcy Code requires that confirmation of a plan is
not likely to be followed by liquidation or the need for further financial
reorganization. For purposes of determining whether the Plan meets this
requirement, the Debtors have analyzed their ability to meet their obligations
under the Plan. As part of this analysis, the Debtors have prepared projections
of their financial performance for each of the five fiscal years subsequent to
the fiscal year ending November 30, 1995 (the "Projection Period"). These
projections, and the assumptions on which they are based, are included in the
Eagle-Picher Industries, Inc., et al. Projected Financial Information included
in the Financial Appendix annexed hereto as Exhibit "C" (the "Projected
Financial Information"). Based upon the Projected Financial Information, the
Debtors believe that the Reorganized Debtors will be able to make all payments
required pursuant to the Plan, and, therefore, that confirmation of the Plan is
not likely to be followed by liquidation or the need for further reorganization.
The Debtors further believe that the Reorganized Debtors will be able to repay
or refinance any and all of the then- outstanding secured indebtedness under the
Plan at or prior to the maturity of such indebtedness.
The Projected Financial Information consists of the following:
- Pro Forma Consolidated Balance Sheet of Reorganized
Eagle-Picher as of December 1, 1996;
- Projected Consolidated Balance Sheets of Reorganized
Eagle-Picher as of December 1, 1996, and November 30 of each
of the years from 1997 through 2001;
- Projected Consolidated Statements of Income of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 20, 2001;
- Projected Consolidated Statements of Cash Flow of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 30, 2001; and
- Projected Capital Structure of Reorganized Eagle-Picher as of
December 1, 1996.
The Projected Financial Information is based on the assumption
that the Plan will be confirmed by the Bankruptcy Court and, for projection
purposes, that the Effective Date and the initial distributions take place as of
December 1, 1996. Although the Projected Financial Information is based upon a
December 1, 1996, Effective Date, the Debtors believe that an actual Effective
Date as late as November 30, 1997, would not have any material adverse effect on
the projections.
The Debtors have prepared the Projected Financial Information
based upon certain assumptions that they believe to be reasonable under the
circumstances. Those assumptions considered
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to be significant are described in the Projected Financial Information. The
Projected Financial Information has not been examined or compiled by independent
accountants. The Plan Proponents make no representations as to the accuracy of
the projections or the ability of the Reorganized Debtors to achieve the
projected results. Many of the assumptions on which the Projected Financial
Information is based are subject to significant uncertainties. Inevitably, some
assumptions will not materialize, and unanticipated events and circumstances may
affect the actual financial results. Therefore, the actual results achieved
throughout the Projection Period may vary from the projected results, and the
variations may be material. All holders of Claims that are entitled to vote to
accept or reject the Plan are urged to examine carefully all of the assumptions
on which the Projected Financial Information is based in evaluating the Plan.
4. BEST INTERESTS TEST.
With respect to each impaired Class of Claims and Equity
Interests, confirmation of the Plan requires that each holder of a Claim or
Equity Interest either (i) accept the Plan or (ii) receive or retain under the
Plan property of a value, as of the Effective Date, that is not less than the
value such holder would receive or retain if the Debtors were liquidated under
chapter 7 of the Bankruptcy Code. This requirement is referred to as the "best
interests test." To determine what holders of Claims and Equity Interests of
each impaired Class would receive if the Debtors were liquidated under chapter
7, the Bankruptcy Court must determine the dollar amount that would be generated
from the liquidation of the Debtors' assets and properties in the context of
chapter 7 liquidation cases. The cash amount that would be available for
satisfaction of Claims (other than Secured Claims) and Equity Interests would
consist of the proceeds resulting from the disposition of the unencumbered
assets of the Debtors, augmented by the unencumbered cash held by the Debtors at
the time of the commencement of the liquidation cases. Such cash amount would be
reduced by the amount of the costs and expenses of the liquidation and by such
additional administrative and priority claims that may result from the
termination of the Debtors' businesses and the use of chapter 7 for the purposes
of liquidation.
The Debtors' costs of liquidation under chapter 7 would
include the fees payable to a trustee in bankruptcy, as well as those that might
be payable to attorneys and other professionals that such a trustee may engage.
In addition, claims would arise by reason of the breach or rejection of
obligations incurred and leases and executory contracts assumed or entered into
by the Debtors in Possession during the pendency of the Chapter 11 Cases. The
foregoing types of claims and other claims that may arise in a liquidation case
or result from the pending Chapter 11 Cases, including any unpaid expenses
incurred by the Debtors in Possession during the Chapter 11 Cases, such as
compensation for attorneys, financial advisers, and accountants, would be paid
in full from the liquidation proceeds before the balance of those proceeds would
be made available to pay prepetition Claims.
To determine if the Plan is in the best interests of each
impaired class, the present value of the distributions from the proceeds of the
liquidation of the Debtors' unencumbered assets and properties, after
subtracting the amounts attributable to the foregoing Claims, are then compared
with the value of the property offered to such Classes of Claims and Equity
Interests under the Plan.
After considering the effects that chapter 7 liquidations
would have on the ultimate proceeds available for distribution to creditors in
the Chapter 11 Cases, including (i) the increased costs and expenses of
liquidations under chapter 7 arising from fees payable to trustees in bankruptcy
and professional advisers to such trustees, (ii) the erosion in value of assets
in chapter 7 cases in the context of the expeditious liquidation required under
a chapter 7 case and the "forced sale" atmosphere that would prevail, and (iii)
the substantial increases in claims that would be satisfied on a priority basis
or on a parity with creditors in the Chapter 11 Cases, the Debtors have
determined that confirmation of the Plan will provide each holder of an Allowed
Claim or Equity Interest with a recovery that is not
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<PAGE> 108
less than such holder would receive pursuant to liquidations of the Debtors
under chapter 7 of the Bankruptcy Code.
The Debtors also believe that the value of any distributions
to each class of Allowed Claims in chapter 7 cases, including all Secured
Claims, would be less than the value of distributions under the Plan because
such distributions in chapter 7 cases would not occur for a substantial period
of time. It is likely that distribution of the proceeds of the liquidations
could be delayed a number of years after the completion of such liquidations in
order to resolve claims and prepare for distributions. In the likely event
litigation was necessary to resolve claims asserted in the chapter 7 cases, the
delay could be prolonged.
The Debtors' Liquidation Analysis is attached hereto as
Exhibit "E" (the "Liquidation Analysis"). The information set forth in Exhibit
"E" provides a summary of the liquidation values of the Debtors' assets assuming
chapter 7 liquidations in which a trustee appointed by the Bankruptcy Court
would liquidate the assets of the Debtors' estates. Reference should be made to
the Liquidation Analysis for a complete discussion and presentation of the
Liquidation Analysis.
Underlying the Liquidation Analysis are a number of estimates
and assumptions that, although considered reasonable by the Debtors' management,
are inherently subject to significant economic and competitive uncertainties and
contingencies beyond the control of the Plan Proponents and management of the
Debtors. The Liquidation Analysis is also based upon assumptions with regard to
liquidation decisions that are subject to change. Accordingly, the values
reflected may not be realized if the Debtors were, in fact, to undergo such a
liquidation.
D. CONSUMMATION.
The Plan will be consummated on the Effective Date. For a more
detailed discussion of the conditions precedent to the Plan and the impact of
the failure to meet such conditions, see Section V.C, "THE PLAN OF
REORGANIZATION - Conditions Precedent to the Effective Date under the Plan."
The Plan is to be implemented pursuant to the provisions of
the Bankruptcy Code.
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IX. MANAGEMENT OF THE REORGANIZED DEBTORS
As of the Effective Date, the management, control, and
operation of the Reorganized Debtors will become the general responsibility of
their respective Boards of Directors.
A. BOARD OF DIRECTORS AND MANAGEMENT.
1. COMPOSITION OF THE BOARD OF DIRECTORS.
The initial Board of Directors of Reorganized Eagle-Picher
will consist of Thomas E. Petry, the Chairman of the Board and Chief Executive
Officer of Eagle-Picher, and the seven other individuals who currently serve on
Eagle-Picher's Board of Directors (or their duly elected successors, if any).
These directors, including all positions and offices held with Eagle-Picher,
their principal occupation during the past five years and present employer;
other boards of directors on which they serve, and the year in which they first
became a director of Eagle-Picher are as follows:
First
Became
Director
--------
PAUL W. CHRISTENSEN, JR., 71 1969
Retired, 1987; Chairman of the Board, 1978-
1987, and President prior thereto, of The
Cincinnati Gear Company, Cincinnati, Ohio, a
manufacturer of custom gears and enclosed
drives.
Member of Audit, Executive, and
Stock Option/Compensation
Committees and Chairman of Audit Committee.
V. ANDERSON COOMBE, 70 1974
Chairman of the Board since March 1991, and
President prior thereto (through April 1991),
of The Wm. Powell Company, Cincinnati, Ohio,
a valve manufacturer.
Director of Star Banc Corp., The Starflo
Corp., Union Central Life Insurance Co.,
and The Wm. Powell Company
Member of Audit, Executive, and Stock Option/
Compensation Committees.
ROGER L. HOWE, 61 1986
Chairman of the Board of U.S. Precision Lens, Inc.,
Cincinnati, Ohio, a manufacturer of optics for
video projection, instrumentation, and photographic
applications.
Director of Cintas Corporation, Star Banc
Corp., and Baldwin Piano & Organ Co.
Member of Executive and Stock Option/Compensation
Committees.
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DANIEL W. LeBLOND, 69 1965
Chairman of the Board of LeBlond Makino Machine
Tool Company, Cincinnati, Ohio, a manufacturer of
machine tools.
Director of The Ingersoll Milling Machine
Company, LeBlond Makino Machine Tool Company,
and The Ohio National Life Insurance Co.
Member of Executive and Stock Option/Compensation
Committees and Chairman of Stock
Option/Compensation Committee.
POWELL McHENRY, 70 1991
Of Counsel to Dinsmore & Shohl, a law firm,
Cincinnati, Ohio, since October 1, 1991; Senior
Vice President and General Counsel of The
Procter & Gamble Company, Cincinnati, Ohio, a
manufacturer of consumer and industrial
products, 1983-1991.
Member of Audit Committee.
THOMAS E. PETRY, 56 1981
Chairman of the Board and Chief Executive
Officer, 1994; Chairman of the Board, President
and Chief Executive Officer, 1992; Chairman of
the Board and Chief Executive Officer, 1989;
President and Chief Executive Officer, 1982;
President and Chief Operating Officer, 1981;
Group Vice President, 1978; President, the Akron
Standard Division, 1977; Vice President
and Treasurer, 1974;
Director of Cinergy Corp., Star Banc
Corp., Union Central Life Insurance
Co., and Insilco Corp.
Member and Chairman of Executive Committee.
EUGENE P. RUEHLMANN, 71 1991
Of Counsel to Vorys, Sater, Seymour & Pease,
a law firm, since January 1, 1996; Partner of
that firm 1989-1996; Chairman, Hamilton County
(Ohio) Republican Central Committee, 1991.
Director of Western-Southern Life
Insurance Company
Member of Audit Committee.
ANDRIES RUIJSSENAARS, 54 1994
President and Chief Operating Officer as of December
1, 1994; Senior Vice President, 1989-1994;
President, the Ohio Rubber Company Division,
1987-1989; Executive Vice President, the Ohio
Rubber Company Division, 1986-1987; General
Manager of Eagle-Picher Industries GmbH in
Ohringen, Germany, 1980-1986.
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The composition of the Board of Directors of each of the other
Reorganized Debtors also will remain unchanged, subject to the rights of
Reorganized Eagle-Picher and the other shareholders of any such Reorganized
Debtor to elect directors in accordance with the articles of incorporation or
bylaws of such Reorganized Debtor.
2. IDENTITY OF OFFICERS.
The executive officers of each of the Debtors immediately
prior to the Effective Date will continue in their then current positions as the
officers of the Reorganized Debtors. Set forth below is the name, age, and
position with Eagle-Picher of each of the top executive officers of Eagle-
Picher (collectively, the "Executive Officers") together with a description of
each officer's employment history:
<TABLE>
<CAPTION>
=========================================================================
NAME POSITION AGE
-------------------------------------------------------------------------
<S> <C> <C>
Thomas E. Petry Director; Chairman of the 56
Board of Directors and Chief
Executive Officer(9)
-------------------------------------------------------------------------
Andries Ruijssenaars Director; President and Chief 54
Operating Officer(10)
-------------------------------------------------------------------------
David N. Hall Senior Vice President - 57
Finance(11)
-------------------------------------------------------------------------
Wayne R. Wickens Senior Vice President(12) 50
-------------------------------------------------------------------------
Carroll D. Curless Vice President and 57
Controller(13)
-------------------------------------------------------------------------
James A. Ralston Vice President, General 49
Counsel and Secretary(14)
=========================================================================
</TABLE>
- --------
(9) Mr. Thomas E. Petry was first employed by Eagle-Picher in 1968. He was
elected Assistant Treasurer in 1971, Treasurer in 1973, and Vice President and
Treasurer in 1974. He served as President of the Akron Standard Division from
1977 to 1978. He was elected Group Vice President in 1978, a Director, President
and Chief Operating Officer in 1981, and President and Chief Executive Officer
in 1982. He served as President from 1981-89 and from 1992-94. He has been
serving as Chairman of the Board since 1989.
(10) Mr. Andries Ruijssenaars was first employed by Eagle-Picher in 1980 as
General Manager of Eagle-Picher Industries GmbH in Ohringen, Germany. He served
as Executive Vice President of the Ohio Rubber Company Division from 1986 to
1987 and as President of the Ohio Rubber Company Division from 1987 to 1989. He
was elected Senior Vice President in 1989 and was appointed a Director in
November 1994. He was elected President and Chief Operating Officer effective
December 1, 1994, and has been serving in those capacities since December 1,
1994.
(11) Mr. David N. Hall was first employed by Eagle-Picher and elected
Treasurer in 1977. He was elected Vice President and Treasurer in 1979, and he
was elected and has been serving as Senior Vice President-Finance since 1987.
(12) Mr. Wayne R. Wickens was first employed by Eagle-Picher in 1976 as a
management trainee with the former Fabricon Automotive Division, was promoted to
Plant Manager in 1979, Vice President in 1981, and then President of Fabricon
Automotive in 1986. He was named President of the Wolverine Gasket Division in
1988, Vice President of the Eagle-Picher Automotive Group in 1989, and Division
President of Hillsdale in 1990. He was elected Senior Vice President of
Eagle-Picher effective December 1, 1994.
(13) Mr. Carroll D. Curless was first employed by Eagle-Picher in 1964. He
was elected Assistant Controller in 1978 and Controller in 1984. He was elected
and has been serving as Vice President and Controller since 1986.
(14) Mr. James A. Ralston was first employed by Eagle-Picher as an attorney
in the Legal Department in 1979. He was elected Assistant Secretary in 1982,
General Counsel in 1982, Vice President and General Counsel in 1984, and
Secretary in 1994. He has been serving as Vice President, General Counsel and
Secretary since 1994.
100
<PAGE> 112
A list of the officers and directors of each of the other Reorganized Debtors is
annexed hereto as Exhibit "G."
B. COMPENSATION OF EXECUTIVE OFFICERS.
The following table sets forth all cash compensation paid by
Eagle-Picher to the Chief Executive Officer and each of the other Executive
Officers for the fiscal year ending November 30, 1995:
<TABLE>
<CAPTION>
Other Annual All Other
Fiscal Year Salary Bonus Compensation Compensation
Name Ended ($) ($) ($)(15) ($)(16)
<S> <C> <C> <C> <C> <C>
Thomas E. Petry 11/30/95 575,000 244,000 255,296 285,611
Andries Ruijssenaars 11/30/95 390,000 145,000 87,298 102,571
David N. Hall 11/30/95 345,000 110,000 120,284 136,415
Wayne R. Wickens 11/30/95 280,000 85,000 24,377 31,109
Carroll D. Curless 11/30/95 215,000 56,000 50,616 60,304
James A. Ralston 11/30/95 215,000 58,000 11,475 18,292
</TABLE>
C. INCENTIVE COMPENSATION PLANS.
The Reorganized Debtors will implement incentive compensation
plans in the ordinary course of business.
D. CONTINUATION OF EXISTING SEVERANCE PLANS.
On or about May 13, 1991, the Bankruptcy Court entered an
"Order on Motion Re Key Employee Retention, Etc.," pursuant to which the Debtors
adopted a Supplemental Severance Program (the "Supplemental Severance Program").
Under the Supplemental Severance Program, a participant whose employment is
terminated by Eagle-Picher, without just cause, receives (i) a base severance
benefit of one week's pay for each year of service with Eagle-Picher, payable
under general payroll pay practices, but reduced dollar for dollar by any
compensation earned from a subsequent employer during the period such benefits
are paid; (ii) a supplemental severance benefit ranging from three months'
salary up to one year's salary, payable in a lump sum upon termination; and
(iii) continuation of certain insurance benefits for up to one week for each
year of service. Payments under the Supplemental Severance Program cannot exceed
twice the terminated employee's annual compensation, and all payments cease upon
the terminated employee's death.
Currently, the Supplemental Severance Program provides that an
employee who is terminated after the confirmation of a plan of reorganization
will not be eligible for a supplemental severance benefit. Pursuant to the Plan
and the Confirmation Order, however, the Supplemental Severance Program
(including the supplemental severance benefit) shall remain in effect subsequent
to the Confirmation Date and for at least one (1) year subsequent to the
Effective Date. The
- -----------------
(15) "Other Annual Compensation" represents Eagle-Picher's payment of taxes
on the purchase of annuities under the SERP (as hereinafter defined).
(16) "All Other Annual Compensation" represents the cost of Eagle-Picher's
purchase of annuities under the SERP (as hereinafter defined) and Eagle-Picher's
contributions to the Eagle-Picher Salaried 401(k) Plan.
101
<PAGE> 113
Supplemental Severance Program will also be modified to provide that, from and
after the Confirmation Date, those persons in the Cincinnati, Ohio, general
office covered by such program who are 50 years or older at the time of any
termination shall receive twice the supplemental severance benefit payment
provided thereunder. To the extent that the benefit payment, so calculated,
would exceed the limit imposed by section 4.6 of Eagle-Picher's existing
severance plan, the excess will be payable under a qualified or non-qualified
pension plan. The Supplemental Severance Program shall continue to cover the
Executive Officers until such time as their management contracts with the
Reorganized Debtors (discussed below) become effective.
E. MANAGEMENT CONTRACTS.
On the Effective Date, certain management contracts
substantially in the form annexed as Exhibit "7.12" to the Plan (the "Management
Contracts") automatically will become effective with respect to the Executive
Officers. The purpose of the Management Contracts is to provide Reorganized
Eagle-Picher with continuity of management by providing its officers with
appropriate assurances of employment security sufficient to allow them to
concentrate on their duties to Reorganized Eagle-Picher without distraction. The
following is a summary of the material terms of the Management Contracts.
Each of the Management Contracts will have a term of thirty
(30) months, with such 30-month period commencing on the Confirmation Date.
Pursuant to the Management Contracts, each of the Executive Officers will
maintain his current position with his current duties and responsibilities and
shall maintain his current geographic place of work. Each of the Executive
Officers shall work full time and shall be subject to an appropriate covenant
not to compete.
The minimum annual salary for each of the Executive Officers
shall be the greater of (a) his salary in effect when the Management Contract
first becomes effective or (b) his salary as increased from time to time. There
shall be an annual December 1 review, but no guaranteed increases in
compensation.
Each of the Executive Officers will participate fully in all
short-term and long-term incentive plans as in effect from time to time. As soon
as practicable after the Effective Date, the Reorganized Debtors shall implement
a competitive long-term incentive plan ("LTIP") in which each of the Executives
shall participate. Even though New Eagle-Picher Common Stock may not be
available for the LTIP, the incentive plan must provide opportunities and
incentives reasonably economically equivalent to those provided by other similar
companies, many of which do provide stock options and/or restricted stock grants
as components of their LTIP.
Each of the Executive Officers shall be entitled to all
employee benefits as in effect from time to time and applicable to all salaried
employees. Each of the Executive Officers also shall be entitled to all
executive benefits consisting of, at a minimum, a supplemental executive
retirement plan ("SERP") on substantially the same terms and conditions that
currently exist. Each of the Executives shall be entitled to four weeks of paid
vacation and shall be entitled to company-paid automobile and business-related
club memberships (no country clubs) substantially in accordance with current
practice.
The following summarizes the pay and benefit provisions that
will be contained in the Management Contracts in the event that an Executive
Officer's employment is terminated:
102
<PAGE> 114
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
EVENT PAY AND BENEFIT PROVISIONS
<S> <C>
By Death According to terms of relevant
plans; plus 30 months of
continuing health care
benefits to surviving covered
dependents, as if the
Executive Officer were still
an active employee.
By Long-Term Disability According to terms of relevant
plans; plus 30 months of
continuing health care
benefits to surviving covered
dependents, as if the
Executive Officer were still
an active employee.
By Reorganized Eagle-Picher, without A lump sum cash severance
the "cause" (i.e., "cause" would encompass payment equal to greater of
employee misconduct) (i) the base salary remaining
to be paid for the term of the
Management Contract, or (ii)
the base salary under the
contract for a period of two
years. This amount shall not
be present-valued, there shall
be no duty on the part of the
Executive Officer to mitigate,
and there shall be no offset
as a result of subsequent
employment. This lump sum
severance payment will be
included in the calculation of
benefits due a terminated
Executive Officer under the
SERP.
By Executive Officer, for "good reason" A lump sum cash severance
payment equal to the greater
of (i) the base salary
remaining to be paid for the
term of the Management
Contract, or (ii) the base
salary under the contract for
a period of two years. This
amount shall not be
present-valued, there shall be
no duty on the part of the
Executive Officer to mitigate,
and there shall be no offset
as a result of subsequent
employment. This lump sum
severance payment will be
included in the calculation of
benefits due a terminated
Executive Officer under the
SERP.
By Executive Officer, without "good Accrued but unpaid salary, pay
reason" in lieu of unused vacation,
and accrued benefits only.
By Reorganized Eagle-Picher, for "cause" Accrued but unpaid salary, pay
in lieu of unused vacation,
and accrued benefits only.
By Reorganized Eagle-Picher, upon According to terms of relevant
expiration of term of Management Contract plans; no special provisions.
- --------------------------------------------------------------------------------
</TABLE>
"Good reason," or constructive termination of employment,
would include circumstances such as the following:
- Diminution of duties.
- Decrease in salary, other than an across-the-board decrease.
- Material diminution in benefits, other than an
across-the-board material diminution.
- Cessation of participation in executive pay or benefit plans.
103
<PAGE> 115
- Relocation or substantial additional travel - without
Executive Officer's consent.
- Breach of the Management Contract.
Good reason or a constructive termination shall not occur in the event of a sale
or disposition of a subsidiary or division if the Executive Officer either (a)
voluntarily elects to be employed by such subsidiary or division or (b) is
offered a comparable position with the Reorganized Debtors. "Comparable" shall
encompass such items as salary, benefits, duties, and geographic location.
Nothing contained in the Management Contracts will in any way
prohibit or preclude the Board of Directors of Reorganized Eagle-Picher, after
the Effective Date, with the consent of the particular Executive Officer, from
amending, extending, or otherwise modifying the Management Contract or otherwise
entering into other agreements with any Executive Officer.
104
<PAGE> 116
X. EXEMPTIONS FROM SECURITIES ACT REGISTRATION
With respect to the Divestiture Notes, the Senior Unsecured
Sinking Fund Debentures, the Tax Refund Notes, and the New Eagle-Picher Common
Stock to be issued under the Plan, Reorganized Eagle-Picher intends to rely upon
the exemption from the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act"), and of equivalent state securities or "blue
sky" laws that is provided by section 1145(a)(1) of the Bankruptcy Code.
Generally, section 1145(a)(1) of the Bankruptcy Code exempts the issuance of
securities from the registration requirements of the Securities Act and
equivalent state securities and "blue sky" laws if the following conditions are
satisfied: (i) the securities are issued by a debtor (or its successor) under a
plan of reorganization; (ii) the recipients of the securities hold a claim
against, an interest in, or a claim for an administrative expense against the
debtor; and (iii) the securities are issued entirely in exchange for the
recipient's claim against or interest in the debtor, or are issued "principally"
in such exchange and "partly" for cash or property. Eagle-Picher believes that
the issuance of the Divestiture Notes, the Senior Unsecured Sinking Fund
Debentures, the Tax Refund Notes, and the New Eagle-Picher Common Stock will
satisfy these requirements.
The Divestiture Notes, the Senior Unsecured Sinking Fund
Debentures, the Tax Refund Notes, and the New Eagle-Picher Common Stock may be
resold by the holders thereof without restriction (other than the transfer
restrictions described in Section , entitled, "RESTRICTIONS ON TRANSFERS OF
CORPORATE SECURITIES AND CERTAIN CLAIMS") unless, as more fully described below,
any such holder is deemed to be an "underwriter" with respect to such
securities, as defined in section 1145(b)(1) the Bankruptcy Code. Generally,
section 1145(b)(1) of the Bankruptcy Code defines an "underwriter" as any person
who (A) purchases a claim against, or interest in, a debtor in a bankruptcy
case, with a view towards the distribution of any security to be received in
exchange for such claim or interest, (B) offers to sell securities issued under
a plan of reorganization on behalf of the holders of such securities, (C) offers
to buy securities issued under a plan of reorganization from persons receiving
such securities, if the offer to buy is made with a view towards distribution of
such securities, or (D) is an issuer as contemplated by section 2(11) of the
Securities Act.
Although the definition of the term "issuer" appears in
section 2(4) of the Securities Act, the reference (contained in section
1145(b)(1)(D) of the Bankruptcy Code) to section 2(11) of the Securities Act
purports to include as "underwriters" all persons who, directly or indirectly,
through one or more intermediaries, control, are controlled by, or are under
common control with, an issuer of securities. "Control" (as such term is defined
in Rule 405 of Regulation C under the Securities Act) means the possession,
direct or indirect, of the power to direct or cause the direction of the
policies of a person, whether through the ownership of voting securities, by
contract, or otherwise. Accordingly, an officer or director of a reorganized
debtor (or its successor) under a plan of reorganization may be deemed to be a
"control person," particularly if such management position is coupled with the
ownership of a significant percentage of the debtor's (or successor's) voting
securities. Moreover, the legislative history of section 1145 of the Bankruptcy
Code suggests that a creditor who owns at least 10% of the securities of a
reorganized debtor may be presumed to be a "control person."
Rule 144A provides a non-exclusive safe harbor exemption from
the registration requirements of the Securities Act for resales to certain
"qualified institutional buyers" of securities that are "restricted securities"
within the meaning of the Securities Act, irrespective of whether the seller of
such securities purchased his, her, or its securities under the provisions of
Rule 144A. Under Rule 144A, a "qualified institutional buyer" is defined to
include, among other persons (e.g., "dealers" registered as such pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and "banks," as defined in Section 3(a)(2) of the Securities Act), any
entity that purchases securities for its own account or for the account of
another qualified institutional buyer and that (in the aggregate) owns and
invests on a discretionary basis at least $100 million in the securities
105
<PAGE> 117
of unaffiliated issuers. Subject to certain qualifications, Rule 144A does not
exempt the offer or sale of securities that, at the time of their issuance, were
securities of the same class of securities then listed on a national securities
exchange (registered as such under Section 6 of the Exchange Act) or quoted in a
U.S. automated inter-dealer quotation system (e.g., NASDAQ). Given that none of
the securities to be issued under the Plan will be securities of a class then
listed or quoted as described above, holders of Divestiture Notes, Senior
Unsecured Sinking Fund Debentures, Tax Refund Notes, and New Eagle-Picher Common
Stock who, in each case, are deemed to be "underwriters" within the meaning of
section 1145(b)(1) of the Bankruptcy Code or who may otherwise be deemed to be
"affiliates" or "control persons" of Reorganized Eagle-Picher within the meaning
of Rule 405 of Regulation C under the Securities Act, and holders of securities
whose securities will be "restricted securities" within the meaning of the
Securities Act should, assuming that all other conditions of Rule 144A are met,
be entitled to avail themselves of the safe harbor resale provisions thereof.
To the extent that Rule 144A is unavailable, such holders may,
under certain circumstances, be able to sell their securities pursuant to the
more limited safe harbor resale provisions of Rule 144 under the Securities Act.
Generally, Rule 144 provides that if certain conditions are met (e.g. volume
limitations, manner of sale, availability of current information about the
issuer, etc.), specified persons who resell "restricted securities" or who
resell securities that are not restricted but who are "affiliates" of the issuer
of the securities sought to be resold, will not be deemed to be "underwriters"
as defined in section 2(11) of the Securities Act. Under paragraph (k) of Rule
144, the aforementioned conditions to resale will no longer apply to restricted
securities sold for the account of a holder who is not an affiliate of
Reorganized Eagle-Picher at the time of such resale and who has not been such
during the three-month period next preceding such resale, so long as a period of
at least three years has elapsed since the later of (i) the date of issuance of
such securities and (ii) the date on which such holder acquired his, her, or its
securities from an affiliate of Reorganized Eagle-Picher.
All certificates and instruments evidencing New Eagle-Picher
Common Stock and New Debt Securities, as the case may be, will bear a legend
substantially in the form below:
THE SECURITIES REPRESENTED BY THIS [CERTIFICATE]
[INSTRUMENT] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE,
OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER
SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO IT THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
THE FOREGOING SUMMARY DISCUSSION IS GENERAL IN NATURE AND HAS
BEEN INCLUDED IN THIS DISCLOSURE STATEMENT SOLELY FOR INFORMATIONAL PURPOSES.
THE DEBTORS MAKE NO REPRESENTATIONS CONCERNING, AND DO NOT HEREBY PROVIDE ANY
OPINION OR ADVICE WITH RESPECT TO, THE SECURITIES LAW AND BANKRUPTCY LAW MATTERS
DESCRIBED ABOVE. IN LIGHT OF THE COMPLEX AND SUBJECTIVE INTERPRETIVE NATURE OF
WHETHER A PARTICULAR RECIPIENT OF NEW DEBT SECURITIES OR NEW EAGLE-PICHER
COMMON STOCK MAY BE DEEMED TO BE AN "UNDERWRITER" WITHIN THE MEANING OF SECTION
1145(B)(1) OF THE BANKRUPTCY CODE AND/OR AN "AFFILIATE" OR "CONTROL PERSON"
UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS AND, CONSEQUENTLY, THE
UNCERTAINTY CONCERNING THE AVAILABILITY OF EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES
106
<PAGE> 118
ACT AND EQUIVALENT STATE SECURITIES AND "BLUE SKY" LAWS, EAGLE-PICHER ENCOURAGES
EACH CLAIMANT TO CONSIDER CAREFULLY AND CONSULT WITH HIS, HER, OR ITS OWN LEGAL
ADVISERS WITH RESPECT TO SUCH (AND ANY RELATED) MATTERS.
107
<PAGE> 119
XI. REORGANIZATION VALUE
The Debtors have been advised by McDonald & Co. with respect
to the value of the Reorganized Debtors. The value (which includes the value of
the Debtors' businesses and the value of certain other assets) of the
Reorganized Debtors prior to any distributions pursuant to the Plan was assumed
for purposes of the Plan by the Debtors to be approximately $734 million as of
an assumed Effective Date of December 1, 1996. Based upon the assumed
reorganization value of the Reorganized Debtors, the estimated amount of cash to
be distributed under the Plan, and an assumed total debt (including capital
lease obligations) under the Plan of approximately $390.2 million, the Debtors
have employed an assumed Equity Value of approximately $254.8 million, or
approximately $25.48 per share of New Eagle-Picher Common Stock based upon a
distribution of 10,000,000 shares of New Eagle-Picher Common Stock under the
Plan.
The foregoing valuations are based upon a number of
assumptions, including a successful reorganization of the Debtors' businesses
and finances in a timely manner, the achievement of the forecasts reflected in
the Projected Financial Information, the amount of available cash, the
availability of certain tax attributes, the continuation of current market
conditions through the Effective Date, and the Plan becoming effective in
accordance with its terms.
Estimates of value do not purport to be appraisals or
necessarily reflect the values that may be realized if assets are sold. The
estimates of value represent hypothetical reorganization values of the
Reorganized Debtors as the continuing owners and operators of their businesses
and assets. Such estimates reflect computations of the estimated reorganization
value of the Reorganized Debtors through the application of various valuation
techniques and do not purport to reflect or constitute appraisals, liquidation
values, or estimates of the actual market value that may be realized through the
sale of any securities to be issued pursuant to the Plan, which may be
significantly different than the amounts set forth herein. The value of
operating businesses such as the Debtors' is subject to uncertainties and
contingencies, which are difficult to predict and which will fluctuate with
changes in factors affecting the financial conditions and prospects of such a
business. AS A RESULT, THE ESTIMATE OF THE REORGANIZATION VALUE SET FORTH HEREIN
IS NOT NECESSARILY INDICATIVE OF ACTUAL OUTCOMES, WHICH MAY BE SIGNIFICANTLY
MORE OR LESS FAVORABLE THAN THOSE SET FORTH HEREIN. BECAUSE SUCH ESTIMATE IS
INHERENTLY SUBJECT TO UNCERTAINTIES, NEITHER THE PLAN PROPONENTS, MCDONALD &
CO., NOR ANY OTHER PERSON ASSUMES RESPONSIBILITY FOR ITS ACCURACY. IN ADDITION,
THE VALUATION OF NEWLY- ISSUED SECURITIES SUCH AS THE NEW EAGLE-PICHER COMMON
STOCK IS SUBJECT TO ADDITIONAL UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE
DIFFICULT TO PREDICT. Actual market prices of such securities at issuance will
depend upon, among other things, prevailing interest rates, conditions in the
financial markets, and other factors that generally influence the prices of
securities.
McDonald & Co. has undertaken its valuation analysis for
purposes of determining the value available to distribute to creditors pursuant
to the Plan and analyzing relative recoveries to creditors thereunder. The
analysis is based on the Projected Financial Information as well as current
market conditions and statistics. The values are as of December 1, 1996.
McDonald & Co. used the discounted cash flow and comparable company multiple
methodologies to value the Debtors' businesses. These valuation techniques
reflect both the market's current view of the Debtors' value as well as a
longer-term focus on the intrinsic value of the cash flow projections in the
Debtors' business plan. McDonald & Co. arrived at an estimated reorganization
valuation of the Reorganized Debtors of $734 million. This figure includes a
value of $618.0 million for the present value of Reorganized Eagle-Picher's
operating cash flow and excess cash after payment of Priority Claims and
Administrative Expenses, the present value of tax refunds of $56 million, and
the present value of deferred tax benefits of $60 million.
108
<PAGE> 120
In preparing the estimated reorganization value of the
Reorganized Debtors, McDonald & Co. did the following: (i) reviewed certain
historical financial information of the Debtors for recent years and interim
periods, (ii) reviewed certain internal financial and operating data of the
Debtors, including financial projections provided by management relating to
their businesses and prospects, (iii) met with certain members of senior
management of the Debtors to discuss operations and future prospects, (iv)
reviewed publicly available financial data and considered the market values of
public companies deemed generally comparable to the operating businesses of the
Debtors, (v) reviewed the capital structures of public companies with capital
structures similar to that contemplated for Reorganized Eagle-Picher, (vi)
reviewed the prices at which companies comparable to various divisions and
subsidiaries of Eagle-Picher have been sold in negotiated private sales, (vii)
reviewed the macro-economic and competitive forces affecting Eagle-Picher's
divisions and subsidiaries serving customers in the automotive, specialty
chemical, and defense markets, (viii) reviewed the capital structure
contemplated for Eagle-Picher upon the Effective Date, and (ix) made such other
investigations and conducted such other analyses as McDonald & Co. deemed
appropriate. Although McDonald & Co. conducted a review and analysis of the
Debtors' businesses, operating assets, and liabilities and business plans,
McDonald & Co. assumed and relied on the accuracy and completeness of all (i)
financial and other information furnished to it by the Debtors and by other
firms retained by the Debtors and (ii) publicly available information. In
addition, McDonald & Co. did not independently verify management's projections
in connection with such valuation, and no independent evaluations or appraisals
of the Debtors' assets were sought or were obtained in connection therewith.
THE VALUATIONS REPRESENT ESTIMATED REORGANIZATION VALUES AND
DO NOT NECESSARILY REFLECT VALUES THAT COULD BE REALIZED IN PUBLIC OR PRIVATE
MARKETS. THE EQUITY VALUE ASCRIBED IN THE ANALYSIS DOES NOT PURPORT TO BE AN
ESTIMATE OF THE POST-REORGANIZATION MARKET TRADING VALUE. SUCH TRADING VALUE, IF
ANY, MAY BE MATERIALLY DIFFERENT FROM THE REORGANIZATION EQUITY VALUE UTILIZED
IN THE VALUATION ANALYSIS.
109
<PAGE> 121
XII. RESTRICTIONS ON TRANSFERS OF CORPORATE
SECURITIES AND CERTAIN CLAIMS
A. RESTRICTIONS ON CORPORATE SECURITIES.
1. CHARTER RESTRICTIONS.
After the Effective Date, the Amended and Restated Articles of
Incorporation shall contain restrictions on the transfer of (i) shares of New
Eagle-Picher Common Stock, (ii) other rights or options to purchase stock of
Reorganized Eagle-Picher, and (iii) any other interests that would be treated as
"stock" of Reorganized Eagle-Picher under Section 382 of the Internal Revenue
Code ("Corporate Securities"). The restrictions are being implemented to permit
the continued utilization of the net operating loss carryovers, capital loss
carryovers, general business credit carryovers, alternative minimum tax
carryovers, foreign tax credit carryovers and any net unrealized built-in losses
(collectively, "Tax Benefits") to which Reorganized Eagle-Picher, or any other
member of the consolidated group of which Reorganized Eagle-Picher is the common
parent, is or may be entitled.
2. CERTAIN TRANSFERS VOID.
The Amended and Restated Articles of Incorporation shall
provide that, at any time during the twenty-five (25) month period after the
Effective Date, any attempted sale, purchase, transfer, assignment, conveyance,
pledge or other disposition (including, without limitation, distributions from
the PI Trust to holders of Allowed Toxic Personal Injury Claims) of any share or
shares of Corporate Securities ("Transfer") to any person or entity or group of
persons or entities acting in concert ("Transferee") who directly or indirectly
owns or is treated as owning (within the meaning of the attribution rules
applicable under Section 382 of the Internal Revenue Code) ("Own") four and
three-fourths percent (4.75%) or more of any class of Corporate Securities or,
after giving effect to the Transfer, would directly or indirectly Own more than
four and three-fourths percent (4.75%) of the outstanding shares of any class of
Corporate Securities, shall be void ab initio and shall not be effective to
Transfer any of such shares to the extent the Transfer increases the
Transferee's direct or indirect ownership of the Corporate Securities above four
and three-fourths percent (4.75%) of the total outstanding shares of such class
of Corporate Securities. Similarly, any Transfer by a transferor who directly or
indirectly Owns five percent (5%) or more of the outstanding shares of any class
of Corporate Securities shall be void ab initio and shall not be effective to
Transfer any of such shares to the purported Transferee.
3. RECOVERY OF PROHIBITED TRANSFERS.
If the Board of Directors determines that a Transfer of
Corporate Securities constitutes a Transfer prohibited by the foregoing rules
("Prohibited Transfer") then, upon written demand by Reorganized Eagle-Picher,
the purported Transferee shall transfer or cause to be transferred any
certificate or other evidence of ownership of Corporate Securities that are the
subject of the Prohibited Transfer ("Prohibited Securities"), together with any
dividends or other distributions that were received by the Transferee from
Reorganized Eagle-Picher with respect to such Prohibited Securities ("Prohibited
Distributions"), to an agent designated by the Board of Directors (the "Agent").
The Agent shall thereupon sell to a buyer or buyers the Prohibited Securities
transferred to it. If the purported Transferee has resold the Prohibited
Securities before receiving Reorganized Eagle-Picher's demand to surrender the
Prohibited Securities to the Agent, the purported Transferee shall be deemed to
have sold the Prohibited Securities for the Agent and shall be required to
transfer to the Agent any Prohibited Distributions and the proceeds of such
sale. If the purported Transferee fails to surrender the Prohibited Securities,
or the proceeds of a sale thereof, and any Prohibited Distributions to the
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Agent within thirty (30) business days from the date on which Reorganized Eagle-
Picher makes a demand for such surrender, then Reorganized Eagle-Picher shall
institute legal proceedings to compel surrender.
4. TREATMENT OF PROHIBITED TRANSFERS.
No employee or agent of Reorganized Eagle-Picher shall record
any Prohibited Transfer, and the purported Transferee shall not be recognized as
a shareholder of Reorganized Eagle-Picher for any purpose whatsoever in respect
of the Prohibited Securities. Until the Prohibited Securities are acquired by
another person in a Transfer that is not a Prohibited Transfer, the purported
Transferee shall not be entitled with respect to such Prohibited Securities to
any rights of shareholders of Reorganized Eagle-Picher, including, without
limitation, the right to vote such Prohibited Securities and to receive dividend
distributions, whether liquidating or otherwise, in respect thereof, if any.
Once the Prohibited Securities have been acquired in a Transfer that is not a
Prohibited Transfer, the Corporate Securities shall cease to be Prohibited
Securities.
5. PROCEEDS OF SALE OF PROHIBITED SECURITIES.
The Agent shall apply any proceeds of a sale by it of
Prohibited Securities and, if the purported Transferee had previously resold the
Prohibited Securities, any amounts received by it from a purported Transferee,
as follows: (a) first, such amount shall be paid to the Agent to the extent
necessary to cover its costs and expenses incurred in connection with its duties
hereunder; (b) second, any remaining amounts shall be paid to the purported
Transferee, up to the amount paid by the purported Transferee for the Prohibited
Securities, which amount shall be determined in the discretion of the Board of
Directors; and (c) third, any remaining amounts shall be paid to one or more
organizations selected by the Board of Directors qualifying under Section
501(c)(3) of the Internal Revenue Code.
6. LEGENDED CERTIFICATES.
In addition to the legend referred to in Section , entitled,
"EXEMPTIONS FROM SECURITIES ACT REGISTRATION," all certificates reflecting
Corporate Securities issued by Reorganized Eagle-Picher on or after the
Effective Date shall bear a conspicuous legend in substantially the following
form:
THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT
TO RESTRICTION PURSUANT TO THE AMENDED AND RESTATED ARTICLES
OF INCORPORATION OF REORGANIZED EAGLE-PICHER REPRINTED IN ITS
ENTIRETY ON THE BACK OF THIS CERTIFICATE.
7. NECESSITY OF RESTRICTIONS.
As indicated above, the stock transfer restrictions apply to
Transfers to a 4.75% or more Transferee and to Transfers by a 5% or more
transferor. With respect to the 4.75% limit, the Plan Proponents recognize that,
under Section 382 of the Internal Revenue Code, an ownership change is measured
by increases in ownership of 5% shareholders. See Section XIV.C.5, entitled,
"CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN - Consequences to Debtors -
Utilization of Net Operating Loss Carryovers." However, complex attribution of
ownership rules may treat an individual as owning stock actually owned by
others. Therefore, in order to ensure that Transfers to a 5% shareholder do not
occur, a .25% safety margin was built into the stock transfer
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restrictions to allow Reorganized Eagle-Picher to monitor transfers that might
jeopardize its Tax Benefits with greater precision. Moreover, an absolute
prohibition on Transfers by 5% shareholders is necessary to ensure that such a
Transfer to a disparate group of individuals, each of whom is less than a 5%
shareholder, will not be treated under the Section 382 aggregation/segregation
rules as a Transfer to a public group, which group in the aggregate will be
treated as a 5% shareholder for purposes of Section 382.
The twenty-five (25) month restriction on stock transfers is
needed for purposes of avoiding a reduction in Reorganized Eagle-Picher's Tax
Benefits to zero under Section 382(l)(5)(D) of the Internal Revenue Code. Such a
restriction, however, is insufficient to prevent a significant limitation on the
Tax Benefits as a result of an ownership change that may occur more than
twenty-five (25) months after the Effective Date.
B. RESTRICTIONS ON TRADING OF ASBESTOS PERSONAL INJURY CLAIMS, LEAD
PERSONAL INJURY CLAIMS, AND ASBESTOS PROPERTY DAMAGE CLAIMS.
Moreover, the Confirmation Order will contain the Claims
Trading Injunction, which will prohibit the trading of Asbestos Personal Injury,
Lead Personal Injury Claims, and Asbestos Property Damage Claims after the
Effective Date. Any action taken in violation of the Claims Trading Injunction
will be void ab initio. It will not, however, prohibit the holder of an Asbestos
or Lead Contribution Claim or an Asbestos Property Damage Contribution Claim
from being subrogated to an Asbestos Personal Injury Claim, Lead Personal Injury
Claim, or Asbestos Property Damage Claim as a result of satisfaction of such
underlying Asbestos Personal Injury Claim, Lead Personal Injury Claim, or
Asbestos Property Damage Claim. Moreover, it will not prohibit the transfer of
an Asbestos Personal Injury Claim, Lead Personal Injury Claim, or Asbestos
Property Damage Claim by will or under the laws of descent and distribution. The
Claims Trading Injunction and certain other restrictions imposed in the Asbestos
and Lead PI Trust Agreement and the Asbestos PD Trust Agreement are being
imposed so that the claims against the PI Trust and the Asbestos PD Trust will
not be characterized as "securities" under applicable state and federal
securities laws.
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XIII. CERTAIN RISK FACTORS TO BE CONSIDERED
HOLDERS OF CLAIMS AGAINST THE DEBTORS SHOULD READ AND CONSIDER
CAREFULLY THE FACTORS SET FORTH BELOW, AS WELL AS THE OTHER INFORMATION SET
FORTH IN THIS DISCLOSURE STATEMENT (AND THE DOCUMENTS DELIVERED TOGETHER
HEREWITH AND/OR INCORPORATED BY REFERENCE), PRIOR TO VOTING TO ACCEPT OR REJECT
THE PLAN. THESE RISK FACTORS SHOULD NOT, HOWEVER, BE REGARDED AS CONSTITUTING
THE ONLY RISKS INVOLVED IN CONNECTION WITH THE PLAN AND ITS IMPLEMENTATION.
A. OVERALL RISKS TO RECOVERY BY HOLDERS OF CLAIMS.
The ultimate recoveries under the Plan to holders of Claims
(other than holders whose entire Distribution is paid in cash or who receive
secured notes under the Plan) depend upon the realizable value of the Tax Refund
Notes, the Divestiture Notes, the Senior Unsecured Sinking Fund Debentures, and
the New Eagle-Picher Common Stock, which are subject to a number of material
risks, including, but not limited to, those specified below. The factors below
assume that the Plan is confirmed by the Bankruptcy Court and that the Effective
Date occurs on or about December 1, 1996. Prior to voting on the Plan, each
holder of a Claim should consider carefully the risk factors specified or
referred to below, including the Exhibits annexed hereto, as well as all of the
information contained in the Plan.
1. ABILITY TO REFINANCE CERTAIN INDEBTEDNESS.
Following the Effective Date of the Plan, the Debtors' working
capital borrowings and letters of credit requirements are anticipated to be
funded under a new credit facility. Obtaining such a credit facility is a
condition precedent to the Effective Date. There can be no assurance, however,
that the Reorganized Debtors will be able to obtain replacement financing for
such facility to fund future working capital borrowings and letters of credit,
or that replacement financing, if obtained, would be on terms equally as
favorable to the Reorganized Debtors. Furthermore, there can be no assurance
that the Reorganized Debtors will be able to refinance the Tax Refund Notes, the
Divestiture Notes, or the Senior Unsecured Sinking Fund Debentures upon their
maturity should such a need arise.
2. OWNERSHIP BY THE PI TRUST.
The PI Trust will beneficially own all the shares of the New
Eagle-Picher Common Stock to be issued pursuant to the Plan. Accordingly, the PI
Trust will be in a position to control the outcome of actions requiring
stockholder approval, including the election of directors. This concentration of
ownership could also facilitate or hinder a negotiated change of control of
Reorganized Eagle-Picher, and, consequently, impact upon the value of the New
Eagle-Picher Common Stock.
3. DIVIDEND POLICIES.
The Debtors cannot anticipate whether Reorganized Eagle-Picher
will pay any dividends on the New Eagle-Picher Common Stock in the foreseeable
future. In addition, the covenants in certain debt instruments to which
Reorganized Eagle-Picher will be a party may limit the ability of Reorganized
Eagle-Picher to pay dividends.
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4. PROJECTED FINANCIAL INFORMATION.
The Projected Financial Information is dependent upon numerous
assumptions, including confirmation and consummation of the Plan in accordance
with its terms, the anticipated future performance of the Reorganized Debtors,
conditions in the automotive industry and the other industries in which the
Reorganized Debtors operate, certain assumptions with respect to competitors of
the Reorganized Debtors, general business and economic conditions, and other
matters, many of which are beyond the control of the Debtors. In addition,
unanticipated events and circumstances occurring subsequent to the preparation
of the Projected Financial Information may affect the actual financial results
of the Reorganized Debtors. Although the Debtors believe that the projections
are reasonable and attainable, some or all of the estimates will vary, and
variations between the actual financial results and those projected may be
material.
5. VALUE OF CONSIDERATION TO BE DISTRIBUTED UNDER THE PLAN.
In estimating the Distribution Value, the Debtors have assumed
that (i) cash has a value equal to its face amount, (ii) the Divestiture Notes,
Senior Unsecured Sinking Fund Debentures, and Tax Refund Notes have a value
equal to their face amount, and (iii) the New Eagle-Picher Common Stock will
have an aggregate value of $254.8 million, or $25.48 a share. There is no
assurance that such assumed values can be obtained.
6. VALUE OF ASBESTOS PROPERTY DAMAGE CLAIMS.
Asbestos Property Damage Claims in the aggregate amount of
approximately $11.5 billion were filed against the Debtors by the Asbestos Bar
Date, approximately $9 billion of which the Debtors remain outstanding after
disallowance of the Asbestos Property Damage Claims as to which timely responses
to the Second Omnibus PD Claims Objection were not filed. Because, however,
prior to the Petition Date Eagle-Picher spent an aggregate of less than $22,000
to resolve Asbestos Property Damage Claims and because Eagle-Picher has not had
any adverse judgments rendered against it on account of Asbestos Property Damage
Claims, the Debtors have assumed, for the purposes of calculating potential
Distributions, that Class 16 will either vote to accept the Plan or that the
Asbestos PD Trust Share will be determined to be less than approximately $9
million. If this assumption proves to be incorrect in any material respect,
Distributions to the PI Trust and the holders of Allowed Environmental Claims
and Allowed Unsecured Claims (other than Convenience Claims) could be diminished
significantly. In any event, the Plan cannot become effective if Class 16 votes
to reject the Plan, and the Asbestos PD Trust Share is determined by the
Bankruptcy Court to be greater than $15 million.
B. THE ASBESTOS AND LEAD PI PERMANENT CHANNELING INJUNCTION.
The Asbestos and Lead PI Permanent Channeling Injunction,
which, inter alia, bars the assertion of "future" Asbestos Personal Injury
Claims and Lead Personal Injury Claims against the Debtors, is the cornerstone
of the Plan. In 1994, the United States Congress added subsections (g) and (h)
to section 524 of the Bankruptcy Code in order to confirm the authority of the
Bankruptcy Court, subject to the conditions specified therein, to issue
injunctions such as the Asbestos and Lead PI Permanent Channeling Injunction
with respect to present and future asbestos-related personal injury Claims and
Demands. Although the Plan, the Asbestos and Lead PI Trust Agreement, and the
Asbestos PI Claims Procedures all have been drafted with the intention of
complying with section 524(g)-(h) of the Bankruptcy Code, and satisfaction of
the conditions imposed by section 524(g)-(h) is a condition precedent to
confirmation of the Plan, there is no guarantee that the validity and
enforceability of the Asbestos and Lead PI Permanent Channeling Injunction or
section 524(g)-(h) or
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the application of the Asbestos and Lead PI Permanent Channeling Injunction to
Asbestos Personal Injury Claims and Lead Personal Injury Claims will not be
challenged, either before or after confirmation of the Plan. Although the
Debtors believe adequate bases exist for the courts to uphold section 524(g)-(h)
and the Asbestos and Lead PI Permanent Channeling Injunction (as it applies to
both Asbestos Personal Injury Claims and Lead Personal Injury Claims), there can
be no assurance that, in the future, courts might not invalidate all or a
portion of section 524(g)-(h) or the Asbestos and Lead PI Permanent Channeling
Injunction.
C. OTHER PRODUCT LIABILITY TORT CLAIMS.
The Debtors have assumed that the fairness of the treatment
provided to the holders of Other Product Liability Tort Claims will be
sufficient to bind such holders as and when their Other Product Liability Tort
Claims are asserted, even though the identity of any such holders is unknown
and, consequently, such holders are unable to vote on the Plan. Thus, there is
no guarantee that a court will enforce the Debtors' discharge as a result of
confirmation of the Plan against the holders of Other Product Liability Tort
Claims if such Claims become manifest after the Effective Date.
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XIV. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
THE FOLLOWING DISCUSSION IS A SUMMARY OF CERTAIN OF THE
SIGNIFICANT FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN TO THE DEBTORS AND TO
HOLDERS OF CLAIMS AND EQUITY INTERESTS. EXCEPT AS OTHERWISE SET FORTH BELOW, NO
RULINGS HAVE BEEN REQUESTED FROM THE IRS. MOREOVER, NO LEGAL OPINIONS HAVE BEEN
REQUESTED FROM COUNSEL WITH RESPECT TO ANY OF THE TAX ASPECTS OF THE PLAN.
HOLDERS OF A CLAIM OR EQUITY INTEREST ARE URGED TO CONSULT THEIR OWN TAX
ADVISERS FOR THE FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES PECULIAR TO
THEM UNDER THE PLAN.
THE FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES OF THE
PLAN TO THE HOLDERS OF CLAIMS AND EQUITY INTERESTS MAY VARY BASED UPON THE
INDIVIDUAL CIRCUMSTANCES OF EACH HOLDER. IN ADDITION, THIS DISCUSSION DOES NOT
COVER ALL ASPECTS OF FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO THE DEBTORS
OR HOLDERS OF ALLOWED CLAIMS OR EQUITY INTERESTS, NOR DOES THE DISCUSSION DEAL
WITH TAX ISSUES PECULIAR TO CERTAIN TYPES OF TAXPAYERS (SUCH AS DEALERS IN
SECURITIES, S CORPORATIONS, LIFE INSURANCE COMPANIES, FINANCIAL INSTITUTIONS,
TAX EXEMPT ORGANIZATIONS, AND FOREIGN TAXPAYERS). NO ASPECT OF FOREIGN, STATE,
LOCAL, OR ESTATE AND GIFT TAXATION IS ADDRESSED. THEREFORE, THE FOLLOWING
SUMMARY IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE
INDIVIDUAL CIRCUMSTANCES OF EACH HOLDER OF A CLAIM OR EQUITY INTEREST.
THIS SUMMARY IS BASED ON THE INTERNAL REVENUE CODE, TREASURY
REGULATIONS PROMULGATED AND PROPOSED THEREUNDER, JUDICIAL DECISIONS AND
PUBLISHED ADMINISTRATIVE RULES, AND PRONOUNCEMENTS OF THE IRS AS IN EFFECT ON
THE DATE HEREOF. CHANGES IN SUCH RULES OR NEW INTERPRETATIONS THEREOF MAY HAVE
RETROACTIVE EFFECT AND COULD, THEREFORE, SIGNIFICANTLY AFFECT THE TAX
CONSEQUENCES DESCRIBED BELOW.
A. CONSEQUENCES TO HOLDERS OF CLAIMS AND EQUITY INTERESTS.
The federal income tax consequences of the implementation of
the Plan to a holder of a Claim will depend, among other things, upon the origin
of the holder's Claim, when the holder's Claim becomes an Allowed Claim, when
the holder receives payment in respect of such Claim, whether the holder reports
income using the accrual or cash method of accounting, whether the holder has
taken a bad debt deduction or worthless security deduction with respect to such
Claim, and whether the holder's Claim constitutes a "security" for federal
income tax purposes.
1. REALIZATION AND RECOGNITION OF GAIN OR LOSS IN GENERAL.
Generally, a holder of an Allowed Claim will realize gain or
loss on the exchange under the Plan of its Allowed Claim for stock and other
property (such as cash, New Debt Securities, or other notes) in an amount equal
to the difference between (i) the sum of the amount of any cash, the issue price
of any New Debt Securities or other notes, and the fair market value on the date
of the exchange of any New Eagle-Picher Common Stock received by the holder
(other than any consideration attributable to a Claim for accrued but unpaid
interest) and (ii) the adjusted basis of the Allowed Claim
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exchanged therefor (other than basis attributable to accrued but unpaid interest
previously included in the holder's taxable income). With respect to the
treatment of accrued but unpaid interest and amounts allocable thereto, see
Section XIV.A.8, entitled, "CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
- - Consequences to Holders of Claims and Equity Interests - Allocation of
Consideration to Interest." Whether or not such realized gain or loss will be
recognized (i.e., taken into account) for federal income tax purposes will
depend in part upon whether such exchange qualifies as a recapitalization or
other "reorganization" as defined in the Internal Revenue Code, which may in
turn depend upon whether the Claim exchanged is classified as a "security" for
federal income tax purposes. Any gain recognized generally will be capital gain
if the Claim was a capital asset in the hands of the exchanging holder, and such
gain would be long-term capital gain if the holder's holding period for the
Claim surrendered exceeded one (1) year at the time of the exchange.
The term "security" is not defined in the Internal Revenue
Code or the regulations thereunder. One of the most significant factors
considered in determining whether a particular debt instrument is a security is
the original term thereof. In general, the longer the term of an instrument, the
greater the likelihood that it will be considered a security. As a general rule,
a debt instrument having an original term of more than ten (10) years will be
classified as a security, and an instrument having an original term of fewer
than five (5) years will not. Debt instruments having a term of at least five
(5) years but not more than ten (10) years are likely to be treated as
securities, but may not be, depending upon their resemblance to ordinary
promissory notes, whether they are publicly traded, whether the instruments are
secured, the financial condition of the debtor at the time the debt instruments
are issued, and other factors.
Although other Claims dealt with under the Plan may constitute
securities (for example, see Section XIV.A.3, entitled, "CERTAIN FEDERAL INCOME
TAX CONSEQUENCES OF THE PLAN - Consequences to Holders of Claims and Equity
Interests - Holders of Secured Claims (Classes 2, 3 and 5 through 14,
Inclusive)"), the Debtors believe that the following debt issues will constitute
securities: the Henry County IRBs, the Houston IRBs, the Mansfield IRBs, the
Vale EDBs, and the 9.5% Sinking Fund Debentures due March 1, 2017.
THE CONCLUSION THAT SOME OR ALL OF THE FOREGOING CLAIMS
CONSTITUTE SECURITIES IS NOT FREE FROM DOUBT. IN THIS REGARD, HOLDERS SHOULD
CONSULT THEIR OWN TAX ADVISERS.
2. HOLDERS OF ALLOWED PRIORITY CLAIMS (CLASS 1)
Holders of Allowed Priority Claims generally will be paid in
full in cash on the Effective Date. Such holders must include such amounts in
their gross income in the taxable year in which such amounts are actually or
constructively received by them. Amounts of income tax and employment tax will
be withheld from such payments as required by law.
3. HOLDERS OF SECURED CLAIMS (CLASSES 2, 3 AND 5 THROUGH 14,
INCLUSIVE).
a. SECURED CLAIMS THAT WILL BE REINSTATED OR PAID IN
FULL.
Holders of Allowed Secured Claims that are to be paid in full
will receive a one-time cash payment in an amount equal to their Allowed Secured
Claims. Conversely, holders of Allowed Secured Claims that are to be reinstated
will receive a one-time cash payment to cure prepetition and postpetition
defaults, and their Claims otherwise will be paid in accordance with their
original contractual terms. Holders of such Allowed Secured Claims generally
will recognize ordinary income
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to the extent that the cash payment is allocated to accrued but unpaid interest
that has not theretofore been included in the holder's taxable income (see
Section XIV.A.8, entitled, "CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
- - Consequences to Holders of Claims and Equity Interests - Allocation of
Consideration to Interest"). Unless the installment method of reporting income
applies, payments allocated to the principal amount of the Allowed Secured Claim
will reduce the holder's basis in the Claim, and, in general, a holder will not
recognize gain for tax purposes. To the extent that the remainder of the Claim
is reinstated without any reduction in amount or material modification, there
should be no federal income tax consequence to the holder of such Claim.
The foregoing analysis may be different for any holder who (i)
holds such a Claim that constitutes a lease, rather than debt, for federal
income tax purposes, (ii) holds such Claim for accrued but unpaid interest that
is not subject to federal income tax under section 103 of the Internal Revenue
Code, or (iii) holds such Claim other than as a result of lending the principal
amount thereof to the Debtors. Consequently, holders should consult their own
tax advisers as to their proper tax treatment.
b. SECURED CLAIMS THAT WILL BE SATISFIED BY CASH, NOTES, OR THE
SURRENDER OF COLLATERAL.
The holder of an Allowed Secured Claim as to which the value
of the collateral securing such Claim is established may (i) have the collateral
securing such Claim returned in satisfaction of the secured portion of the
Claim, (ii) receive cash in payment of the secured portion of the Claim in an
amount not to exceed the value of such collateral, or (iii) receive a note in
the amount of the Claim. If the value of the collateral is less than the amount
of the Allowed Claim, the deficiency amount will be treated as an Unsecured
Claim, unless the holder of such Claim has elected treatment pursuant to section
1111(b) of the Bankruptcy Code.
Each holder of such an Allowed Secured Claim who receives
cash, a note, or collateral will recognize ordinary income to the extent (if
any) that such consideration is allocated to accrued but unpaid interest that
has not theretofore been included in the holder's taxable income (see Section
XIV.A.8, entitled, "CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN -
Consequences to Holders of Claims and Equity Interests - Allocation of
Consideration to Interest"). Gain or loss will be realized to the extent that
the amount of any cash, the fair market value of any collateral, or the issue
price of any note received in excess of that allocable to interest exceeds (or
is less than) the adjusted tax basis of the Allowed Secured Claim. If the
holder's Allowed Secured Claim and the note received by such holder (if any) do
not constitute "securities" for federal income tax purposes (see Section
XIV.A.1, entitled, "CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN -
Consequences to Holders of Claims and Equity Interests Realization and
Recognition of Gain or Loss in General"), the entire amount of such realized
gain or loss will be recognized (i.e., taken into account) for federal income
tax purposes. If the holder's Allowed Secured Claim and the note received by
such holder constitute "securities" for federal income tax purposes, (i) any
realized loss will not be recognized for federal income tax purposes, and (ii)
any realized gain will be recognized in an amount equal to the lesser of (a) the
gain realized or (b) the amount of cash and the fair market value of the
collateral received in excess of the amount allocated to accrued but unpaid
interest.
The foregoing analysis may be different for any holder who (i)
holds such a Claim that constitutes a lease, rather than debt, for federal
income tax purposes, (ii) holds such Claim for accrued but unpaid interest that
is not subject to federal income tax under section 103 of the Internal Revenue
Code, or (iii) holds such Claim other than as a result of lending the principal
amount thereof to the Debtors. Consequently, holders should consult their own
tax advisers as to their proper tax treatment.
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4. ASBESTOS PERSONAL INJURY CLAIMS AND LEAD PERSONAL INJURY
CLAIMS (CLASS 17).
Each Allowed Asbestos Personal Injury Claim and Allowed Lead
Personal Injury Claim will be liquidated and satisfied by distributions from the
PI Trust. The tax treatment of the receipt of payments by a holder of such a
Claim generally will depend upon the nature of the Claim. Because the amounts
received by a holder of an Allowed Asbestos Personal Injury Claim or an Allowed
Lead Personal Injury Claim will be attributable to, and compensation for, such
holder's personal injuries or sickness, within the meaning of Section 104 of the
Internal Revenue Code, any such amounts received should be nontaxable to the
recipient.
5. ASBESTOS PROPERTY DAMAGE CLAIMS AND OTHER PRODUCT LIABILITY
TORT CLAIMS (CLASSES 16 AND 18).
Each Allowed Asbestos Property Damage Claim will be liquidated
and satisfied by distributions from the Asbestos PD Trust. The tax treatment of
the receipt of payments by a holder of such a Claim generally will depend upon
the nature of the Claim. If any Distribution received by a holder of such a
Claim is used to restore damaged property to its original condition, such
Distribution generally should be nontaxable to the recipient. However, any
Distribution made in respect of property that has been destroyed and which will
not be replaced by the holder of the Claim generally should be treated like a
sale or exchange of such property and may give rise to gain or loss equal to the
difference between (i) the amount realized by the holder of the Claim, and (ii)
the adjusted tax basis of the holder in the destroyed property. To the extent
that a Distribution received by a holder of a Claim is used to replace destroyed
property, or a part thereof, with similar property, the holder may avoid
recognizing gain under Section 1033 of the Internal Revenue Code. Because the
tax treatment of any such Distribution under the Plan will depend on facts
peculiar to each holder of a Claim, holders should consult their own tax
advisers as to the proper tax treatment of the receipt of such a distribution.
The tax treatment of the receipt of payments by a holder of an
Allowed Other Product Liability Tort Claim also will depend upon the nature of
the Claim. Amounts attributable to, and constituting compensation for, personal
injuries or sickness should be nontaxable to the recipient under Section 104 of
the Internal Revenue Code. Amounts attributable to the damage of property will
be treated for federal income tax purposes in a manner similar to the Asbestos
Property Damage Claims discussed above.
6. UNSECURED CLAIMS (CLASSES 15, 20, AND 21).
The Debtors believe that, except with respect to certain
industrial development revenue bonds and debentures, the Unsecured Claims
generally do not constitute "securities" for federal income tax purposes (see
Section XIV.A.1, entitled, "CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
- - Consequences to Holders of Claims and Equity Interests - Realization and
Recognition of Gain or Loss in General"). The tax treatment of the receipt of
consideration by holders of such Claims will depend, among other things, on the
nature of the Claims. For example, payment in respect of property sold to the
Debtors may give rise to gain or loss realized by the holder; payments
consisting of compensation for services rendered may be taxable as ordinary
income; payments allocated to accrued but unpaid interest on a debt obligation
that the holder of such obligation has not theretofore included in taxable
income may give rise to ordinary income; repayment of monies borrowed or payment
of Claims as to which the holder has a basis greater than zero because of
amounts previously included in income will give rise to gain or loss in an
amount equal to the difference between the basis of the Claim and the amount
received in respect thereof. Because the tax
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treatment of any such payments will depend on facts peculiar to each holder,
holders should consult their own tax advisers as to the proper tax treatment of
the receipt of such payments.
7. EQUITY INTERESTS (CLASS 24).
All Equity Interests will be canceled on the Effective Date
for no consideration. Holders of such Equity Interests generally will be
entitled to claim a capital loss, equal to their adjusted basis in their Equity
Interests, as of the last day of the taxable year in which an event occurs
indicating that the Equity Interests are worthless.
8. ALLOCATION OF CONSIDERATION TO INTEREST.
Holders of Claims will recognize ordinary income to the extent
that any consideration received under the Plan in exchange therefor is allocable
to accrued but unpaid interest that has not already been included in the
holder's taxable income. If, on the other hand, amounts of accrued but unpaid
interest previously included in the holder's taxable income exceed the amount of
consideration allocable to such interest, the holder generally should be treated
as recognizing an ordinary loss.
The proper allocation between principal and interest of
amounts received in exchange for the discharge of a Claim at a discount is
unclear and may be affected by, among other things, the rules in the Internal
Revenue Code relating to imputed interest, original issue discount, market
discount, and bond issuance premium. However, the Plan provides that, for
federal income tax purposes, consideration to be distributed pursuant to the
Plan will be allocated to the principal amount of a Claim first and then, to the
extent the consideration exceeds the principal amount of the Claim, to accrued
but unpaid interest. Nevertheless, it is possible that the IRS may take the
position that a pro rata portion of the consideration received by each holder of
an interest-bearing obligation must be allocated to interest, or that
consideration must be allocated first to accrued but unpaid interest and then to
principal. In this regard, holders of Claims should consult their own tax
advisers.
9. MARKET DISCOUNT.
"Market discount" is defined generally in the Internal Revenue
Code as the excess, if any, of (i) the "stated redemption price at maturity" of
a debt obligation over (ii) the adjusted basis of the debt obligation in the
hands of a holder immediately after its acquisition. For any bond having
original issue discount, the stated redemption price at maturity shall be
treated as equal to the sum of the issue price of the bond and the aggregate
amount of original issue discount includible in the gross income of all holders
for periods before the acquisition of the bond by the taxpayer or, in the case
of a tax-exempt obligation, the aggregate amount of the original issue discount
that accrued during the periods before the acquisition of the bond by the
taxpayer. A "market discount bond" is defined as any bond having market
discount. Debt instruments in the hands of original holders are not market
discount bonds. Moreover, under a de minimis exception, there is no market
discount if the excess of the stated redemption price at maturity of a debt
instrument over the holder's adjusted basis in the debt instrument is less than
0.25% of the stated redemption price at maturity multiplied by the number of
complete years after the acquisition date to the date of maturity. Unless the
holder elects otherwise, the accrued market discount for an old debt instrument
generally is the amount calculated by multiplying the market discount for such
debt instrument by a factor, the numerator of which is the number of days an old
debt instrument has been held by the holder and the denominator of which is the
number of days after the acquisition of the old debt instrument up to and
including its maturity date.
Holders of old debt instruments in whose hands such
instruments are market discount bonds will be required to treat as ordinary
income any gain recognized on the exchange of such
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instruments pursuant to the Plan to the extent of the market discount accrued
during the holder's period of ownership, unless the holder has elected to
include the market discount in income as it accrued. Any additional gain would
be characterized as discussed above.
B. INFORMATION REPORTING AND BACKUP WITHHOLDING.
Under the backup withholding rules of the Internal Revenue
Code, a holder of a Claim may be subject to backup withholding at a rate of 31%
with respect to Distributions or payments made pursuant to the Plan, including
payments by the PI Trust and the Asbestos PD Trust, unless such holder (i) comes
within certain exempt categories (generally including corporations) and, when
required, demonstrates this fact, or (ii) provides a correct taxpayer
identification number and certifies under penalties of perjury that the taxpayer
identification number is correct and that the holder is not subject to backup
withholding because of a failure to report all dividend and interest income.
Backup withholding is not an additional tax, but merely an advance payment,
which may be refunded to the extent it results in an overpayment of tax. Holders
of Claims may be required to establish exemption from backup withholding or to
make arrangements with respect to the payment of backup withholding.
C. CONSEQUENCES TO DEBTORS.
1. DISCHARGE-OF-INDEBTEDNESS INCOME GENERALLY.
In general, the discharge of a debt obligation by the obligor
for an amount less than the adjusted issue price (generally, the amount received
upon incurring the obligation plus the amount of any previously amortized
original issue discount and less the amount of any previously amortized bond
issue premium) gives rise to cancellation-of-indebtedness ("COD") income, which
must be included in the obligor's income for federal income tax purposes,
unless, in accordance with Section 108(e)(2) of the Internal Revenue Code,
payment of the liability would have given rise to a deduction. A corporate
debtor that issues its own stock in satisfaction of its debt is treated as
realizing COD income to the extent the fair market value of the stock issued is
less than the adjusted issue price of the debt. COD income is not recognized by
a taxpayer that is a debtor in a title 11 case if a discharge is granted by the
court or pursuant to a plan approved by the court (the "bankruptcy exclusion
rules").
Pursuant to the Plan, Administrative Expenses and Priority Tax
Claims generally will be paid in full and, therefore, treatment of such Claims
should not give rise to COD income. With respect the Unsecured Claims, however,
the satisfaction of such Claims in accordance with the terms of the Plan should
give rise to approximately $66.8 million of COD income. With respect to all
other Claims, the Debtors anticipate that, as a result of the application of the
stock-for-debt exception (discussed below) and Section 108(e)(2) of the Internal
Revenue Code, the satisfaction of such Claims under the Plan should not give
rise to a significant amount of COD income.
2. ATTRIBUTE REDUCTION.
The relief accorded to COD income by the bankruptcy exclusion
rules is not without cost. If a taxpayer excludes COD income because of the
bankruptcy exclusion rules, it is required to reduce prescribed tax attributes
in the following order: (1) net operating losses ("NOLs") for the taxable year
of the discharge and NOL carryovers to such taxable year, dollar for dollar; (2)
general business credit carryovers, 33-1/3 cents for each dollar of excluded
income; (3) the minimum tax credit available under Section 53(b) of the Internal
Revenue Code as of the beginning of the taxable year immediately following the
taxable year of the discharge, 33-1/3 cents for each dollar of excluded income;
(4) capital losses for the taxable year of the discharge and any capital loss
carryover to such taxable year, dollar for dollar; (5) the basis of the
taxpayer's assets, dollar for dollar, but the basis
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cannot be reduced below an amount based on the taxpayer's aggregate liabilities
immediately after the discharge; (6) passive activity loss or credit carryovers
of the taxpayer under Section 469(b) of the Internal Revenue Code from the
taxable year of the discharge, dollar for dollar in the case of loss carryovers
and 33-1/3 cents for each dollar of excludible income in the case of credit
carryovers; and (7) foreign tax credit carryovers, 33-1/3 cents for each dollar
of excluded income. However, the taxpayer may elect to avoid the prescribed
order of attribute reduction and instead reduce the basis of depreciable
property first, without regard to the "aggregate liabilities" limitation. This
election extends to stock of a subsidiary if the subsidiary consents to reduce
the basis of its depreciable property.
The Debtors anticipate that the amount of attribute reduction
required under the Plan will be approximately $66.8 million.
3. STOCK-FOR-DEBT EXCEPTION.
A major exception to the attribute reduction rules provides
that certain stock issued by a corporate debtor in a title 11 case is deemed to
satisfy fully any indebtedness for which it is issued, even if the stock has a
value less than the amount of the indebtedness (the "stock-for-debt exception").
If the stock-for-debt exception applies, a corporate debtor is not required to
reduce its tax attributes in accordance with Section 108(b) of the Internal
Revenue Code. Although the stock-for-debt exception was repealed by the Revenue
Reconciliation Act of 1993, the exception is still applicable to the Debtors
because their chapter 11 petitions were filed before January 1, 1994.
To satisfy the stock-for-debt exception, (i) the stock issued
to creditors must not be "disqualified stock" (stock with a stated redemption
price that may be called by the issuer or put to the issuer by the holder, or
which has a fixed redemption date), (ii) the stock issued to creditors must not
be "nominal or token," and (iii) with respect to an unsecured creditor, the
ratio of the value of the stock received by such unsecured creditor to the
amount of its indebtedness that is canceled or exchanged for stock in the
workout must not be less than 50% of a similar ratio computed for all unsecured
creditors participating in the workout.
The Debtors believe that the New Eagle-Picher Common Stock
issued under the Plan will satisfy these three tests. Consequently, as a result
of the application of either the stock-for-debt exception or Section 108(e)(2)
of the Internal Revenue Code, there should not be a significant amount of
attribute reduction (if any) under Section 108(b) of the Internal Revenue Code
as a result of the transfer of the New Eagle-Picher Common Stock to the PI Trust
in satisfaction of the Asbestos Personal Injury Claims and Lead Personal Injury
Claims.
4. DEDUCTION OF AMOUNTS TRANSFERRED TO SATISFY CLAIMS.
a. CASH AND NEW EAGLE-PICHER COMMON STOCK.
To the extent Distributions under the Plan of cash and New
Eagle-Picher Common Stock satisfy Claims with respect to which the Debtors
otherwise would be entitled to a federal income tax deduction for the payment
thereof, the Reorganized Debtors should be entitled to a current federal income
tax deduction for such Distributions. Moreover, the Debtors have obtained from
the IRS a ruling, which provides that the Reorganized Debtors will be entitled
to a current federal income tax deduction for all transfers of cash and New
Eagle-Picher Common Stock to the PI Trust. Although the Debtors have not
requested any such ruling from the IRS with respect to the Asbestos PD Trust,
the Debtors believe that the Reorganized Debtors also will be entitled to a
current federal income tax deduction for all transfers of cash to the Asbestos
PD Trust. The amount of the aggregate deduction to which the Reorganized Debtors
will be entitled shall equal the sum of the amount of cash and the
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fair market value of the New Eagle-Picher Common Stock transferred to the PI
Trust and transferred to satisfy Claims the payment of which would otherwise
give rise to a deduction and the amount of cash transferred to the Asbestos PD
Trust.
It should be noted, however, that the current deduction for
transfers to the PI Trust and the Asbestos PD Trust will only be allowed to the
extent that the transferred amounts do not represent amounts received from the
settlement of an insurance claim and are excludable from gross income. If the
settlement of an insurance claim of the Debtors, if any, occurs after the
transfer of assets to the PI Trust or the Asbestos PD Trust and after the
Reorganized Debtors have taken a deduction with respect to such transfer, the
Reorganized Debtors must include in income the amounts received from the
settlement of the insurance claim to the extent of the deduction.
Although subject to a final determination of the fair market
value of the New Eagle-Picher Common Stock on the date of transfer, the Debtors
anticipate that the amount of such a deduction should be approximately $330.3
million.
The Debtors currently do not have any NOL carryovers. However,
after applying the foregoing deduction against the income or gain of the Debtors
recognized during the taxable year including the Effective Date, and after the
attribute reduction required in accordance with Section 108(b) of the Internal
Revenue Code of approximately $66.8 million, the Debtors anticipate that the
Debtors should have a NOL carryover of approximately $226.0 million. The Debtors
believe that this NOL will not be materially limited by Section 382 of the
Internal Revenue Code because of the Debtors' reliance on the bankruptcy
exception contained in Section 382(l)(5) (see Section XIV.C.5, entitled,
"CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN - Consequences to Debtor -
Utilization of Net Operating Loss Carryovers").
b. DIVESTITURE NOTES, SENIOR UNSECURED SINKING FUND
DEBENTURES, AND TAX REFUND NOTES.
Contrary to the treatment of the New Eagle-Picher Common Stock
and cash, the Reorganized Debtors will not be allowed a current federal income
tax deduction for the transfer of the Divestiture Notes, Senior Unsecured
Sinking Fund Debentures, and Tax Refund Notes to the PI Trust, the Asbestos PD
Trust, or to satisfy Claims the payment of which otherwise would give rise to a
deduction. Instead, the Reorganized Debtors will only be allowed a deduction as
principal and interest payments are made on such debt obligations. Therefore,
over the term of the Divestiture Notes, Senior Unsecured Sinking Fund
Debentures, and Tax Refund Notes the Reorganized Debtors should be entitled to
an aggregate deduction of approximately $581.0 million, which includes interest
payable on such notes. The Debtors believe that the amount of these deductions
will not be materially limited by Section 382 of the Internal Revenue Code
because of the Debtors' reliance on the bankruptcy exception contained in
Section 382(l)(5) (see Section XIV.C.5, entitled, "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE PLAN - Consequences to Debtors - Utilization of Net
Operating Loss Carryovers").
5. UTILIZATION OF NET OPERATING LOSS CARRYOVERS.
In general, whenever there is a 50% ownership change of a
debtor corporation during a three-year period, the ownership change rules in
Section 382 of the Internal Revenue Code limit the utility of NOLs on an annual
basis to the product of the fair market value of the corporate equity
immediately before the ownership change, multiplied by a hypothetical interest
rate published monthly by the IRS called the "long-term tax-exempt rate." In any
given year, this limitation may be increased by certain built-in gains realized
after, but accruing economically before, the ownership change and
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the carryover of unused Section 382 limitations from prior years. The long-term
tax-exempt rate as of the date of this Disclosure Statement is 5.80%.
The harsh effects of the ownership change rules can be
ameliorated by an exception that applies in the case of federal bankruptcy
reorganizations. Under the so-called "Section 382(l)(5) bankruptcy exception" to
Section 382 of the Internal Revenue Code, if the reorganization results in an
exchange by qualifying creditors and stockholders of their claims and interests
for at least 50% of the debtor's stock (in vote and value), then the general
ownership change rules will not apply. Instead, the debtor will be subject to a
different tax regime under which the NOLs are not limited on an annual basis but
are reduced by (i) the amount of interest deductions claimed during the three
(3) taxable years preceding the date of the reorganization, and during the part
of the taxable year prior to and including the reorganization, in respect of
debt converted into stock in the reorganization, and (ii) 50% of the excess of
the amount of the debt (other than indebtedness for interest included in clause
(i)) satisfied with stock in an exchange to which the stock-for-debt exception
applies over the value of the stock so issued. Moreover, if the Section
382(l)(5) bankruptcy exception applies, any further ownership change of the
debtor within a two-year period will result in forfeiture of all of the debtor's
NOLs incurred prior to the date of the second ownership change.
If the debtor otherwise would qualify for the Section
382(l)(5) bankruptcy exception, but the NOL reduction rules mandated thereby
would seriously reduce the NOL, the debtor may elect instead to be subject to
the annual limitation rules of Section 382 of the Internal Revenue Code, but is
permitted to value the equity of the corporation for purposes of applying the
formula by using the value immediately after the ownership change (by adding the
value of the old loss corporation resulting from any surrender or cancellation
of creditors' claims) instead of immediately before the ownership change (the
"Section 382(l)(6) limitation").
Because the Debtors have obtained from the IRS a ruling that
provides that, for purposes of determining whether the Plan qualifies under
Section 382(l)(5)(A), the beneficiaries of the PI Trust, rather than the PI
Trust itself, will be considered to own the New Eagle-Picher Common Stock
actually owned by the PI Trust, the Debtors intend to rely upon the Section
382(l)(5) bankruptcy exception. As indicated above, by relying on the Section
382(l)(5) bankruptcy exception, the Debtors' NOLs will have to be reduced by an
amount equal to (i) the amount of interest deductions claimed by the Debtors for
the three (3) taxable years preceding the date of the ownership change and for
the part of the taxable year prior to and including the date of the ownership
change, which the Debtors estimate to be approximately zero, and (ii) 50% of the
COD income that was not applied to reduce the Debtors' NOLs as a result of the
application of the stock-for-debt exception (other than COD income attributable
to interest included in clause (i) above), which the Debtors estimate to be
approximately zero as a result of the Debtors' anticipated reliance on Section
108(e)(2), and not the stock-for-debt exception. Holders of Claims should note,
however, that the amount of NOLs available to the Reorganized Debtors is based
on factual and legal issues with respect to which there can be no certainty. The
amount of NOL carryovers is subject to audit and adjustments by the IRS, and it
is entirely possible that the NOLs could be significantly less than $226.0
million.
6. CONSOLIDATED RETURN ITEMS.
The confirmation of the Plan may result in the recognition of
income or loss attributable to the existence of deferred intercompany
transactions, excess loss accounts, or similar items. The Debtors, however, do
not believe that the consequence of such items (if any) would have a material
effect on the Reorganized Debtors.
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7. ALTERNATIVE MINIMUM TAX.
A corporation is required to pay alternative minimum tax to
the extent that 20% of "alternative minimum taxable income" ("AMTI") exceeds the
corporation's regular tax liability for the year. AMTI is generally equal to
regular taxable income with certain adjustments. For purposes of computing AMTI,
a corporation is entitled to offset no more than 90% of its AMTI with NOLs (as
computed for alternative minimum tax purposes). Thus, if the Reorganized
Debtors' consolidated group is subject to the alternative minimum tax in future
years, a federal tax of 2% (20% of the 10% of AMTI not offset by NOLs) will
apply to any net taxable income earned by the Reorganized Debtors' consolidated
group in future years that is otherwise offset by NOLs.
D. TAXATION OF THE PI TRUST AND THE ASBESTOS PD TRUST.
The Debtors have obtained a ruling from the IRS that provides
that the PI Trust will constitute a "qualified settlement fund" under section
1.468B-1 of the Treasury Regulations. As a qualified settlement fund, the PI
Trust generally will be subject to federal income taxation as a corporation,
except that its taxable income will be taxed at the maximum rate applicable to
trusts and estates (currently 39.6%). In determining the taxable income of the
PI Trust, (i) amounts transferred by the Debtors to the PI Trust should be
excluded from its income; (ii) the adjusted tax basis in the hands of the PI
Trust of New Eagle-Picher Common Stock, Divestiture Notes, Senior Unsecured
Sinking Fund Debentures, and Tax Refund Notes transferred thereto should be
equal to the fair market value of such stock and debt instruments on the date of
transfer; (iii) any distribution of property from the PI Trust will result in
the realization of gain or loss by the PI Trust in an amount equal to the
difference between the fair market value of the property on the date of
distribution and the PI Trust's adjusted tax basis in such property; and (iv)
administrative costs (including state and local taxes) incurred by the PI Trust
should be deductible.
Although the Debtors have not requested a ruling from the IRS
with respect to the Asbestos PD Trust's qualification as a qualified settlement
fund under section 1.468B-1 of the Treasury Regulations, the Debtors believe
that the Asbestos PD Trust will be subject to federal income taxation in the
same manner as the PI Trust, discussed above.
* * *
THE FOREGOING IS INTENDED ONLY AS A SUMMARY OF CERTAIN FEDERAL
INCOME TAX ASPECTS OF THE PLAN AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING
AND ADVICE BASED UPON THE INDIVIDUAL CIRCUMSTANCES OF EACH HOLDER OF AN ALLOWED
CLAIM OR EQUITY INTEREST.
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XV. ALTERNATIVES TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
If the Plan is not confirmed and consummated, the Debtors'
alternatives include (i) liquidation of the Debtors under chapter 7 of the
Bankruptcy Code and (ii) the preparation and presentation of an alternative plan
of reorganization.
A. LIQUIDATION UNDER CHAPTER 7.
If no chapter 11 plan can be confirmed, the Chapter 11 Cases
may be converted to cases under chapter 7 of the Bankruptcy Code in which a
trustee would be elected or appointed to liquidate the assets of the Debtors. A
discussion of the effect that a chapter 7 liquidation would have on the recovery
of holders of Claims is set forth in Section VIII.C.4, "CONFIRMATION AND
CONSUMMATION PROCEDURE - Confirmation - Best Interests Test." In performing the
liquidation analysis, the Debtors have assumed that all holders of Asbestos
Personal Injury Claims (whether presently known or unknown) will be determined
to have "claims" that are entitled to share in the proceeds from any such
liquidation. The Debtors believe that liquidation under chapter 7 would result
in (i) smaller distributions being made to creditors than those provided for in
the Plan because of the additional administrative expenses involved in the
appointment of a trustee and attorneys and other professionals to assist such
trustee, (ii) additional expenses and claims, some of which would be entitled to
priority, which would be generated during the liquidation and from the rejection
of unexpired leases and executory contracts in connection with the cessation of
the Debtors' operations, and (iii) the failure to realize the greater, going
concern value of all of the Debtors' assets.
B. ALTERNATIVE PLAN OF REORGANIZATION.
If the Plan is not confirmed, the Debtors or any other party
in interest could attempt to formulate a different plan of reorganization. Such
a plan might involve either a reorganization and continuation of the Debtors'
businesses or an orderly liquidation of their assets. During the mediation
process and the negotiations subsequent to the Agreement in Principle, the
Debtors explored various alternatives to the Plan.
The Debtors believe that the Plan enables the Debtors to
emerge from chapter 11 successfully and expeditiously, preserves their
businesses, and allows Claimants to realize the highest recoveries under the
circumstances. In a liquidation under chapter 11 of the Bankruptcy Code, the
assets of the Debtors would be sold in an orderly fashion over a more extended
period of time than in a liquidation under chapter 7, and a trustee need not be
appointed. Accordingly, creditors would receive greater recoveries than in a
chapter 7 liquidation. Although a chapter 11 liquidation is preferable to a
chapter 7 liquidation, the Debtors believe that a liquidation under chapter 11
is a much less attractive alternative to Claimants because a greater return is
provided for in the Plan to Claimants. In any liquidation, Claimants will be
paid their Distribution in cash, whereas, under the Plan, some Claimants will
receive a part of their Distribution in notes or New Eagle-Picher Common Stock.
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XVI. CONCLUSION AND RECOMMENDATION
The Plan Proponents believe that confirmation and
implementation of the Plan is preferable to any of the alternatives described
above because it will provide the greatest recoveries to holders of Claims. In
addition, other alternatives would involve significant delay, uncertainty, and
substantial additional administrative costs. THE PLAN PROPONENTS URGE HOLDERS OF
IMPAIRED CLAIMS ENTITLED TO VOTE ON THE PLAN TO VOTE TO ACCEPT THE PLAN AND TO
EVIDENCE SUCH ACCEPTANCE BY RETURNING THEIR BALLOTS SO THAT THEY WILL BE
RECEIVED BY THE EAGLE-PICHER BALLOT TABULATION CENTER NO LATER THAN 5:00 P.M.,
CINCINNATI, OHIO, TIME, ON NOVEMBER 4, 1996.
Dated: August 28, 1996
Respectfully submitted,
EAGLE-PICHER INDUSTRIES, INC.
By: /s/ THOMAS E. PETRY
---------------------------------------
Name: Thomas E. Petry
Title: Chairman of the Board and Chief
Executive Officer
DAISY PARTS, INC.
By: /s/ JAMES A. RALSTON
---------------------------------------
Name: James A. Ralston
Title: Secretary
TRANSICOIL INC.
By: /s/ JAMES A. RALSTON
---------------------------------------
Name: James A. Ralston
Title: Assistant Secretary
MICHIGAN AUTOMOTIVE RESEARCH
CORPORATION
By: /s/ JAMES A. RALSTON
---------------------------------------
Name: James A. Ralston
Title: Assistant Secretary
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EDI, INC.
By: /s/ JAMES A. RALSTON
---------------------------------------
Name: James A. Ralston
Title: Assistant Secretary
EAGLE-PICHER MINERALS, INC.
By: /s/ JAMES A. RALSTON
---------------------------------------
Name: James A. Ralston
Title: Secretary
HILLSDALE TOOL & MANUFACTURING
CO.
By: /s/ JAMES A. RALSTON
---------------------------------------
Name: James A. Ralston
Title: Secretary
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INDEX OF PERTINENT DEFINITIONS
23(b)(1)(B) Class ..................................................16
Additional Sites ..................................................40
Administrative Expenses................................................50
Affiliate Claims and Interests.........................................68
Agreement in Principle.................................................31
Amplicon Lease Secured Claim...........................................53
Asbestos and Lead PI Trust Agreement...................................81
Asbestos Bar Date ..................................................26
Asbestos PD Trust ...................................................7
Asbestos PD Trust Agreement............................................91
Asbestos PD Trust Share................................................10
Asbestos Personal Injury Claims........................................62
Asbestos PI Claims Procedures..........................................85
Asbestos Property Damage Claims....................................36, 60
Asbestos Property Damage Claims Resolution Procedures..................61
Asbestos-Related Contribution Claims...................................43
Available Cash ..................................................72
Ballots ...................................................1
Bankruptcy Code ...................................................1
Bankruptcy Court ...................................................1
Bankruptcy Court Stay Order............................................47
Bearer Debt Securities..................................................4
Certification Order ..................................................16
Chapter 11 Cases ..................................................18
Claimant ...................................................1
Colorado Springs Settlement............................................42
Committees' 2004 Motions...............................................47
Committees' 2004 Order.................................................48
Confirmation Conditions................................................69
Confirmation Hearing ...................................................1
Connecticut Mutual Note Secured Claim..................................54
Convenience Claim ...................................................7
Convenience Claims ..................................................59
Corporate Securities .................................................112
Daisy Parts, Inc. ...................................................1
Debtor-Owned Sites ..................................................40
Debtors ...................................................1
Designated Real Property Tax Claims....................................54
DIP Credit Facility ..................................................24
DIP Lenders ..................................................25
Distribution Amount ..................................................64
Distribution Value ...................................................6
District Court ..................................................38
Divestiture Notes ..................................................73
DOI ..................................................40
Eagle-Picher Industries, Inc............................................1
Effective Date ..................................................71
I
<PAGE> 141
Environmental Claims ...............................................7, 64
Environmental Settlement Agreement.....................................40
EPA ...................................................7
Equity Value ..................................................74
Estimation Motion ..................................................32
Estimation Order ...................................................6
Estimation Proceeding..................................................32
Exchange Act .................................................107
Exclusive Periods ..................................................26
Executive Officers .................................................102
Exigent Health Claim ..................................................88
Extraordinary Asbestos Personal Injury Claim...........................88
Extreme Hardship Claim.................................................88
FAB Loans ..................................................24
Final Distribution Date................................................11
First Fidelity Lease Secured Claim ....................................55
Fleet Credit Secured Claim.............................................55
Future Claimants' Representative.......................................22
GE Capital Secured Claim...............................................56
General Bar Date ..................................................25
Grove IRB Claim ..................................................56
Hillsdale ...................................................1
Hillsdale Exclusivity Motion...........................................27
IBM Credit Corporation Secured Claim...................................56
Initial Distribution Date..............................................11
Injury Claimants' Committee............................................20
Inter-Market Note Secured Claim........................................57
Kalkaska Claim ..................................................67
Lead Personal Injury Claim.............................................35
Leesburg Secured Claim.................................................58
Liquidated Sites ..................................................40
Liquidation Analysis ..................................................99
Management Contracts .................................................104
MARCO ...................................................1
MDL Panel ..................................................27
Mediator ..................................................31
Minerals ...................................................1
New York District Court................................................16
Northwestern Group Secured Claims......................................58
Offsite Negotiations ..................................................31
Original Plan ..................................................27
Other Product Liability Tort Claims.................................7, 64
Other Secured Claims"..................................................59
Payment Percentage ..................................................85
Penalty Claims ..................................................68
Pennsylvania District Court............................................27
Petition Date ..................................................18
PI Protected Party ..................................................77
PI Trust ...................................................6
II
<PAGE> 142
PI Trust Share ...................................................6
Plan ...................................................1
Plan Proponents ...................................................1
Prepetition Banks ..................................................24
Prepetition Liquidated Claims..........................................86
Priority Claims ..................................................52
Pro Rata Share ..................................................10
Prohibited Transfer .................................................112
Projected Financial Information........................................97
Projection Period ..................................................97
Protected Party ..................................................77
PRPs ..................................................39
Record Date ...................................................4
Registered Debt Securities..............................................2
Related Parties ..................................................77
Renewed UCC Exclusivity Motion.........................................27
Second Amended Plan ...................................................6
Securities Act .................................................107
Senior Unsecured Sinking Fund Debentures...............................73
Specified Treatment Claims.............................................67
State Parties ..................................................40
Stay Motion ..................................................47
Stay Order ..................................................16
Stockholders ...................................................1
Substantive Consolidation Complaint....................................48
Supplemental Severance Program........................................103
TAC ..................................................82
Tax Benefits .................................................112
Tax Claims ..................................................52
Tax Refund Notes ..................................................72
Three Year Service Period..............................................81
Toxic Personal Injury Claims...........................................81
Trustees ..................................................81
UCC Claims Objections..................................................47
UCC's 2004 Motion ..................................................47
UCC's Data Gathering Motion............................................48
UCC's Late Claims Motion...............................................47
Unsecured Claims ..................................................65
Unsecured Creditors' Committee.........................................19
Vale EDBs Claims ..................................................59
Voting Deadline ...................................................2
Voting Procedures ...................................................1
Voting Record Date ..................................................93
III
<PAGE> 143
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
- -------------------------------
EXHIBIT "A"
THIRD AMENDED CONSOLIDATED PLAN OF REORGANIZATION
<PAGE> 144
ARTICLE 1
DEFINITIONS ............................................................... 1
1.1 Defined Terms ................................................... 1
1.1.1 Administrative Expense .................................... 1
1.1.2 Administrative Expense Creditor ........................... 1
1.1.3 Affiliate ................................................. 1
1.1.4 Affiliate Claims and Interests ............................ 1
1.1.5 Agent Bank ................................................ 2
1.1.6 Allowed ................................................... 2
1.1.7 Allowed Amount ............................................ 3
1.1.8 Amended and Restated Articles of Incorporation ............ 3
1.1.9 Amended and Restated Code of Regulations .................. 3
1.1.10 Amplicon Lease Secured Claim ............................. 3
1.1.11 Articles of Incorporation ................................ 3
1.1.12 Asbestos and Lead PI Permanent Channeling Injunction ..... 3
1.1.13 Asbestos and Lead PI Trust Agreement ..................... 4
1.1.14 Asbestos or Lead Contribution Claim ...................... 4
1.1.15 Asbestos PD Trust ........................................ 4
1.1.16 Asbestos PD Trust Agreement .............................. 4
1.1.17 Asbestos PD Trust Funding Obligation ..................... 4
1.1.18 Asbestos PD Trust Share .................................. 4
1.1.19 Asbestos Personal Injury Claim ........................... 4
1.1.20 Asbestos Property Damage Claim ........................... 5
1.1.21 Asbestos Property Damage Contribution Claims ............. 5
1.1.22 Available Cash ........................................... 5
1.1.23 Ballot ................................................... 6
1.1.24 Ballot Date .............................................. 6
1.1.25 Bankruptcy Code .......................................... 6
1.1.26 Bankruptcy Court ......................................... 6
1.1.27 Bankruptcy Rules ......................................... 6
1.1.28 Bearer Unsecured Debt Securities ......................... 6
1.1.29 Board of Directors ....................................... 6
1.1.30 Business Day ............................................. 6
1.1.31 Chapter 11 Cases ......................................... 6
1.1.32 Claim .................................................... 6
1.1.33 Claims Settlement Guidelines ............................. 6
1.1.34 Claims Trading Injunction ................................ 6
1.1.35 Confirmation Date ........................................ 7
1.1.36 Confirmation Deadline .................................... 7
1.1.37 Confirmation Order ....................................... 7
1.1.38 Connecticut Mutual Note Secured Claim .................... 7
1.1.39 Contingent Claim ......................................... 7
1.1.40 Convenience Claim ........................................ 7
1.1.41 Creditor ................................................. 7
1.1.42 Debtors .................................................. 7
1.1.43 Debtors in Possession .................................... 7
1.1.44 Demand ................................................... 8
<PAGE> 145
1.1.45 Designated Real Property Tax Claim ...................... 8
1.1.46 DIP Credit Facility ..................................... 8
1.1.47 DIP Credit Facility Claim ............................... 8
1.1.48 DIP Lenders ............................................. 8
1.1.49 Disallowed Claim ........................................ 8
1.1.50 Disputed Claim .......................................... 8
1.1.51 Disputed Claim Amount ................................... 8
1.1.52 Distribution ............................................ 8
1.1.53 Distribution Amount ..................................... 8
1.1.54 Distribution Value ...................................... 8
1.1.55 District Court .......................................... 8
1.1.56 Divestiture Notes ....................................... 9
1.1.57 Eagle-Picher ............................................ 9
1.1.58 Effective Date .......................................... 9
1.1.59 Encumbrance ............................................. 9
1.1.60 Entity .................................................. 9
1.1.61 Environmental Claim ..................................... 9
1.1.62 Environmental Settlement Agreement ...................... 9
1.1.63 Equity Interest ......................................... 9
1.1.64 Equity Security Holders' Committee ...................... 9
1.1.65 Equity Value: ........................................... 9
1.1.66 Estimated Amount ........................................ 10
1.1.67 Existing Eagle-Picher Common Stock ...................... 10
1.1.68 Final Distribution Date ................................. 10
1.1.69 Final Order ............................................. 10
1.1.70 First Fidelity Group .................................... 10
1.1.71 First Fidelity Lease Secured Claim ...................... 10
1.1.72 Fleet Credit Secured Claim .............................. 10
1.1.73 Future Claimants' Representative ........................ 10
1.1.74 GE Capital Secured Claim ................................ 10
1.1.75 Grove IRB Secured Claim ................................. 11
1.1.76 Henry County IRBs ....................................... 11
1.1.77 Hillsdale ............................................... 11
1.1.78 Houston IRBs ............................................ 11
1.1.79 IBM Credit Corporation Secured Claim .................... 11
1.1.80 Initial Distribution Date ............................... 11
1.1.81 Injury Claimants' Committee ............................. 11
1.1.82 Inter-Market Note Secured Claim ......................... 11
1.1.83 Internal Revenue Code ................................... 11
1.1.84 IRS ..................................................... 12
1.1.85 Kalkaska Claim .......................................... 12
1.1.86 Lead Personal Injury Claim .............................. 12
1.1.87 Leesburg Note ........................................... 12
1.1.88 Leesburg Secured Claim .................................. 12
1.1.89 Mansfield IRBs .......................................... 12
1.1.90 MARCO ................................................... 12
1.1.91 New Debt Securities ..................................... 12
1.1.92 New Eagle-Picher Common Stock ........................... 12
1.1.93 Northwestern Group ...................................... 12
<PAGE> 146
1.1.94 Northwestern Group Secured Claims ....................... 13
1.1.95 Other Product Liability Tort Claim ...................... 13
1.1.96 Other Secured Claim ..................................... 13
1.1.97 Penalty Claim ........................................... 13
1.1.99 Petition Date ........................................... 13
1.1.100 PI Protected Party ..................................... 13
1.1.101 PI Trust ............................................... 14
1.1.102 PI Trust Share ......................................... 14
1.1.103 Plan ................................................... 14
1.1.104 Priority Claim ......................................... 14
1.1.105 Pro Rata Share ......................................... 14
1.1.106 Product Liability Tort Claim ........................... 14
1.1.107 Record Date ............................................ 15
1.1.108 Registered Unsecured Debt Securities ................... 15
1.1.109 Related Parties ........................................ 15
1.1.110 Reorganized Debtors .................................... 15
1.1.111 Reorganized Eagle-Picher ............................... 15
1.1.112 Retention Period ....................................... 15
1.1.113 Schedules .............................................. 15
1.1.114 Senior Unsecured Sinking Fund Debentures.. 15
1.1.115 Secured Claim .......................................... 15
1.1.117 Supplemental Severance Program ......................... 16
1.1.118 Tax Claim .............................................. 16
1.1.119 Tax Refund Notes ....................................... 16
1.1.121 Trustees ............................................... 16
1.1.122 Unliquidated Claim ..................................... 16
1.1.123 Unsecured Claim ........................................ 16
1.1.124 Unsecured Creditors' Committee ......................... 16
1.1.125 Unsecured Debt Securities .............................. 16
1.1.126 Unsecured Debt Securities Indenture .................... 16
1.1.127 Unsecured Debt Securities Trustee ...................... 16
1.1.128 Vale EDBs .............................................. 16
1.1.129 Vale EDBs Claims ....................................... 17
1.1.130 Voting Procedures Order ................................ 17
1.2 Other Terms..................................................... 17
1.3 Exhibits........................................................ 17
ARTICLE 2
PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSES AND TAX CLAIMS ......... 18
2.1 Payment of Allowed Administrative Expenses ..................... 18
2.2 Compensation and Reimbursement ................................. 18
2.3 DIP Credit Facility Claim ...................................... 18
2.4 Tax Claims ..................................................... 18
ARTICLE 3
CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS .............. 19
3.1 Summary ........................................................ 19
3.2 Classification and Treatment ................................... 20
<PAGE> 147
3.3 Compromise and Settlement Relating to the Amount of the PI Trust
Share........................................................... 32
3.4 Controversy Concerning Impairment............................... 33
ARTICLE 4
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN ...................... 34
4.1 Modification of the Plan ....................................... 34
4.2 Revocation or Withdrawal ....................................... 34
4.2.1 Right to Revoke ......................................... 34
4.2.2 Effect of Withdrawal or Revocation ...................... 34
4.3 Amendment of Plan Documents .................................... 34
ARTICLE 5
PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS .............................. 35
5.1 Objections to Claims; Prosecution of Disputed Claims 35
5.2 Amendment of Claims Settlement Guidelines ...................... 35
5.3 Distributions on Account of Disputed Claims .................... 35
ARTICLE 6
ACCEPTANCE OR REJECTION OF THE PLAN ...................................... 36
6.1 Impaired Classes to Vote ....................................... 36
6.2 Acceptance by Class of Claims .................................. 36
6.3 Nonconsensual Confirmation ..................................... 36
ARTICLE 7
IMPLEMENTATION OF THE PLAN ............................................... 37
7.1 Amendment of Articles of Incorporation ......................... 37
7.2 Amendment of Code of Regulations ............................... 37
7.3 Distributions under the Plan ................................... 37
7.4 Timing of Distributions under the Plan ......................... 37
7.5 Manner of Payment under the Plan ............................... 37
7.6 Hart-Scott-Rodino Compliance ................................... 38
7.7 Fractional Shares or Other Distributions ....................... 38
7.8 Occurrence of the Confirmation Date ............................ 38
7.9 Occurrence of the Effective Date ............................... 40
7.10 Distribution of Unclaimed Property ............................ 41
7.11 Management of the Reorganized Debtors ......................... 41
7.12 Supplemental Severance Program ................................ 41
7.13 Corporate Action .............................................. 41
7.14 Effectuating Documents and Further Transactions ............... 42
7.15 Dissolution of EDI, Inc. ...................................... 42
7.16 Allocation of Plan Distributions Between Principal and Interest 42
7.17 District Court Approval of the Confirmation Order.............. 42
ARTICLE 8
EXECUTORY CONTRACTS AND UNEXPIRED LEASES ................................. 43
<PAGE> 148
8.1 Assumption of Executory Contracts and Unexpired Leases ......... 43
8.2 Rejection of Executory Contracts and Unexpired Leases .......... 43
8.3 Claims Arising from Rejection or Termination ................... 43
8.4 Previously Scheduled Contracts ................................. 44
8.5 Insurance Policies ............................................. 44
8.5.1 Assumed Insurance Policies ............................... 44
8.5.2 Rejected Insurance Agreements ............................ 44
8.5.3 Reservation of Rights .................................... 44
8.6 Indemnification and Reimbursement Obligations .................. 44
8.7 Compensation and Benefit Programs .............................. 45
ARTICLE 9
RETENTION OF JURISDICTION ................................................ 46
ARTICLE 10
TRANSFERS OF PROPERTY TO AND ASSUMPTION OF CERTAIN LIABILITIES BY
THE PI TRUST ............................................................. 48
10.1 Transfer of Certain Property to the PI Trust .................. 48
10.1.1 Transfer of Books and Records .......................... 48
10.1.2 Transfer of Certain Insurance Rights ................... 48
10.1.3 Transfer of Plan Consideration ......................... 48
10.2 Assumption of Certain Liabilities by the PI Trust.. 49
10.3 Certain Property Held in Trust by the Reorganized Debtors 49
10.4 Authority of the Debtors ...................................... 49
ARTICLE 11
TRANSFERS OF PROPERTY TO AND ASSUMPTION OF CERTAIN LIABILITIES BY
THE ASBESTOS PD TRUST .................................................... 50
11.1 Transfer of Certain Property to the Asbestos PD Trust 50
11.2 Assumption of Certain Liabilities by the Asbestos PD Trust 50
11.3 Certain Property Held in Trust by the Reorganized Debtors 50
11.4 Authority of the Debtors ...................................... 51
ARTICLE 12
MISCELLANEOUS PROVISIONS ................................................. 52
12.1 Payment of Statutory Fees ..................................... 52
12.2 Discharge of the Debtors ...................................... 52
12.3 Rights of Action .............................................. 52
12.4 Third Party Agreements ........................................ 52
12.5 Dissolution of Committees ..................................... 52
12.6 Exculpation ................................................... 53
12.7 Title to Assets; Discharge of Liabilities ..................... 53
12.8 Surrender and Cancellation of Instruments ..................... 53
12.9 Notices ....................................................... 53
12.10 Headings ..................................................... 55
12.11 Severability ................................................. 55
<PAGE> 149
12.12 Governing Law ................................................ 55
12.13 Filing of Additional Documents ............................... 55
12.14 Compliance with Tax Requirements ............................. 55
12.15 Exemption from Transfer Taxes ................................ 56
<PAGE> 150
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ---------------------------------- )
THIRD AMENDED CONSOLIDATED PLAN OF REORGANIZATION
The Debtors, Future Claimants' Representative, and Injury Claimants'
Committee (collectively, the "Plan Proponents") hereby collectively propose the
following third amended consolidated plan of reorganization:
ARTICLE
1
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the following terms shall have
the respective meanings specified below, unless the context otherwise requires:
1.1.1 Administrative Expense: Any Claim constituting a cost or
expense of administration in the Chapter 11 Cases under section 503 of the
Bankruptcy Code, including, without express or implied limitation, any actual
and necessary costs and expenses of preserving the estate of the Debtors, any
actual and necessary costs and expenses of operating the businesses of the
Debtors, any indebtedness or obligations incurred or assumed by any of the
Debtors in Possession in connection with the conduct of its or their business or
for the acquisition or lease of property or the rendition of services, any
allowed compensation or reimbursement of expenses under section 503(b)(2)-(5) of
the Bankruptcy Code, and any fees or charges assessed against the estate of any
of the Debtors under section 1930, chapter 123, title 28, United States Code.
1.1.2 Administrative Expense Creditor: Any Creditor entitled
to payment of an Administrative Expense.
1.1.3 Affiliate: Any Entity that is an "affiliate" of any of
the Debtors within the meaning of section 101(2) of the Bankruptcy Code except
(i) American Imaging Services, Inc., (ii) Tri Sigma Corporation, and (iii) the
PI Trust.
<PAGE> 151
1.1.4 Affiliate Claims and Interests: All Claims against any
of the Debtors held by an Affiliate or any interest in any of the Debtors other
than in Eagle-Picher.
1.1.5 Agent Bank: NBD Bank, N.A., as agent under the DIP
Credit Facility.
1.1.6 Allowed:
1.1.6.1 With respect to any Claim other than an
Administrative Expense, Asbestos Property Damage Claim, or Product
Liability Tort Claim, proof of which was filed within the applicable
period of limitation fixed in accordance with Bankruptcy Rule 3003(c)(3)
by the Bankruptcy Court, (i) as to which no objection to the allowance
thereof has been interposed within the applicable period of limitation
fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or a Final
Order of the Bankruptcy Court, such Claim to the extent asserted in the
proof of such Claim, or (ii) as to which an objection has been interposed,
such Claim to the extent that it has been allowed in whole or in part by a
Final Order of the Bankruptcy Court.
1.1.6.2 With respect to any Claim other than an
Administrative Expense or Product Liability Tort Claim, as to which no
proof of claim was filed within the applicable period of limitation fixed
by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or a Final Order
of the Bankruptcy Court, such Claim to the extent that it has been listed
by one of the Debtors in its Schedules as liquidated in amount and not
disputed or contingent.
1.1.6.3 With respect to any Claim that is asserted to
constitute an Administrative Expense (i) that represents an actual or
necessary expense of preserving the estate or operating the business of
the Debtors, any such Claim to the extent that the Debtors determine it to
constitute an Administrative Expense, (ii) other than with respect to a
Claim of a professional person employed under section 327 or 1103 of the
Bankruptcy Code that is required to apply to the Bankruptcy Court for the
allowance of compensation and reimbursement of expenses pursuant to
section 330 of the Bankruptcy Code, that the Debtors do not believe
constitutes an Administrative Expense, any such Claim to the extent it is
allowed in whole or in part by a Final Order of the Bankruptcy Court and
only to the extent that such allowed portion is deemed, pursuant to a
Final Order of the Bankruptcy Court, to constitute a cost or expense of
administration under sections 503(b) and 507(a)(1) of the Bankruptcy Code,
or (iii) that represents a Claim of a professional person employed under
section 327 or 1103 of the Bankruptcy Code that is required to apply to
the Bankruptcy Court for the allowance of compensation and reimbursement
of expenses pursuant to section 330 of the Bankruptcy Code, such Claim to
the extent it is allowed by a Final Order of the Bankruptcy Court under
section 330 of the Bankruptcy Code.
1.1.6.4 With respect to any Asbestos Personal Injury
Claim or Lead Personal Injury Claim, such Claim to the extent that it is
allowed in accordance with the procedures established pursuant to the
Asbestos and Lead PI Trust Agreement and the claims resolution procedures
implemented in accordance therewith.
1.1.6.5 With respect to any Asbestos Property Damage
Claim, proof of which was filed within the applicable period of limitation
fixed in accordance with Bankruptcy Rule 3003(c)(3) by the Bankruptcy
Court, such Claim to the extent that it is allowed in accordance with the
claims resolution procedures established for Class 16 of the Plan and such
other procedures as may be established in connection with the Asbestos PD
Trust.
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1.1.6.6 With respect to any Other Product Liability Tort
Claim, such Claim to the extent (i) it is timely asserted against the
Debtors or the Reorganized Debtors, as the case may be, and (ii) it is
litigated to judgment in a liquidated amount by a Final Order of a court
of competent jurisdiction or is liquidated by the agreement of the
respective Reorganized Debtor and the holder of such Other Product
Liability Tort Claim.
1.1.7 Allowed Amount: The lesser of (a) the dollar amount of
an Allowed Claim or (b) the Estimated Amount of such Claim. Unless otherwise
specified herein or by Final Order of the Bankruptcy Court, the Allowed Amount
of an Allowed Claim shall not include interest accruing on such Allowed Claim
from and after the Petition Date.
1.1.8 Amended and Restated Articles of Incorporation: The
Articles of Incorporation, to be amended and restated in accordance with section
7.1 hereof, in substantially the form of Exhibit "1.1.8" to the Plan.
1.1.9 Amended and Restated Code of Regulations: The Code of
Regulations of Eagle-Picher, to be amended and restated in accordance with
section hereof, in substantially the form of Exhibit "1.1.9" to the Plan.
1.1.10 Amplicon Lease Secured Claim: All Claims under or
relating to that certain (a) Lease Agreement, dated February 2, 1990, between
Transicoil Inc. and Amplicon, Inc. and Schedule No. 1 thereto and (b) Lease
Guaranty, dated February 2, 1990, by Eagle-Picher, as guarantor, to the extent
that such Claims constitute Secured Claims under that certain Stipulation and
Order for Adequate Protection, which was "so ordered" by the Bankruptcy Court on
or about October 21, 1992.
1.1.11 Articles of Incorporation: The Articles of
Incorporation of Eagle-Picher, as such Articles of Incorporation may be amended
by the Amended and Restated Articles of Incorporation or otherwise.
1.1.12 Asbestos and Lead PI Permanent Channeling Injunction:
An order or orders of the Bankruptcy Court or the District Court permanently and
forever staying, restraining, and enjoining any Entity from taking any of the
following actions for the purpose of, directly or indirectly, collecting,
recovering, or receiving payment of, on, or with respect to any Asbestos
Personal Injury Claims or Lead Personal Injury Claims (other than actions
brought to enforce any right or obligation under the Plan, any Exhibits to the
Plan, or any other agreement or instrument between any of the Debtors or the
Reorganized Debtors and the PI Trust, which actions shall be in conformity and
compliance with the provisions hereof):
a. commencing, conducting, or continuing in any manner,
directly or indirectly, any suit, action, or other proceeding
(including, without express or implied limitation, a judicial,
arbitral, administrative, or other proceeding) in any forum against
or affecting any PI Protected Party or any property or interests in
property of any PI Protected Party;
b. enforcing, levying, attaching (including, without
express or implied limitation, any prejudgment attachment),
collecting, or otherwise recovering by any means or in any manner,
whether directly or indirectly, any judgment, award, decree, or
other order against any PI Protected Party or any property or
interests in property of any PI Protected Party;
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c. creating, perfecting, or otherwise enforcing in any
manner, directly or indirectly, any Encumbrance against any PI
Protected Party or any property or interests in property of any PI
Protected Party;
d. setting off, seeking reimbursement of, contribution
from, or subrogation against, or otherwise recouping in any manner,
directly or indirectly, any amount against any liability owed to any
PI Protected Party or any property or interests in property of any
PI Protected Party; and
e. proceeding in any manner in any place with regard to
any matter that is subject to resolution pursuant to the PI Trust,
except in conformity and compliance therewith.
1.1.13 Asbestos and Lead PI Trust Agreement: That certain
Eagle-Picher Industries, Inc. Personal Injury Settlement Trust Agreement,
substantially in the form of Exhibit "1.1.13" to the Plan.
1.1.14 Asbestos or Lead Contribution Claim: Any right to
payment, claim, remedy, liability, or Demand now existing or hereafter arising,
whether or not such right, claim, remedy, liability, or Demand is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured, whether or not
the facts of or legal bases for such right, claim, remedy, liability, or Demand
are known or unknown, that is (i) held by (A) any Entity (other than a director
or officer entitled to indemnification pursuant to section of the Plan) who has
been, is, or may be a defendant in an action seeking damages for death, bodily
injury, or other personal damages (whether physical, emotional, or otherwise) to
the extent caused or allegedly caused, directly or indirectly, by exposure to
(x) asbestos or asbestos-containing products or (y) products that contain lead
chemicals, or (B) any assignee or transferee of such Entity, and (ii) on account
of alleged liability of any of the Debtors for reimbursement or contribution of
any portion of any damages such Entity has paid or may pay to the plaintiff in
such action.
1.1.15 Asbestos PD Trust: The trust established in accordance
with the Asbestos PD Trust Agreement.
1.1.16 Asbestos PD Trust Agreement: That certain Eagle-Picher
Industries, Inc. Asbestos Property Damage Settlement Trust Agreement,
substantially in the form of Exhibit "1.1.16" to the Plan.
1.1.17 Asbestos PD Trust Funding Obligation: Either (a) if
Class 16 votes to accept the Plan, cash in the amount of Three Million and
00/100 Dollars ($3,000,000.00) or (b) if Class 16 votes to reject the Plan, the
Pro Rata Share with respect to the Asbestos PD Trust Share of the Distribution
Value, payable in an amount of the Senior Unsecured Sinking Fund Debentures
equal to such Pro Rata Share.
1.1.18 Asbestos PD Trust Share: Either (a) if Class 16 votes
to reject the Plan, a value to be established by the Bankruptcy Court as the
estimated aggregate value of Asbestos Property Damage Claims as of the Petition
Date or (b) if Class 16 votes to accept the Plan, $0.00.
1.1.19 Asbestos Personal Injury Claim: Any right to payment,
claim, remedy, liability, or Demand now existing or hereafter arising, whether
or not such right, claim, remedy, liability, or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent,
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matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured, whether or not the facts of or legal bases for such right, claim,
remedy, liability, or Demand are known or unknown, for, under any theory of law,
equity, admiralty, or otherwise, death, bodily injury, or other personal damages
(whether physical, emotional, or otherwise) to the extent caused or allegedly
caused, directly or indirectly, by exposure to asbestos or asbestos-containing
products that were manufactured, sold, supplied, produced, distributed,
released, or in any way marketed by any of the Debtors prior to the Petition
Date, including, without express or implied limitation, any right, claim,
remedy, liability, or Demand for compensatory damages (such as loss of
consortium, wrongful death, survivorship, proximate, consequential, general, and
special damages) and including punitive damages and any Asbestos or Lead
Contribution Claim.
1.1.20 Asbestos Property Damage Claim: Any Claim against any
of the Debtors, under any theory of law, equity, admiralty, or otherwise, for
damages arising from the presence in buildings or other structures of asbestos
or asbestos-containing products that was or were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, or for which any of the Debtors is otherwise liable due to the
acts or omissions of any of the Debtors, including, without express or implied
limitation, all such Claims for compensatory damages (such as proximate,
consequential, general, and special damages) and punitive damages, but excluding
Asbestos Property Damage Contribution Claims.
1.1.21 Asbestos Property Damage Contribution Claims: Any Claim
against any of the Debtors that is (i) held by (A) any Entity (other than a
director or officer entitled to indemnification pursuant to section of the Plan)
who has been, is, or may be a defendant in an action seeking damages arising
from the presence in buildings or other structures of asbestos or
asbestos-containing products that was or were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, or for which any of the Debtors is otherwise liable due to the
acts or omissions of any of the Debtors or (B) any assignee or transferee of
such Entity, and (ii) on account of alleged liability by any of the Debtors for
reimbursement or contribution of any portion of any damages such Entity has paid
or may pay to the plaintiff in such action.
1.1.22 Available Cash: All cash (other than restricted cash,
including, without express or implied limitation, any cash held in escrow by or
on behalf of the Debtors and cash held in the "Divestiture Account" maintained
at Star Bank, N.A., Cincinnati) that would be shown on a balance sheet of
Eagle-Picher and its consolidated subsidiaries as of the last day of the month
in which the Effective Date occurs, prepared in accordance with generally
accepted accounting principles, less the sum of the following as of such date:
(i) Fifteen Million and 00/100 Dollars ($15,000,000.00), (ii) the Allowed Amount
of Allowed Administrative Expenses, (iii) a reasonable estimate by the Debtors
of additional Administrative Expenses (such as professional fees and expenses)
that may become Allowed thereafter, (iv) the Allowed Amount of Allowed Tax
Claims, (v) a reasonable estimate by the Debtors of additional Tax Claims that
may become Allowed thereafter, (vi) the DIP Credit Facility Claim, (vii) the
Amplicon Lease Secured Claim, (viii) the First Fidelity Lease Secured Claim,
(ix) the Fleet Credit Secured Claim, (x) the GE Capital Secured Claim, (xi) the
Grove IRB Secured Claim, (xii) the IBM Credit Corporation Secured Claim, (xiii)
the Leesburg Secured Claim, (xiv) the Allowed Amount of Other Secured Claims,
(xv) a reasonable estimate by the Debtors of additional Other Secured Claims
that may become Allowed thereafter, (xvi) the Allowed Amount of Allowed
Convenience Claims, (xvii) a reasonable estimate by the Debtors of additional
Convenience Claims that may become Allowed thereafter, (xviii) if Class 16 votes
to accept the Plan, the Asbestos PD Trust Funding Obligation, and (xix) the
amount reasonably estimated by the Debtors to be the cost of curing any defaults
under the executory contracts and unexpired leases to be assumed by the Debtors
under the Plan.
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1.1.23 Ballot: The form or forms distributed to holders of
impaired Claims on which is to be indicated the acceptance or rejection of the
Plan.
1.1.24 Ballot Date: The date set by the Bankruptcy Court by
which all completed ballots must be received.
1.1.25 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as
amended, and as codified in title 11 of the United States Code, as applicable to
the Chapter 11 Cases.
1.1.26 Bankruptcy Court: The United States District Court for
the Southern District of Ohio, Western Division, having jurisdiction over the
Chapter 11 Cases and, to the extent of any reference made pursuant to section
157 of title 28 of the United States Code, the unit of such District Court
constituted pursuant to section 151 of title 28 of the United States Code.
1.1.27 Bankruptcy Rules: The Federal Rules of Bankruptcy
Procedure, as amended, as applicable to the Chapter 11 Cases, including the
Local Rules of the Bankruptcy Court.
1.1.28 Bearer Unsecured Debt Securities: Such of the Henry
County IRBs, Houston IRBs, and the Mansfield IRBs that are not registered in the
name of the holder (whether fully registered or as to principal only), including
such of the Henry County IRBs, Houston IRBs, and the Mansfield IRBs as are
registered to "bearer."
1.1.29 Board of Directors: The Board of Directors of
Eagle-Picher, as it may exist from time to time.
1.1.30 Business Day: Any day on which commercial banks are
required to be open for business in Cincinnati, Ohio.
1.1.31 Chapter 11 Cases: The cases of the Debtors commenced by
the filing by each of the Debtors of a voluntary petition for relief under
chapter 11 of the Bankruptcy Code on the Petition Date and procedurally
consolidated as Case No. 1-91-00100.
1.1.32 Claim: (a) A "claim," as defined in section 101(5) of
the Bankruptcy Code, against any of the Debtors or Debtors in Possession,
whether or not asserted, whether or not the facts of or legal bases therefor are
known or unknown, and specifically including, without express or implied
limitation, any rights under sections 502(g), 502(h), or 502(i) of the
Bankruptcy Code, any claim of a derivative nature, any potential or unmatured
contract claims, and any other Contingent Claim, and (b) any Environmental Claim
or Product Liability Tort Claim, whether or not it constitutes a "claim," as
defined in section 101(5) of the Bankruptcy Code.
1.1.33 Claims Settlement Guidelines: The settlement guidelines
and authority contained in that certain Order Authorizing Debtors to Compromise
or Settle Claims and Controversies, entered by the Clerk of the Bankruptcy Court
on December 1, 1991, as amended in accordance with section of the Plan.
1.1.34 Claims Trading Injunction: An order or orders of the
Bankruptcy Court or the District Court permanently and forever staying,
restraining, and enjoining any Entity from, directly or indirectly, purchasing,
selling, transferring, assigning, conveying, pledging, or otherwise acquiring or
disposing of any Asbestos Personal Injury Claim, Lead Personal Injury Claim, or
Asbestos Property Damage Claim; provided, however, that the foregoing shall not
apply to (i) the transfer of an Asbestos Personal Injury Claim, Lead Personal
Injury Claim, or Asbestos Property
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<PAGE> 156
Damage Claim to the holder of an Asbestos or Lead Contribution Claim or Asbestos
Property Damage Contribution Claim, as the case may be, solely as a result of
such holder's satisfaction of such Asbestos Personal Injury Claim, Lead Personal
Injury Claim, or Asbestos Property Damage Contribution Claim, as the case may
be, or (ii) the transfer of an Asbestos Personal Injury Claim, Lead Personal
Injury Claim, or Asbestos Property Damage Claim by will or under the laws of
descent and distribution. Any such order or orders will also provide that any
action taken in violation thereof will be void ab initio.
1.1.35 Confirmation Date: The date on which the Confirmation
Order is entered by the Clerk of the Bankruptcy Court.
1.1.36 Confirmation Deadline: The date that is one hundred
fifty (150) days after the filing of the Plan with the Bankruptcy Court.
1.1.37 Confirmation Order: The order or orders of the
Bankruptcy Court confirming the Plan in accordance with the provisions of
chapter 11 of the Bankruptcy Code, which will contain, inter alia, the Asbestos
and Lead PI Permanent Channeling Injunction and the Claims Trading Injunction.
1.1.38 Connecticut Mutual Note Secured Claim: All Claims under
that certain (a) Note in the original principal amount of Six Million One
Hundred Fourteen Thousand Six Hundred Fifty-Nine and 00/100 Dollars
($6,114,659.00) issued by Hillsdale to Connecticut Mutual Life Insurance Company
on or about July 29, 1988, (b) Agreement, dated July 29, 1988, between Hillsdale
and Connecticut Mutual Life Insurance Company, and (c) Security Agreement, dated
July 29, 1988, between Hillsdale, as grantor, and Connecticut Mutual Life
Insurance Company, as lender and secured party, to the extent that such Claims
constitute "Secured Claims" under that certain Stipulation and Order for
Adequate Protection, which was "so ordered" by the Bankruptcy Court on November
25, 1991.
1.1.39 Contingent Claim: Any Claim, the liability for which
attaches or is dependent upon the occurrence or happening, or is triggered by,
an event, which event has not yet occurred, happened, or been triggered, as of
the date on which such Claim is sought to be estimated or an objection to such
Claim is filed, whether or not such event is within the actual or presumed
contemplation of the holder of such Claim and whether or not a relationship
between the holder of such Claim and any of the Debtors now or hereafter exists
or previously existed.
1.1.40 Convenience Claim: As to each holder of an Unsecured
Claim, (a) an Unsecured Claim held by such holder in an Allowed Amount of Five
Hundred and 00/100 Dollars ($500.00) or less, or (b) an Unsecured Claim of such
holder the Allowed Amount of which has been reduced to Five Hundred and 00/100
Dollars ($500.00) by the election of the holder thereof, as provided on the
Ballot.
1.1.41 Creditor: Any Entity that holds a Claim against any of
the Debtors or Debtors in Possession.
1.1.42 Debtors: Collectively, Eagle-Picher, Daisy Parts, Inc.,
Transicoil Inc., MARCO, EDI, Inc., Eagle-Picher Minerals, Inc., and Hillsdale.
1.1.43 Debtors in Possession: The Debtors, each in its
respective capacity as a debtor in possession pursuant to sections 1107(a) and
1108 of the Bankruptcy Code.
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1.1.44 Demand: A demand for payment, present or future, that
(i) was not a Claim during the Chapter 11 Cases; (ii) arises out of the same or
similar conduct or events that gave rise to the Claims addressed by the Asbestos
and Lead PI Permanent Channeling Injunction; and (iii) pursuant to the Plan, is
to be paid by the PI Trust.
1.1.45 Designated Real Property Tax Claim: Any Claim for taxes
assessed against Parcel No. 27-B-040-0-00-001-0 in Lake County, Ohio.
1.1.46 DIP Credit Facility: The postpetition credit facility
furnished to the Debtors in Possession by the DIP Lenders, the specific terms of
which are set forth in that certain Credit and Agency Agreement, dated May 29,
1991, as extended by that certain First Amendment to Credit Agreement, dated as
of February 26, 1992, and as amended and restated by that certain Credit and
Agency Agreement, dated November 5, 1992, as amended by that certain First
Amendment to Credit Agreement, dated as of August 29, 1994.
1.1.47 DIP Credit Facility Claim: Collectively, all Claims of
the DIP Lenders arising under the DIP Credit Facility.
1.1.48 DIP Lenders: NBD Bank, N.A., for itself and as agent,
and Star Bank, N.A., Cincinnati, PNC Bank, Ohio, N.A., f/k/a The Central Trust
Company, N.A., and The Bank of Nova Scotia.
1.1.49 Disallowed Claim: A Claim that is disallowed in its
entirety by a Final Order of the Bankruptcy Court or such other court of
competent jurisdiction.
1.1.50 Disputed Claim: A Claim that is neither an Allowed
Claim nor a Disallowed Claim; provided, however, that no Environmental Claim
shall be considered a Disputed Claim for the purposes of the Plan.
1.1.51 Disputed Claim Amount: The Estimated Amount of a
Disputed Claim, or, if no Estimated Amount exists, the amount set forth in the
proof of claim relating to such Disputed Claim as the liquidated amount of such
Disputed Claim.
1.1.52 Distribution: The payment or distribution under the
Plan of property or interests in property to the holders of Allowed Claims
(other than Asbestos Personal Injury Claims, Lead Personal Injury Claims, and
Asbestos Property Damage Claims) and to the PI Trust and the Asbestos PD Trust.
1.1.53 Distribution Amount: The amount of Distribution Value
payable to a holder of an Allowed Environmental Claim pursuant to section of the
Plan, an Allowed Unsecured Claim in accordance with section , or a Specified
Treatment Claim in accordance with section of the Plan on the Initial
Distribution Date or the Final Distribution Date, as the case may be.
1.1.54 Distribution Value: The sum of the Equity Value plus
Available Cash plus the aggregate face amount of the New Debt Securities.
1.1.55 District Court: The United States District Court for
the Southern District of Ohio, Western Division, having jurisdiction over the
Chapter 11 Cases.
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1.1.56 Divestiture Notes: Those certain Senior Unsecured Notes
in the aggregate principal amount of Fifty Million and 00/100 Dollars
($50,000,000.00), bearing interest at a rate determined by McDonald & Company
Securities, Inc., after consultation with the financial advisers to the
Unsecured Creditors' Committee, on the Effective Date as the rate such Senior
Unsecured Notes should bear in order to have a market value of one hundred
percent (100%) of their principal amount on the Effective Date, and
substantially in the form of Exhibit "1.1.56" to the Plan.
1.1.57 Eagle-Picher: Eagle-Picher Industries, Inc., an Ohio
corporation.
1.1.58 Effective Date: The first Business Day after the date
on which all of the conditions precedent to the effectiveness of the Plan
specified in Section have been satisfied or waived or, if a stay of the
Confirmation Order is in effect on such date, the first Business Day after the
expiration, dissolution, or lifting of such stay.
1.1.59 Encumbrance: With respect to any asset, any mortgage,
lien, pledge, charge, security interest, assignment, or encumbrance of any kind
or nature in respect of such asset (including, without express or implied
limitation, any conditional sale or other title retention agreement, any
security agreement, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).
1.1.60 Entity: An individual, corporation, partnership,
association, joint stock company, joint venture, estate, trust, unincorporated
organization, or government or any political subdivision thereof, or other
person or entity.
1.1.61 Environmental Claim: Any Claim as to which the
treatment thereof is set forth in (a) the Environmental Settlement Agreement or
(b) an agreement by and between any of the Debtors and any party asserting a
Claim against any of the Debtors relating to alleged contamination under the
federal or state environmental laws or regulations, pursuant to which agreement
all or a portion of such Claim (to the extent and subject to the limitations
imposed by such agreement) may be asserted by the holder thereof after the
Effective Date, to the extent that such agreement is approved and authorized by
a Final Order of the Bankruptcy Court or otherwise in accordance with the Claims
Settlement Guidelines.
1.1.62 Environmental Settlement Agreement: That certain
Settlement Agreement, lodged with the Bankruptcy Court on March 23, 1995, by and
between the Debtors and the parties listed on the signatory pages thereof, to
the extent that such Settlement Agreement is approved and authorized by the
Bankruptcy Court by a Final Order of the Bankruptcy Court.
1.1.63 Equity Interest: Any interest in Eagle-Picher
represented by shares of Existing Eagle-Picher Common Stock.
1.1.64 Equity Security Holders' Committee: The Official
Committee of Equity Security Holders consisting of Entities appointed as members
in the Chapter 11 Cases in accordance with section 1102(a) of the Bankruptcy
Code and their duly appointed successors, if any, as the same may be
reconstituted from time to time.
1.1.65 Equity Value: The residual value of the equity of
Reorganized Eagle-Picher (i.e., after excluding the amount of cash to be
distributed under the Plan and debt of the Reorganized Debtors), as determined
by McDonald & Company Securities, Inc., after consultation with the financial
advisers to the Unsecured Creditors' Committee, as of the date of the
commencement of
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the hearing on confirmation of the Plan, or as otherwise determined in a factual
finding contained in the Confirmation Order.
1.1.66 Estimated Amount: The estimated dollar value of an
Unliquidated Claim, Disputed Claim, or Contingent Claim pursuant to section
502(c) of the Bankruptcy Code.
1.1.67 Existing Eagle-Picher Common Stock: Voting common stock
of Eagle-Picher, with a par value of $1.25 for each share, authorized pursuant
to the Articles of Incorporation as in effect immediately prior to the Effective
Date.
1.1.68 Final Distribution Date: A date on or after the Initial
Distribution Date and after all Disputed Claims (other than Asbestos Personal
Injury Claims, Lead Personal Injury Claims, and Asbestos Property Damage Claims)
have become either Allowed Claims or Disallowed Claims that is selected by
Reorganized Eagle-Picher in its discretion but, in any event, is no later than
thirty (30) days thereafter, or such later date as the Bankruptcy Court may
establish, upon request by Reorganized Eagle-Picher, for cause shown.
1.1.69 Final Order: An order 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 Debtors or the Reorganized Debtors, as the case
may be, and their counsel or, in the event that an appeal, writ of certiorari,
or reargument or rehearing thereof has been sought, such order shall have been
affirmed by the highest court to which such order was appealed, or certiorari
has been denied or from which reargument or rehearing was sought, and the time
to take any further appeal, petition for certiorari or move for reargument or
rehearing shall have expired.
1.1.70 First Fidelity Group: First Fidelity Leasing Group,
Inc.
1.1.71 First Fidelity Lease Secured Claim: All Claims under
that certain Master Lease Finance Agreement, dated October 31, 1990, between
Eagle-Picher and First Fidelity Group, to the extent that such Claims
constituted Secured Claims as of November 1, 1991, less the aggregate amount of
payments made by Eagle-Picher to First Fidelity Group pursuant to that certain
Stipulation and Order Setting Motions of First Fidelity Group, which was "so
ordered" by the Bankruptcy Court and entered by the Bankruptcy Court on March
17, 1992.
1.1.72 Fleet Credit Secured Claim: All Claims under certain
equipment schedules, dated January 25, 1988, March 24, 1988, May 19, 1988, and
May 24, 1988, respectively, between MARCO and Fleet Credit Corporation, to the
extent that such Claims constitute Secured Claims under that certain Stipulation
and Order Settling Motions of Fleet Credit Corporation, which was "so ordered"
by the Bankruptcy Court on July 20, 1992.
1.1.73 Future Claimants' Representative: The Legal
Representative for Future Claimants appointed pursuant to the order of the
Bankruptcy Court dated October 31, 1991.
1.1.74 GE Capital Secured Claim: The Secured Claim of General
Electric Capital Corporation in the amount of Twenty-Two Thousand Four Hundred
Fifty-Four and 89/100 Dollars ($22,454.89), pursuant to that certain Stipulation
and Order of Dismissal between Eagle-Picher and General Electric Capital
Corporation, which was "so ordered" by the Bankruptcy Court on January 18, 1994.
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1.1.75 Grove IRB Secured Claim: Claims under that certain (a)
Note, dated August 9, 1989, from Eagle-Picher to the Grove Industrial
Development Authority of Grove, Oklahoma, in the original principal amount of
$450,000.00 and (b) Mortgage, filed on August 9, 1989, in the State of Oklahoma,
Delaware County, to the extent that such Claims constitute Secured Claims.
1.1.76 Henry County IRBs: The Henry County Development
Authority Industrial Development Revenue Bonds (Eagle-Picher Industries, Inc.
Project), Series 1981, in the original principal amount of Two Million Five
Hundred Thousand and 00/100 Dollars ($2,500,000.00).
1.1.77 Hillsdale: Hillsdale Tool & Manufacturing Co., a
Michigan corporation.
1.1.78 Houston IRBs: The Port Development Corporation
Industrial Development Revenue Bonds, Series 1980 (Eagle-Picher Industries,
Inc., Project), in the original principal amount of Three Million and 00/100
Dollars ($3,000,000.00).
1.1.79 IBM Credit Corporation Secured Claim: All Claims of IBM
Credit Corporation under that certain Term Lease Master Agreement No. ZHOAO43
between The Ohio Rubber Co., a former division of Eagle-Picher, and IBM Credit
Corporation, dated May 16, 1989, and the related Term Lease Supplements thereto,
to the extent that such Claims constituted Secured Claims as of November 1,
1991, less the aggregate amount of payments made by Eagle-Picher to IBM Credit
Corporation pursuant to that certain Stipulation and Order Settling Motion of
IBM Credit Corporation, which was "so ordered" by the Bankruptcy Court on
January 15, 1992.
1.1.80 Initial Distribution Date: A date on or after the
Effective Date that is selected by Reorganized Eagle-Picher in its discretion
but, in any event, is within thirty (30) days after the Effective Date, or such
later date as the Bankruptcy Court may establish, upon request by Reorganized
Eagle-Picher, for cause shown.
1.1.81 Injury Claimants' Committee: The Official Committee of
Injury Claimants, consisting of Entities appointed as members in the Chapter 11
Cases in accordance with section 1102(a) of the Bankruptcy Code and their duly
appointed successors, if any, as the same may be reconstituted from time to
time.
1.1.82 Inter-Market Note Secured Claim: All Claims under that
certain (a) Note Agreement, dated July 7, 1988, between Inter-Market Capital
Corporation and Eagle-Picher, (b) 9.8820% Promissory Note issued by Eagle-Picher
to New England Mutual Life Insurance Company on or about July 7, 1988, and (c)
Security Agreement, dated September 14, 1989, between Hillsdale, as grantor and
guarantor, and New England Mutual Life Insurance Company, as lender and secured
party, to the extent that such Claims constitute "Secured Claims" under that
certain Stipulation and Order Providing Adequate Protection of Interests of New
England Mutual Life Insurance Company, which was "so ordered" by the Bankruptcy
Court on April 7, 1992, as modified and extended by that certain Stipulation
Providing Adequate Protection of Interests of Certain Affiliates of Morgens,
Waterfall, Vintiadis & Company, Inc., which was approved by the Bankruptcy Court
by an order entered on February 14, 1995.
1.1.83 Internal Revenue Code: The Internal Revenue Code of
1986, as amended, and any applicable rulings, regulations (including temporary
and proposed regulations) promulgated thereunder, judicial decisions, and
notices, announcements, and other releases of the United States Treasury
Department or the IRS.
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1.1.84 IRS: The United States Internal Revenue Service.
1.1.85 Kalkaska Claim: Allowed Unsecured Claim in the amount
of Two Million and 00/100 Dollars ($2,000,000.00) pursuant to a settlement
approved by an order of the Bankruptcy Court entered on or about November 24,
1993.
1.1.86 Lead Personal Injury Claim: Any right to payment,
claim, remedy, liability, or Demand, now existing or hereafter arising, whether
or not such right, claim, remedy, liability, or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, whether or not the facts of
or legal bases for such right, claim, remedy, liability, or Demand are known or
unknown, for, under any theory of law, equity, admiralty, or otherwise, death,
bodily injury, or other personal damages (whether physical, emotional, or
otherwise) to the extent caused or allegedly caused, directly or indirectly, by
exposure to products that contained lead chemicals that were manufactured, sold,
supplied, produced, distributed, or in any way marketed by any of the Debtors
prior to the Petition Date, including, without express or implied limitation,
any right, claim, remedy, liability, or Demand for compensatory damages (such as
loss of consortium, wrongful death, survivorship, proximate, consequential,
general, and special damages) and including punitive damages and any Asbestos or
Lead Contribution Claim.
1.1.87 Leesburg Note: That certain note, dated as of October
4, 1977, from William Robert Jacobsen to Sun First National Bank of Leesburg, as
Trustee of the J.D. Manly Construction Company Living Trust.
1.1.88 Leesburg Secured Claim: All Claims under (a) the
Leesburg Note and (b) that certain mortgage, dated October 4, 1977, recorded at
O.R. 638, pages 1587 through 1591, inclusive, of the Public Records of Lake
County, Florida, as amended by a mortgage amendment, recorded at O.R. 691, page
55, of the Public Records of the Lake County, Florida, which note and mortgage
were assumed by Eagle-Picher pursuant to a certain Real Estate Agreement, dated
as of May 18, 1979, between Eagle-Picher and William R. Jacobsen.
1.1.89 Mansfield IRBs: The Industrial Development Revenue
Bonds (Eagle- Picher Industries, Inc. Project) issued by the City of Mansfield,
Ohio, in the original principal amount of Two Million and 00/100 Dollars
($2,000,000.00).
1.1.90 MARCO: Michigan Automotive Research Corporation, a
Michigan corporation.
1.1.91 New Debt Securities: Collectively, the Divestiture
Notes, the Senior Unsecured Sinking Fund Debentures, and the Tax Refund Notes.
1.1.92 New Eagle-Picher Common Stock: Voting common stock,
with no par value, of Reorganized Eagle-Picher from and after the Effective Date
after giving effect to the Amended and Restated Articles of Incorporation.
1.1.93 Northwestern Group: Northwestern National Life
Insurance Company, Northern Life Insurance Company, The North Atlantic Life
Insurance Company of America, and American Investors Life Insurance Company.
1.1.94 Northwestern Group Secured Claims: All Claims under
that certain (a) Note Purchase Agreement, dated April 21, 1989, between
Eagle-Picher and the Northwestern
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Group and (b) Security Agreement, dated April 21, 1989, executed by Eagle-Picher
in favor of the Northwestern Group, to the extent that such Claims constituted
Secured Claims as of March 12, 1991, less the aggregate amount of payments made
by Eagle-Picher to the Northwestern Group or any successor in interest to the
Northwestern Group pursuant to that certain Stipulation and Order for Adequate
Protection Payments to Northwestern Group, which was entered by the Bankruptcy
Court on May 9, 1991.
1.1.95 Other Product Liability Tort Claim: Any Product
Liability Tort Claim as to which the facts or existence of first become apparent
to the holder of such Claim after the Effective Date other than Asbestos
Personal Injury Claims and Lead Personal Injury Claims.
1.1.96 Other Secured Claim: Any Secured Claim other than the
Amplicon Lease Secured Claim, the Connecticut Mutual Note Secured Claim, the
Designated Real Property Tax Claim, the Grove IRB Secured Claim, the First
Fidelity Lease Secured Claim, the Fleet Credit Secured Claim, the IBM Credit
Corporation Secured Claim, the Inter-Market Note Secured Claim, the Leesburg
Secured Claim, the Northwestern Group Secured Claim, and the Vale EDBs.
1.1.97 Penalty Claim: Any Claim (i) for any fine, penalty,
collection fee, or forfeiture, or for multiple, exemplary, or punitive damages
to the extent that such fine, penalty, forfeiture, or damages are not
compensation for actual pecuniary loss suffered by the holder of such Claim, but
not any such Claim to the extent that any of the Debtors has agreed to treat
such Claim under the Plan as an Unsecured Claim, or (ii) that, pursuant to an
order of the Bankruptcy Court, is subordinated for purposes of distribution to
all Allowed Unsecured Claims.
1.1.98 Per Share Value: An amount equal to the Equity Value
divided by ten million (10,000,000).
1.1.99 Petition Date: January 7, 1991.
1.1.100 PI Protected Party: Any of the following parties:
1.1.100.1 the Debtors;
1.1.100.2 the Reorganized Debtors;
1.1.100.3 an Affiliate;
1.1.100.4 any Entity that, pursuant to the Plan or after
the Effective Date, becomes a direct or indirect transferee of, or
successor to, any assets of any of the Debtors, the Reorganized Debtors,
or the PI Trust (but only to the extent that liability is asserted to
exist by reason of it becoming such a transferee or successor);
1.1.100.5 any Entity that, pursuant to the Plan or after
the Effective Date, makes a loan to any of the Reorganized Debtors or the
PI Trust or to a successor to, or transferee of, any assets of any of the
Debtors, the Reorganized Debtors, or the PI Trust (but only to the extent
that liability is asserted to exist by reason of such Entity becoming such
a lender or to the extent any pledge of assets made in connection with
such a loan is sought to be upset or impaired); or
1.1.100.6 any Entity to the extent he, she, or it is
alleged to be directly or indirectly liable for the conduct of, Claims
against, or Demands on any of the
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Debtors, the Reorganized Debtors, or the PI Trust on account of Asbestos
Personal Injury Claims or Lead Personal Injury Claims by reason of one or
more of the following:
1.1.100.6.1 such Entity's ownership of a financial
interest in any of the Debtors or the Reorganized Debtors, a past or
present affiliate of any of the Debtors or the Reorganized Debtors,
or predecessor in interest of any of the Debtors or the Reorganized
Debtors;
1.1.100.6.2 such Entity's involvement in the
management of any of the Debtors or the Reorganized Debtors or any
predecessor in interest of any of the Debtors or the Reorganized
Debtors;
1.1.100.6.3 such Entity's service as an officer,
director, or employee of any of the Debtors, the Reorganized
Debtors, or Related Parties;
1.1.100.6.4 such Entity's provision of insurance
to any of the Debtors, the Reorganized Debtors, or Related Parties;
or
1.1.100.6.5 such Entity's involvement in a
transaction changing the corporate structure, or in a loan or other
financial transaction affecting the financial condition, of any of
the Debtors, the Reorganized Debtors, or any of the Related Parties.
1.1.101 PI Trust: The trust established in accordance with the
Asbestos and Lead PI Trust Agreement.
1.1.102 PI Trust Share: Two Billion and 00/100 Dollars
($2,000,000,000).
1.1.103 Plan: This plan of reorganization, either in its
present form or as it may be amended, supplemented, or otherwise modified from
time to time, and the exhibits and schedules to the foregoing, as the same may
be in effect at the time such reference becomes operative.
1.1.104 Priority Claim: Any Claim to the extent such claim is
entitled to priority in right of payment under section 507(a) of the Bankruptcy
Code, other than an Administrative Expense, DIP Credit Facility Claim, or Tax
Claim.
1.1.105 Pro Rata Share: Amount obtained by dividing the
Allowed Amount of an Allowed Claim, or, in the case of the Distribution to the
PI Trust or the Asbestos PD Trust, the PI Trust Share or the Asbestos PD Trust
Share, respectively, by the sum of (a) the PI Trust Share, the Asbestos PD Trust
Share, and all Allowed Unsecured Claims (other than Allowed Convenience Claims),
and Allowed Environmental Claims, and (b) the Disputed Claim Amount of all
Disputed Unsecured Claims (other than Disputed Convenience Claims).
1.1.106 Product Liability Tort Claim: Any right to payment,
claim, remedy, liability, or Demand, now existing or hereafter arising, whether
or not such right, claim, remedy, liability, or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, whether or not the facts of
or legal bases for such right, claim, remedy, liability, or Demand are known or
unknown, for, under any theory of law, equity, admiralty, or otherwise, death,
bodily injury, or other personal damages (whether physical, emotional, or
otherwise) to the extent caused or allegedly caused, directly or indirectly, by
exposure to any products or byproducts that were manufactured, sold, supplied,
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produced, released, distributed, or in any way marketed by any of the Debtors
prior to the Petition Date, including, without express or implied limitation,
any right, claim, remedy, liability, or Demand for compensatory damages (such as
loss of consortium, wrongful death, survivorship, proximate, consequential,
general, and special damages), including punitive damages, and including,
without express or implied limitation, any Asbestos Personal Injury Claim or
Lead Personal Injury Claim.
1.1.107 Record Date: The first Business Day that is five (5)
days from and after the Confirmation Date.
1.1.108 Registered Unsecured Debt Securities: (a) The 9.5%
Sinking Fund Debentures Due March 1, 2017, issued by Eagle-Picher, and (b) such
of the Henry County IRBs, Mansfield IRBs, and the Houston IRBs that are not
Bearer Unsecured Debt Securities.
1.1.109 Related Parties: (a) Any past or present affiliate of
any of the Debtors or the Reorganized Debtors, (b) any predecessor in interest
of any of the Debtors or the Reorganized Debtors, or (c) any Entity that owned a
financial interest in any of the Debtors or the Reorganized Debtors, any past or
present affiliate of any of the Debtors or the Reorganized Debtors, or any
predecessor in interest of any of the Debtors or the Reorganized Debtors.
1.1.110 Reorganized Debtors: The Debtors, or any successors in
interest thereto, from and after the Effective Date.
1.1.111 Reorganized Eagle-Picher: Eagle-Picher, or any
successor in interest thereto, from and after the Effective Date.
1.1.112 Retention Period: Five (5) years from and after the
Effective Date, or such shorter period as the Bankruptcy Court may set.
1.1.113 Schedules: The schedules of assets and liabilities and
the statements of financial affairs filed by the Debtors in Possession with the
Bankruptcy Court, as required by section 521 of the Bankruptcy Code and the
Official Bankruptcy Forms of the Bankruptcy Rules, as such schedules and
statements may be amended by the Debtors in Possession from time to time in
accordance with Bankruptcy Rule 1009.
1.1.114 Senior Unsecured Sinking Fund Debentures: Those
certain Senior Unsecured Sinking Fund Debentures in the aggregate principal
amount of Two Hundred Fifty Million and 00/100 Dollars ($250,000,000.00),
bearing interest at a rate determined by McDonald & Company Securities, Inc. on
the Effective Date as the rate such Senior Unsecured Sinking Fund Debentures
should bear in order to have a market value of one hundred percent (100%) of
their principal amount on the Effective Date, and substantially in the form set
forth in Exhibit "1.1.114" to the Plan.
1.1.115 Secured Claim: Any Claim against any of the Debtors to
the extent of the value of any interest in property of the estate of such Debtor
securing such Claim, except for the DIP Credit Facility Claim.
1.1.116 Specified Treatment Claims: The Kalkaska Claim, the
TLG Associates Claim, and any other Unsecured Claim that is (a) Allowed in
connection with a settlement with one or more of the Debtors and (b) for which a
minimum and maximum distribution under the Plan are specified.
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1.1.117 Supplemental Severance Program: The Supplemental
Severance Program approved by the Bankruptcy Court pursuant to its "Order on
Motion Re Key Employee Retention, Etc.," entered on May 13, 1991.
1.1.118 Tax Claim: A Claim against any of the Debtors that is
of a kind specified in section 507(a)(8) of the Bankruptcy Code.
1.1.119 Tax Refund Notes: Those certain Senior Unsecured Notes
in an aggregate principal amount equal to the federal income tax refund
estimated by Eagle-Picher to be due and owing to the Debtors as of the Effective
Date, bearing interest at a rate determined by McDonald & Company Securities,
Inc. on the Effective Date as the rate such Senior Unsecured Notes should bear
in order to have a market value of one hundred percent (100%) of their principal
amount on the Effective Date, and in substantially the form of Exhibit "1.1.119"
to the Plan.
1.1.120 TLG Associates Claim: Allowed Unsecured Claim in the
amount of Two Hundred Fifteen Thousand Eight Hundred Thirty-Five and 00/100
($215,835.00) pursuant to a settlement approved by an order of the Bankruptcy
Court dated December 29, 1995.
1.1.121 Trustees: Collectively, the persons serving as
trustees of the PI Trust, pursuant to the terms of the Asbestos and Lead PI
Trust Agreement.
1.1.122 Unliquidated Claim: Any Claim, the amount of liability
for which has not been fixed, whether pursuant to agreement, applicable law, or
otherwise, as of the date on which such Claim is sought to be estimated.
1.1.123 Unsecured Claim: Any Claim that is not an
Administrative Expense, Tax Claim, Priority Claim, Asbestos Personal Injury
Claim, Asbestos Property Damage Claim, Lead Personal Injury Claim, Environmental
Claim, Other Product Liability Tort Claim, Designated Real Property Tax Claim,
Affiliate Claims and Interests, Penalty Claim, or Secured Claim.
1.1.124 Unsecured Creditors' Committee: The Official Unsecured
Creditors' Committee, consisting of Entities appointed as members in the Chapter
11 Cases in accordance with section 1102(a) of the Bankruptcy Code and their
duly appointed successors, if any, as the same may be reconstituted from time to
time.
1.1.125 Unsecured Debt Securities: Collectively, the Bearer
Unsecured Debt Securities and the Registered Unsecured Debt Securities.
1.1.126 Unsecured Debt Securities Indenture: The respective
indenture and any other agreements, documents, and instruments governing an
issue of Unsecured Debt Securities, as amended, supplemented, or modified as of
the date hereof.
1.1.127 Unsecured Debt Securities Trustee: The respective
trustee acting pursuant to an Unsecured Debt Securities Indenture.
1.1.128 Vale EDBs: Those certain Ten Million and 00/100
Dollars ($10,000,000.00) in original principal amount of Economic Development
Bonds, Series XCVI, issued by the State of Oregon Economic Development
Commission to finance the construction in the Harney and Malheur Counties of
Oregon of certain facilities of Eagle-Picher Minerals, Inc.
1.1.129 Vale EDBs Claims: Claims with respect to the Vale
EDBs.
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1.1.130 Voting Procedures Order: An order of the Bankruptcy
Court approving procedures relating to the solicitation and tabulation of votes
with respect to the Plan.
1.2 OTHER TERMS. Wherever from the context it appears appropriate,
each term stated in either the singular or the plural shall include the singular
and the plural, and pronouns stated in the masculine, feminine, or neuter gender
shall include the masculine, the feminine, and the neuter. The words "herein,"
"hereof," "hereto," "hereunder," and others of similar import refer to the Plan
as a whole and not to any particular section, subsection, or clause contained in
the Plan. An initially capitalized term used herein that is not defined herein
shall have the meaning ascribed to such term, if any, in the Bankruptcy Code,
unless the context shall otherwise require.
1.3 EXHIBITS. All Exhibits to the Plan shall be contained in a
separate Exhibit Volume, which shall be filed with the Clerk of the Bankruptcy
Court not less than twenty (20) days prior to the commencement of the hearing on
confirmation of the Plan. Such Exhibits may be inspected in the office of the
Clerk of the Bankruptcy Court during normal hours of operation of the Bankruptcy
Court. Holders of Claims and Equity Interests may obtain a copy of such Exhibit
Volume, once filed, from Eagle-Picher by a written request sent to the following
address:
Eagle-Picher Industries, Inc.
P.O. Box 1847
Cincinnati, OH 45202
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ARTICLE 2
PROVISIONS FOR PAYMENT OF
ADMINISTRATIVE EXPENSES AND TAX CLAIMS
2.1 PAYMENT OF ALLOWED ADMINISTRATIVE EXPENSES. The Allowed Amount
of each Allowed Administrative Expense shall be paid in full, in cash, on the
Effective Date; provided, however, that (i) Administrative Expenses representing
(a) liabilities incurred in the ordinary course of business by any of the
Debtors in Possession or (b) liabilities arising under loans or advances to the
Debtors in Possession, whether or not incurred in the ordinary course of
business, shall be assumed and paid by the respective Reorganized Debtors in
accordance with the terms and conditions of the particular transactions and any
agreements relating thereto, (ii) the Bankruptcy Court shall fix in the
Confirmation Order a date for the filing of and a date to hear and determine all
applications for final allowances of compensation or reimbursement of expenses
under section 330 of the Bankruptcy Code, and (iii) if an Administrative
Expense, other than a trade payable incurred in the ordinary course of business
by any of the Debtors in Possession and other than a DIP Credit Facility Claim,
is a Contingent Claim or Unliquidated Claim as of the Effective Date, the
Debtors may request the Bankruptcy Court to estimate such Administrative Expense
pursuant to section 502(c) of the Bankruptcy Code, in which case the Allowed
Amount of such Administrative Expense shall be paid in full, in cash, on the
date that an order estimating such Administrative Expense becomes a Final Order.
2.2 COMPENSATION AND REIMBURSEMENT. The Allowed Amount of all
Administrative Expenses arising under section 503(b)(2), 503(b)(3), 503(b)(4),
or 503(b)(5) of the Bankruptcy Code shall be paid in full, in cash, (a) upon the
later of (i) the Effective Date and (ii) the date upon which the order with
respect to the allowance or disallowance of any such Administrative Expense
becomes a Final Order, or (b) upon such other terms as may be mutually agreed
upon between each Administrative Expense Creditor and the Reorganized Debtors.
2.3 DIP CREDIT FACILITY CLAIM. On the Effective Date, the DIP Credit
Facility Claim shall be paid, in full, in cash. Unless otherwise agreed by the
DIP Lenders, to the extent that any letters of credit issued pursuant to the DIP
Credit Facility remain outstanding on the Effective Date, the Debtors will pay
to the Agent Bank, for the ratable benefit of the DIP Lenders, cash in an amount
equal to the face amount of such letters of credit, which shall be held by the
Agent Bank for the repayment of all amounts due in respect of such letters of
credit.
2.4 TAX CLAIMS. Each holder of an Allowed Tax Claim shall be paid
the Allowed Amount of its Allowed Tax Claim, at the option of the Reorganized
Debtors, either (a) in full, in cash, on the Effective Date or (b) upon such
other terms as may be mutually agreed upon between each holder of a Tax Claim
and the Reorganized Debtors.
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ARTICLE 3
CLASSIFICATION AND TREATMENT OF CLAIMS
AND EQUITY INTERESTS
3.1 SUMMARY. Claims and Equity Interests are classified for all
purposes, including, without express or implied limitation, voting,
confirmation, and distribution pursuant to the Plan, as follows:
CLASS STATUS
Class 1: Priority Claims Unimpaired - not entitled to vote.
Class 2: Amplicon Lease Secured Unimpaired - not entitled to vote.
Claim
Class 3: Connecticut Mutual Note Impaired - entitled to vote
Secured Claim
Class 4: Designated Real Property Impaired - entitled to vote.
Tax Claims
Class 5: First Fidelity Lease Unimpaired - not entitled to vote.
Secured Claim
Class 6: Fleet Credit Secured Claim Unimpaired - not entitled to vote.
Class 7: GE Capital Secured Claim Unimpaired - not entitled to vote.
Class 8: Grove IRB Secured Claim Unimpaired - not entitled to vote.
Class 9: IBM Credit Corporation Unimpaired - not entitled to vote.
Secured Claim
Class 10: Inter-Market Note Impaired - entitled to vote.
Secured Claim
Class 11: Leesburg Secured Claim Unimpaired - not entitled to vote.
Class 12: Northwestern Group Secured Impaired - entitled to vote.
Claims
Class 13: Vale EDBs Claims Unimpaired - not entitled to vote.
Class 14: Other Secured Claims Unimpaired - not entitled to vote.
Class 15: Convenience Claims Unimpaired - not entitled to vote.
Class 16: Asbestos Property Damage Impaired - entitled to vote.
Claims
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Class 17: Asbestos Personal Injury Impaired - entitled to vote.
Claims and Lead Personal
Injury Claims
Class 18: Other Product Liability Impaired - entitled to vote.
Tort Claims
Class 19: Environmental Claims Impaired - entitled to vote.
Class 20: Unsecured Claims Impaired - entitled to vote.
other than Convenience
Claims and Specified
Treatment Claims
Class 21: Specified Treatment Claims Impaired - entitled to vote.
Class 22: Affiliate Claims and Unimpaired - not entitled to vote.
Interests
Class 23: Penalty Claims Impaired - deemed to reject the Plan.
Class 24: Equity Interests Impaired - deemed to reject the Plan.
3.2 CLASSIFICATION AND TREATMENT.
3.2.1 CLASS 1. PRIORITY CLAIMS.
1. Classification: Class 1 consists of all Allowed
Priority Claims.
2. Treatment: Each holder of an Allowed Priority Claim
shall be paid the Allowed Amount of its Allowed Priority Claim, in full, in
cash, on the Effective Date.
3. Status: Class 1 is not impaired. The holders of the
Claims in Class 1 are deemed to accept the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.2.2 CLASS 2. AMPLICON LEASE SECURED CLAIM.
1. Classification: Class 2 consists of the Amplicon
Lease Secured Claim.
2. Treatment: At the option of the Debtors and in
accordance with section 1124 of the Bankruptcy Code, the Amplicon Lease Secured
Claim shall be treated in one of the following ways:
a. The legal, equitable and contractual rights to
which the Amplicon Lease Secured Claim entitles the holder thereof
shall be unaltered.
or
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b. Notwithstanding any contractual provision or
applicable law that entitles the holder of the Amplicon Lease
Secured Claim to demand or receive payment of such Claim prior to
the stated maturity of such Claim from and after the occurrence of a
default under the agreements governing or instruments evidencing the
Amplicon Lease Secured Claim, the Amplicon Lease Secured Claim shall
be reinstated, and the Debtors shall (i) cure all defaults that
occurred before or from and after the Petition Date (other than
defaults of a kind specified in section 365(b)(2) of the Bankruptcy
Code), (ii) reinstate the maturity of the Amplicon Lease Secured
Claim as such maturity existed prior to the occurrence of such
default, (iii) compensate the holder of such Claim for any damages
incurred as a consequence of any reasonable reliance by such holder
on such contractual provision or such applicable law, and (iv) not
otherwise alter the legal, equitable, or contractual rights to which
the holder of the Amplicon Lease Secured Claim is entitled.
or
c. On the Effective Date, the holder of the
Amplicon Lease Secured Claim shall be paid the Allowed Amount of the
Amplicon Lease Secured Claim, in full, in cash.
3. Status: Class 2 is not impaired. The holder of the
Claim in Class 2 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.3 CLASS 3. CONNECTICUT MUTUAL NOTE SECURED CLAIM.
1. Classification: Class 3 consists of the Connecticut
Mutual Note Secured Claim.
2. Treatment: The holder of the Connecticut Mutual Note
Secured Claim will retain the liens securing the Connecticut Mutual Note Secured
Claim and, on the Effective Date, will receive a note, substantially in the form
of Exhibit "1.1.38" to the Plan, which shall (i) have a maturity date of June 1,
2001, (ii) bear interest at the rate of 10.0% per annum, (iii) have a principal
amount equal to the amount of the Connecticut Mutual Note Secured Claim, and
(iv) provide for equal monthly payments of principal and interest in an amount
sufficient to fully amortize the principal amount of such note over the term of
such note.
3. Status: Class 3 is impaired. To the extent and in the
manner provided in the Voting Procedures Order, the holder of the Claim in Class
3 is entitled to vote to accept or reject the Plan.
3.2.4 CLASS 4. DESIGNATED REAL PROPERTY TAX CLAIM.
1. Classification: Class 4 consists of the Designated
Real Property Tax Claim.
2. Treatment: On the Effective Date, the property
securing the Designated Real Property Tax Claim shall be transferred to the
holder of the Designated Real Property Tax Claim in full and complete
satisfaction of the Designated Real Property Tax Claim. Notwithstanding the
foregoing, if the property securing the Designated Real Property Tax Claim is
sold
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prior to the Effective Date, the Designated Real Property Tax Claim shall be
paid in full, in cash, on the date on which such sale is consummated.
3. Status: Class 4 is impaired. To the extent and in the
manner provided in the Voting Procedures Order, the holder of the Claim in Class
4 is entitled to vote to accept or reject the Plan.
3.2.5 CLASS 5. FIRST FIDELITY LEASE SECURED CLAIM.
1. Classification: Class 5 consists of the First
Fidelity Lease Secured Claim.
2. Treatment: On the Effective Date, the holder of the
First Fidelity Lease Secured Claim shall be paid the Allowed Amount of the First
Fidelity Lease Secured Claim, in full, in cash.
3. Status: Class 5 is unimpaired. The holder of the
Claim in Class 5 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.6 CLASS 6. FLEET CREDIT SECURED CLAIM.
1. Classification: Class 6 consists of the Fleet Credit
Secured Claim.
2. Treatment: On the Effective Date, the holder of the
Fleet Credit Secured Claim shall be paid the Allowed Amount of the Fleet Credit
Secured Claim, in full, in cash.
3. Status: Class 6 is unimpaired. The holder of the
Claim in Class 6 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.7 CLASS 7. GE CAPITAL SECURED CLAIM.
1. Classification: Class 7 consists of the GE Capital
Secured Claim.
2. Treatment: On the Effective Date, the holder of the
GE Capital Secured Claim shall be paid the Allowed Amount of the GE Capital
Secured Claim, in full, in cash.
3. Status: Class 7 is not impaired. The holder of the
Claim in Class 7 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.8 CLASS 8. GROVE IRB SECURED CLAIM.
1. Classification: Class 8 consists of the Grove IRB
Secured Claim.
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2. Treatment: On the Effective Date, the holder of the
Grove IRB Secured Claim shall be paid the Allowed Amount of the Grove IRB
Secured Claim, in full, in cash.
3. Status: Class 8 is not impaired. The holder of the
Claim in Class 8 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.9 CLASS 9. IBM CREDIT CORPORATION SECURED CLAIM.
1. Classification: Class 9 consists of the IBM Credit
Corporation Secured Claim.
2. Treatment: On the Effective Date, the holder of the
IBM Credit Corporation Secured Claim shall be paid the Allowed Amount of the IBM
Credit Corporation Secured Claim, in full, in cash.
3. Status: Class 9 is not impaired. The holder of the
Claim in Class 9 is deemed to accept the Plan, and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.10 CLASS 10. INTER-MARKET NOTE SECURED CLAIM.
1. Classification: Class 10 consists of the Inter-Market
Note Secured Claim.
2. Treatment: The holder of the Inter-Market Note
Secured Claim will retain the liens securing the Inter-Market Note Secured Claim
and, on the Effective Date, will receive a note, substantially in the form of
Exhibit "1.1.82" to the Plan, which shall (i) have a maturity date of June 1,
2001, (ii) bear interest at the rate of 10.0% per annum, (iii) have a principal
amount equal to the amount of the Inter-Market Note Secured Claim, and (iv)
provide for equal monthly payments of principal and interest in an amount
sufficient to fully amortize the principal amount of such note over the term of
such note.
3. Status: Class 10 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holder of the Claim in
Class 10 is entitled to vote to accept or reject the Plan.
3.2.11 CLASS 11. LEESBURG SECURED CLAIM.
1. Classification: Class 11 consists of the Leesburg
Secured Claim.
2. Treatment: On the Effective Date, the holder of the
Leesburg Secured Claim shall be paid the Allowed Amount of the Leesburg Secured
Claim, in full, in cash.
3. Status: Class 11 is not impaired. The holder of the
Claim in Class 11 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
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3.2.12 CLASS 12. NORTHWESTERN GROUP SECURED CLAIMS.
1. Classification: Class 12 consists of the Northwestern
Group Secured Claims.
2. Treatment: The holders of the Northwestern Group
Secured Claims will retain the liens securing the Northwestern Group Secured
Claims and, on the Effective Date, will each receive a note, substantially in
the form of Exhibit "1.1.94" to the Plan, which shall (i) have a maturity date
of May 1, 2001, (ii) bear interest at the rate of 10.0% per annum, (iii) have a
principal amount equal to the amount of such holder's share of the Northwestern
Group Secured Claims, and (iv) provide for equal monthly payments of principal
and interest in an amount sufficient to fully amortize the principal amount of
such note over the term of such note.
3. Status: Class 12 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 12 are entitled to vote to accept or reject the Plan.
3.2.13 CLASS 13. VALE EDBS CLAIMS.
1. Classification: Class 13 consists of the Vale EDBs
Claims.
2. Treatment: Notwithstanding any contractual provision
or applicable law that entitles the holders of the Vale EDBs Claims to demand or
receive payment of such Claims prior to the stated maturity of such Claims from
and after the occurrence of a default under the agreements or instruments
evidencing the Vale EDBs Claims, the Vale EDBs shall be reinstated, and the
Debtors shall (i) cure all defaults that occurred before or from and after the
Petition Date (other than defaults of a kind specified in section 365(b)(2) of
the Bankruptcy Code), (ii) reinstate the maturity of the Vale EDBs as such
maturity existed prior to the occurrence of such default, (iii) compensate the
holders of the Vale EDBs Claims for any damages incurred as a consequence of any
reasonable reliance by such holders on such contractual provision or such
applicable law, and (iv) not otherwise alter the legal, equitable, or
contractual rights to which the holders of the Vale EDBs Claims are entitled.
Entry of the Confirmation Order shall constitute a finding that no amounts are
payable and owing under subsections (i) and (iii) hereof.
3. Status: Class 13 is not impaired. The holders of the
Claims in Class 13 are deemed to accept the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.2.14 CLASS 14. OTHER SECURED CLAIMS.
1. Classification: Class 14 consists of all Allowed
Other Secured Claims. Although placed in one class for purposes of convenience,
each Allowed Other Secured Claim shall be treated as though in a separate class
for all purposes under the Plan.
2. Treatment: At the option of the Debtors and in
accordance with section 1124 of the Bankruptcy Code, each Allowed Other Secured
Claim shall be treated in one of the following ways:
a. The legal, equitable and contractual rights to
which such Allowed Other Secured Claim entitles the holder of such
Claim shall be unaltered.
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or
b. Notwithstanding any contractual provision or
applicable law that entitles the holder of an Allowed Other Secured
Claim to demand or receive payment of such Claim prior to the stated
maturity of such Claim from and after the occurrence of a default
under the agreements governing or instruments evidencing such Claim,
such Claim shall be reinstated, and the Debtors shall (i) cure all
defaults that occurred before or from and after the Petition Date
(other than defaults of a kind specified in section 365(b)(2) of the
Bankruptcy Code), (ii) reinstate the maturity of such Claim as such
maturity existed prior to the occurrence of such default, (iii)
compensate the holder of such Claim for any damages incurred as a
consequence of any reasonable reliance by such holder on such
contractual provision or such applicable law, and (iv) not otherwise
alter the legal, equitable, or contractual rights to which the
holder of such Claim is entitled.
or
c. On the later of the Effective Date or the date
on which an Other Secured Claim becomes Allowed, the holder of such
Allowed Other Secured Claim shall be paid the Allowed Amount of such
Claim, in full, in cash. Interest accruing on any Allowed Other
Secured Claim after the Petition Date shall be accrued at the rate
of eight percent (8%) per annum.
3. Status: Class 14 is not impaired. The holders of the
Claims in Class 14 are deemed to accept the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.2.15 CLASS 15. CONVENIENCE CLAIMS.
1. Classification: Class 15 consists of all Allowed
Convenience Claims.
2. Treatment: Each holder of an Allowed Convenience
Claim shall be paid the Allowed Amount of its Allowed Convenience Claim, in
full, in cash on the Effective Date.
3. Election: Any holder of an Unsecured Claim that
desires treatment of such Claim as a Convenience Claim shall make such election
on the Ballot to be provided to holders of Unsecured Claims and return such
Ballot to the address specified therein on or before the Ballot Date. Any
election made after the Ballot Date shall not be binding on the Debtors unless
the Ballot Date is expressly waived in writing by the Debtors with respect to
any such Claim.
4. Status: Class 15 is not impaired. The holders of the
Claims in Class 15 are deemed to accept the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.2.16 CLASS 16. ASBESTOS PROPERTY DAMAGE CLAIMS.
1. Classification: Class 16 consists of all Asbestos
Property Damage Claims.
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2. Treatment: All Asbestos Property Damage Claims shall
be determined and paid pursuant to the terms, provisions, and procedures of the
Asbestos PD Trust and the Asbestos PD Trust Agreement and the claims resolution
procedures adopted pursuant thereto and referred to in subsection 4. of this
section . The Asbestos PD Trust will be funded in accordance with the provisions
of section of the Plan. The sole recourse of the holder of an Asbestos Property
Damage Claim shall be the Asbestos PD Trust, and such holder shall have no right
whatsoever at any time to assert its Asbestos Property Damage Claim against the
Reorganized Debtors. Without limiting the foregoing, on the Effective Date, all
entities shall be permanently and forever stayed, restrained, and enjoined from
taking any of the following actions for the purpose of, directly or indirectly,
collecting, recovering, or receiving payment of, on, or with respect to any
Asbestos Property Damage Claims (other than actions brought to enforce any right
or obligation under the Plan, any Exhibits to the Plan, or any other agreement
or instrument between any of the Debtors or the Reorganized Debtors and the
Asbestos PD Trust, which actions shall be in conformity and compliance with the
provisions hereof):
a. commencing, conducting, or continuing in any manner,
directly or indirectly, any suit, action, or other proceeding
(including, without express or implied limitation, a judicial,
arbitral, administrative, or other proceeding) in any forum against
or affecting any of the Reorganized Debtors or any property or
interests in property of any of the Reorganized Debtors;
b. enforcing, levying, attaching (including, without
express or implied limitation, any prejudgment attachment),
collecting, or otherwise recovering by any means or in any manner,
whether directly or indirectly, any judgment, award, decree, or
other order against any of the Reorganized Debtors or any property
or interests in property of any of the Reorganized Debtors;
c. creating, perfecting, or otherwise enforcing in any
manner, directly or indirectly, any Encumbrance against any of the
Reorganized Debtors or any property or interests in property of any
of the Reorganized Debtors;
d. setting off, seeking reimbursement of, contribution
from, or subrogation against, or otherwise recouping in any manner,
directly or indirectly, any amount against any liability owed to any
of the Reorganized Debtors or any property or interests in property
of any of the Reorganized Debtors; and
e. proceeding in any manner in any place with regard to
any matter that is subject to resolution pursuant to the Asbestos PD
Trust, except in conformity and compliance therewith.
3. Selection of Trustees for Asbestos PD Trust: If Class
16 votes to accept the Plan, then the trustees for the Asbestos PD Trust will be
selected by the representatives of each group for which a class proof of claim
asserting Asbestos Property Damage Claims was timely filed in the Chapter 11
Cases. If Class 16 votes to reject the Plan, Eagle-Picher will select one or
more trustees for the Asbestos PD Trust, by notice filed with the Bankruptcy
Court on or before ten (10) days prior to the Confirmation Hearing. Eagle-Picher
reserves the right to select Reorganized Eagle-Picher as the sole trustee of the
Asbestos PD Trust if Class 16 votes to reject the Plan.
4. Claims Resolution Procedures: If Class 16 votes to
accept the Plan, then the trustees for the Asbestos PD Trust will establish
procedures for the allowance and payment of Asbestos Property Damage Claims. If
Class 16 votes to reject the Plan, then the claims
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resolution procedures attached to the Plan as Exhibit "1.1.6.5" will govern and
control in all respects the allowance and payment of Asbestos Property Damage
Claims.
5. Status: Class 16 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 16 are entitled to vote to accept or reject the Plan.
3.2.17 CLASS 17. ASBESTOS PERSONAL INJURY CLAIMS AND
LEAD PERSONAL INJURY CLAIMS.
1. Classification: Class 17 consists of all Asbestos
Personal Injury Claims and Lead Personal Injury Claims.
2. Treatment: All Asbestos Personal Injury Claims and
Lead Personal Injury Claims shall be determined and paid pursuant to the terms,
provisions, and procedures of the PI Trust and the Asbestos and Lead PI Trust
Agreement. The PI Trust will be funded in accordance with the provisions of
section of the Plan. The sole recourse of the holder of an Asbestos Personal
Injury Claim or Lead Personal Injury Claim shall be the PI Trust, and such
holder shall have no right whatsoever at any time to assert its Asbestos
Personal Injury Claim or Lead Personal Injury Claim, as the case may be, against
any PI Protected Party. Without limiting the foregoing, on the Effective Date,
all Entities shall be permanently and forever stayed, restrained, and enjoined
from taking any of the following actions for the purpose of, directly or
indirectly, collecting, recovering, or receiving payment of, on, or with respect
to any Asbestos Personal Injury Claims or Lead Personal Injury Claims (other
than actions brought to enforce any right or obligation under the Plan, any
Exhibits to the Plan or any other agreement or instrument between any of the
Debtors, or the Reorganized Debtors and the PI Trust, which actions shall be in
conformity and compliance with the provisions hereof):
a. commencing, conducting, or continuing in any manner,
directly or indirectly, any suit, action, or other proceeding
(including, without express or implied limitation, a judicial,
arbitral, administrative, or other proceeding) in any forum against
or affecting any PI Protected Party or any property or interests in
property of any PI Protected Party;
b. enforcing, levying, attaching (including, without
express or implied limitation, any prejudgment attachment),
collecting, or otherwise recovering by any means or in any manner,
whether directly or indirectly, any judgment, award, decree, or
other order against any PI Protected Party or any property or
interests in property of any PI Protected Party;
c. creating, perfecting, or otherwise enforcing in any
manner, directly or indirectly, any Encumbrance against any PI
Protected Party or any property or interests in property of any PI
Protected Party;
d. setting off, seeking reimbursement of, contribution
from, or subrogation against, or otherwise recouping in any manner,
directly or indirectly, any amount against any liability owed to any
PI Protected Party or any property or interests in property of any
PI Protected Party; and
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e. proceeding in any manner in any place with regard to
any matter that is subject to resolution pursuant to the PI Trust,
except in conformity and compliance therewith.
Nothing contained herein shall constitute or be deemed a waiver of any claim,
right, or cause of action that the Debtors, the Reorganized Debtors, or the PI
Trust may have against any Entity in connection with or arising out of an
Asbestos Personal Injury Claim or Lead Personal Injury Claim.
3. Discounted Payment Election: The Ballot to be
distributed to holders of Asbestos Personal Injury Claims will permit such
holders to elect to have their Asbestos Personal Injury Claims processed and
paid pursuant to the discounted payment procedure set forth in the Asbestos and
Lead PI Trust Agreement and the claims resolution procedures adopted pursuant
thereto.
4. Status: Class 17 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 17 are entitled to vote to accept or reject the Plan.
3.2.18 CLASS 18. OTHER PRODUCT LIABILITY TORT CLAIMS.
1. Classification: Class 18 consists of all Other
Product Liability Tort Claims.
2. Treatment: Each holder of an Allowed Other Product
Liability Tort Claim shall receive consideration having a value, determined by
Reorganized Eagle-Picher in good faith, equal to the value that would have been
distributed to such holder if such Allowed Other Product Liability Tort Claim
had been an Allowed Unsecured Claim on the Final Distribution Date; provided,
however, that, in determining the Pro Rata Share that would have been payable if
such Allowed Other Product Liability Tort Claim had been an Allowed Unsecured
Claim, no adjustments shall be made to the denominator of the equation specified
in section ; provided further, that, if any Other Product Liability Tort Claim
becomes known prior to the Final Distribution Date, the Other Product Liability
Tort Claim shall be treated as an Unsecured Claim for all purposes. The
treatment provided herein is not, and shall not be deemed to constitute, a
waiver of any of the Debtors' applicable non-bankruptcy defenses, including
statute of limitations.
3. Status: Class 18 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 18 are entitled to vote to accept or reject the Plan.
3.2.19 CLASS 19. ENVIRONMENTAL CLAIMS.
1. Classification: Class 19 consists of all
Environmental Claims.
2. Treatment: Each holder of an Environmental Claim
shall be entitled to treatment of its Environmental Claim and receive such
consideration as is provided in the settlement agreement applicable to such
Environmental Claim. Without limiting the provisions of such settlement
agreement, each holder of an Environmental Claim, to the extent any portion of
such Environmental Claim becomes Allowed prior to any Distribution, shall
receive on the Initial Distribution Date and the Final Distribution Date its Pro
Rata Share of the Distribution Value less the aggregate value of consideration
(computed as provided herein) previously distributed on account of
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such Allowed portion of the Environmental Claim in any Distribution made prior
thereto. The sole recourse of the holders of Environmental Claims against the
Debtors, the Reorganized Debtors, or any property or interests in property of
the Debtors or the Reorganized Debtors shall be in accordance with the rights of
such holders set forth in such settlement agreement. Nothing contained herein or
in any settlement agreement relating to an Environmental Claim shall constitute
or be deemed a waiver of any claim, right, or cause of action that the Debtors
or the Reorganized Debtors may have against any Entity that is not a party to
such settlement agreement. As to any portion of an Environmental Claim that
becomes Allowed prior to the Initial Distribution Date or the Final Distribution
Date, the holder of such Environmental Claim shall receive its Distribution
Amount in consideration consisting of Available Cash in an amount equal to
one-half (1/2) of the Distribution Amount and Divestiture Notes having an
aggregate principal amount equal to one-half (1/2) of the Distribution Amount.
3. Status: Class 19 is impaired. The holders of the Claims in
Class 19 are entitled to vote to accept or reject the Plan.
3.2.20 CLASS 20. UNSECURED CLAIMS OTHER THAN CONVENIENCE
CLAIMS AND THE SPECIFIED TREATMENT CLAIMS.
1. Classification: Class 20 consists of Unsecured Claims
other than Convenience Claims and Specified Treatment Claims.
2. Treatment: Each holder of an Allowed Unsecured Claim
in Class 20 shall receive on the Initial Distribution Date and the Final
Distribution Date its Pro Rata Share of the Distribution Value less the
aggregate value of consideration (computed as provided herein) previously
distributed on account of such Allowed Unsecured Claim in any Distribution made
prior thereto. On the Initial Distribution Date and the Final Distribution Date,
each such holder's Distribution Amount shall be paid in consideration consisting
of Available Cash in an amount equal to one-half (1/2) of the Distribution
Amount and Divestiture Notes having an aggregate principal amount equal to
one-half (1/2) of the Distribution Amount.
3. Cancellation of Unsecured Debt Securities: As of the
Effective Date, all notes, agreements, and securities evidencing Unsecured
Claims and the rights of the holders thereof thereunder, including, without
express or implied limitation, the Unsecured Debt Securities and each Unsecured
Debt Securities Indenture, shall be cancelled and deemed null and void and of no
further force and effect, and the holders thereof shall have no rights, and such
instruments shall evidence no rights, except the right to receive the
Distributions provided herein. Notwithstanding the foregoing, such cancellation
shall not impair the rights and duties under each Unsecured Debt Securities
Indenture as between the Unsecured Debt Securities Trustee and the beneficiaries
of the trust created thereby.
4. Surrender of Bearer Unsecured Debt Securities:
Distributions with respect to the Bearer Unsecured Debt Securities shall be made
to the Unsecured Debt Securities Trustee for payment to the individual holders
of Bearer Unsecured Debt Securities. No holder of Bearer Unsecured Debt
Securities shall be entitled to any Distribution unless and until such holder
shall have first surrendered or caused to be surrendered to the Unsecured Debt
Securities Trustee the original Bearer Unsecured Debt Securities held by it or,
in the event that such Unsecured Debt Securities have been lost, destroyed,
stolen, or mutilated, executed and delivered an affidavit of loss and indemnity
with respect thereto in the form customarily utilized for such purposes that is
reasonably satisfactory to the Debtors and the Unsecured Debt Securities Trustee
and, in the event either the Debtors or the Unsecured Debt Securities Trustee
requests, furnished a bond in form and substance (including, without express or
implied limitation, amount) reasonably satisfactory to the Debtors or the
Unsecured Debt
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Securities Trustee, as the case may be. Promptly upon the surrender of any
Bearer Unsecured Debt Securities, the Unsecured Debt Securities Trustee shall
cancel such securities and deliver such cancelled securities to the Reorganized
Debtors or otherwise dispose of such securities in such manner as the
Reorganized Debtors may request. In accordance with section 1143 of the
Bankruptcy Code, any holder of Bearer Unsecured Debt Securities that fails to
surrender its Bearer Unsecured Debt Securities or deliver an affidavit of loss
and indemnity as provided herein within the Retention Period shall be deemed to
have forfeited all rights and claims against the Debtors and the Reorganized
Debtors and shall not participate in any Distribution on account of the Bearer
Unsecured Debt Securities. As soon as practicable after the receipt of the
foregoing from the holder of Bearer Unsecured Debt Securities, the Unsecured
Debt Securities Trustee shall make the Distribution provided hereunder.
Thereafter, the Unsecured Debt Securities Trustee shall maintain a register of
the holders of Bearer Unsecured Debt Securities that have complied with the
foregoing provisions of this paragraph and the amount of Bearer Unsecured Debt
Securities held by each such holder, and any further Distribution made shall be
made by the Unsecured Debt Securities Trustee to the holders reflected on such
register.
5. Record Date for Registered Unsecured Debt Securities:
As at the close of business on the Record Date, the transfer ledgers for the
Registered Unsecured Debt Securities shall be closed, and there shall be no
further changes in the record holders of any Registered Unsecured Debt
Securities. Distributions with respect to the Registered Unsecured Debt
Securities shall be made to the Unsecured Debt Securities Trustee for payment to
the record holders of any Registered Unsecured Debt Securities as reflected on
the transfer ledgers for the Registered Unsecured Debt Securities as at the
close of business on the Record Date. The Debtors or the Reorganized Debtors, as
the case may be, and the Unsecured Debt Securities Trustee shall have no
obligation to recognize any transfer of the Registered Unsecured Debt Securities
that is not recorded on the transfer ledgers for the Registered Unsecured Debt
Securities as of the close of business on the Record Date. The Debtors or the
Reorganized Debtors, as the case may be, and the Unsecured Debt Securities
Trustee shall be entitled instead to recognize and deal with, for all purposes
hereunder, only those record holders stated on the transfer ledgers of the
Registered Unsecured Debt Securities Trustee as of the close of business on the
Record Date.
6. Expiration of the Retention Period: Upon the
expiration of the Retention Period, all monies or other property held for
distribution by the Unsecured Debt Securities Trustee shall be returned to the
Reorganized Debtors by the Unsecured Debt Securities Trustee, free and clear of
any claim or interest of any nature whatsoever, including, without express or
implied limitation, escheat rights of any governmental unit under applicable
law.
7. Compensation of the Unsecured Debt Securities
Trustee: The Unsecured Debt Securities Trustee shall be compensated by the
Reorganized Debtors for services rendered from and after the Effective Date,
including the reasonable compensation, disbursements, and expenses of the agents
and legal counsel of the Unsecured Debt Securities Trustee in connection with
the performance of its duties under this section and shall be indemnified by the
Reorganized Debtors for any loss, liability, or expense incurred by it in
connection with the performance of such duties to the same extent and in the
same manner as provided in the Unsecured Debt Securities Indenture.
8. Interest: Interest shall neither accrue nor be
payable with respect to Allowed Unsecured Claims.
9. Status: Class 20 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 20 are entitled to vote to accept or reject the Plan.
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3.2.21 CLASS 21. SPECIFIED TREATMENT CLAIMS.
1. Classification: Class 21 consists of the Specified
Treatment Claims.
2. Treatment: Each holder of a Specified Treatment Claim
shall receive on the Initial Distribution Date and the Final Distribution Date
its Pro Rata Share of the Distribution Value less the aggregate value of
consideration (computed as provided herein) previously distributed on account of
such Specified Treatment Claim in any Distribution made prior thereto. On the
Initial Distribution Date and the Final Distribution Date, each such holder's
Distribution Amount shall be paid in consideration consisting of Available Cash
in an amount equal to one-half (1/2) of the Distribution Amount and Divestiture
Notes having an aggregate principal amount equal to one-half (1/2) of the
Distribution Amount. Notwithstanding the foregoing, the aggregate value of the
Distributions on account of such Specified Treatment Claim shall be no less than
the amount set forth in the settlement agreement pursuant to which such
Specified Treatment Claim became Allowed and shall not exceed the amount set
forth in such settlement agreement.
3. Status: Class 21 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 21 are entitled to vote to accept or reject the Plan.
3.2.22 CLASS 22. AFFILIATE CLAIMS AND INTERESTS.
1. Classification: Class 22 consists of Affiliate Claims
and Interests.
2. Treatment: At the option of the Debtors and in
accordance with section 1124 of the Bankruptcy Code, the Allowed Affiliate
Claims and Interests shall be treated in one of the following ways:
a. The legal, equitable and contractual rights to
which such Allowed Affiliate Claims and Interests entitle the holder
of any such Claims and Interests shall be unaltered.
or
b. Notwithstanding any contractual provision or
applicable law that entitles the holder of Allowed Affiliate Claims
and Interests to demand or receive payment thereof prior to the
stated maturity thereof from and after the occurrence of a default
under the agreements governing or instruments evidencing such
Allowed Affiliate Claims and Interests, such Affiliate Claims and
Interests shall be reinstated, and the Debtors shall (i) cure all
defaults that occurred before or from and after the Petition Date
(other than defaults of a kind specified in section 365(b)(2) of the
Bankruptcy Code), (ii) reinstate the maturity of such Affiliate
Claims and Interests as such maturity existed prior to the
occurrence of such default, (iii) compensate the holders of such
Affiliate Claims and Interests for any damages incurred as a
consequence of any reasonable reliance by such holder on such
contractual provision or such applicable law, and (iv) not otherwise
alter the legal, equitable, or contractual rights to which the
holders of such Affiliate Claims and Interests are entitled.
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or
c. On the later of the Effective Date or the date
on which any Affiliate Claims and Interests become Allowed, the
holder of such Allowed Affiliate Claims and Interests shall be paid
the Allowed Amount of such Affiliate Claims and Interests, in full,
in cash.
3. Status: Class 22 is not impaired. The holders of
Claims and Interests in Class 22 are deemed to accept the Plan and, accordingly,
are not entitled to vote to accept or reject the Plan.
3.2.23 CLASS 23. PENALTY CLAIMS.
1. Classification: Class 23 consists of Penalty Claims.
2. Treatment: The holders of Penalty Claims will not
receive or retain any interest or property under the Plan.
3. Status: Class 23 is impaired. The holders of Claims
in Class 23 are deemed to reject the Plan and, accordingly, are not entitled to
vote to accept or reject the Plan.
3.2.24 CLASS 24. EQUITY INTERESTS.
1. Classification: Class 24 consists of Equity
Interests.
2. Treatment: The holders of Equity Interests will not
receive or retain any interest or property under the Plan. On the Effective
Date, the certificates that previously evidenced ownership of Existing
Eagle-Picher Common Stock shall be cancelled and shall be null and void, and the
holders thereof shall have no rights, and such certificates shall evidence no
rights.
3. Status: Class 24 is impaired. The holders of Equity
Interests are deemed to reject the Plan and, accordingly, are not entitled to
vote to accept or reject the Plan.
3.3 COMPROMISE AND SETTLEMENT RELATING TO THE AMOUNT OF THE PI TRUST
SHARE. The use of the amount of Two Billion and 00/100 Dollars
($2,000,000,000.00) as the PI Trust Share under the Plan represents a compromise
and settlement between the Plan Proponents and the Unsecured Creditors'
Committee regarding the issues raised in the appeal by the Unsecured Creditors'
Committee of the Bankruptcy Court's Decision and Order on 1) Debtors' Motion to
Estimate Liability and 2) Motion of UCC for Information Gathering, dated
December 4, 1995, and as amended on December 14, 1995, which appeal shall be
deemed dismissed with prejudice on the Effective Date. The Unsecured Creditors'
Committee will take whatever actions are reasonably necessary to effectuate such
dismissal.
3.4 CONTROVERSY CONCERNING IMPAIRMENT. In the event of a controversy
as to whether any class of Claims or Equity Interests is impaired under the
Plan, the Bankruptcy Court shall, after notice and a hearing, determine such
controversy prior to the Confirmation Date.
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ARTICLE 4
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN
4.1 MODIFICATION OF THE PLAN. The Plan Proponents may, upon the
unanimous written consent of all Plan Proponents, alter, amend, or modify the
Plan under section 1127(a) of the Bankruptcy Code at any time prior to the
Confirmation Date so long as the Plan, as modified, meets the requirements of
sections 1122 and 1123 of the Bankruptcy Code. After the Confirmation Date and
prior to the Effective Date, the Plan Proponents, upon the unanimous written
consent of all Plan Proponents, may alter, amend, or modify the Plan in
accordance with section 1127(b) of the Bankruptcy Code.
4.2 REVOCATION OR WITHDRAWAL.
4.2.1 Right to Revoke. The Plan may be revoked or withdrawn
prior to the Confirmation Date by either (a) after the Confirmation Deadline,
any of the Plan Proponents or (b) upon the unanimous written consent of all Plan
Proponents, the Plan Proponents.
4.2.2 Effect of Withdrawal or Revocation. If the Plan is
revoked or withdrawn prior to the Confirmation Date, then the Plan shall be
deemed null and void. In such event, nothing contained herein shall be deemed to
constitute a waiver or release of any claims by the Debtors or any other Entity
or to prejudice in any manner the rights of the Debtors or any Entity in any
further proceedings involving the Debtors.
4.3 AMENDMENT OF PLAN DOCUMENTS. From and after the Effective Date,
the authority to amend, modify, or supplement the Exhibits to the Plan and any
documents attached to such Exhibits shall be as provided in such Exhibits and
their respective attachments.
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ARTICLE 5
PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS
5.1 OBJECTIONS TO CLAIMS; PROSECUTION OF DISPUTED CLAIMS. The
Reorganized Debtors shall object to the allowance of Claims filed with the
Bankruptcy Court (other than Asbestos Personal Injury Claims, Lead Personal
Injury Claims, and Asbestos Property Damage Claims) with respect to which the
Reorganized Debtors dispute liability in whole or in part. Notwithstanding the
foregoing, the Reorganized Debtors, at their option, may continue to prosecute
objections to Lead Personal Injury Claims and Asbestos Property Damage Claims if
such objections are pending as of the Effective Date. To the extent that
objections to Lead Personal Injury Claims are not pending as of the Effective
Date or the Reorganized Debtors elect not to prosecute pending objections to
Lead Personal Injury Claims, the PI Trust shall be vested with the complete
power and authority to file and prosecute any such objections. To the extent
that objections to Asbestos Property Damage Claims are not pending as of the
Effective Date or the Reorganized Debtors elect not to prosecute pending
objections to Asbestos Property Damage Claims, the Asbestos PD Trust shall be
vested with the complete power and authority to file and prosecute any such
objections. All objections that are filed and prosecuted by the Reorganized
Debtors as provided herein shall be litigated to Final Order by the Reorganized
Debtors or compromised and settled in accordance with the Claims Settlement
Guidelines. Unless otherwise provided herein or ordered by the Bankruptcy Court,
all objections by the Reorganized Debtors to Claims shall be served and filed no
later than one week after the Effective Date.
5.2 AMENDMENT OF CLAIMS SETTLEMENT GUIDELINES. On the Effective
Date, the Claims Settlement Guidelines shall be amended as set forth on Exhibit
"5.2" to the Plan.
5.3 DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS. Notwithstanding
Section 3.2 hereof, a Distribution shall only be made by the Reorganized Debtors
to the holder of a Disputed Claim when, and to the extent that, such Disputed
Claim becomes Allowed. No interest shall be paid on account of Disputed Claims
that later become Allowed except to the extent that payment of interest is
required under section 506(b) of the Bankruptcy Code. No Distribution shall be
made with respect to all or any portion of any Disputed Claim pending the entire
resolution thereof in the manner prescribed by section hereof.
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ARTICLE 6
ACCEPTANCE OR REJECTION OF THE PLAN
6.1 IMPAIRED CLASSES TO VOTE. Each holder of a Claim in an impaired
class of Claims shall be entitled to vote to accept or reject the Plan to the
extent and in the manner provided by the Voting Procedures Order.
6.2 ACCEPTANCE BY CLASS OF CLAIMS. Acceptance of the Plan by any
impaired class of Claims shall be determined in accordance with the Voting
Procedures Order.
6.3 NONCONSENSUAL CONFIRMATION. Because Classes 23 and 24 are deemed
to have rejected the Plan, the Plan Proponents intend to request that the
Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the
Bankruptcy Code with respect to Classes 23 and 24. In the event that any
impaired class of Claims shall fail to accept the Plan in accordance with
section 1129(a) of the Bankruptcy Code, the Plan Proponents reserve the right to
(a) request that the Bankruptcy Court confirm the Plan in accordance with
section 1129(b) of the Bankruptcy Code with respect to such non-accepting class,
in which case the Plan shall constitute a motion for such relief, or (b) amend
the Plan in accordance with section 4.1 hereof.
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ARTICLE 7
IMPLEMENTATION OF THE PLAN
7.1 AMENDMENT OF ARTICLES OF INCORPORATION. The Articles of
Incorporation shall be amended and restated as of the Effective Date in
substantially the form of the Amended and Restated Articles of Incorporation,
inter alia, (a) to prohibit the issuance of nonvoting equity securities as
required by section 1123(a)(6) of the Bankruptcy Code, subject to further
amendment of such Amended and Restated Articles of Incorporation as permitted by
applicable law, (b) to authorize the cancellation of the Existing Eagle-Picher
Common Stock and the creation of twenty million (20,000,000) shares of New
Eagle-Picher Common Stock, (i) of which ten million (10,000,000) shares shall be
issued to the PI Trust and the holders of Allowed Claims pursuant to the
provisions of the Plan, and (ii) of which ten million (10,000,000) shares shall
be reserved for future issuance, (c) to restrict the transfer of New
Eagle-Picher Common Stock and any other interests that would be treated as
"stock" of Reorganized Eagle-Picher under Section 382 of the Internal Revenue
Code in order to permit the continued utilization of the net operating loss
carryovers, capital loss carryovers, general business credit carryovers,
alternative minimum tax carryovers, foreign tax credit carryovers, and any net
unrealized built-in losses to which Reorganized Eagle-Picher, or any other
member of the consolidated group of which Reorganized Eagle-Picher is the common
parent, is or may be entitled, and (d) to effectuate the provisions of the Plan.
7.2 AMENDMENT OF CODE OF REGULATIONS. The Code of Regulations of
Eagle-Picher shall be amended and restated as of the Effective Date in
substantially the form of the Amended and Restated Code of Regulations.
7.3 DISTRIBUTIONS UNDER THE PLAN. Whenever any Distribution to be
made under this Plan shall be due on a day other than a Business Day, such
Distribution shall instead be made, without interest, on the immediately
succeeding Business Day, but shall be deemed to have been made on the date due.
For federal income tax purposes, a Distribution will be allocated to the
principal amount of a Claim first and then, to the extent the Distribution
exceeds the principal amount of the Claim, to accrued but unpaid interest.
7.4 TIMING OF DISTRIBUTIONS UNDER THE PLAN. Any Distribution to be
made by the Debtors or the Reorganized Debtors pursuant to the Plan shall be
deemed to have been timely made if made within ten (10) days after the time
therefor specified in the Plan. Distributions with respect to Classes 19, 20,
and 21, and to the PI Trust shall only be made on the Initial Distribution Date
and the Final Distribution Date; provided, however, that, if a Claim in any of
Classes 19, 20, or 21 becomes Allowed subsequent to the Initial Distribution
Date, the Reorganized Debtors may, in their sole discretion, make a Distribution
with respect to such Claim prior to the Final Distribution Date. If Class 16
votes to accept the Plan, the Distribution of the Asbestos PD Trust Funding
Obligation will be made on the Effective Date. If Class 16 votes to reject the
Plan, the Distribution of the Asbestos PD Trust Funding Obligation will be made
on the Initial Distribution Date and, to the extent not distributed on the
Initial Distribution Date, the Final Distribution Date.
7.5 MANNER OF PAYMENT UNDER THE PLAN. Unless the Entity receiving a
payment agrees otherwise, any payment in cash to be made by the Debtors or the
Reorganized Debtors shall be made, at the election of the Debtors or the
Reorganized Debtors (as the case may be), by check drawn on a domestic bank or
by wire transfer from a domestic bank.
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7.6 HART-SCOTT-RODINO COMPLIANCE. Any shares of New Eagle-Picher
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
Improvement 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.
7.7 FRACTIONAL SHARES OR OTHER DISTRIBUTIONS. Notwithstanding
anything to the contrary contained herein, no fractional shares of New
Eagle-Picher Common Stock shall be distributed, no New Debt Securities will be
issued in an amount equal to fractional cents, and no cash payments of fractions
of cents will be made. Fractional cents shall be rounded to the nearest whole
cent (with .5 cent or less to be rounded down). Fractional shares shall be
rounded to the nearest whole share (with .5 share or less to be rounded down).
7.8 OCCURRENCE OF THE CONFIRMATION DATE. The following shall
constitute conditions to confirmation of the Plan:
7.8.0.1 The Bankruptcy Court makes the following
findings, each of which shall be contained in the Confirmation Order:
7.8.0.1.1 The Asbestos and Lead PI Permanent
Channeling Injunction is to be implemented in connection with the PI
Trust.
7.8.0.1.2 At the time of the order for relief with
respect to Eagle-Picher, Eagle-Picher had been named as a defendant
in personal injury, wrongful death, and property damage actions
seeking recovery for damages allegedly caused by the presence of, or
exposure to, asbestos or asbestos-containing products.
7.8.0.1.3 At the time of the order for relief with
respect to Eagle-Picher, Eagle-Picher had been named as a defendant
in personal injury, wrongful death, and property damage actions
seeking recovery for damages allegedly caused by the presence of, or
exposure to, lead-containing chemicals.
7.8.0.1.4 The PI Trust, as of the Effective Date,
will assume the liabilities of the Debtors with respect to Asbestos
Personal Injury Claims and Lead Personal Injury Claims.
7.8.0.1.5 The PI Trust is to be funded in whole or
in part by securities of one or more of the Debtors and by the
obligations of such Debtors to make future payments, including
dividends.
7.8.0.1.6 The PI Trust is to own, or by the
exercise of rights granted under the Plan would be entitled to own
if specified contingencies occur, a majority of the voting shares of
Eagle-Picher, the direct or indirect parent corporation of each of
the Debtors.
7.8.0.1.7 The Debtors are likely to be subject to
substantial future Demands for payment arising out of the same or
similar conduct or events that gave rise to the Claims that are
addressed by the Asbestos and Lead PI Permanent Channeling
Injunction.
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7.8.0.1.8 The actual amounts, numbers, and timing
of the future Demands referenced in section cannot be determined.
7.8.0.1.9 Pursuit of the Demands referenced in
section outside the procedures prescribed by the Plan is likely to
threaten the Plan's purpose to deal equitably with Claims and future
Demands.
7.8.0.1.10 The terms of the Asbestos and Lead PI
Permanent Channeling Injunction, including any provisions barring
actions against third parties pursuant to section 524(g)(4)(A), are
set out in the Plan and in any disclosure statement supporting the
Plan.
7.8.0.1.11 The Plan establishes, in Class 17
(Asbestos Personal Injury Claims and Lead Personal Injury Claims), a
separate class of the claimants whose Claims are to be addressed by
the PI Trust.
7.8.0.1.12 Class 17 (Asbestos Personal Injury
Claims and Lead Personal Injury Claims) has voted, by at least 75
percent (75%) of those voting, in favor of the Plan.
7.8.0.1.13 Pursuant to court orders or otherwise,
the PI Trust will operate through mechanisms such as structured,
periodic, or supplemental payments, pro rata distributions,
matrices, or periodic review of estimates of the numbers and values
of present Claims and future Demands, or other comparable
mechanisms, that provide reasonable assurance that the PI Trust will
value, and be in a financial position to pay, present Claims and
future Demands that involve similar Claims in the same manner.
7.8.0.1.14 The Future Claimants' Representative
was appointed as part of the proceedings leading to issuance of the
Asbestos and Lead PI Permanent Channeling Injunction for the purpose
of protecting the rights of persons that might subsequently assert
Demands that are addressed in the Asbestos and Lead PI Permanent
Channeling Injunction and transferred to the PI Trust.
7.8.0.1.15 Identifying each PI Protected Party in
the Asbestos and Lead PI Permanent Channeling Injunction is fair and
equitable with respect to persons that might subsequently assert
Demands against each such PI Protected Party, in light of the
benefits provided, or to be provided, to the PI Trust by or on
behalf of any such PI Protected Party.
7.8.0.2 Class 17 (Asbestos Personal Injury Claims and
Lead Personal Injury Claims) votes, by at least 75 percent (75%) of those
voting, in favor of the Plan.
7.8.0.3 The Bankruptcy Court has entered an order
approving the Environmental Settlement Agreement, which shall be
reasonably acceptable to the Plan Proponents, and such order has become a
Final Order.
7.8.0.4 The Confirmation Order shall be, in form and
substance, acceptable to the Plan Proponents.
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The Plan shall not be confirmed and the Confirmation Order shall not be entered
until and unless each of the foregoing conditions to confirmation is either
satisfied or waived by the unanimous vote of the Plan Proponents.
7.9 OCCURRENCE OF THE EFFECTIVE DATE. The "effective date of the
plan," as used in section 1129 of the Bankruptcy Code, shall not occur, and the
Plan shall be of no force and effect, until the Effective Date. The occurrence
of the Effective Date is subject to satisfaction of the following conditions
precedent:
7.9.0.1 The Confirmation Order has become a Final Order, or,
if not, then at least thirty (30) days have elapsed since the Confirmation
Date.
7.9.0.2 The Bankruptcy Court and/or the District Court, as
required, shall have entered the Asbestos and Lead PI Permanent Channeling
Injunction, which shall contain terms satisfactory to the Plan Proponents.
7.9.0.3 The Confirmation Order and the Asbestos and Lead PI
Permanent Channeling Injunction shall be in full force and effect.
7.9.0.4 No proceedings to estimate any Claims are pending.
7.9.0.5 If Class 16 votes to accept the Plan, the trustees for
the Asbestos PD Trust have been selected and have executed the Asbestos PD
Trust Agreement.
7.9.0.6 All Trustees have been selected in accordance with
that certain letter, dated November 9, 1993, from Eagle-Picher to the
Injury Claimants' Committee and the Future Claimants' Representative.
7.9.0.7 All Trustees have executed the Asbestos and Lead PI
Trust Agreement.
7.9.0.8 Certain favorable rulings have been obtained from the
IRS with respect to the qualification of the PI Trust as a "qualified
settlement fund" within the meaning of Treasury Regulation section
1.468B-1.
7.9.0.9 Certain favorable rulings have been obtained from the
IRS with respect to the application of section 382 of the Internal Revenue
Code.
7.9.0.10 The Reorganized Debtors shall have entered into and
shall have credit availability under a credit facility to provide the
Reorganized Debtors with working capital (including letters of credit) in
an amount sufficient to meet the needs of the Reorganized Debtors, as
determined by the Reorganized Debtors.
7.9.0.11 The Asbestos PD Trust Share has been determined to be
no greater than Fifteen Million and 00/100 Dollars ($15,000,000.00).
Notwithstanding the foregoing, the Plan Proponents reserve, in their sole
discretion, the right, upon unanimous agreement of the Plan Proponents, to waive
the occurrence of any of the foregoing conditions precedent to the Effective
Date or to modify any of such conditions precedent; provided, however, that the
waiver or modification of condition set forth in section 7.9.0.11 hereof may
only be made upon the unanimous agreement of the Plan Proponents and the
Unsecured Creditors' Committee.
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Any such waiver of a condition precedent hereof may be effected at any time,
without notice, without leave or order of the Bankruptcy Court, and without any
formal action other than proceeding to consummate the Plan. Any actions required
to be taken on the Effective Date shall take place and shall be deemed to have
occurred simultaneously, and no such action shall be deemed to have occurred
prior to the taking of any other such action. If the Plan Proponents unanimously
decide that one of the foregoing conditions cannot be satisfied and the
occurrence of such condition is not waived by the Plan Proponents (or, in the
case of section 7.9.0.11, the Plan Proponents and the Unsecured Creditors'
Committee), then the Plan Proponents shall file a notice of the failure of the
Effective Date with the Bankruptcy Court, at which time the Plan and the
Confirmation Order shall be deemed null and void.
7.10 DISTRIBUTION OF UNCLAIMED PROPERTY. Any Distribution under the
Plan that is unclaimed after one hundred eighty (180) days following the date
such property is distributed shall be deemed not to have been made and shall be
transferred to the Reorganized Debtors, free and clear of any claims or
interests of any Entities, including, without express or implied limitation, any
claims or interests of any governmental unit under escheat principles. Nothing
contained herein shall affect the discharge of the Claim with respect to which
such Distribution was made, and the holder of such Claim shall be forever barred
from enforcing such Claim against the Reorganized Debtors or the Reorganized
Debtors' assets, estates, properties, or interests in property.
7.11 MANAGEMENT OF THE REORGANIZED DEBTORS. On the Effective Date,
the employment contracts substantially in the form of Exhibit "" to the Plan
automatically shall become effective. On the Effective Date, the Board of
Directors shall consist of the same individuals who sit on the Board of
Directors on the day immediately preceding the Effective Date. Each of the
members of such Board of Directors shall serve until the first annual meeting of
stockholders of Reorganized Eagle-Picher or his or her earlier resignation or
removal in accordance with the Amended and Restated Articles of Incorporation or
the Amended and Restated Code of Regulations. The composition of the board of
directors of each of the Reorganized Debtors, other than Reorganized
Eagle-Picher, shall remain unchanged, subject to the rights of Reorganized
Eagle-Picher and the other shareholders of any such Reorganized Debtor to elect
directors in accordance with the articles of incorporation or bylaws of such
Reorganized Debtor. The officers of the respective Debtors immediately prior to
the Effective Date shall serve as the officers of the respective Reorganized
Debtors on and after the Effective Date in accordance with any employment
agreement with the Reorganized Debtors and applicable nonbankruptcy law.
7.12 SUPPLEMENTAL SEVERANCE PROGRAM. The Supplemental Severance
Program shall be modified as provided in Exhibit "" to the Plan. The
Supplemental Severance Program, as so modified, shall remain in effect
subsequent to the Effective Date, and all benefits shall be payable thereunder
in accordance with the terms thereof, as modified.
7.13 CORPORATE ACTION. On the Effective Date, the adoption of the
Amended and Restated Articles of Incorporation, the filing by Reorganized
Eagle-Picher of the Amended and Restated Articles of Incorporation, and the
adoption of the Amended and Restated Code of Regulations, as contemplated by
section hereof, shall be authorized and approved in all respects, in each case
without further action under applicable law, regulation, order, or rule,
including, without express or implied limitation, any action by the stockholders
or directors of the Debtors, the Debtors in Possession, or the Reorganized
Debtors. On the Effective Date or as soon thereafter as is practicable,
Eagle-Picher shall file with the Secretary of State of the State of Ohio, in
accordance with Ohio Revised Code section 1701.73, the Amended and Restated
Articles of Incorporation. On the Effective Date, the cancellation of the
Existing Eagle-Picher Common Stock, the issuance of the New Eagle-Picher Common
Stock, the issuance of the New Debt Securities, the approval and effectiveness
of the
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employment agreements, severance, and other benefits described in sections 7.11,
7.12, 8.7 and hereof, and other matters provided under the Plan involving the
corporate structure of the Reorganized Debtors or corporate action by the
Reorganized Debtors shall be deemed to have occurred, be authorized, and shall
be in effect from and after the Effective Date without requiring further action
under applicable law, regulation, order, or rule, including, without express or
implied limitation, any action by the stockholders or directors of the Debtors,
the Debtors in Possession, or the Reorganized Debtors. The Reorganized Debtors
shall be authorized to enter into the reorganized credit facility referenced in
section 7.9.0.10 hereof without any further order of the Bankruptcy Court.
7.14 EFFECTUATING DOCUMENTS AND FURTHER TRANSACTIONS. Each of the
officers of the Debtors and the Reorganized Debtors is authorized, in accordance
with his or her authority under the resolutions of the Board of Directors, 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 notes or securities issued pursuant to the Plan.
7.15 DISSOLUTION OF EDI, INC. On or as of the Effective Date, EDI,
Inc. will be dissolved, and such dissolution shall be effective as of the
Effective Date pursuant to the Confirmation Order without any further action by
the stockholder or directors of EDI, Inc.
7.16 ALLOCATION OF PLAN DISTRIBUTIONS BETWEEN PRINCIPAL AND
INTEREST. To the extent that any Allowed Claim entitled to a Distribution under
the Plan is comprised of indebtedness and accrued but unpaid interest thereon,
such Distribution shall, for federal income tax purposes, be allocated to the
principal amount of the Claim first and then, to the extent the consideration
exceeds the principal amount of the Claim, to accrued but unpaid interest.
7.17 DISTRICT COURT APPROVAL OF THE CONFIRMATION ORDER. The Plan
Proponents may seek to have the Confirmation Order and the Asbestos and Lead PI
Permanent Channeling Injunction either entered or affirmed by the District
Court.
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ARTICLE 8
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
8.1 ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES. Any
executory contracts or unexpired leases listed on Exhibit "8.1" to the Plan
shall be deemed to have been assumed by the Reorganized Debtors on the Effective
Date, and the Plan shall constitute a motion to assume such executory contracts
and unexpired leases. Subject to the occurrence of the Effective Date, entry of
the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute
approval of such assumptions pursuant to section 365(a) of the Bankruptcy Code
and a finding by the Bankruptcy Court that each such assumption is in the best
interest of the Debtors, their estates, and all parties in interest in the
Chapter 11 Cases. With respect to each such executory contract or unexpired
lease assumed by the Reorganized Debtors, unless otherwise determined by the
Bankruptcy Court pursuant to a Final Order or agreed to by the parties thereto
prior to the Effective Date, the dollar amount required to cure any defaults of
the Debtors existing as of the Confirmation Date shall be conclusively presumed
to be the amount set forth in Exhibit "8.1" with respect to such executory
contract or unexpired lease. Subject to the occurrence of the Effective Date,
any such cure amount shall be treated as an Allowed Administrative Expense under
the Plan, and, upon payment of such Allowed Administrative Expense, all defaults
of the Debtors existing as of the Confirmation Date with respect to such
executory contract or unexpired lease shall be deemed cured.
8.2 REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES. Any
executory contracts or unexpired leases of any of the Debtors that (i) are not
listed on Exhibit "8.1" to the Plan, (ii) have not been assumed by any of the
Debtors with the approval of the Bankruptcy Court, and (iii) are not the subject
of pending motions to assume at the Confirmation Date shall be deemed to have
been rejected by the Debtors, the Plan shall constitute a motion to reject such
executory contracts and unexpired leases, and the Reorganized Debtors shall have
no liability thereunder except as is specifically provided in the Plan. Entry of
the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute
approval of such rejections pursuant to section 365(a) of the Bankruptcy Code
and a finding by the Bankruptcy Court that each such rejected executory contract
or unexpired lease is burdensome and that the rejection thereof is in the best
interest of the Debtors, their estates, and all parties in interest in the
Chapter 11 Cases.
8.3 CLAIMS ARISING FROM REJECTION OR TERMINATION. Claims created by
the rejection of executory contracts or unexpired leases (including, without
limitation, the rejection provided in Section of the Plan) or the expiration or
termination of any executory contract or unexpired lease prior to the
Confirmation Date must be filed with the Bankruptcy Court and served on the
Debtors no later than thirty (30) days after (i) in the case of an executory
contract or unexpired lease that was terminated or expired by its terms prior to
the Confirmation Date, the Confirmation Date, (ii) in the case of an executory
contract or unexpired lease rejected by the Debtors, the entry of the order of
the Bankruptcy Court authorizing such rejection, or (iii) in the case of an
executory contract or unexpired lease that is deemed rejected pursuant to
section 8.2 of the Plan, the Confirmation Date. Any Claims for which a proof of
claim is not filed and served within such time will be forever barred from
assertion and shall not be enforceable against the Debtors, their estates,
assets, properties, or interests in property, or the Reorganized Debtors or
their estates, assets, properties, or interests in property. Unless otherwise
ordered by the Bankruptcy Court, all such Claims that are timely filed as
provided herein shall be treated as Unsecured Claims under the Plan.
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8.4 PREVIOUSLY SCHEDULED CONTRACTS. Exhibit "8.4" to the Plan sets
forth a list of agreements that were listed on the Schedules as executory
contracts, but which the Debtors believe should not be considered executory
contracts. If any such agreements are determined to be executory contracts, the
Debtors or the Reorganized Debtors, as the case may be, reserve the right to
seek the assumption or rejection of any such contracts, and the time within
which the Debtors or the Reorganized Debtors, as the case may be, may seek to
assume or reject any such agreements shall be tolled until ten (10) Business
Days after the date on which an order determining that any such agreement is an
executory contract becomes a Final Order. Set forth on Exhibit "8.4" is the
amount that the Debtors intend to treat as an Allowed Unsecured Claim for each
such agreement. Such amount and the treatment of each such agreement shall be
binding unless, on or before ten (10) days after the Confirmation Date, the
other party to any such agreement either (i) files a proof of claim (which proof
of claim shall be deemed timely filed) or (ii) files a motion seeking to compel
assumption or rejection of such agreement.
8.5 INSURANCE POLICIES.
8.5.1 Assumed Insurance Policies. To the extent that any or
all of the insurance policies set forth on Exhibit "8.5.1" to the Plan are
considered to be executory contracts, then, notwithstanding anything contained
in sections 8.1 and 8.2 of the Plan to the contrary, the Plan shall constitute a
motion to assume the insurance policies set forth on Exhibit "8.5.1" to the
Plan, and, subject to the occurrence of the Effective Date, the entry of the
Confirmation Order by the Clerk of the Bankruptcy Court shall constitute
approval of such assumption pursuant to section 365(a) of the Bankruptcy Code
and a finding by the Bankruptcy Court that each such assumption is in the best
interest of the Debtors, their estates, and all parties in interest in the
Chapter 11 Cases. Unless otherwise determined by the Bankruptcy Court pursuant
to a Final Order or agreed to by the parties thereto prior to the Effective
Date, no payments are required to cure any defaults of the Debtors existing as
of the Confirmation Date with respect to each such insurance policy set forth on
Exhibit "8.5.1" to the Plan. To the extent that the Bankruptcy Court determines
otherwise as to any such insurance policy, the Debtors reserve the right to seek
rejection of such insurance policy or other available relief.
8.5.2 Rejected Insurance Agreements. To the extent that any or
all of the insurance agreements set forth on Exhibit "8.5.2" to the Plan are
considered to be executory contracts, then, notwithstanding anything contained
in sections 8.1 and 8.2 of the Plan to the contrary, the Plan shall constitute a
motion to reject the insurance agreements set forth on Exhibit "8.5.2" to the
Plan, and the entry of the Confirmation Order by the Clerk of the Bankruptcy
Court shall constitute approval of such rejection pursuant to section 365(a) of
the Bankruptcy Code and a finding by the Bankruptcy Court that each such
rejected insurance agreement set forth on Exhibit "8.5.2" to the Plan is
burdensome and that the rejection thereof is in the best interest of the
Debtors, their estates, and all parties in interest in the Chapter 11 Cases.
8.5.3 Reservation of Rights. Nothing contained in the Plan,
including this section , shall constitute a waiver of any claim, right, or cause
of action that the Debtors or the Reorganized Debtors, as the case may be, may
hold against the insurer under any policy of insurance.
8.6 INDEMNIFICATION AND REIMBURSEMENT OBLIGATIONS. For purposes of
the Plan, the obligations of the Debtors to indemnify and reimburse their
directors or officers that were directors or officers, respectively, as at the
Petition Date or who became directors or officers after the Petition Date
against and for any obligations pursuant to articles of incorporation, codes of
regulations, bylaws, applicable state law, or specific agreement, or any
combination of the foregoing shall survive
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confirmation of the Plan, remain unaffected thereby, and not be discharged in
accordance with section 1141 of the Bankruptcy Code, irrespective of whether
indemnification or reimbursement is owed in connection with an event occurring
before, on, or after the Petition Date.
8.7 COMPENSATION AND BENEFIT PROGRAMS. All employment and severance
policies (including, without limitation, the Supplemental Severance Program, as
modified pursuant to section hereof), and all compensation and benefit plans,
policies and programs of the Debtors applicable to their present and former
employees, officers, and directors, including, without express or implied
limitation, all savings plans, retirement plans, health care plans, disability
plans, severance benefit plans, incentive plans, and life, accidental death, and
dismemberment insurance plans, shall be deemed to be, and shall be treated as
though they are, executory contracts that are deemed assumed under the Plan, and
the Debtors' obligations under such plans, policies, and programs shall be
deemed assumed pursuant to section 365(a) of the Bankruptcy Code, survive
confirmation of the Plan, remain unaffected thereby, and not be discharged in
accordance with section 1141 of the Bankruptcy Code. Any defaults existing under
any of such plans, policies, and programs shall be cured promptly after they
become known by the Debtors. Notwithstanding the foregoing, on the Effective
Date, the Eagle-Picher Automatic Dividend Reinvestment and Voluntary Cash
Payment Plan, the Eagle-Picher Industries, Inc. Stock Option Plan of 1983, as
amended, and the Eagle-Picher Industries, Inc. Stock Option Plan of 1990 will be
deemed terminated, cancelled, and of no further force and effect, and the
participants thereunder shall have no further rights thereunder.
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ARTICLE 9
RETENTION OF JURISDICTION
Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, the
Bankruptcy Court shall retain and shall have exclusive jurisdiction over any
matter (a) arising under the Bankruptcy Code, (b) arising in or related to the
Chapter 11 Cases or the Plan, or (c) that relates to the following:
9.1 To interpret, enforce, and administer the terms of the Asbestos
and Lead PI Trust Agreement (including all annexes and exhibits thereto), the
Asbestos PD Trust Agreement (including all annexes and exhibits thereto), and
the restrictions on transfer of New Eagle-Picher Common Stock, Asbestos Personal
Injury Claims, Asbestos Property Damage Claims, and Lead Personal Injury Claims
contained in the Amended and Restated Articles of Incorporation and the
Confirmation Order.
9.2 To hear and determine any and all motions or applications
pending on the Confirmation Date for the assumption and/or assignment or
rejection of executory contracts or unexpired leases to which any of the Debtors
is a party or with respect to which any of the Debtors may be liable, and to
hear and determine any and all Claims resulting therefrom or from the expiration
or termination of any executory contract or unexpired lease prior to the
Confirmation Date;
9.3 To determine any and all adversary proceedings, applications,
motions, and contested or litigated matters that may be pending on the Effective
Date or that, pursuant to the Plan, may be instituted by any of the Reorganized
Debtors after the Effective Date, including, without express or implied
limitation, any claims to avoid any preferences, fraudulent transfers, or other
voidable transfers, or otherwise to recover assets for the benefit of the
Debtors' estates;
9.4 To hear and determine any objections to the allowance of Claims
arising prior to the Effective Date, whether filed, asserted, or made before or
after the Effective Date, including, without express or implied limitation, to
hear and determine any objections to the classification of any Claim and to
allow or disallow any Disputed Claim in whole or in part;
9.5 To issue such orders in aid of execution of the Plan to the
extent authorized or contemplated by section 1142 of the Bankruptcy Code;
9.6 To consider any modifications of the Plan, remedy any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including, without express or implied limitation, the Confirmation Order;
9.7 To hear and determine all applications for allowances of
compensation and reimbursement of expenses of professionals under sections 330
and 331 of the Bankruptcy Code and any other fees and expenses authorized to be
paid or reimbursed under the Plan;
9.8 To hear and determine all controversies, suits, and disputes
that may relate to, impact upon, or arise in connection with the Plan (and all
Exhibits to the Plan) or its interpretation, implementation, enforcement, or
consummation;
9.9 To the extent that Bankruptcy Court approval is required, to
consider and act on the compromise and settlement of any Claim or cause of
action by or against the Debtors' estates;
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9.10 To determine such other matters that may be set forth in the
Plan, the Confirmation Order, the Claims Trading Injunction, or the Asbestos and
Lead PI Permanent Channeling Injunction, or that may arise in connection with
the Plan, the Confirmation Order, the Claims Trading Injunction, or the Asbestos
and Lead PI Permanent Channeling Injunction;
9.11 To hear and determine any proceeding that involves the
validity, application, construction, enforceability, or modification of the
Claims Trading Injunction or the Asbestos and Lead PI Permanent Channeling
Injunction or of the application of section 524(g) of the Bankruptcy Code to the
Asbestos and Lead PI Permanent Channeling Injunction.
9.12 To hear and determine matters concerning state, local, and
federal taxes, fines, penalties, or additions to taxes for which the Debtors or
Debtors in Possession may be liable, directly or indirectly, in accordance with
sections 346, 505, and 1146 of the Bankruptcy Code; and
9.13 To enter an order or final decree closing the Chapter 11 Cases.
To the extent that the Bankruptcy Court is not permitted under applicable law to
preside over any of the foregoing matters, the reference to the "Bankruptcy
Court" in this Article 9 shall be deemed to be replaced by the "District Court."
Notwithstanding anything in this Article 9 to the contrary, the allowance of
Asbestos Personal Injury Claims and Lead Personal Injury Claims (other than any
such Claims as to which the Reorganized Debtors prosecute objections pursuant to
section hereof) and the forum in which such allowance will be determined will be
governed by and in accordance with the procedures established by the Asbestos
and Lead PI Trust Agreement and the Trustees, and the allowance of Asbestos
Property Damage Claims (other than any such Claims as to which the Reorganized
Debtors prosecute objections pursuant to section 5.1 hereof) and the forum in
which such allowance will be determined will be governed by and in accordance
with the procedures established by the Asbestos PD Trust Agreement and the
trustees for the Asbestos PD Trust.
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ARTICLE 10
TRANSFERS OF PROPERTY TO AND ASSUMPTION OF
CERTAIN LIABILITIES BY THE PI TRUST
10.1 TRANSFER OF CERTAIN PROPERTY TO THE PI TRUST.
10.1.1 Transfer of Books and Records. On the Effective Date or
as soon thereafter as is practicable, the Reorganized Debtors shall transfer and
assign, or cause to be transferred and assigned, to the PI Trust the books and
records of the Debtors that pertain directly to Asbestos Personal Injury Claims
or Lead Personal Injury Claims that have been asserted against the Debtors
(except, in the case of Lead Personal Injury Claims, to the extent that any such
Lead Personal Injury Claims are the subject of an objection brought by any of
the Debtors and which the Reorganized Debtors prosecute in accordance with
section 5.1 hereof, in which case the books and records pertaining to such Lead
Personal Injury Claims will be transferred to the PI Trust as soon as
practicable after such objection has been resolved by a Final Order). The Plan
Proponents will request that the Bankruptcy Court, in the Confirmation Order,
rule that such transfer does not result in the destruction or waiver of any
applicable privileges pertaining to such books and records. If the Bankruptcy
Court does not so rule, at the option of the Plan Proponents, the Reorganized
Debtors will retain the books and records and enter into arrangements to permit
the PI Trust to have access to such books and records.
10.1.2 Transfer of Certain Insurance Rights. Certain rights to
insurance, to be agreed upon by the Plan Proponents (each in its sole
discretion), also will be transferred to the PI Trust on the Effective Date.
10.1.3 Transfer of Plan Consideration. On the Initial
Distribution Date, the Reorganized Debtors shall transfer and assign, or cause
to be transferred and assigned, to the PI Trust all right, title, and interest
in and to the Pro Rata Share with respect to the PI Trust Share of the
Distribution Value. Such Pro Rata Share shall be payable to the PI Trust in the
following consideration: (i) first, the Tax Refund Notes; (ii) second, ten
million (10,000,000) shares of New Eagle-Picher Common Stock, (iii) third, to
the extent that the value of consideration paid under (i) and (ii) of this
section 10.1.3 is less than such Pro Rata Share, the amount of Available Cash
remaining after making all Distributions required to be made to the holders of
Claims in Classes 19, 20, and 21 of the Plan on the Initial Distribution Date
less the amount of Available Cash that may be required to be paid to the holders
of Claims in Classes 19, 20, and 21 of the Plan if all Disputed Claims become
Allowed in the full Disputed Amount; (iv) fourth, if the value of consideration
paid under (i), (ii), and (iii) of this section 10.1.3 is less than such Pro
Rata Share, Senior Unsecured Sinking Fund Debentures in an aggregate principal
amount equal to the lesser of (a) the remaining amount of such Pro Rata Share
after payment of the consideration under (i), (ii), and (iii) of this section
10.1.3 and (b) the aggregate principal amount of Senior Unsecured Sinking Fund
Debentures remaining after making any Distribution required to be made to the
Asbestos PD Trust on the Initial Distribution Date less the aggregate amount of
Senior Unsecured Sinking Fund Debentures that may be required to be distributed
to the Asbestos PD Trust if all Disputed Claims are disallowed; and (v) fifth,
to the extent that the value of consideration paid under (i), (ii), (iii), and
(iv) of this section 10.1.3 is less than such Pro Rata Share, Divestiture Notes
in an aggregate principal amount equal to the lesser of (x) the remaining amount
of such Pro Rata Share after payment of the consideration under (i), (ii),
(iii), and (iv) of this section 10.1.3 and (y) the aggregate principal amount of
Divestiture Notes remaining after making all Distributions required to be made
to the holders of Claims in Classes 19, 20, and 21 of the Plan on the Initial
Distribution Date less the aggregate amount of Divesture Notes that may be
required to be paid
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to the holders of Claims in Classes 19, 20, and 21 of the Plan if all Disputed
Claims become Allowed in the full Disputed Amount. On the Final Distribution
Date, the Reorganized Debtors shall transfer and assign, or cause to be
transferred and assigned, to the PI Trust all right, title, and interest in and
to the Available Cash, Senior Unsecured Sinking Fund Debentures, Divestiture
Notes, and shares of New Eagle-Picher Common Stock remaining after making all
other Distributions required to be made under the Plan on the Final Distribution
Date.
10.2 ASSUMPTION OF CERTAIN LIABILITIES BY THE PI TRUST. In
consideration for the property transferred to the PI Trust pursuant to section
10.1 hereof and in furtherance of the purposes of the PI Trust and the Plan,
the PI Trust shall assume all liability and responsibility for all Asbestos
Personal Injury Claims and Lead Personal Injury Claims, and the Reorganized
Debtors shall have no further financial or other responsibility or liability
therefor.
10.3 CERTAIN PROPERTY HELD IN TRUST BY THE REORGANIZED DEBTORS. If
and to the extent that any property of the Reorganized Debtors specified in
section 10.1 hereof, under applicable law or any binding contractual provision,
cannot be effectively transferred and assigned to the PI Trust pursuant to
section 10.1 hereof, or if for any reason after the Effective Date the
Reorganized Debtors shall retain or receive any property that is owned by the
Reorganized Debtors or the Debtors (as the case may be) and is to be transferred
to the PI Trust pursuant to section 10.1 hereof, then the Reorganized Debtors
shall hold such property (and any proceeds thereof) in trust for the benefit of
the PI Trust and shall take such actions with respect to such property (and any
proceeds thereof) as the Trustees shall direct in writing. The Reorganized
Debtors shall provide to the Trustees reasonable access to the relevant books
and records of the Debtors and the Reorganized Debtors during normal business
hours for the purpose of assisting the Trustees in defending against the
Asbestos Personal Injury Claims and Lead Personal Injury Claims and otherwise
administering the PI Trust.
10.4 AUTHORITY OF THE DEBTORS. On the Confirmation Date, the Debtors
shall be empowered and authorized to take or cause to be taken, prior to the
Effective Date, all actions necessary to enable them to implement effectively
the provisions of the Plan and the PI Trust Agreement.
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ARTICLE 11
TRANSFERS OF PROPERTY TO AND ASSUMPTION OF
CERTAIN LIABILITIES BY THE ASBESTOS PD TRUST
11.1 TRANSFER OF CERTAIN PROPERTY TO THE ASBESTOS PD TRUST. On the
Effective Date or as soon thereafter as is practicable, the Reorganized Debtors
shall transfer and assign, or cause to be transferred and assigned, to the
Asbestos PD Trust the books and records of the Debtors that pertain directly to
Asbestos Property Damage Claims that have been asserted against the Debtors
(except to the extent that any Asbestos Property Damage Claims are the subject
of an objection brought by any of the Debtors and which the Reorganized Debtors
prosecute in accordance with section 5.1 hereof, in which case the books and
records pertaining to such Asbestos Property Damage Claims will be transferred
to the Asbestos PD Trust as soon as practicable after such objection has been
resolved by a Final Order). The Plan Proponents will request that the Bankruptcy
Court, in the Confirmation Order, rule that such transfer does not result in the
destruction or waiver of any applicable privileges pertaining to such books and
records. If the Bankruptcy Court does not so rule, at the option of the Plan
Proponents, the Reorganized Debtors will retain the books and records and enter
into arrangements to permit the Asbestos PD Trust to have access to such books
and records. If Class 16 votes to accept the Plan, then, on the Effective Date,
the Reorganized Debtors shall transfer and assign, or cause to be transferred
and assigned, to the Asbestos PD Trust the Asbestos PD Trust Funding Obligation.
If Class 16 votes to reject the Plan, then, on the Initial Distribution Date and
the Final Distribution Date, the Reorganized Debtors shall transfer and assign,
or cause to be transferred and assigned, to the Asbestos PD Trust all right,
title, and interest in and to the Pro Rata Share of the Asbestos PD Trust of the
Distribution Value by the transfer to the Asbestos PD Trust of Senior Unsecured
Sinking Fund Debentures in the aggregate principal amount equal to such Pro Rata
Share of the Distribution Value less the aggregate principal amount of Senior
Unsecured Sinking Fund Debentures previously transferred to the Asbestos PD
Trust in any Distribution made prior thereto.
11.2 ASSUMPTION OF CERTAIN LIABILITIES BY THE ASBESTOS PD TRUST. In
consideration for the property transferred to the Asbestos PD Trust pursuant to
section 11.1 hereof and in furtherance of the purposes of the Asbestos PD Trust
and the Plan, the Asbestos PD Trust shall assume all liability and
responsibility for all Asbestos Property Damage Claims, and the Reorganized
Debtors shall have no further financial or other responsibility or liability
therefor.
11.3 CERTAIN PROPERTY HELD IN TRUST BY THE REORGANIZED DEBTORS. If
and to the extent that any property of the Reorganized Debtors specified in
section 11.1 hereof, under applicable law or any binding contractual provision,
cannot be effectively transferred and assigned to the Asbestos PD Trust pursuant
to section hereof, or if for any reason after the Effective Date the Reorganized
Debtors shall retain or receive any property that is owned by the Reorganized
Debtors or the Debtors (as the case may be) and is to be transferred to the
Asbestos PD Trust pursuant to section 11.1 hereof, then the Reorganized Debtors
shall hold such property (and any proceeds thereof) in trust for the benefit of
the Asbestos PD Trust and shall take such actions with respect to such property
(and any proceeds thereof) as the trustees of the Asbestos PD Trust shall direct
in writing. The Reorganized Debtors shall provide to the trustees of the
Asbestos PD Trust reasonable access to the relevant books and records of the
Debtors and the Reorganized Debtors during normal business hours for the purpose
of assisting the trustees of the Asbestos PD Trust in defending against the
Asbestos Property Damage Claims and otherwise administering the Asbestos PD
Trust.
11.4 AUTHORITY OF THE DEBTORS. On the Confirmation Date, the Debtors
shall be empowered and authorized to take or cause to be taken, prior to the
Effective Date, all actions
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necessary to enable them to implement effectively the provisions of the Plan and
the Asbestos PD Trust Agreement.
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ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 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 hearing on confirmation of the Plan, shall be paid by the Debtors
on or before the Effective Date.
12.2 DISCHARGE OF THE DEBTORS. The rights afforded in the Plan and
the treatment of all Claims and Equity Interests herein shall be in exchange for
and in complete satisfaction, discharge, and release of all Claims and Equity
Interests of any nature whatsoever, including any interest accrued thereon from
and after the Petition Date, against the Debtors and the Debtors in Possession,
or any of their estates, assets, properties, or interests in property. Except as
otherwise provided herein, on the Effective Date, all Claims against and Equity
Interests in the Debtors and the Debtors in Possession shall be satisfied,
discharged, and released in full. The Reorganized Debtors shall not be
responsible for any obligations of the Debtors or the Debtors in Possession
except those expressly assumed by the Reorganized Debtors in the Plan. All
Entities shall be precluded and forever barred from asserting against the
Debtors, the Reorganized Debtors, their respective successors or assigns, or
their assets, properties, or interests in property any other or further Claims
based upon any act or omission, transaction, or other activity of any kind or
nature that occurred prior to the Effective Date, whether or not the facts of or
legal bases therefor were known or existed prior to the Effective Date.
12.3 RIGHTS OF ACTION. Any rights, claims, or causes of action
accruing to the Debtors or Debtors in Possession pursuant to the Bankruptcy Code
or pursuant to any statute or legal theory, including, without express or
implied limitation, any avoidance or recovery actions under sections 544, 545,
547, 548, 549, 550, 551, and 553 of the Bankruptcy Code and any rights to,
claims, or causes of action for recovery under any policies of insurance issued
to or on behalf of any of the Debtors or Debtors in Possession shall remain
assets of the Debtors' estates and, on the Effective Date, shall be transferred
to the Reorganized Debtors. The Reorganized Debtors shall be deemed the
appointed representative to, and may, pursue, litigate, and compromise and
settle any such rights, claims, or causes of action, as appropriate, in
accordance with what is in the best interests of and for the benefit of the
Reorganized Debtors.
12.4 THIRD PARTY AGREEMENTS. The Distributions to the various
classes of Claims hereunder shall not affect the right of any Entity to levy,
garnish, attach, or employ any other legal process with respect to such
Distributions by reason of any claimed subordination rights or otherwise. All of
such rights and any agreements relating thereto shall remain in full force and
effect.
12.5 DISSOLUTION OF COMMITTEES. On the Effective Date, the Future
Claimants' Representative, the Injury Claimants' Committee, the Unsecured
Creditors' Committee, and the Equity Security Holders' Committee shall thereupon
be released and discharged of and from all further authority, duties,
responsibilities, and obligations relating to and arising from and in connection
with the Chapter 11 Cases, and all such committees shall be deemed dissolved and
the Future Claimants' Representative's appointment terminated; provided,
however, that, in the event that the Effective Date occurs prior to the
Confirmation Order becoming a Final Order, the Unsecured Creditors' Committee,
Future Claimants' Representative, and the Injury Claimants' Committee may, at
their option, continue to serve and function for the sole purpose of
participating in any appeal of the Confirmation Order until such time as the
Confirmation Order becomes a Final Order.
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12.6 EXCULPATION. None of the Reorganized Debtors, any of the Plan
Proponents, or any of their officers, directors, employees, or agents shall have
or incur any liability to any Entity for any act or omission in connection with
or arising out of 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 gross negligence or willful misconduct, and in all
respects shall be entitled to rely upon the advice of counsel with respect to
their duties and responsibilities under the Plan.
12.7 TITLE TO ASSETS; DISCHARGE OF LIABILITIES. Except as otherwise
provided in the Plan, on the Effective Date, title to all assets and properties
and interests in property dealt with by the Plan shall vest in the Reorganized
Debtors free and clear of all Claims, Equity Interests, Encumbrances, and other
interests, and the Confirmation Order shall be a judicial determination of
discharge of the liabilities of the Debtors, except as provided in the Plan.
12.8 SURRENDER AND CANCELLATION OF INSTRUMENTS. In addition to the
provisions of section hereof, each holder of a promissory note or other
instrument evidencing a Claim shall surrender such promissory note or instrument
to the Reorganized Debtors, and the Reorganized Debtors shall distribute or
cause to be distributed to the holder thereof the appropriate Distribution
hereunder. At the option of the Reorganized Debtors (in their sole and absolute
discretion), no Distribution hereunder shall be made to or on behalf of any
holder of such Claim unless and until such promissory note or instrument is
received or the unavailability of such note or instrument is reasonably
established to the satisfaction of the Reorganized Debtors. In accordance with
section 1143 of the Bankruptcy Code, any such holder of such a Claim that fails
to surrender or cause to be surrendered such promissory note or instrument or to
execute and deliver an affidavit of loss and indemnity reasonably satisfactory
to the Reorganized Debtors and, in the event that the Reorganized Debtors
request, furnish a bond in form and substance (including, without limitation,
amount) reasonably satisfactory to the Reorganized Debtors within the Retention
Period shall be deemed to have forfeited all rights, claims, and interests and
shall not participate in any Distribution hereunder.
12.9 NOTICES. Any notices, requests, and demands required or
permitted to be provided under the Plan, in order to be effective, shall be in
writing (including, without express or implied limitation, by facsimile
transmission), 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 Debtors: Eagle-Picher Industries, Inc.
Attention: General Counsel
IF BY HAND OR OVERNIGHT DELIVERY:
580 Building
580 Walnut Street
Suite 1300
Cincinnati, Ohio 45202
A-52
<PAGE> 202
IF BY MAIL:
Post Office Box 779
Cincinnati, Ohio 45201
Telecopier: (513) 721-3404
Telephone Confirmation: (513) 629-2400
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen Karotkin, Esq.
Telecopier: (212) 310-8007
Telephone Confirmation: (212) 310-8888
and
Frost & Jacobs
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
Attention: Edmund J. Adams, Esq.
Telecopier: (513) 651-6981
Telephone Confirmation: (513) 651-6800
If to the Injury
Claimants'
Committee: Robert E. Sweeney, Esq.
Robert E. Sweeney Co., L.P.A.
Suite 1500, Illuminating Building
55 Public Square
Cleveland, Ohio 44113
Telecopier: (216) 696-0732
Telephone Confirmation: (216) 696-0606
and
Keating, Muething & Klekamp
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
Attention: Kevin E. Irwin, Esq.
Telecopier: (513) 579-6457
Telephone Confirmation: (513) 579-6400
A-53
<PAGE> 203
If to the Future
Representative: James J. G. McMonagle, Esq.
24 Walnut
Chagrin Falls, Ohio 44022
Telecopier: (216) 696-1210
Telephone Confirmation: (216) 696-1422
and
McCarthy, Lebit, Crystal & Haiman Co., LPA
1800 Midland Building
101 Prospect Avenue, West
Cleveland, Ohio 44115
Attention: Robert S. Balantzow, Esq.
Telecopier: (216) 696-1210
Telephone Confirmation: (216) 696-1422
12.10 HEADINGS. The headings used in the Plan are inserted for
convenience only and neither constitute a portion of the Plan nor in any manner
affect the construction of the provisions of the Plan.
12.11 SEVERABILITY. At the unanimous option of the Plan Proponents
acting in their sole discretion, any provision of the Plan, the Claims Trading
Injunction, the Confirmation Order, the Asbestos and Lead PI Permanent
Channeling Injunction, or any of the Exhibits to the Plan that is prohibited,
unenforceable, or invalid shall, as to any jurisdiction in which such provision
is prohibited, unenforceable, or invalidated, be ineffective to the extent of
such prohibition, unenforceability, or invalidation without invalidating the
remaining provisions of the Plan, the Claims Trading Injunction, the
Confirmation Order, the Asbestos and Lead PI Permanent Channeling Injunction,
and the Exhibits to the Plan or affecting the validity or enforceability of such
provisions in any other jurisdiction.
12.12 GOVERNING LAW. Unless a rule of law or procedure is supplied
by federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws of
the State of Ohio, without giving effect to the conflicts of laws principles
thereof, shall govern the construction of the Plan and any agreements,
documents, and instruments executed in connection with the Plan, except as
otherwise expressly provided in such instruments, agreements or documents.
12.13 FILING OF ADDITIONAL DOCUMENTS. On or before the Effective
Date, the Debtors 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.
12.14 COMPLIANCE WITH TAX REQUIREMENTS. In connection with the Plan,
the Debtors will comply with all withholding and reporting requirements imposed
by federal, state and local taxing authorities, and all distributions hereunder
shall be subject to such withholding and reporting requirements.
A-54
<PAGE> 204
12.15 EXEMPTION FROM TRANSFER TAXES. Pursuant to section 1146(c) of
the Bankruptcy Code, the issuance, transfer, or exchange of notes 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 express or
implied limitation, the liens and security interests provided under the
reorganized credit facility referenced in section 7.9.0.10 hereof, shall not
be subject to any stamp, real estate transfer, mortgage recording, or other
similar tax.
Dated: Cincinnati, Ohio
August 28, 1996
Respectfully submitted,
EAGLE-PICHER INDUSTRIES, INC.
By: /s/ THOMAS E. PETRY
-----------------------------------------
Name: Thomas E. Petry
Title: Chairman of the Board and Chief
Executive Officer
DAISY PARTS, INC.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Secretary
TRANSICOIL INC.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Assistant Secretary
MICHIGAN AUTOMOTIVE RESEARCH
CORPORATION
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Assistant Secretary
A-55
<PAGE> 205
EDI, INC.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Assistant Secretary
EAGLE-PICHER MINERALS, INC.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Secretary
HILLSDALE TOOL & MANUFACTURING CO.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Secretary
WEIL, GOTSHAL & MANGES LLP
Co-Attorneys for Eagle-Picher
Industries, Inc., et al.
Chapter 11 Debtors in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
and
FROST & JACOBS
Co-Attorneys for Eagle-Picher
Industries, Inc., et al.
Chapter 11 Debtors in Possession
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
(513) 651-6800
A-56
<PAGE> 206
JAMES J.G. McMONAGLE,
THE FUTURE CLAIMANTS'
REPRESENTATIVE
/s/ JAMES J.G. McMONAGLE
--------------------------------------------
McCarthy, Lebit, Crystal &
Haiman Co., LPA
Attorneys for the Future
Claimants' Representative
1800 Midland Building
101 Prospect Avenue, West
Cleveland, Ohio 44115
(216) 696-1422
THE INJURY CLAIMANTS' COMMITTEE
By: /s/ ROBERT E. SWEENEY
-----------------------------------------
Name: Robert E. Sweeney
Title: Chairperson
Keating, Muething & Klekamp
Attorneys for the Injury
Claimants' Committee
1800 Provident Tower
One East Fourth Street
P.O. Box 1800
Cincinnati, Ohio 45202
(513) 579-6400
<PAGE> 207
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
Exhibit "1.1.6.5"
FORM OF ASBESTOS PROPERTY
DAMAGE CLAIMS RESOLUTION PROCEDURES
<PAGE> 208
ASBESTOS PROPERTY DAMAGE CLAIMS RESOLUTION PROCEDURES
1. DEFINITIONS AND INTERPRETATION
1.1. The following terms and phrases shall have the following meanings:
"ACBM" shall mean asbestos-containing building
materials that the Claimant alleges
constitute One-Cote or Super "66."
"Accredited Inspector" shall mean a person accredited for the
purposes of inspecting for ACBM pursuant to
section 206 of title II of the Toxic
Substances Control Act, 15 U.S.C. Section
2646.
"Accredited Inspector shall mean a signed, written report of an
Report" Accredited Inspector, which states (i) the
name, address, state of accreditation,
accreditation number, and the date of the
inspection; (ii) separately, for each
Homogeneous Area of ACBM for which a Claim
is made, (a) its location, (b) the
application of the ACBM, (c) the total
quantity of ACBM (stating in the case of
pipe fittings, the number and diameter, in
the case of pipe covering, the length and
diameter, and in the case of other
applications, the area), (d) whether the
ACBM is in need of repair, and (e) whether
the ACBM is in a position where it is likely
to be disturbed; (iii) the total number of
decontamination areas that it would be
necessary to construct; (iv) for each
decontamination area, (a) the total floor
area (in square feet) and (b) the total
circumference (in linear feet); and (v) if
an Approved Laboratory Report is submitted
with a Claim Information Form, certification
by the Accredited Inspector that the
Accredited Inspector has taken two bulk
samples from each Homogeneous Area listed in
(ii) in accordance with the procedures
described in the Protocols and an inventory
of the locations of the Homogeneous Areas
where samples are collected, the exact
location from which each sample is
collected, and the date of such collection.
"Adjusted Nominal shall mean the nominal value of a Claim
Value" assessed by reference to the Compensation
Model and adjusted by reference to the
Evaluation Criteria in accordance with
sections 4.3 and 4.4.
"Applicable Jurisdiction" shall mean the jurisdiction of the state in
which the buildings that are the subject of
the Claim are situated.
"Approved Laboratory" shall mean a laboratory conducting
constituent analysis listed in Exhibit "1"
or any laboratory that is a successful
participant in the National Institute of
Standards and Technology National Voluntary
Laboratory Accreditation Program for both
Asbestos Bulk Sample Analysis by Method in
40 C.F.R. 763, Appendix A, Subpart F, and
Airborne Fiber Analysis by Transmission
Electron Microscopy by the method in 40
C.F.R. 763, Appendix A, Subpart E.
A.1.1.6.5-1
<PAGE> 209
"Approved Laboratory Report" shall mean a signed, written report by an
Approved Laboratory, pursuant to which the
Approved Laboratory (i) certifies (a) that
it has received the bulk samples referenced
in the related Accredited Inspector Report
and (b) that it has analyzed such bulk
samples in accordance with some or all of
the procedures described in the Protocols,
and (ii) makes one or more of the
certification(s) set forth in section 4.4.2
hereof. The Approved Laboratory Report
shall contain such other details of the
results and the procedures used to
adequately explain the analyses of the bulk
samples referenced therein.
"Arbitration" shall mean the binding dispute resolution
procedure set forth in section 7.
"Asbestos Abatement Program" shall mean a program for the removal and
disposal of ACBM carried out pursuant to
applicable federal and state regulations
and otherwise than in connection with the
renovation or demolition of a building.
"Asbestos PD Trust" shall mean the trust established in
accordance with the Eagle-Picher
Industries, Inc. Asbestos Property Damage
Settlement Trust Agreement, substantially
in the form of Exhibit "1.1.16" to the
Plan.
"Bankruptcy Court" shall mean the United States Bankruptcy
Court for the Southern District of Ohio,
Western Division.
"Claim" shall mean any "Asbestos Property Damage
Claim," as such term is defined in a
confirmed plan of reorganization in the
Chapter 11 Cases.
"Claim Information Form" shall mean the Claim Information Form in
the form annexed hereto as Exhibit "2."
"Claimant" shall mean an entity asserting a Claim.
"Claims Information Deadline" shall mean the date that is one hundred
eighty (180) days after the Effective Date.
"Chapter 11 Cases" shall mean the cases of Eagle-Picher and
its affiliates under chapter 11 of title 11
of the United States Code, pending in the
Bankruptcy Court under the consolidated
case number 1-91-00100.
"Compensation Model" shall mean the table of compensation values
set forth in Exhibit "3."
"Eagle-Picher" shall mean Eagle-Picher Industries, Inc.
"Effective Date" shall have the same meaning as provided in
the Plan.
"Evaluation Criteria" shall mean those criteria for evaluating
the Adjusted Nominal Value of a Claim set
forth in section 4.4.2.
"Homogeneous Area" shall mean an area of ACBM that is uniform
in color and texture.
"Nominal Value" shall mean the nominal value of a Claim
assessed in accordance with section 4.3.
"Notice of Arbitration" shall mean a notice of arbitration served
by a Claimant on the Asbestos PD Trust
pursuant to section 7.1.
A.1.1.6.5-2
<PAGE> 210
"Notice of Decision" shall mean a notice of decision served by
the Asbestos PD Trust on a Claimant
pursuant to section 5 in the form annexed
hereto as Exhibit "4."
"Notice of Reconsideration" shall mean a notice of
reconsideration served by a Claimant on the
Asbestos PD Trust pursuant to section 6.1
in the form annexed hereto as Exhibit "5."
"One-Cote" shall mean the product sold under the trade
name "One-Cote Insulating and Finishing
Cement."
"Plan" shall mean the Second Amended Consolidated
Plan of Reorganization of the debtors in
the Chapter 11 Cases, or such other plan
that may be confirmed with respect to
Eagle-Picher in the Chapter 11 Cases.
"Protocols" shall mean the product identification
protocols for One-Cote and Super "66" set
forth in Exhibits "6" and "7,"
respectively.
"Qualification Criteria" shall mean the criteria set forth in
section 4.2, which must be satisfied before
a claim may be allowed.
"Super '66'" shall mean the product sold under the trade
name "Super '66' Insulating Cement."
"Trustee" shall mean, collectively, the trustee(s)
of the Asbestos PD Trust.
1.2. The headings and title of this document are for convenience only and
are not to be construed as part of the operative provisions of this
document or as defining or limiting in any way the scope or intent of
the provisions of this document.
1.3. References in this document to any section shall include all sections
in such section.
1.4. All references in this document to the singular shall include the
plural, where applicable.
1.5. Exhibits referred to in this document are hereby incorporated into and
made a part of this document.
1.6. The terms and provisions of this document shall be interpreted in
accordance with and governed by applicable federal law and the laws of
the State of Ohio without giving effect to the doctrine of conflict of
laws.
2. ORGANIZATION
2.1. These procedures shall be the exclusive method for the evaluation and
settlement of Claims.
2.2. The Asbestos PD Trust may at any time following the Claims Information
Deadline, and at the sole discretion of the Trustee, by written notice
to each Claimant that has filed a Claim Information Form, extend any of
the dates established in these procedures within which a Claimant may
or shall take an action. The Asbestos PD Trust may only shorten any of
the dates within which a Claimant may or shall take an action or extend
the time within which the Asbestos PD Trust may or shall take an action
by consent of the Claimant(s) affected or by order of the Bankruptcy
Court.
3. CLAIM INFORMATION FORM
A.1.1.6.5-3
<PAGE> 211
3.1. On or before the date that is ninety (90) days after the Effective
Date, the Asbestos PD Trust shall mail to each holder of a Claim that
has filed a proof of claim in the Chapter 11 Cases and that has not
previously been disallowed or withdrawn, a copy of these Asbestos
Property Damage Claims Resolution Procedures and a Claim Information
Form. The Asbestos PD Trust shall provide one copy of these Asbestos
Property Damage Claims Resolution Procedures and a Claim Information
Form to the representative of each class that has filed a class proof
of claim in the Chapter 11 Cases so long as such class proof of claim
has not been disallowed as of the Effective Date, which representative
shall be responsible for distributing these Asbestos Property Damage
Claims Resolution Procedures and the Claim Information Form to each of
the members of such class; provided, however, that the Asbestos PD
Trust shall either (i) furnish any such class representative with
copies of these Asbestos Property Damage Claims Resolution Procedures
and the Claim Information Form, if within sixty (60) days after the
Effective Date, such class representative notifies the Asbestos PD
Trust of the number of copies needed for distribution to class members,
or (ii) distribute these Asbestos Property Damage Claims Resolution
Procedures and the Claim Information Form to each member of a class if,
on or before sixty (60) days after the Effective Date, the class
representative furnishes the Asbestos PD Trust with the names and
addresses of the class members in a format acceptable to the Asbestos
PD Trust that will permit the automated distribution of the Asbestos
Property Damage Claims Resolution Procedures and the Claim Information
Form.
3.2. Each Claimant shall complete and serve the Claim Information Form so
that it is RECEIVED at the address specified on the Claim Information
Form on or before the Claims Information Deadline. EACH MEMBER OF A
CLASS THAT HAS FILED A CLASS PROOF OF CLAIM MUST FILE A SEPARATE CLAIM
INFORMATION FORM. IF A CLASS MEMBER DOES NOT TIMELY FILE A SEPARATE
CLAIM INFORMATION FORM, SUCH MEMBER WILL HAVE NO RIGHT TO ANY
DISTRIBUTION FROM THE ASBESTOS PD TRUST.
3.3. The Claimant shall complete a separate Claim Information Form for each
building with respect to which the Claim is made. Each Claim
Information Form shall state separately for each building the following
information:
3.3.1. the name, location, and use of the building;
3.3.2. the date on which the Claimant first became aware of the
presence of the ACBM that are the subject of the Claim;
3.3.3. the date on which each Eagle-Picher product was installed;
3.3.4. separately for each Homogeneous Area, the Eagle-Picher
brand-name, location, and application of each product with
respect to which the Claim is made;
3.3.5. separately for each Homogeneous Area of ACBM, whether the
ACBM for which the Claim is made remains in place, whether
it has been abated pursuant to an Asbestos Abatement
Program, or any other disposition of the ACBM;
3.3.6. separately for each Homogeneous Area of ACBM, whether the
ACBM has been removed pursuant to a renovation or
demolition, or otherwise than in connection with an Asbestos
Abatement Program and, if so, the date of removal and actual
abatement costs;
A.1.1.6.5-4
<PAGE> 212
3.3.7. separately for each Homogeneous Area, whether the ACBM is in
need of repair and whether the ACBM is in a position in
which it is likely to be disturbed;
3.3.8. the total number rooms or areas for which it would be
necessary to construct an enclosure and decontamination area
if the ACBM were to be removed; and
3.3.9. separately for each Homogeneous Area, the quantity of the
ACBM with respect to which the Claim is made, stating in the
case of fittings the number and diameter of each fitting, in
the case of pipe the diameter and length, and in other cases
the area.
3.4. The Claimant shall attach to the Claim Information Form the following
documentary evidence:
3.4.1. a copy of all documentary evidence (if any) evidencing the
date of installation of ACBM;
3.4.2. a copy of all documentary evidence (if any) evidencing the
date on which the Claimant first became aware of the
presence of ACBM;
3.4.3. an Approved Laboratory Report;
3.4.4. with respect to a building in which ACBM remains in place,
an Accredited Inspector Report; and
3.4.5. with respect to a building in which ACBM was removed
pursuant to an Asbestos Abatement Program, evidence (if any)
that such ACBM was removed pursuant to such program and
copies of bid specifications and contracts for the abatement
work, together with copies of the receipted bills or other
proof of payment.
4. ASSESSMENT OF CLAIMS
4.1. Each Claim shall be assessed solely by reference to the Qualification
Criteria, Evaluation Criteria, and Compensation Model.
4.2. QUALIFICATION CRITERIA
4.2.1. In order to be allowed, a Claim must satisfy each of the
following Qualification Criteria:
4.2.1.1. The Claimant properly filed a proof of claim
corresponding to the ACBM for which the Claim is
made in the Chapter 11 Cases on or before September
30, 1992, except to the extent that (i) the
Bankruptcy Court has ordered, on or before the
Effective Date, that the Claimant be permitted to
file such proof of claim untimely, and the Claimant
has, in fact, filed its proof of claim within the
time specified by the Bankruptcy Court or (ii)
Eagle-Picher has expressly consented to the
untimely filing of such proof of claim, and such
proof of claim is filed in accordance with any
conditions attached by Eagle-Picher to such
consent.
A.1.1.6.5-5
<PAGE> 213
4.2.1.2. The Claim has not previously been disallowed by an
order of the Bankruptcy Court or withdrawn.
4.2.1.3. The Claim is not factually time-barred under the
statute of limitations or statute of repose of the
Applicable Jurisdiction.
4.2.1.4. The Claim is not otherwise barred by the law of the
Applicable Jurisdiction.
4.2.1.5. The Claimant timely served a Claim Information Form
containing the information required by section 3.3
hereof; provided, however, that a Claimant that has
timely served a Claim Information Form but that has
failed to supply all of the information required by
section 3.3 hereof may supplement its Claim
Information Form with such information within
thirty (30) days after receipt of notice by the
Asbestos PD Trust that information is missing from
the Claim Information Form.
4.2.1.6. The ACBM with respect to which the Claim is being
made was not removed from the building as part of a
renovation or demolition otherwise than in
connection with an Asbestos Abatement Program.
4.2.1.7. The Claimant has not previously received
compensation with respect to the ACBM for which
Claim is made in excess of the Claim's Adjusted
Nominal Value from another party or trust.
4.2.2. Disallowance of Claims based upon their failure to meet any
of the Qualification Criteria shall be made by the Bankruptcy
Court, after notice to the Claimants affected and a hearing
thereon.
4.3. COMPENSATION MODEL; NOMINAL VALUE
4.3.1. The Nominal Value of each Claim will be
calculated by the Asbestos PD Trust with reference to the
quantity, application, condition and location of the ACBM with
respect to each Homogeneous Area in respect of which the Claim
is made, and the number of enclosure and decontamination areas
necessary if that ACBM were to be removed, applying the
removal costs and the appropriate proportion of the work area
costs set forth in the Compensation Model.
4.3.2. Where the ACBM with respect to which the Claim is made has
been abated as part of an Asbestos Abatement Program, the
Nominal Value of the Claim shall be the lesser of (i) the
Nominal Value calculated by reference to the Compensation
Model in accordance with section 4.3.1 and (ii) the actual
abatement costs incurred by the Claimant.
4.4. EVALUATION CRITERIA; ADJUSTED NOMINAL VALUE
4.4.1. The Nominal Value of the Claim for each Homogenous Area shall
be adjusted in accordance with the provisions set forth herein
in order to take into account the
A.1.1.6.5-6
<PAGE> 214
weight and sufficiency of the evidence provided by the
Claimant showing that One-Cote or Super "66" was installed and
has not previously been removed or replaced otherwise than
pursuant to an Asbestos Abatement Program.
4.4.2. Proof of the installation of One-Cote or Super "66" for each
Homogenous Area may be established by the Claimant by the
following analytical and/or documentary evidence:
4.4.2.1. A Claim will be awarded 40 proof points if
the Claimant submits an Approved Laboratory
Report that contains the following
certification: "Based upon the PLM tests
specified in the Protocols, the bulk samples
referenced herein are consistent with
[One-Cote] [Super '66']."
4.4.2.2. A Claim will be awarded 30 proof points if
the Claimant submits an Approved Laboratory
Report that contains the following
certification: "Based upon the qualitative
scanning electron microscopy and/or
transmission electron microscopy tests
specified in the Protocols, the bulk samples
referenced herein are consistent with
[One-Cote] [Super '66']."
4.4.2.3. A Claim will be awarded 30 proof points if
the Claimant submits an Approved Laboratory
Report that contains the following
certification: "Based upon quantitative x-ray
diffraction and chemical analysis tests
specified in the Protocols, the bulk samples
referenced herein are consistent with
[One-Cote] [Super '66']."
4.5. The proof points awarded with respect to a Claim shall be totaled. The
Adjusted Nominal Value of a Claim with respect to each Homogenous Area
shall be calculated based upon the following formula:
Adjusted
Nominal = Nominal x Proof Points
Value Value 100
The Adjusted Nominal Value of a Claim shall be the sum of the Adjusted
Nominal Values for each Homogenous Area for which a Claim is made.
4.6. For each Homogenous Area of ACBM that the Accredited Inspector has
determined is not in need of repair and which is not in a position in
which it is likely to be disturbed, the Adjusted Nominal Value
calculated pursuant to the preceding subsection shall be further
adjusted downward by 75%.
5. NOTICE OF DECISION
5.1. The Asbestos PD Trust shall, within the later of (i) if either
Eagle-Picher or the Asbestos PD Trust moves to disallow a Claim and the
Bankruptcy Court enters an order denying such motion as to such Claim,
thirty (30) days after entry of such order, or (ii) one hundred eighty
(180) days after the Claims Information Deadline serve on each Claimant
a Notice of Decision with respect to each Claim stating the extent to
which the Claim has been accepted.
A.1.1.6.5-7
<PAGE> 215
5.2. The Notice of Decision shall state the Nominal Value and the Adjusted
Nominal Value of the Claim and explain the application of the
Evaluation Criteria and the Compensation Model in the assessment and
valuation of the Claim.
5.3. The Notice of Decision will specify the date by which a Notice of
Reconsideration must be filed in accordance with the provisions of
section 6.1.
6. RECONSIDERATION
6.1. Any Claimant that is dissatisfied with the decision in the Notice of
Decision may serve on the Asbestos PD Trust a Notice of Reconsideration
within thirty (30) days after service of the Notice of Decision.
Failure to timely serve on the Asbestos PD Trust a Notice of
Reconsideration shall be deemed a consent to the Notice of Decision and
the Adjusted Nominal Value stated therein, and the Claimant shall be
deemed to have waived any right to seek further review of its Claim.
6.2. The Notice of Reconsideration must identify specifically which of the
Evaluation Criteria and Compensation Model the Claimant contends were
improperly applied by the Asbestos PD Trust, stating the reason(s) for
seeking reconsideration and including any supporting documentation. A
Claimant may seek reconsideration of the Notice of Decision solely on
the basis that the Evaluation Criteria or Compensation Model formulae
have been improperly applied by the Asbestos PD Trust.
6.3. The Asbestos PD Trust shall confer with the Claimant or the Claimant's
designated representative in an effort to reach agreement on the
Adjusted Nominal Value of the Claim. The Asbestos PD Trust may agree
upon an Adjusted Nominal Value of a Claim in the discretion of the
Trustee, but the Asbestos PD Trust shall have no obligation to base its
assessment of the Adjusted Nominal Value of a Claim on anything other
than application of the Evaluation Criteria and the Compensation Model.
7. ARBITRATION
7.1. At any time within twenty (20) days following the service of the
response of the Asbestos PD Trust to the Notice of Reconsideration, the
Claimant may serve a Notice of Arbitration on the Asbestos PD Trust. If
a Notice of Arbitration is not timely served by a Claimant, then the
Claimant shall be deemed to have waived any right to seek Arbitration
or any further review of its Claim, and the Adjusted Nominal Value of
the Claim set forth in the Notice of Decision, or otherwise agreed to
in writing by the Asbestos PD Trust within the time period for seeking
Arbitration, shall be binding on the Claimant.
7.2. The Asbestos PD Trust shall maintain a list of a minimum of ten
independent arbitrators who are available to hear disputes hereunder.
The Asbestos PD Trust shall, within ten (10) days after receipt of a
Notice of Arbitration, send to the Claimant the names and addresses of
the ten independent arbitrators. The Claimant shall have fifteen (15)
days from the date the list is served to strike five arbitrators and to
return the list to the Asbestos PD Trust. The Asbestos PD Trust shall
select one of the five arbitrators not stricken by the Claimant to
arrange a date on which the Arbitration can be conducted, such date to
be mutually convenient to the Asbestos PD Trust, the Claimant, and the
arbitrator. Unless otherwise agreed to by the Asbestos PD Trust, in its
sole discretion, all Arbitration proceedings will be conducted in
Cincinnati, Ohio. Upon confirmation of the date on which Arbitration
will commence, the Asbestos PD Trust shall notify the Claimant in
writing of its date and location.
A.1.1.6.5-8
<PAGE> 216
7.3. The arbitrator shall conduct a de novo review of the Claim. In
assessing the extent to which the Claim should be allowed, the
arbitrator shall apply only the Evaluation Criteria and the
Compensation Model in accordance with the procedures set forth herein.
The Asbestos PD Trust shall pay the fees and expenses of the
arbitrator; provided, however, that in the event Claimant fails to
obtain an award equal to or greater than 120 percent (120%) of the
Adjusted Nominal Value of such Claim set forth in the Notice of
Decision, such fees shall be borne by the Claimant. The Claimant may,
but need not, be represented by counsel in the arbitration proceeding.
The Claimant shall be solely responsible for all fees and expenses
incurred by the Claimant and its representatives in connection with the
Arbitration or otherwise pursuant to these Asbestos Property Damage
Claims Resolution Procedures.
8. NOTICES
8.1. All notices and other communications made or served under these
Asbestos Property Damage Claims Resolution Procedures shall be in
writing and shall be deemed to have been duly served on the date of
delivery, if delivered by hand or by express delivery service, or on
the third business day after the deposit into an authorized United
States mail depository, if mailed by First Class Mail, postage prepaid.
Notices to the Asbestos PD Trust shall be addressed as follows:
Eagle-Picher Industries, Inc. Asbestos Property Damage Claims Facility
P.O. Box 1847
Cincinnati, Ohio 45201
Notices to a Claimant shall be addressed as specified in the Claim
Information Form.
A.1.1.6.5-9
<PAGE> 217
EXHIBIT "1"
APPROVED LABORATORIES
RJ Lee Group, Inc.
350 Hochberg Road
Monroeville, PA 15146
Contact: Dr. Richard J. Lee
(412) 325-1776
Capabilities: PLM, SEM, CCSEM, XRD
McCrone Environmental Services, Inc.
850 Pasquinelli Drive
Westmont, IL 60559
(708) 887-7100
Capabilities: PLM, SEM, CCSEM, XRD
Clayton Environmental Consultants, Inc.
400 Chastain Center Boulevard, N.W.
Suite 490
Kennesaw, GA 30144
Contact: Owen S. Crankshaw
(404) 499-7500
Capabilities: PLM, SEM, XRD
Millette, Vanderwood & Associates
5500 Oakbrook Parkway, Suite 200
Norcross, GA 30093
Contact: James Millette
(404) 662-8509
Capabilities: PLM, SEM, CCSEM
Materials Analytical Services, Inc.
3597 Parkaway Lane, Suite 250
Norcross, GA 30092
Contact: William E. Longo
(404) 448-3200
Capabilities: PLM, SEM, XRD
EMSL of California, Inc.
17620 South Amphlett Boulevard
Suite 130
San Mateo, CA 94402
Contact: Peter Frasca
(609) 858-4800
Capabilities: PLM, SEM, XRD
EMS Laboratories
117 West Bellevue Drive
Pasadena, CA 91105-2503
Contact: Bernadine Kolk
(818) 568-4065
Capabilities: PLM, SEM, XRD
Particle Diagnostics, Inc.
106-A White Horse Pike
Haddon Heights, NJ 8035
Contact: James J. Weitzman
(609) 547-0491
Capabilities: PLM, XRD
Miero Analytical Laboratories, Inc.
3618 N.W. 97th Boulevard
Gainesville, FL 32606
Contact: Nancy Dehgan
(904) 332-1701
Capabilities: PLM, SEM
Forensic Analytical Specialties, Inc.
3777 Depot Road, Suite 406
Hayward, CA 94545-2756
(510) 887-8828
Capabilities: PLM, SEM, XRD
A1.1.6.5-1-1
<PAGE> 218
EXHIBIT "2"
IN THE UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
)
EAGLE-PICHER INDUSTRIES, INC. )
) CONSOLIDATED CASE NO.
et al., ) 1-91-00100
) Chapter 11 - Judge Perlman
Debtors. )
- --------------------------------------------------------------------------------
CLAIM INFORMATION FORM FOR
ASBESTOS-RELATED PROPERTY DAMAGE CLAIMS
- --------------------------------------------------------------------------------
NOTE: A SEPARATE CLAIM INFORMATION FORM MUST
BE FILED FOR EACH BUILDING INCLUDED IN A CLAIMANT'S CLAIM
CLAIMANT INFORMATION
Claim Number: [Eagle-Picher #]--
-----------------------------------------------------------
(Consecutively number claims for each building, using the
preassigned claim number as a prefix)
Claimant Name:
-----------------------------------------------------------
Claimant Address:
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Claimant Type (check one):
Owner Operator Attorney in Fact
/ / / / / /
A1.1.6.5-2-1
<PAGE> 219
BUILDING INFORMATION
Building Name: _______________________________________________________
(Include any ceremonial name for the building. If the
building is part of a complex, the building's
designation should appear here, and the complex name
should appear under Location.)
Division or Agency
Operating Building: _______________________________________________________
(If a division or agency of a governmental entity or
corporation is operating the building, the name of the
agency or division operating the building should appear
here.)
Site Identification: _______________________________________________________
(If claimant routinely uses a unique numerical
identification for its buildings, this should be
inserted to aid in uniquely defining the claim.)
Building Address
or Location: _______________________________________________________
_______________________________________________________
(If the building is part of a complex, such as a group
of hospital buildings, this should be indicated. If the
complex has a single street address, usually of the
administration building, then this should be included
with that fact so indicated.)
Construction Date:
Original _________ Addition 1 _________ Addition 2 _________
Addition 3 _________ Addition 4 _________
(The approximate year(s) of construction of the original building and any
additions should be indicated, whether or not they are the dates of installation
of asbestos-containing materials.)
Building Type/Purpose: _______________________________________________________
_______________________________________________________
_______________________________________________________
(short description of the routine building uses, e.g.
school, hospital, office building, library, convention
center, manufacturing plant, museum, etc.)
Dates of Any Consultants' Reports Received Relating to Asbestos-Containing
Materials in Building: ________________________________________________________
Date Claimant First Became Aware of Presence of Asbestos-Containing Materials in
Building: ____________________________________________________________________
A1.1.6.5-2-2
<PAGE> 220
PRODUCT INFORMATION
(COMPLETE CHART FOR EACH HOMOGENEOUS AREA - AN AREA
OF ASBESTOS-CONTAINING MATERIALS THAT IS UNIFORM IN TEXTURE AND COLOR. ATTACH
ADDITIONAL PAGES, IF NECESSARY)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
ASBESTOS-CONTAINING CONDITION
HOMOGENEOUS MATERIALS (CHECK ANY THAT
AREA # _____ PRODUCT I.D. (CHECK ONE) APPLY)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Location (i.e., boiler room, Brand Name: / / remain in place Asbestos-
cafeteria, office): containing
materials in this
/ / abated pursuant to Asbestos homogeneous
Abatement Program area are
Installation date: Attached Approved Date:___________________________ / / in need of
Laboratory Report repair
based upon the Abatement Costs:
following (check all
Application (check one and that apply): $______________________________ / / likely to be
complete pertinent disturbed
information):
/ / Fittings / / PLM tests / / removed in other renovation or
demolition
Number: _____________
/ / qualitative Date:___________________________
Diameter:_____________ scanning electron
miscroscopy and/or Removal Costs:
/ / Pipes transmission electron
microscopy $______________________________
Number:_____________
Length:______________ / / quantitative x-ray / / Other (please attach explanation)
diffraction and
/ / Other chemical analysis
Area:________________
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
A1.1.6.5-2-3
<PAGE> 221
OTHER CLAIMS AND ACTIONS
(LIST ALL OTHER ACTIONS OR PROCEEDINGS IN WHICH A CLAIM HAS BEEN ASSERTED FOR
ASBESTOS-RELATED PROPERTY DAMAGE ON ACCOUNT OF THIS BUILDING, STATE WHETHER THE
STATUS OF ACTION AS IT PERTAINS TO SUCH CLAIM, AND, IF A RECOVERY WAS RECEIVED,
THE AMOUNT OF SUCH RECOVERY. ATTACH ADDITIONAL PAGES, IF NECESSARY.)
<TABLE>
<CAPTION>
=======================================================================================================
AMOUNT OF
CASE NAME CASE NUMBER STATUS OF CASE RECOVERY, IF ANY
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
/ / pending
$____________________
/ / settled
/ / dismissed without
prejudice
If claimant is a member of a
/ / dismissed with class that has received a
prejudice classwide recovery, then
check this box and do not
/ / judgment in favor of list an amount
claimant on some or all
counts
/ / Class recovery
/ / judgment in favor of
defendant on all counts
- -------------------------------------------------------------------------------------------------------
</TABLE>
A1.1.6.5-2-4
<PAGE> 222
<TABLE>
<CAPTION>
=======================================================================================================
AMOUNT OF
CASE NAME CASE NUMBER STATUS OF CASE RECOVERY, IF ANY
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
/ / pending
$____________________
/ / settled
/ / dismissed without
prejudice
If claimant is a member of a
/ / dismissed with class that has received a
prejudice classwide recovery, then
check this box and do not
/ / judgment in favor of list an amount
claimant on some or all
counts
/ / Class recovery
/ / judgment in favor of
defendant on all counts
- -------------------------------------------------------------------------------------------------------
/ / pending
$____________________
/ / settled
/ / dismissed without
prejudice
If claimant is a member of a
/ / dismissed with class that has received a
prejudice classwide recovery, then
check this box and do not
/ / judgment in favor of list an amount
claimant on some or all
counts
/ / judgment in favor of
defendant on all counts / / Class recovery
- -------------------------------------------------------------------------------------------------------
</TABLE>
A1.1.6.5-2-5
<PAGE> 223
<TABLE>
<CAPTION>
=======================================================================================================
AMOUNT OF
CASE NAME CASE NUMBER STATUS OF CASE RECOVERY, IF ANY
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
/ / pending $____________________
/ / settled
/ / dismissed without
prejudice If claimant is a member of a
class that has received a
/ / dismissed with classwide recovery, then
prejudice check this box and do not
list an amount
/ / judgment in favor of
claimant on some or all / / Class recovery
counts
/ / judgment in favor of
defendant on all counts
- -------------------------------------------------------------------------------------------------------
/ / pending $____________________
/ / settled
/ / dismissed without
prejudice If claimant is a member of a
class that has received a
/ / dismissed with classwide recovery, then
prejudice check this box and do not
list an amount
/ / judgment in favor of
claimant on some or all / / Class recovery
counts
/ / judgment in favor of
defendant on all counts
=======================================================================================================
</TABLE>
A1.1.6.5-2-6
<PAGE> 224
ATTACHMENTS
(ALL DOCUMENTATION SUBMITTED MUST BE IN READABLE FORM. ILLEGIBLE DOCUMENTATION
WILL BE DISREGARDED, OR THE ASBESTOS PD TRUST MAY SEEK TO HAVE THE CLAIMANT
SUPPLY A LEGIBLE COPY. ALL DOCUMENTATION MUST BE CONSECUTIVELY NUMBERED TO
CORRESPOND TO THE CLAIM NUMBER. FOR EXAMPLE, IF TEN DOCUMENTS ARE SUBMITTED
RELATING TO CLAIM NO. 11111-5 (I.E., IN SUPPORT OF THE FIFTH BUILDING COVERED
UNDER CLAIM NO. 11111), EACH DOCUMENT MUST BE NUMBERED 11111-5-1 THROUGH
11111-5-10.)
The following documents are attached to this Claim Information Form (check all
that apply)
/ / Documents that show the date of installation of asbestos-containing
materials
/ / Documents that show the date on which Claimant first became aware of
the presence of asbestos-containing materials in the building
/ / Approved Laboratory Report
/ / Accredited Inspector Report (required if asbestos-containing materials
remain in place in the building)
/ / Documents that show that asbestos-containing materials were removed
pursuant to an Asbestos Abatement Program, including bid
specifications, contracts for the abatement work, and proof of payment
A1.1.6.5-2-7
<PAGE> 225
CERTIFICATION
The undersigned certifies to the best of his [her] knowledge under penalty of
perjury that the information contained and submitted with this Claim Information
Form is true and correct.
____________ _______________________________ _____________________
Date (Print Name and Title, if any) (Signature)
SUBMISSION REQUIREMENT
This Claim Information Form must be submitted and received no later than
_____________, 1996 to the address below, or returned in the enclosed
pre-addressed envelope:
EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS PROPERTY DAMAGE
CLAIMS FACILITY
P.O. Box 1847
Cincinnati, Ohio 45202
A1.1.6.5-2-8
<PAGE> 226
EXHIBIT "3"
COMPENSATION MODEL
<TABLE>
<CAPTION>
WORK AREA COST
<S> <C>
Isolation barrier : $2.50 per linear foot
Floor cover : $0.30 per square foot
Decontamination enclosure : $100.00 each work area
REMOVAL COST
1/2" - 1 1/2" pipe : $3.75 per linear foot
2" - 3" pipe : $4.15 per linear foot
4" - 5" pipe : $5.00 per linear foot
6" - 10" pipe : $8.50 per linear foot
LENGTH OF COVERING
1/2" - 1 1/2" fitting : $3.75 per fitting
2" - 3" fitting : $4.15 per fitting
4" - 5" fitting : $5.00 per fitting
6" - 10" fitting : $8.50 per fitting
Boilers, breaching
and ducting : $9.00 per square foot
</TABLE>
A1.1.6.5-3-1
<PAGE> 227
EXHIBIT "4"
FORM OF NOTICE OF DECISION
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-4-1
<PAGE> 228
EXHIBIT "5"
FORM OF NOTICE OF RECONSIDERATION
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-5-1
<PAGE> 229
EXHIBIT "6"
PROTOCOLS FOR ONE-COTE
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-6-1
<PAGE> 230
EXHIBIT "7"
PROTOCOLS FOR SUPER "66"
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-7-1
<PAGE> 231
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
EXHIBIT "1.1.8"
FORM OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 232
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
EXHIBIT "1.1.9"
FORM OF AMENDED AND RESTATED CODE OF REGULATIONS
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 233
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
EXHIBIT "1.1.13"
FORM OF EAGLE-PICHER INDUSTRIES, INC.
PERSONAL INJURY SETTLEMENT TRUST AGREEMENT
<PAGE> 234
EAGLE-PICHER INDUSTRIES, INC.
PERSONAL INJURY SETTLEMENT TRUST AGREEMENT
This Trust Agreement is among Eagle-Picher Industries, Inc., an Ohio
corporation and debtor in possession ("EAGLE-PICHER"), and its affiliates, Daisy
Parts, Inc., Transicoil, Inc., Michigan Automotive Research Corp., EDI, Inc.,
Eagle-Picher Minerals, Inc., Eagle-Picher Europe, Inc., and Hillsdale Tool &
Manufacturing Co. ("SETTLORS"), and Darius W. Gaskins, Jr., Kevin O'Donnell,
Daniel M. Phillips, William J. Williams and Marshall Wright, as Trustees
("TRUSTEES"), pursuant to the Second Amended Consolidated Joint Plan of
Reorganization of Eagle-Picher and its affiliated debtors, dated July 15, 1996
(the "PLAN").
WHEREAS, at the time of the entry of the order for relief in the
Chapter 11 Cases, Eagle-Picher was named as a defendant in personal injury,
wrongful death, and property damage actions seeking recovery for damages
allegedly caused by the presence of, or exposure to, asbestos or
asbestos-containing products; and
WHEREAS, Eagle-Picher and its affiliated debtors (collectively, the
"DEBTORS") have reorganized under the provisions of Chapter 11 of the Bankruptcy
Code in cases pending in the United States Bankruptcy Court for the Southern
District of Ohio known as In re Eagle-Picher Industries, Inc., et al.,
Consolidated Case No. 1-91-00100 ("CHAPTER 11 CASES"); and
WHEREAS, the Plan, filed by the Debtors, the Legal Representative for
Future Claimants appointed by the Bankruptcy Court pursuant to its order of
October 31, 1991 ("FUTURE REPRESENTATIVE") and the Bankruptcy Court-appointed
committee composed of the representatives of certain tort claimants of the
Debtors ("INJURY CLAIMANTS' COMMITTEE") has been confirmed by the Bankruptcy
Court; and
WHEREAS, the Plan provides, inter alia, for the creation of the
Eagle-Picher Industries, Inc. Personal Injury Settlement Trust ("PI TRUST"); and
WHEREAS, pursuant to the Plan, the PI Trust is to be funded in whole or
in part by the securities of the Debtors and by the obligation of the Debtors to
make future payments, including dividends; and
WHEREAS, pursuant to the Plan, the PI Trust is to own a majority of the
voting shares of the Eagle-Picher; and
WHEREAS, pursuant to the Plan, the PI Trust is to use its assets or
income to pay Claims and Demands, as defined in Sections 101(5) and 524(g)(5) of
the Bankruptcy Code respectively, against the Debtors; and
WHEREAS, the Plan provides, among other things, for the complete
settlement and satisfaction of all liabilities and obligations of the Debtors
with respect to Asbestos Personal Injury Claims and Lead Personal Injury Claims
(hereinafter Asbestos Personal Injury Claims and Lead Personal Injury Claims are
sometimes jointly referred to as "TOXIC PERSONAL INJURY CLAIMS"); and
WHEREAS, pursuant to the Plan, the PI Trust is intended to qualify as a
"Qualified Settlement Fund" within the meaning of Section 1.468B-1 of the
Treasury Regulations promulgated under Section 468B of the Internal Revenue
Code; and
A1.1.13-1
<PAGE> 235
WHEREAS, the Bankruptcy Court has determined that the PI Trust and the
Plan satisfy all the prerequisites for a supplemental injunction pursuant to
Section 524(g) of the Bankruptcy Code, which Asbestos and Lead PI Permanent
Channeling Injunction has been entered in connection with the Confirmation
Order;
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the meanings specified
below:
1.1 Affiliate: Any Entity that is an "affiliate" of any of the Debtors
within the meaning of Section 101(2) of the Bankruptcy Code except (i) American
Imaging Services, Inc., (ii) Tri Sigma Corporation, and (iii) the PI Trust.
1.2 Asbestos and Lead PI Permanent Channeling Injunction: An order or
orders of the Bankruptcy Court or the District Court permanently and forever
staying, restraining, and enjoining any Entity from taking any of the following
actions for the purpose of, directly or indirectly, collecting, recovering, or
receiving payment of, on, or with respect to any Asbestos Personal Injury Claims
or Lead Personal Injury Claims (other than actions brought to enforce any right
or obligation under the Plan, any Exhibits to the Plan, or any other agreement
or instrument between any of the Debtors or the Reorganized Debtors and the PI
Trust, which actions shall be in conformity and compliance with the provisions
hereof):
(a) commencing, conducting, or continuing in any manner, directly
or indirectly, any suit, action, or other proceeding (including, without express
or implied limitation, a judicial, arbitral, administrative, or other
proceeding) in any forum against or affecting any PI Protected Party or any
property or interests in property of any PI Protected Party;
(b) enforcing, levying, attaching (including, without express or
implied limitation, any prejudgment attachment), collecting, or otherwise
recovering by any means or in any manner, whether directly or indirectly, any
judgment, award, decree, or other order against any PI Protected Party or any
property or interests in property of any PI Protected Party;
(c) creating, perfecting, or otherwise enforcing in any manner,
directly or indirectly, any Encumbrance against any PI Protected Party or any
property or interests in property of any PI Protected Party;
(d) setting off, seeking reimbursement of, contribution from, or
subrogation against, or otherwise recouping in any manner, directly or
indirectly, any amount against any liability owed to any PI Protected Party or
any property or interests in property of any PI Protected Party; and
(e) proceeding in any manner in any place with regard to any
matter that is subject to resolution pursuant to the PI Trust, except in
conformity and compliance therewith.
1.3 Asbestos or Lead Contribution Claim: Any right to payment, claim,
remedy, liability, or Demand now existing or hereafter arising, whether or not
such right, claim, remedy, liability or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, whether or not the facts of
or legal bases for such right, claim, remedy, liability or Demand are known or
unknown, that is (i) held by (A) any Entity (other than a director or officer
A1.1.13-2
<PAGE> 236
entitled to indemnification pursuant to Section 8.6 of the Plan) who has been,
is, or may be a defendant in an action seeking damages for death, bodily injury,
or other personal damages (whether physical, emotional, or otherwise) to the
extent caused or allegedly caused, directly or indirectly, by exposure to (x)
asbestos or asbestos-containing products or (y) products that contain lead
chemicals, or (B) any assignee or transferee of such Entity, and (ii) on account
of alleged liability of any of the Debtors for reimbursement or contribution of
any portion of any damages such Entity has paid or may pay to the plaintiff in
such action.
1.4 Asbestos Personal Injury Claim: Any right to payment, claim,
remedy, liability, or Demand now existing or hereafter arising, whether or not
such right, claim, remedy, liability, or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, whether or not the facts of
or legal bases for such right, claim, remedy, liability, or Demand are known or
unknown, for, under any theory of law, equity, admiralty, or otherwise, death,
bodily injury, or other personal damages (whether physical, emotional, or
otherwise) to the extent caused or allegedly caused, directly or indirectly, by
exposure to asbestos or asbestos-containing products that were manufactured,
sold, supplied, produced, distributed, released, or in any way marketed by any
of the Debtors prior to the Petition Date, including, without express or implied
limitation, any right, claim, remedy, liability, or Demand for compensatory
damages (such as loss of consortium, wrongful death, survivorship, proximate,
consequential, general, and special damages) and including punitive damages and
any Asbestos or Lead Contribution Claim.
1.5 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as amended, and
as codified in Title 11 of the United States Code, as applicable to the Chapter
11 Cases.
1.6 Bankruptcy Court: The United States District Court for the Southern
District of Ohio, Western Division, having jurisdiction over the Chapter 11
Cases and, to the extent of any reference made pursuant to section 157 of title
28 of the United States Code, the unit of such District Court constituted
pursuant to section 151 of title 28 of the United States Code.
1.7 Business Day: Any day on which commercial banks are required to be
open for business in Cincinnati, Ohio.
1.8 Claim: (a) A "claim," as defined in Section 101(5) of the
Bankruptcy Code, against any of the Debtors or Debtors in Possession, whether or
not asserted, whether or not the facts of or legal bases therefor are known or
unknown, and specifically including, without express or implied limitation, any
rights under Sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, any
claim of a derivative nature, any potential or unmatured contract claims, and
any other Contingent Claim, and (b) any Environmental Claim or Product Liability
Tort Claim, whether or not it constitutes a "claim," as defined in Section
101(5) of the Bankruptcy Code.
1.9 Confirmation Order: The order or orders of the Bankruptcy Court
confirming the Plan in accordance with the provisions of Chapter 11 of the
Bankruptcy Code, which will contain, inter alia, the Asbestos and Lead PI
Permanent Channeling Injunction, the Asbestos Property Damage Permanent
Channeling Injunction, and the Claims Trading Injunction.
1.10 Contingent Claim: Any Claim, the liability for which attaches or
is dependent upon the occurrence or happening, or is triggered by, an event,
which event has not yet occurred, happened, or been triggered, as of the date on
which such Claim is sought to be estimated or an objection to such Claim is
filed, whether or not such event is within the actual or presumed contemplation
of the holder of such Claim and whether or not a relationship between the holder
of such Claim and any of the Debtors now or hereafter exists or previously
existed.
A1.1.13-3
<PAGE> 237
1.11 Demand: A demand for payment, present or future, that (i) was not
a Claim during the Chapter 11 Cases; (ii) arises out of the same or similar
conduct or events that gave rise to the Claims addressed by the Asbestos and
Lead PI Permanent Channeling Injunction; and (iii) pursuant to the Plan, is to
be paid by the PI Trust.
1.12 Divestiture Notes: Those certain Senior Unsecured Notes in the
aggregate principal amount of Fifty Million and 00/100 Dollars ($50,000,000.00),
bearing interest at a rate determined by McDonald & Company Securities, Inc. on
the Effective Date as the rate such Senior Unsecured Notes should bear in order
to have a market value of one hundred percent (100%) of their principal amount
on the Effective Date, and substantially in the form of Exhibit "1.1.55" to the
Plan.
1.13 Effective Date: The first Business Day after the date on which all
of the conditions precedent to the effectiveness of the Plan specified in
Section 7.10 of the Plan have been satisfied or waived or, if a stay of the
Confirmation Order is in effect on such date, the first Business Day after the
expiration, dissolution, or lifting of such stay.
1.14 Encumbrance: With respect to any asset, any mortgage, lien,
pledge, charge, security interest, assignment, or encumbrance of any kind or
nature in respect of such asset (including, without express or implied
limitation, any conditional sale or other title retention agreement, any
security agreement, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).
1.15 Entity: An individual, corporation, partnership, association,
joint stock company, joint venture, estate, trust, unincorporated organization,
or government or any political subdivision thereof, or other person or entity.
1.16 Environmental Claim: Any Claim as to which the treatment thereof
is set forth in (a) the Environmental Settlement Agreement or (b) an agreement
by and between any of the Debtors and any party asserting a Claim against any of
the Debtors relating to alleged contamination under the federal or state
environmental laws or regulations, pursuant to which agreement all or a portion
of such Claim (to the extent and subject to the limitations imposed by such
agreement) may be asserted by the holder thereof after the Effective Date, to
the extent that such agreement is approved and authorized by a Final Order of
the Bankruptcy Court or otherwise in accordance with the Claims Settlement
Guidelines.
1.17 Environmental Settlement Agreement: That certain Settlement
Agreement, lodged with the Bankruptcy Court on March 23, 1995, by and between
the Debtors and the parties listed on the signatory pages thereof, to the extent
that such Settlement Agreement is approved and authorized by the Bankruptcy
Court by a Final Order of the Bankruptcy Court.
1.18 Final Order: An order 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 Debtors or the Reorganized Debtors, as the case
may be, and their counsel or, in the event that an appeal, writ of certiorari,
or reargument or rehearing thereof has been sought, such order shall have been
affirmed by the highest court to which such order was appealed, or certiorari
has been denied or from which reargument or rehearing was sought, and the time
to take any further appeal, petition for certiorari or move for reargument or
rehearing shall have expired.
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1.19 Lead Personal Injury Claim: Any right to payment, claim, remedy,
liability, or Demand, now existing or hereafter arising, whether or not such
right, claim, remedy, liability, or Demand is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, whether or not the facts of or legal
bases for such right, claim, remedy, liability, or Demand are known or unknown,
for, under any theory of law, equity, admiralty, or otherwise, death, bodily
injury, or other personal damages (whether physical, emotional, or otherwise) to
the extent caused or allegedly caused, directly or indirectly, by exposure to
products that contained lead chemicals that were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, including, without express or implied limitation, any right,
claim, remedy, liability, or Demand for compensatory damages (such as loss of
consortium, wrongful death, survivorship, proximate, consequential, general, and
special damages) and including punitive damages and any Asbestos or Lead
Contribution Claim.
1.20 New Eagle-Picher Common Stock: Voting common stock, with no par
value, of Reorganized Eagle-Picher from and after the Effective Date after
giving effect to the Amended and Restated Articles of Incorporation.
1.21 Petition Date: January 7, 1991
1.22 PI Protected Party: Any of the following parties:
(a) the Debtors;
(b) the Reorganized Debtors;
(c) an Affiliate;
(d) any Entity that, pursuant to the Plan or after the Effective
Date becomes a direct or indirect transferee of, or successor to any assets of
any of the Debtors, the Reorganized Debtors, or the PI Trust (but only to the
extent that liability is asserted to exist by reason of it becoming such a
transferee or successor);
(e) any Entity that, pursuant to the Plan or after the Effective
Date, makes a loan to any of the Reorganized Debtors or the PI Trust or to a
successor to, or transferee of, any assets of any of the Debtors, the
Reorganized Debtors, or the PI Trust (but only to the extent that liability is
asserted to exist by reason of such Entity becoming such a lender or to the
extent any pledge of assets made in connection with such a loan is sought to be
upset or impaired); or
(f) any Entity to the extent he, she, or it is alleged to be
directly or indirectly liable for the conduct of, Claims against, or Demands on
any of the Debtors, the Reorganized Debtors, or the PI Trust on account of
Asbestos Personal Injury Claims or Lead Personal Injury Claims by reason of one
or more of the following:
(i) such Entity's ownership of a financial interest in
any of the Debtors or the Reorganized Debtors, a past or present
affiliate of any of the Debtors or the Reorganized Debtors, or
predecessor in interest of any of the Debtors or the Reorganized
Debtors;
(ii)such Entity's involvement in the management of any
of the Debtors or the Reorganized Debtors or any predecessor in
interest of any of the Debtors or the Reorganized Debtors;
A1.1.13-5
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(iii) such Entity's service as an officer, director, or
employee of any of the Debtors, the Reorganized Debtors, or Related
Parties;
(iv) such Entity's provision of insurance to any of the
Debtors, the Reorganized Debtors, or Related Parties; or
(v) such Entity's involvement in a transaction changing
the corporate structure, or in a loan or other financial transaction
affecting the financial condition, of any of the Debtors, the
Reorganized Debtors, or any of the Related Parties.
1.23 Product Liability Tort Claim: Any right to payment, claim, remedy,
liability, or Demand, now existing or hereafter arising, whether or not such
right, claim, remedy, liability, or Demand is reduced to judgment, liquidated,
unliquidated fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured, or unsecured, whether or not the facts of or legal bases for
such right, claim, remedy, liability, or Demand are known or unknown, for, under
any theory of law, equity, admiralty, or otherwise, death, bodily injury, or
other personal damages (whether physical, emotional, or otherwise) to the extent
caused or allegedly caused, directly or indirectly, by exposure to any products
or byproducts that were manufactured, sold, supplied, produced, released,
distributed, or in any way marketed by any of the Debtors prior to the Petition
Date, including, without express or implied limitation, any right, claim,
remedy, liability, or Demand for compensatory damages (such as loss of
consortium, wrongful death, survivorship, proximate, consequential, general, and
special damages), including punitive damages, and including, without express or
implied limitation, any Asbestos Personal Injury Claim or Lead Personal Injury
Claim.
1.24 Related Parties: (a) Any past or present affiliate of any of the
Debtors or the Reorganized Debtors, (b) any predecessor in interest of any of
the Debtors or the Reorganized Debtors, or (c) any Entity that owned a financial
interest in any of the Debtors or the Reorganized Debtors, any past or present
affiliate of any of the Debtors or the Reorganized Debtors, or any predecessor
in interest of any of the Debtors or the Reorganized Debtors.
1.25 Reorganized Debtors: The Debtors, or any successors in interest
thereto, from and after the Effective Date.
1.26 Reorganized Eagle-Picher: Eagle-Picher, or any successor in
interest thereto, from and after the Effective Date.
1.27 Senior Unsecured Sinking Fund Debentures: Those certain Senior
Unsecured Sinking Fund Debentures in the aggregate principal amount of Two
Hundred Fifty Million and 00/100 Dollars ($250,000,000.00), bearing interest at
a rate determined by McDonald & Company Securities, Inc. on the Effective Date
as the rate such Senior Unsecured Sinking Fund Debentures should bear in order
to have a market value of one hundred percent (100%) of their principal amount
on the Effective Date, and substantially in the form set forth in Exhibit
"1.1.114" to the Plan.
All capitalized terms used herein and not defined in this Article 1 or
in another provision of this Trust Agreement shall have the meanings assigned to
them in the Plan and/or the Bankruptcy Code, which definitions are incorporated
by reference herein.
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ARTICLE 2
AGREEMENT OF TRUST
2.1 Creation and Name. The Settlor hereby creates a trust known as the
"Eagle-Picher Industries, Inc. Personal Injury Settlement Trust", which is the
PI Trust provided for and referred to in the Plan. The Trustees of the PI Trust
may transact the business and affairs of the PI Trust in the name, "Eagle-Picher
Industries Personal Injury Settlement Trust".
2.2 Purpose. The purpose of the PI Trust is to assume any and all
liabilities of the Debtors, their successors in interest or their affiliates,
with respect to any and all Toxic Personal Injury Claims; to use the PI Trust's
assets and income to promptly pay holders of valid Toxic Personal Injury Claims
in such a way that holders of similar Toxic Personal Injury Claims are paid in
substantially the same manner; and to otherwise comply in all respects with the
requirements of a trust set forth in Section 524(g)(2)(B)(i) of the Bankruptcy
Code. This purpose shall be fulfilled through the provisions of this Trust
Agreement, the Eagle-Picher Industries, Inc. Asbestos Injury Claims Resolution
Procedures attached hereto as Annex B ("EPI ASBESTOS CLAIMS PROCEDURES"), and
any Lead Personal Injury Claims procedures adopted pursuant to the Trust
Agreement ("EPI LEAD CLAIMS PROCEDURES").
2.3 Transfer of Assets. The Settlors hereby transfer and assign to the
PI Trust the property set forth in Article 10 of the Plan ( herein the
"ASSETS").
2.4 Acceptance of Assets and Assumption of Liabilities.
(a) In furtherance of the purposes of the PI Trust, the Trustees,
on behalf of the PI Trust, hereby expressly accept the transfer and assignment
to the PI Trust of the Assets.
(b) In furtherance of the purposes of the PI Trust, and subject
to Article 5.4, the Trustees, on behalf of the PI Trust, expressly assume all
liability for all Toxic Personal Injury Claims as provided for in Article 10 of
the Plan. Except as otherwise provided in the EPI Asbestos Claims Procedures,
the PI Trust shall have all defenses, cross-claims, offsets, and recoupments
regarding Toxic Personal Injury Claims that Eagle-Picher has or would have had
under applicable law.
(c) Neither the Debtors nor their successors in interest or their
affiliates shall be entitled to any indemnification from the PI Trust for any
expenses, costs, and fees (including attorneys' fees), judgments, settlements,
or other liabilities arising from or incurred in connection with, any action
related to a Toxic Personal Injury Claim, including, but not limited to,
indemnification or contribution for Toxic Personal Injury Claims prosecuted
against Reorganized Eagle-Picher. Nothing in this section or any other section
of this Trust Agreement shall be construed in any way to limit the scope,
enforceability, or effectiveness of the Asbestos and Lead PI Permanent
Channeling Injunction issued in connection with the Plan or the PI Trust's
assumption of all liability with respect to Toxic Personal Injury Claims.
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<PAGE> 241
ARTICLE 3
POWERS AND TRUST ADMINISTRATION
3.1 Powers.
(a) Subject to the limitations set forth in this Trust Agreement,
the Trustees shall have the power to take any and all actions that, in the
judgment of the Trustees, are necessary or proper to fulfill the purposes of the
PI Trust, including, without limitation, each power expressly granted in this
Article 3.1, any power reasonably incidental thereto, and any trust power now or
hereafter permitted under the laws of the State of Ohio.
(b) Except as otherwise specified herein, the Trustees need not
obtain the order or approval of any court in the exercise of any power or
discretion conferred hereunder.
(c) Without limiting the generality of Article 3.1(a) above, the
Trustees shall have the power to:
(i) receive and hold the Assets, vote the New
Eagle-Picher Common Stock, exercise all rights with respect to, and
sell any securities issued by Reorganized Eagle-Picher that are
included in the Assets, subject to any restrictions set forth in the
articles of incorporation of Reorganized Eagle-Picher;
(ii) invest the monies held from time to time by the PI
Trust;
(iii) sell, transfer or exchange any or all of the
Assets at such prices and upon such terms as they may consider proper,
consistent with the other terms of this Trust Agreement;
(iv) pay liabilities and expenses of the PI Trust;
(v) change the state of domicile of the PI Trust;
(vi) establish such funds, reserves and accounts within
the PI Trust estate, as deemed by the Trustees to be useful in carrying
out the purposes of the PI Trust;
(vii) sue and be sued and participate, as a party or
otherwise, in any judicial, administrative, arbitrative or other
proceeding;
(viii) amend the Bylaws, a copy of which is annexed
hereto as Annex A (the "BYLAWS");
(ix) appoint such officers and hire such employees and
engage such legal, financial, accounting, investment and other
advisors, alternative dispute resolution panelists, and agents as the
business of the PI Trust requires, and to delegate to such persons such
powers and authorities as the fiduciary duties of the Trustees permit
and as the Trustees, in their discretion, deem advisable or necessary
in order to carry out the terms of this PI Trust;
(x) pay employees, legal, financial, accounting,
investment and other advisors and agents reasonable compensation,
including without limitation, compensation at rates approved by the
Trustees for services rendered prior to the execution hereof;
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<PAGE> 242
(xi) reimburse the Trustees, subject to Article 5.5,
and reimburse such officers, employees, legal, financial, accounting,
investment and other advisors and agents all reasonable out-of-pocket
costs and expenses incurred by such persons in connection with the
performance of their duties hereunder, including without limitation,
costs and expenses incurred prior to the execution hereof;
(xii) execute and deliver such deeds, leases and other
instruments as the Trustees consider proper in administering the PI
Trust;
(xiii) enter into such other arrangements with third
parties as are deemed by the Trustees to be useful in carrying out the
purposes of the PI Trust, provided such arrangements do not conflict
with any other provision of this Trust Agreement;
(xiv) in accordance with Article 5.6, indemnify (and
purchase insurance indemnifying) Trustees and TAC members, and
officers, employees, agents, advisers and representatives of the PI
Trust or the TAC to the fullest extent that a corporation or trust
organized under the law of the PI Trust's domicile is from time to time
entitled to indemnify and/or insure its directors, trustees, officers,
employees, agents, advisers and representatives;
(xv) indemnify (and purchase insurance indemnifying)
the Additional Indemnitees as defined in Article 5.6 hereof;
(xvi) delegate any or all of the authority herein
conferred with respect to the investment of all or any portion of the
Assets to any one or more reputable individuals or recognized
institutional investment advisers or investment managers without
liability for any action taken or omission made because of any such
delegation, except as provided in Article 5.4;
(xvii) consult with Reorganized Eagle-Picher at such
times and with respect to such issues relating to the conduct of the PI
Trust as the Trustees consider desirable;
(xviii) make, pursue (by litigation or otherwise),
collect, compromise or settle any claim, right, action or cause of
action included in the Assets; and
(xix) merge or contract with other claims resolution
facilities that are not specifically created by this Agreement or the
EPI Asbestos Claims Procedures, subject to Article 3.2(e) of this
Agreement; provided that such merger or contract shall not (a) alter
the EPI Asbestos Claims Procedures; (b) subject the Reorganized Debtors
or any successor in interest to any risk of having any Toxic Personal
Injury Claim asserted against it or them; or (c) otherwise jeopardize
the validity or enforceability of the Asbestos and Lead PI Permanent
Channeling Injunction.
(d) The Trustees shall promptly educate and inform themselves as
to Lead Personal Injury Claims that may be asserted against the PI Trust. To do
so, the Trustees shall expend no more than $2.5 million of PI Trust funds, in
total, for medical, scientific, and other research into diseases and conditions
allegedly caused by exposure to lead pigment-containing products. This research
shall also be used to determine what products cause such diseases and
conditions. The nature of the research conducted shall be in the Trustees' sole
discretion. This subsection shall in no way limit the Trustees' authority to
expend money as they otherwise are permitted or required by other sections of
this Trust Agreement, including, without limitation, Article 3.3 herein.
(e) The Trustees shall not have the power to guaranty any debt of
other persons.
A1.1.13-9
<PAGE> 243
3.2 General Administration.
(a) The Trustees shall act in accordance with the Bylaws. To the
extent not inconsistent with the terms of this Trust Agreement, the Bylaws
govern the affairs of the PI Trust.
(b) The Trustees shall timely file such income tax and other
returns and statements and comply with all withholding obligations, as required
under the applicable provisions of the Internal Revenue Code and of any state
law and the regulations promulgated thereunder.
(c) (i) The Trustees shall cause to be prepared and filed with
the Bankruptcy Court, as soon as available, and in any event within
ninety (90) days following the end of each fiscal year, an annual report
containing financial statements of the PI Trust (including, without
limitation, a balance sheet of the PI Trust as of the end of such fiscal
year and a statement of operations for such fiscal year) audited by a
firm of independent certified public accountants selected by the
Trustees and accompanied by an opinion of such firm as to the fairness
of the financial statements' presentation of the cash and investments
available for the payment of claims and as to the conformity of the
financial statements with generally accepted accounting principles. The
Trustees shall provide a copy of such report to the TAC and to
Reorganized Eagle-Picher.
(ii) Simultaneously with delivery of each set of
financial statements referred to in Article 3.2(c)(i) above, the
Trustees shall cause to be prepared and filed with the Bankruptcy Court
a report containing a summary regarding the number and type of claims
disposed of during the period covered by the financial statements.
(iii) All materials required to be filed with the
Bankruptcy Court by this Article 3.2 shall be available for inspection
by the public in accordance with procedures established by the
Bankruptcy Court.
(d) The Trustees shall cause to be prepared and submitted to the
TAC as soon as practicable prior to the commencement of each fiscal year a
budget and cash flow projections covering such fiscal year and the succeeding
four fiscal years.
(e) The Trustees shall consult with the TAC (as hereinafter
defined) on the appointment of successor Trustees, the implementation and
administration of the EPI Asbestos Claims Procedures, the expenditure of funds
for research as described in Article 3.1 (d), and the adoption and
administration of the EPI Lead Claims Procedures (herein the EPI Asbestos Claims
Procedures and the EPI Lead Claims Procedures are some times jointly referred to
as the "PROCEDURES"). The Trustees shall be required to obtain the consent of a
majority of the members of the TAC in order:
(i) to amend materially the Procedures, unless such
amendment relates to the specific amounts or percentages to be paid to
holders of Toxic Personal Injury Claims who have not elected discounted
payment, in which case, TAC consent is not required; or
(ii) to merge or participate with any claims resolution
facility that was not specifically created under this Trust Agreement or
the Procedures; or
(iii) to amend any provision of Article 6 herein; or
(iv) to terminate the PI Trust pursuant to Article
7.2(a)(iii) herein.
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<PAGE> 244
The TAC shall not unreasonably withhold any consent required hereunder, and if
ever the TAC shall withhold any consent required hereunder, at the election of
the Trustees, the dispute between the Trustees and the TAC shall be resolved
through the implementation of binding alternative dispute resolution procedures
mutually agreed to by the Trustees and the TAC.
3.3 Claims Administration.
(a) General Principles.
The Trustees shall proceed quickly to implement the EPI Asbestos
Claims Procedures, and they shall proceed quickly to adopt the EPI Lead Claims
Procedures when, and if, Lead Personal Injury Claims become eligible for
processing by the PI Trust. The PI Trust shall pay holders of valid Toxic
Personal Injury Claims in accordance with the provisions hereof as promptly as
funds become available. In their administration of the Procedures, the Trustees
shall favor settlement over arbitration, arbitration over resort to the tort
system, and fair and efficient resolution of claims in all cases, while
endeavoring to preserve and enhance the PI Trust estate.
(b) Asbestos Personal Injury Claims.
(i) The Trustees shall employ mechanisms such as the
review of estimates of the numbers and values of Asbestos Personal
Injury Claims, or other comparable mechanisms, that provide reasonable
assurance the PI Trust will value, and be in a financial position to
pay, similar present asbestos personal injury Claims and future asbestos
personal injury Demands in substantially the same manner.
(ii) The Trustees shall administer the processing and
payment of Asbestos Personal Injury Claims in accordance with the EPI
Asbestos Claims Procedures, a copy of which is annexed hereto as Annex
B, as the same may be amended from time to time, in accordance with the
provisions hereof and thereof.
(c) Lead Personal Injury Claims.
(i) The Trustees shall employ mechanisms such as the
review of estimates of the numbers and values of Lead Personal Injury
Claims, or other comparable mechanisms, that provide reasonable
assurance the PI Trust will value, and be in a financial position to
pay, similar present lead personal injury Claims and future lead
personal injury Demands in substantially the same manner.
Notwithstanding the foregoing, due to (x) the present absence of any
court judgment imposing personal injury liability upon any lead pigment
manufacturer like Eagle-Picher, and (y) the difficult, expensive, and
inherently uncertain task of estimating the amount of valid Lead
Personal Injury Claims, if any, that the PI Trust may be required to pay
some time in the future, the Trustees shall not be required to estimate
the PI Trust's possible liability for, or decide whether to reserve
funds or otherwise maintain sufficient resources for the payment of,
Lead Personal Injury Claims until the latest of the following events:
(A) four years have passed after the Effective
Date;
(B) the PI Trust has paid One Million Dollars
($1,000,000) in indemnity costs, as opposed to claim defense
costs, for Lead Personal Injury Claims in any one calendar year;
or
A1.1.13-11
<PAGE> 245
(C) holders of Lead Personal Injury Claims
obtain final, nonappealable liability judgments against lead
pigment manufacturers in more than one state.
(ii) The Trustees shall administer the processing and
payment of Lead Personal Injury Claims pursuant to the EPI Lead Claims
Procedures to be adopted by the Trustees. The EPI Lead Claims Procedures
shall be similar to the EPI Asbestos Claims Procedures. For example,
like the EPI Asbestos Claims Procedures, the EPI Lead Claims Procedures
shall provide that the holders of Lead Personal Injury Claims shall be
prevented from suing the PI Trust in the tort system until they have
exhausted their remedies against the PI Trust under the EPI Lead Claims
Procedures. However, due to (x) the present absence of any court
judgment imposing personal injury liability upon any lead pigment
manufacturer like Eagle-Picher, and (y) the difficult, expensive, and
inherently uncertain task of estimating the amount of valid Lead
Personal Injury Claims, if any, that the PI Trust may be required to pay
some time in the future, the EPI Lead Claims Procedures shall differ
from the EPI Asbestos Claims Procedures in at least the following
respect:
(A) no Lead Personal Injury Claim or any claim
for contribution, indemnification, or reimbursement of liability
for a Lead Personal Injury Claim shall be eligible for processing
by the PI Trust unless the holder can demonstrate that either the
holder or a similarly situated lead personal injury claimant has
obtained a final, nonappealable judgment against a lead pigment
manufacturer under the state law applicable to the holder's
claim;
The PI Trust's determination under (A) above as to whether a
claim is eligible for processing (i) shall be final and nonappealable
and (ii) shall not be deemed to be an exhaustion of the claim holder's
remedies against the PI Trust, so that any claims the PI Trust
determines to be ineligible for processing may be refiled against the PI
Trust at such time as eligibility can be established under (A) above.
(d) Bankruptcy Court Claims Bar Date Orders.
(i) As provided herein, the Trustees shall enforce the
Bankruptcy Court's claims' bar date orders that are applicable to Toxic
Personal Injury Claims.
(ii) The Trustees shall disallow any Toxic Personal
Injury Claim if they determine the claimant inexcusably failed to comply
with an applicable claims bar date order entered by the Bankruptcy
Court, and any such decision shall be final and non-appealable.
Notwithstanding the foregoing, the Trustees shall not disallow a Toxic
Personal Injury Claim for failure to comply with an applicable claims
bar date order if the holder of such Toxic Personal Injury Claim
demonstrates that the asbestos or lead related disease complained of
first manifested itself after the applicable claims bar date order. For
example, an asbestos disease victim (A) who first manifested any
asbestos related disease after the applicable claims' bar date or (B)
who suffered from a less serious asbestos related disease, such as
pleural thickening, at the time of the applicable bar date and who later
developed a more serious asbestos related disease, such as cancer, shall
not have his claim disallowed for failure to comply with the applicable
claims bar date order.
(iii) The Trustees shall have complete discretion to
determine whether a claimant inexcusably failed to comply with an
applicable claims bar date order. In making this determination, the
Trustees may be guided by the "excusable neglect" standard developed
under federal bankruptcy law in connection with the adjudication of late
filed proofs of claim in bankruptcy cases.
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<PAGE> 246
ARTICLE 4
ACCOUNTS, INVESTMENTS, AND PAYMENTS
4.1 Accounts. The Trustees may, from time to time, create such accounts
and reserves within the PI Trust estate as they may deem necessary, prudent or
useful in order to provide for the payment of expenses and valid Toxic Personal
Injury Claims and may, with respect to any such account or reserve, restrict the
use of monies therein.
4.2 Separate Reserve For Future Claims. The first Fifty Million
($50,000,000) paid on the Divestiture Notes and the Senior Unsecured Sinking
Fund Debentures held by the PI Trust shall be segregated and held in a separate
account as a reserve for the payment of valid Toxic Personal Injury Claims whose
holders first manifest a disease after the Effective Date. The segregation and
holding of such funds, however, shall not in any way alter the duties of the
Trustees to pay similar present and future Toxic Personal Injury Claims in
substantially the same manner.
4.3 Investments. Investment of monies held in the PI Trust shall be
administered in the manner in which individuals of ordinary prudence, discretion
and judgment would act in the management of their own affairs, subject to the
following limitations and provisions:
(a) The PI Trust may acquire and hold any stock or securities
issued by Reorganized Eagle-Picher and included in the Assets and any New
Eagle-Picher Common Stock issuable on the exercise or conversion thereof,
without regard to any of the limitations set forth in the other parts of this
Article 4.
(b) Except with respect to entities owned and controlled by the
PI Trust for purposes of carrying out provisions of this Trust Agreement, the PI
Trust shall not acquire or hold any equity in any Person or business enterprise
unless such equity is in the form of securities that are traded on a national
securities exchange or major international securities exchange or over the
National Association of Securities Dealers Automated Quotation System.
(c) The PI Trust shall not acquire or hold any repurchase
obligations unless, in the opinion of the Trustees, they are adequately
collateralized.
4.4 Source of Payments. All PI Trust expenses, payments and all
liabilities with respect to Toxic Personal Injury Claims shall be payable solely
out of the PI Trust estate. Neither Eagle-Picher, Reorganized Eagle-Picher, any
Debtors, their subsidiaries, any successor in interest or the present or former
directors, officers, employees or agents of Eagle-Picher, Reorganized
Eagle-Picher, any Debtors or their subsidiaries, nor the Trustees, the TAC, or
any of their officers, agents, advisers or employees shall be liable for the
payment of any PI Trust expense or Toxic Personal Injury Claim or any other
liability of the PI Trust.
ARTICLE 5
TRUSTEES
5.1 Number. There initially shall be five (5) Trustees, two of whom
shall serve for a period of three (3) years from the effective date of the PI
Trust ("THREE YEAR SERVICE PERIOD"). At the end of the Three Year Service
Period, the two trustee positions subject to the Three Year Service Period will
automatically terminate and the PI Trust will thereafter operate with three
Trustees until termination of the PI Trust pursuant to Article 7.2.
The initial Trustees shall be those persons named on the signature page hereof.
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<PAGE> 247
5.2 Term of Service.
(a) Pursuant to Article 5.1, two of the initial Trustees shall
serve until the earlier of (i) the expiration of the Three Year Service Period,
(ii) his or her death, (iii) his or her resignation pursuant to Article 5.2(c),
(iv) his or her removal pursuant to Article 5.2(d), or (v) the termination of
the PI Trust pursuant to Article 7.2, at which time the term shall terminate
automatically.
(b) Trustees whose terms do not terminate upon the expiration of
the Three Year Service Period shall serve until the earlier of (i) the
termination of the PI Trust pursuant to Article 7.2 below, (ii) his or her
death, (iii) his or her resignation pursuant to Article 5.2(c) below, or (iv)
his or her removal pursuant to Article 5.2(d) below, at which time his or her
term shall terminate automatically.
(c) Any Trustee may resign at any time by written notice to each
of the remaining Trustees and the TAC. Such notice shall specify a date when
such resignation shall take effect, which shall not be less than 90 days after
the date such notice is given, where practicable.
(d) Any Trustee may be removed in the event that such Trustee
becomes unable to discharge his or her duties hereunder due to accident or
physical or mental deterioration, or for other good cause. Good cause shall be
deemed to include, without limitation, any failure to comply with Article 5.9, a
consistent pattern of neglect and failure to perform or participate in
performing the duties of the Trustees hereunder, or repeated nonattendance at
scheduled meetings. Such removal shall require the unanimous decision of the
other Trustees. Such removal shall take effect at such time as the other
Trustees shall determine.
5.3 Appointment of Successor Trustee.
(a) In the event of a vacancy in the position of a Trustee, the
vacancy shall be filled by majority vote of the remaining Trustees who shall
refrain from making any appointment that may result in the appearance of
impropriety; provided, however, that during the Three Year Service Period the
remaining Trustees, in their discretion, may decide not to appoint a successor
Trustee to fill such a vacancy so long as the remaining Trustees number no less
than three (3).
(b) Immediately upon the appointment of any successor Trustee,
all rights, titles, duties, powers and authority of the predecessor Trustee
hereunder shall be vested in, and undertaken by, the successor Trustee without
any further act. No successor Trustee shall be liable personally for any act or
omission of his or her predecessor Trustee.
5.4 Liability of Trustees. No Trustee, officer, or employee of the PI
Trust shall be liable to the PI Trust, to any person holding a Toxic Personal
Injury Claim, or to any other Person except for such Trustee's, officer's or
employee's own breach of trust committed in bad faith or for willful
misappropriation. No Trustee, officer, or employee of the PI Trust shall be
liable for any act or omission of any other officer, agent, or employee of the
PI Trust, unless the Trustee acted with bad faith or willful misconduct in the
selection or retention of such officer, agent, or employee.
5.5 Compensation and Expenses of Trustees.
(a) Each of the Trustees shall receive compensation from the PI
Trust for his or her services as Trustee in the amount of $ 35,000 per annum,
plus a per diem allowance for meetings attended in the amount of $1,000, or some
other amount as determined by the Trustees, payable as determined by the
Trustees. The Trustees shall determine the scope and duration of activities that
constitute a meeting and may
A1.1.13-14
<PAGE> 248
provide for partial payment of per diem amounts for activities of less than a
full day's duration. The per annum compensation payable to the Trustees
hereunder may only be increased annually by the Trustees proportionately with
any increase in the Consumer Price Index -- All Cities (or any successor index)
for the corresponding annual period. Any increase in excess of that amount may
be made only with the approval of the Bankruptcy Court.
(b) The PI Trust will promptly reimburse the Trustees for all
reasonable out-of-pocket costs and expenses incurred by the Trustees in
connection with the performance of their duties hereunder.
5.6 Indemnification of Trustees and Others.
(a) The PI Trust shall indemnify and defend the Trustees, the PI
Trust's officers, agents, advisers or employees, to the fullest extent that a
corporation or trust organized under the laws of the PI Trust's domicile is from
time to time entitled to indemnify and defend its directors, trustees, officers,
employees, agents or advisers against any and all liabilities, expenses, claims,
damages or losses incurred by them in the performance of their duties hereunder.
Notwithstanding the foregoing, the Trustees shall not be indemnified or defended
in any way for any liability, expense, claim, damage or loss for which they are
liable under Article 5.4. Additionally, each member of the Injury Claimants'
Committee and its professionals, the Future Representative and his
professionals, and each member of the TAC (collectively, "ADDITIONAL
INDEMNITEES") who was or is a party, or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding of any kind, whether
civil, administrative or arbitrative, by reason of any act or omission of such
Additional Indemnitees with respect to (i) the Chapter 11 Cases, (ii) the
liquidation of any Toxic Personal Injury Claims, or (iii) the administration of
the PI Trust and the implementation of the Procedures, shall be indemnified and
defended by the PI Trust against expenses, costs and fees (including attorneys'
fees), judgments, awards, costs, amounts paid in settlement, and liabilities of
all kinds incurred by each Additional Indemnitee in connection with or resulting
from such action, suit, or proceeding, if he or she acted in good faith and in a
manner such Additional Indemnitee reasonably believed to be in, or not opposed
to, the best interests of the holders of Toxic Personal Injury Claims.
(b) Reasonable expenses, costs and fees (including attorneys'
fees) incurred by or on behalf of a Trustee or Additional Indemnitee in
connection with any action, suit, or proceeding, whether civil, administrative
or arbitrative from which they are indemnified by the PI Trust pursuant to this
Article 5.6, may be paid by the PI Trust in advance of the final disposition
thereof upon receipt of an undertaking by or on behalf of such Trustee or
Additional Indemnitee to repay such amount unless it shall be determined
ultimately that such Trustee or Additional Indemnitee is entitled to be
indemnified by the PI Trust.
(c) The Trustees shall have the power, generally or in specific
cases, to cause the PI Trust to indemnify the employees and agents of the PI
Trust to the same extent as provided in this Article 5.6 with respect to the
Trustees.
(d) Any indemnification under Article 5.6(c) of this Agreement
shall be made by the PI Trust upon a determination that indemnification of such
Person is proper in the circumstances. Such determination shall be made by a
majority vote of the Trustees who were not parties to such action, suit, or
proceeding, if at least two such Trustees were not parties; otherwise the
determination will be made by legal counsel to the PI Trust.
(e) The Trustees may purchase and maintain reasonable amounts and
types of insurance on behalf of an individual who is or was a Trustee, officer,
employee, agent or representative of the PI Trust or Additional Indemnitee
against liability asserted against or incurred by such individual in that
capacity or arising from his or her status as a Trustee, officer, employee,
agent or representative.
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<PAGE> 249
5.7 Trustees' Lien. The Trustees shall have a prior lien upon the PI
Trust corpus to secure the payment of any amounts payable to them pursuant to
Articles 5.5 and 5.6.
5.8 Trustees' Employment of Experts. The Trustees may, but shall not be
required to, consult with counsel, accountants, appraisers and other parties
deemed by the Trustees to be qualified as experts on the matters submitted to
them (regardless of whether any such party is affiliated with any of the
Trustees in any manner, except as otherwise expressly provided in this Trust
Agreement), and the opinion of any such parties on any matters submitted to them
by the Trustees shall be full and complete authorization and protection in
respect of any action taken or not taken by the Trustees hereunder in good faith
and in accordance with the written opinion of any such party.
5.9 Trustees' Independence. No Trustee shall, during the term of his
service, hold a financial interest in Reorganized Eagle-Picher or act as
attorney for Reorganized Eagle-Picher or as an attorney or advisor for any
person who holds a Toxic Personal Injury Claim.
5.10 Trustees' Service as Officers or Consultants to the Trust. The
Trustees may, but are not required to, select any Trustee to serve as an officer
or manager of the Trust or as a consultant to the Trust. In the event any
Trustee serves the Trust in such a capacity, the Trust shall compensate the
Trustee in an amount determined by the Trustees. Compensation for a Trustee's
service as an officer or manager of the Trust or as a consultant to the Trust
shall be in addition to compensation paid pursuant to Article 5.5.
5.11 Trustees' Service as Directors of Reorganized Eagle-Picher.
Notwithstanding the provisions of Article 5.9 above, the Trustees are not
prohibited from serving as directors of Reorganized Eagle-Picher. If any Trustee
serves as a director of Reorganized Eagle-Picher, he shall not receive for such
service compensation over and above the compensation received as Trustee under
Article 5.5, but he shall receive from the PI Trust a per diem allowance in the
amount that Reorganized Eagle-Picher pays its directors for their attendance at
meetings.
5.12 Bond. The Trustees shall not be required to post any bond or other
form of surety or security unless otherwise ordered by the Bankruptcy Court.
ARTICLE 6
TRUSTEES' ADVISORY COMMITTEE
6.1 Formation; Duties. A Trustees' Advisory Committee (the "TAC") shall
be formed. The Trustees shall consult with the TAC on the appointment of
successor Trustees and the implementation and administration of the Procedures.
The Trustees may consult with the TAC on any matter affecting the PI Trust, and
certain actions by the Trustees are subject to the prior consent of the TAC as
provided in Article 3.2(e) hereof. The TAC shall endeavor to act in the best
interests of the holders of all Toxic Personal Injury Claims.
6.2 Number; Chairperson.
(a) There shall be three members of the TAC. One of the initial
TAC members shall be the Future Representative; the two other initial TAC
members shall be Robert E. Sweeney and Robert B. Steinberg. The TAC shall act in
all cases by majority vote.
(b) There shall be a Chairperson of the TAC. The Chairperson
shall act as the TAC's liaison, he shall coordinate and schedule meetings of the
TAC, and he shall handle all administrative matters
A1.1.13-16
<PAGE> 250
that come before the TAC. The Future Representative shall serve as Chairperson
of the TAC for as long as he is a member of the TAC.
6.3 Term of Office.
(a) Each member of the TAC shall serve for the duration of the PI
Trust, subject to the earlier of his or her death, resignation, or removal.
(b) Subject to Article 6.4(b) hereof, any member of the TAC may
resign at any time by written notice to each of the remaining members specifying
the date when such resignation shall take place.
(c) Any member of the TAC may be removed in the event such member
becomes unable to discharge his or her duties hereunder due to accident,
physical deterioration, mental incompetence, or a consistent pattern of neglect
and failure to perform or to participate in performing the duties of such member
hereunder, such as repeated nonattendance at scheduled meetings. Such removal
shall be made by the unanimous decision of the other members of the TAC, and it
shall be effective at such time as all other members of the TAC determine.
6.4 Appointment of Successor.
(a) A vacancy in the TAC caused by the resignation of a TAC
member shall be filled with an individual nominated by the resigning TAC member
and approved by the unanimous vote of all TAC members. The resigning TAC
member's resignation shall not be effective until such approval is obtained and
the successor TAC member has accepted the appointment.
(b) In the event of a vacancy in the membership of the TAC other
than one caused by resignation, the vacancy shall be filled by the unanimous
vote of the remaining member(s) of the TAC; provided, however, that the Future
Representative shall have the exclusive right to predesignate his successor,
subject only to the unanimous approval of the remaining member(s) of the TAC.
6.5 Compensation and Expenses of TAC Members.
(a) Each member of the TAC shall receive compensation from the PI
Trust for his or her services in the amount of $2,500.00 per diem for meetings
attended by such member, payable as determined by the Trustees, but not less
frequently than quarterly. Such per diem amount shall be increased or decreased
annually pro rata with the amount that the per diem for meetings paid to the
Trustees is increased or decreased pursuant to Article 5.5(a). For purposes of
determining the per diem amount hereunder, the same definition of "meeting"
shall apply to the TAC as is adopted by the Trustees for meetings of the
Trustees.
(b) In the discretion of the Trustees, the Future Representative
may receive compensation from the PI Trust in addition to the per diem meeting
allowance paid to each member of the TAC, if they deem it appropriate to
compensate him for the additional duties imposed upon him as Chairperson of the
TAC. Such additional compensation shall be paid at the hourly rate previously
approved for the Future Representative by the Bankruptcy Court in the Chapter 11
Cases.
(c) All reasonable out-of-pocket costs and expenses incurred by
TAC members in connection with the performance of their duties hereunder will be
promptly reimbursed to such members by the PI Trust.
A1.1.13-17
<PAGE> 251
6.6 Procedure for Obtaining Consent of TAC. In the event a matter is
subject to the consent of the TAC pursuant to the terms hereof, the Trustees
shall provide the TAC with the appropriate information regarding the matter in
question. Upon receipt of such information, the TAC shall be given a period of
twenty (20) days to respond to the Trustees' request for consent. This twenty
(20) day period may be extended with the consent of the Trustees. In the event
that the TAC does not respond to the Trustees within such twenty (20) day
period, or any extension thereof, as to their approval or non-approval to such
matter, then approval by the TAC shall be deemed to have been granted. The
members of the TAC must consider in good faith any request by the Trustees prior
to any non-approval thereof, and no member of the TAC may withhold his consent
unreasonably.
ARTICLE 7
GENERAL PROVISIONS
7.1 Irrevocability. The PI Trust is irrevocable, but is subject to
amendment as provided in Article 7.3.
7.2 Termination.
(a) The PI Trust shall automatically terminate on the date (the
"TERMINATION DATE") 90 days after the first occurrence of any of the following
events:
(i) the Trustees in their sole discretion decide to
terminate the PI Trust because (A) they deem it unlikely that new Toxic
Personal Injury Claims will be filed against the PI Trust and (B) all
Toxic Personal Injury Claims duly filed with the PI Trust have been
liquidated and satisfied and twelve consecutive months have elapsed
during which no new Toxic Personal Injury Claim has been filed with the
PI Trust;
(ii) if the Trustees have procured and have in place
irrevocable insurance policies and have established claims handling
agreements and other necessary arrangements with suitable third parties
adequate to discharge all expected remaining obligations and expenses of
the PI Trust in a manner consistent with this Trust Agreement and the
Procedures, the date on which the Bankruptcy Court enters an order
approving such insurance and other arrangements and such order becomes
final;
(iii) if in the judgment of two/thirds of the Trustees,
with the consent of the TAC (which consent shall not be unreasonably
withheld), the continued administration of the PI Trust is uneconomic
or inimical to the best interests of the persons holding Toxic Personal
Injury Claims and the termination of the PI Trust will not expose or
subject Reorganized Eagle-Picher or any other Reorganized Debtor or any
successor in interest to any increased or undue risk of having any Toxic
Personal Injury Claims asserted against it or them or in any way
jeopardize the validity or enforceability of the Asbestos and Lead PI
Permanent Channeling Injunction; or
(iv) 21 years less 91 days pass after the death of the
last survivor of all the descendants of Joseph P. Kennedy, Sr. of
Massachusetts living on the date hereof.
(b) On the Termination Date, after payment of all the PI Trust's
liabilities have been provided for, all monies remaining in the PI Trust estate
shall be transferred to charitable organization(s) exempt from federal income
tax under Section 501(c)(3) of the Internal Revenue Code, which tax-exempt
organization(s) shall be selected by the Trustees using their reasonable
discretion; provided, however, that (I)
A1.1.13-18
<PAGE> 252
if practicable, the tax-exempt organization(s) shall be related to the treatment
of, research, or the relief of suffering of individuals suffering from asbestos
or lead caused disorders, and (ii) the tax-exempt organization(s) shall not bear
any relationship to Reorganized Eagle-Picher within the meaning of Section
468(d)(3) of the Internal Revenue Code.
7.3 Amendments. The Trustees, after consultation with the TAC, and
subject to the TAC's consent when so provided herein, may modify or amend this
Trust Agreement or any document annexed to it, including, without limitation,
the Bylaws, or the Procedures, except that Articles 2.2 (Purpose), 2.4
(Acceptance of Assets and Assumption of Liabilities), 3.1(e) (precluding
guaranty of others' debt), 3.2(e) (Trustees' consultation with TAC), 3.3(a)-(c)
(claims administration), 5.1 (Number of Trustees), 5.2 (Term of Service), 5.3
(Appointment of Successor Trustees), 5.5 (Compensation and Expenses of
Trustees), 5.6 (Indemnification of Trustees and Others), 5.9 (Trustees'
Disinterestedness), 6.1 (TAC Formation and Duties), 6.2 (TAC Number and
Chairperson), 6.4 (Appointment of Successor (TAC)), 7.1 (Irrevocability), 7.2
(Termination) and 7.3 (Amendments) herein shall not be modified or amended in
any respect. No consent from the Settlors shall be required to modify or amend
this Trust Agreement or any document annexed to it. Any modification or
amendment made pursuant to this section must be done in writing. Notwithstanding
anything contained herein to the contrary, neither this Trust Agreement nor the
Procedures shall be modified or amended in any way that would jeopardize the
efficacy or enforceability of the Asbestos and Lead PI Permanent Channeling
Injunction.
7.4 Meetings. For purposes of Articles 5.5 and 6.5 of this Trust
Agreement, a TAC member or a Trustee shall be deemed to have attended a meeting
in the event such person spends a substantial portion of the day conferring, by
phone or in person, on PI Trust matters with TAC members or Trustees. The
Trustees shall have complete discretion to determine whether a meeting, as
described herein, occurred for purposes of Articles 5.5 and 6.5.
7.5 Severability. Should any provision in this Trust Agreement be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this Trust Agreement.
7.6 Notices. Notices to persons asserting claims shall be given at the
address of such person, or, where applicable, such person's legal
representative, in each case as provided on such person's claim form submitted
to the PI Trust with respect to his or her Toxic Personal Injury Claim. Any
notices or other communications required or permitted hereunder shall be in
writing and delivered at the addresses designated below, or sent by telecopy
pursuant to the instructions listed below, or mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows, or to
such other address or addresses as may hereafter be furnished by any of
Reorganized Eagle-Picher, the Trustees or the TAC to the others in compliance
with the terms hereof.
To the PI Trust
or the Trustees: _______________________________
_______________________________
_______________________________
A1.1.13-19
<PAGE> 253
To the TAC: Robert E. Sweeney, Esq.
Robert E. Sweeney Co., L.P.A.
Suite 1500, Illuminating Building
55 Public Square
Cleveland, Ohio 44113
Telecopier: (216) 696-0732
Telephone Confirmation: (216) 696-0606
and
Robert B. Steinberg, Esq.
Rose, Klein & Marias
18th Floor
801 South Grand Avenue
Los Angeles, California 90017-4645
Telecopier: (213) 623-7755
Telephone Confirmation: (213) 626-0571
and
James J. McMonagle
24 Walnut Street
Chagrin Falls, Ohio 44022
Telecopier: (216) 844-5010
Telephone Confirmation: (216) 844-3817
To Reorganized
Eagle-Picher: Eagle-Picher Industries, Inc.
Attention: General Counsel
IF BY HAND OR OVERNIGHT DELIVERY:
Suite 1300, 580 Building
580 Walnut Street
Cincinnati, Ohio 45202
IF BY MAIL:
Post Office Box 779
Cincinnati, Ohio 45201
Telecopier: (513) 721-3404
Telephone Confirmation: (513) 629-2400
and
A1.1.13-20
<PAGE> 254
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen Karotkin, Esq.
Telecopier: (212) 310-8007
Telephone Confirmation: (212) 310-8888
and
Frost & Jacobs
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
Attention: Edmund J. Adams, Esq.
Telecopier: (513) 651-6981
Telephone Confirmation: (513) 651-6800
All such notices and communications shall be effective when
delivered at the designated addresses or when the telecopy communication is
received at the designated addresses and confirmed by the recipient by return
telecopy in conformity with the provisions hereof.
7.7 Counterparts. This Trust Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but such counterparts
shall together constitute but one and the same instrument.
7.8 Successors and Assigns. The provisions of this Trust Agreement shall
be binding upon and inure to the benefit of the Settlors, the PI Trust, and the
Trustees and their respective successors and assigns, except that neither the
Settlors nor the PI Trust nor any Trustee may assign or otherwise transfer any
of its, or his or her rights or obligations under this Trust Agreement except,
in the case of the PI Trust and the Trustees, as contemplated by Article 3.1.
7.9 Limitation on Claim Interests for Securities Laws Purposes. Toxic
Personal Injury Claims, and any interests therein, (a) shall not be assigned,
conveyed, hypothecated, pledged or otherwise transferred, voluntarily or
involuntarily, directly or indirectly, except by will or under the laws of
descent and distribution; (b) shall not be evidenced by a certificate or other
instrument; (c) shall not possess any voting rights; and (d) shall not be
entitled to receive any dividends or interest; provided, however, that the
foregoing shall not apply to the holder of an Asbestos or Lead Contribution
Claim that is subrogated to an Asbestos Personal Injury Claim or Lead Personal
Injury Claim as a result of its satisfaction of such Asbestos Personal Injury
Claim or Lead Personal Injury Claim.
7.10 Entire Agreement; No Waiver. The entire agreement of the parties
relating to the subject matter of this Trust Agreement is contained herein and
in the documents referred to herein, and this Trust Agreement and such documents
supersede any prior oral or written agreements concerning the subject matter
hereof. No failure to exercise or delay in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any further
exercise thereof or of any other right, power or privilege. The rights and
remedies herein provided are cumulative and are not exclusive of rights under
law or in equity.
A1.1.13-21
<PAGE> 255
7.11 Headings. The headings used in this Trust Agreement are inserted
for convenience only and neither constitute a portion of this Trust Agreement
nor in any manner affect the construction of the provisions of this Trust
Agreement.
7.12 Governing Law. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio.
7.13 Settlors' Representative. Eagle-Picher is hereby irrevocably
designated as the representative of the Settlors, and it is hereby authorized to
take any action required of the Settlors in connection with the Trust Agreement.
7.14 Dispute Resolution. Any disputes that arise under this Agreement or
under the annexes hereto shall be resolved by the Bankruptcy Court pursuant to
Article 9 of the Plan, except as otherwise provided herein or in the annexes
hereto. Notwithstanding anything else herein contained, to the extent any
provision of this Trust Agreement is inconsistent with any provision of the
Plan, the Plan shall control.
7.15 Enforcement and Administration. The parties hereby acknowledge the
Bankruptcy Court's continuing exclusive jurisdiction to interpret and enforce
the terms of this Trust Agreement and the annexes hereto, pursuant to Article 9
of the Plan.
7.16 Effectiveness. This Trust Agreement shall not become effective
until it has been executed and delivered by all the parties hereto and until the
Effective Date.
IN WITNESS WHEREOF, the parties have executed this Trust Agreement this
____ day of __________________, 1996.
SETTLORS:
EAGLE-PICHER INDUSTRIES, INC.
BY:____________________________
Name:__________________________
Title: ________________________
DAISY PARTS, INC.
BY:____________________________
Name:__________________________
Title: ________________________
TRANSICOIL, INC.
BY:____________________________
Name:__________________________
Title: ________________________
A1.1.13-22
<PAGE> 256
MICHIGAN AUTOMOTIVE RESEARCH CORP.
BY:____________________________
Name:__________________________
Title: ________________________
EDI, INC.
BY:____________________________
Name:__________________________
Title: ________________________
EAGLE-PICHER MINERALS, INC.
BY:____________________________
Name:__________________________
Title: ________________________
HILLSDALE TOOL &
MANUFACTURING CO.
BY:____________________________
Name:__________________________
Title: ________________________
A1.1.13-23
<PAGE> 257
TRUSTEES:
_______________________________
Name: Darius W. Gaskins, Jr.
_______________________________
Name: Kevin O'Donnell
_______________________________
Name: William J. Williams
_______________________________
Name: Daniel M. Phillips
(3 Year Term)
_______________________________
Name: Marshall Wright
(3 Year Term)
A1.1.13-24
<PAGE> 258
ANNEX A
EPI PERSONAL INJURY SETTLEMENT TRUST
BYLAWS
ARTICLE I
OFFICES
SECTION 1. Principal Office. The initial principal office of the EPI
Personal Injury Settlement Trust (the "PI Trust") shall be in
____________________ or at such other place as the Trustees shall from time to
time select.
SECTION 2. Other Offices. The PI Trust may have such other offices at
such other places as the Trustees may from time to time determine to be
necessary for the efficient and cost-effective administration of the PI Trust.
ARTICLE II
TRUSTEES
SECTION 1. Control of Property, Business and Affairs. The property,
business and affairs of the PI Trust shall be managed by or under the direction
of the Trustees, provided that certain decisions of the Trustees shall be
subject to the consent of the Trustees' Advisory Committee (the "TAC") as
provided in the Trust Agreement to which these Bylaws are attached as Annex A.
SECTION 2. Number, Resignation and Removal. The number of Trustees and
the provisions governing the resignation and removal of a Trustee and the
appointment of a successor Trustee shall be governed by the provisions of
Article 5 of the Trust Agreement.
SECTION 3. Quorum and Manner of Acting. During the Three Year Service
Period described in Article 5.1 of the Trust Agreement, the presence of 3
Trustees shall constitute a quorum for the transaction of business; after the
Three Year Service Period described in Article 5.1 of the Trust Agreement, two
(2) Trustees shall constitute a quorum for the transaction of business. In the
absence of a quorum, the Trustee[s] present may adjourn the meeting from time to
time until a quorum shall be present. During the Three Year Service Period
described in Article 5.1 of the Trust Agreement, the vote, at a meeting at which
a quorum is present of at least three (3) Trustees shall be an act of the
Trustees; after the Three Year Service Period described in Article 5.1 of the
Trust Agreement, the vote, at a meeting at which a quorum is present of at least
two (2) Trustees shall be an act of the Trustees.
SECTION 4. Regular Meetings. Regular meetings of the Trustees may be
held at such time and place as shall from time to time be determined by the
Trustees provided that the Trustees shall meet at least once per calendar
quarter. After there has been such determination, and a notice thereof has been
once given to each Trustee, regular meetings may be held without further notice
being given.
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<PAGE> 259
SECTION 5. Special Meeting Notice. Special meetings of the Trustees
shall be held whenever called by one or more of the Trustees. Notice of each
such meeting shall be delivered by overnight courier to each Trustee, addressed
to him or her at his or her residence or usual place of business, at least three
days before the date on which the meeting is to be held, or shall be sent to him
or her at such place by personal delivery or by telephone or telecopy not later
than two (2) days before the day of which such meeting is to be held. Such
notice shall state the place, date and hour of the meeting and the purposes for
which it is called. In lieu of the notice to be given as set forth above, a
waiver thereof in writing, signed by the Trustee or Trustees entitled to receive
such notice, whether before or after the meeting, shall be deemed equivalent
thereto for purposes of this Section 5. No notice to or waiver by any Trustee
with respect to any special meeting shall be required if such Trustee shall be
present at said meeting.
SECTION 6. Action Without a Meeting; Meeting by Conference Call. Any
action required or permitted to be taken at any meeting of the Trustees may be
taken without a meeting if all Trustees consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Trustees.
The Trustees also may take any action required or permitted to be taken
at any meeting by means of conference telephone or similar communication
equipment provided that all persons participating in the meeting can hear each
other. Participation in a meeting pursuant to this paragraph shall constitute
presence in person at such meeting.
ARTICLE III
OFFICERS
SECTION 1. Principal Officers. The principal officer of the PI Trust
shall be an Executive Director. The PI Trust may also have such other principal
officers, including one or more Assistant Directors, a Secretary-Treasurer and a
Controller, as the Trustees may in their discretion appoint after determining
that such appointment will promote the efficient and cost-effective
administration of the PI Trust.
SECTION 2. Election and Term of Office. The principal officer(s) of the
PI Trust shall be chosen by the Trustees. Each such officer shall hold office
until his successor shall have been duly chosen and qualified or until his
earlier death, resignation or removal.
SECTION 3. Subordinate Officers. In addition to the principal officers
enumerated in Section 1 of this Article III, the PI Trust may have such other
subordinate officers, agents and employees as the Trustees may deem necessary
for the efficient and cost-effective administration of the PI Trust, each of
whom shall hold office for such period, have such authority, and perform such
duties as the Trustees may from time to time determine. The Trustees may
delegate to any principal officer the power to appoint and to remove any such
subordinate officers, agents or employees.
SECTION 4. Removal. The Executive Director or any other officer may be
removed with or without cause, at any time, by resolution adopted by the
Trustees at any regular meeting of the Trustees or at any special meeting of the
Trustees called for that purpose at which a quorum is present.
SECTION 5. Resignations. Any officer may resign at any time by giving
written notice to the Trustees. The resignation of any officer shall take effect
upon receipt of notice thereof or at such later
A1.1.13A-2
<PAGE> 260
time as shall be specified in such notice and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 6. Powers and Duties. The officers of the PI Trust shall have
such powers and perform such duties as may be conferred upon or assigned to them
by the Trustees.
ARTICLE IV
TRUSTEES' ADVISORY COMMITTEE
SECTION 1. Regular Meetings. Regular meetings of the TAC may be held at
such time and place as shall from time to time be determined by the TAC,
provided that the TAC shall meet as often as is necessary to respond promptly to
matters referred to it for consultation or consent by the Trustees. After a
schedule for regular meetings has been determined, and a notice thereof has been
once given to each TAC member, regular meetings may be held without further
notice being given.
SECTION 2. Special Meeting; Notice. Special meetings of the TAC shall
be held whenever called by one or more of the TAC members. Notice of each such
meeting shall be delivered by overnight courier to each TAC member, addressed to
him or her at his or her residence or usual place of business, at least three
days before the date on which the meeting is to be held, or shall be sent to him
or her at such place by personal delivery or by telephone or telecopy, not later
than two (2) days before the day on which such meeting is to be held. Such
notice shall state the place, date and hour of the meeting and the purposes for
which it is called. In lieu of the notice to be given as set forth above, a
waiver thereof in writing, signed by the TAC members entitled to receive such
notice, whether before or after the meeting, shall be deemed equivalent thereto
for purposes of this Section 2. No notice to or waiver by any TAC member with
respect to any special meeting shall be required if such TAC member shall be
present at such meeting.
SECTION 3. Action Without a Meeting; Meeting by Conference Call. Any
action required or permitted to be taken at any meeting of the TAC may be taken
without a meeting if all members of the TAC consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the TAC.
The TAC may take any action required or permitted to be taken at any
meeting by means of conference telephone or similar communication equipment
provided that all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this paragraph shall constitute presence
in person at such meeting.
SECTION 4. Reimbursement of Expenses. All reasonable out-of-pocket
expenses incurred by each member of the TAC in connection with the performance
of his duties hereunder will be reimbursed promptly to such member by the PI
Trust upon presentation of appropriate documentation.
ARTICLE V
AMENDMENTS
The Bylaws of the PI Trust, other than Article II, Article IV and this
Article V, may be amended by the Trustees at any meeting of the Trustees,
provided that notice of the proposed amendment is
A1.1.13A-3
<PAGE> 261
contained in the notice of such meeting. The Bylaws contained in Article IV may
be amended by the Trustees only after receipt of the consent of the TAC to the
proposed amendment.
A1.1.13A-4
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A.1.1.13B- 1
ANNEX B
EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS INJURY CLAIMS RESOLUTION PROCEDURES
These Eagle-Picher Industries Asbestos Personal Injury Claims
Resolution Procedures (the "EPI ASBESTOS CLAIMS PROCEDURES") have been prepared
in connection with the First Amended Consolidated Joint Plan of Reorganization
of Eagle-Picher Industries, Inc. ("EAGLE-PICHER") and its affiliated Debtors
(the "PLAN") confirmed by order of the United States Bankruptcy Court for the
Southern District of Ohio, dated __________________, 1996 ("BANKRUPTCY COURT")
in In re Eagle-Picher Industries, Inc., et al., Consolidated Case No.
1-91-00100 ("CHAPTER 11 CASES") and the Eagle-Picher Industries, Inc. Personal
Injury Settlement Trust Agreement (the "TRUST AGREEMENT") filed in connection
with the Plan.
These EPI Asbestos Claims Procedures provide for processing,
liquidating, paying, and satisfying all Asbestos Personal Injury Claims as
provided in and required by the Plan and the Trust Agreement. The trustees of
the PI Trust (the "TRUSTEES") shall implement and administer these EPI Asbestos
Claims Procedures in accordance with the Trust Agreement.
SECTION I
Definitions
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Trust Agreement.
SECTION II
Purpose and Interpretation
2.1 Purpose. These EPI Asbestos Claims Procedures are adopted pursuant
to the Trust Agreement. They are designed to provide prompt payment to holders
of similar, valid Asbestos Personal Injury Claims in substantially the same
manner.
2.2 Interpretation. Nothing in these EPI Asbestos Claims Procedures
shall be deemed to create a substantive right for any claimant. Without limiting
the foregoing, these EPI Asbestos Claims Procedures specifically shall not
create any substantive right for any claimant to be afforded now, or in the
future, a discounted cash payment election, as described in Section 5.2 herein,
in any amount. These EPI Asbestos Claims Procedures are procedural, and they may
be amended, deleted, or added to pursuant to the terms of the Trust Agreement
and the terms of these EPI Asbestos Claims Procedures.
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A.1.1.13B- 2
SECTION III
Trustees' Advisory Committee
The Trustees shall consult with the Trustees' Advisory Committee
("TAC"), appointed pursuant to the Trust Agreement, on the implementation and
administration of these EPI Asbestos Claims Procedures, including, but not
limited to, implementation of procedures under various claimant payment
programs, including any future programs offering discounted payments;
development of Asbestos Personal Injury Claims categories and values of claims,
as set forth in Section 5.3; auditing and monitoring claims; alternative dispute
resolution forms and procedures; releases; and interpretation of these EPI
Asbestos Claims Procedures. When consultation is required under the Trust
Agreement or these EPI Asbestos Claims Procedures, the Trustees need only seek
advice and counsel from the TAC and are free to accept or reject any
recommendation of the TAC. The Trustees shall be subject to the consent of the
TAC on the issues enumerated in Article 3.2(e) of the Trust Agreement,
consistent with the provisions of that Section.
SECTION IV
Payment Percentage; Periodic Estimates
There is inherent uncertainty regarding Eagle-Picher's total liability
to holders of Asbestos Personal Injury Claims as well as the total value of the
assets available to pay valid Asbestos Personal Injury Claims. Consequently,
there is inherent uncertainty regarding the amounts that claimants will receive.
To ensure substantially equivalent treatment of all present and future valid
Asbestos Personal Injury Claims, prior to making distributions to claimants,
other than those who have elected the discounted cash payment described in
Section 5.2, the Trustees must determine the percentage of full liquidated value
that valid Asbestos Personal Injury Claims would be likely to receive ("PAYMENT
PERCENTAGE"). No claimant shall receive payments under the individualized review
process that exceed the PI Trust's most recent determination of the Payment
Percentage. The Trustees must base this determination, on the one hand, on
estimates of the number, types, and values of present and future Asbestos
Personal Injury Claims and, on the other hand, on the value of the PI Trust's
assets, the liquidity of those assets, the PI Trust's expected future expenses
for administration and legal defense, and other material matters that are
reasonable and likely to affect the sufficiency of funds to pay a comparable
percentage of full value to all holders of Asbestos Personal Injury Claims.
Periodically, but no less frequently than once every two (2) years, the Trustees
shall reconsider their determination of the Payment Percentage to assure that it
is based on accurate, current information and may, after such reconsideration,
change the Payment Percentage, if necessary. When making these determinations,
the Trustees shall exercise common sense and flexibly evaluate all relevant
factors.
SECTION V
Claims Types; Processing and Payment
5.1 Prepetition Liquidated Claims.
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A.1.1.13B- 3
(a) Processing and Payment. Unless not feasible after every reasonable
effort, no later than 60 days after the Effective Date the Trustees shall pay
Asbestos Personal Injury Claims that were liquidated by settlement agreement
entered into prior to January 7, 1991 or by judgment that became final and
nonappealable prior to January 7, 1991 ("PREPETITION LIQUIDATED CLAIMS"). These
claims shall be paid in an order to be determined by the Trustees based on a
first-in first-out ("FIFO") principle. These claims may require no processing
other than verification of the holder's identity, payment, and release of the PI
Trust. The liquidated value of a Prepetition Liquidated Claim shall be the
amount awarded in the prepetition judgment or settlement agreement, and holders
of Prepetition Liquidated Claims shall be paid the appropriate Payment
Percentage based upon that liquidated value.
(b) Marshalling. Prepetition Liquidated Claims that are
secured by letters of credit, appeal bonds, or other security or sureties shall
first exhaust their rights against any applicable security or surety before
making a claim against the PI Trust. In the event that such security or surety
is insufficient to pay the Prepetition Liquidated Claim in full, the deficiency
shall be processed and paid as a Prepetition Liquidated Claim.
5.2 Discounted Cash Payment Election.
(a) Rationale. The Plan provides for a discounted cash payment
election that may be made at the time the eligible holders of Asbestos Personal
Injury Claims vote to accept or reject the Plan. Those holders of valid Asbestos
Personal Injury Claims who so elect shall make a full and final settlement with
the PI Trust (except as provided in Section 5.2(c) herein) in exchange for a
single cash payment in the amounts shown below for each disease category:
Mesothelioma $6,500
Lung Cancer $2,000
Other Cancer $1,000
Non-malignancy $ 400
This discounted cash payment election is designed, in part, for claimants who
easily can be determined by the PI Trust to have valid Asbestos Personal Injury
Claims and who desire to have a fixed and certain payment made expeditiously
rather than wait for payment after individualized review. This discounted cash
payment election further is designed, in part, for claimants who easily can be
determined by the PI Trust to have valid Asbestos Personal Injury Claims for
non-malignant injuries and who wish to have a fixed payment now and the right to
receive a further payment if they should subsequently be diagnosed as having an
asbestos-related malignancy.
(b) Processing and Payment. Unless not feasible after every
reasonable effort, no later than 60 days after the Effective Date the Trustees
shall process and pay the holders of Asbestos Personal Injury Claims who elect
to receive a discounted cash payment in an order to be determined by the
Trustees based on a FIFO principle. The Trustees shall determine appropriate
procedures for ensuring that only holders of valid Asbestos Personal Injury
Claims are paid under the discounted cash payment election. These procedures for
ensuring payment only to holders of valid Asbestos Personal Injury Claims under
the discount ed cash payment election shall be based upon the guidelines set
forth in Section 7.1 herein.
<PAGE> 265
A.1.1.13B- 4
(c) Subsequent Malignancy. The holder of a valid Asbestos
Personal Injury Claim based upon a non-malignant asbestos injury or condition
who elects to receive a discounted cash payment as provided herein may file a
new Asbestos Personal Injury Claim for an asbestos-related malignancy that is
subsequently diagnosed, and any additional payments to which such claimant may
be entitled shall not be reduced by the amount of the discounted cash payment.
(d) No Review. The Trustees' decision that the holder of an
Asbestos Personal Injury Claim should not receive a discounted cash payment is
not reviewable. However, the holder of an Asbestos Personal Injury Claim whose
claim is denied discounted cash payment may then elect individualized review as
set forth in Section 5.3.
(e) Future Discounted Payment Elections. In the future, the
Trustees, in their complete discretion, may, or may not, offer claimants
discounted cash payments for valid Asbestos Personal Injury Claims. In the event
they decide to offer claimants discounted cash payments in the future, they
shall have complete discretion to determine the amounts and procedures for such
future discounted cash payments and under no circumstances shall they be
obligated in the future to pay the same amounts set forth in Section 5.2(a)
herein for discounted cash payments.
5.3 Individually Reviewed Claims; Claims Categories.
(a) Rationale. A claimant (i) who initially elects
individualized review, or (ii) whose Asbestos Personal Injury Claim was rejected
by the Trustees for discounted cash payment and who then elects individualized
review, shall have his or her Asbestos Personal Injury Claim reviewed, based
upon an evaluation of exposure, loss, damages, injury, and other factors
determinative of claim value according to applicable tort law. The detailed
examination and individualized valuation of Asbestos Personal Injury Claims is
designed for claimants with serious or fatal asbestos-related injuries whose
Asbestos Personal Injury Claims require the added expense of individualized
examination.
(b) Categories and Values. The PI Trust will categorize
Asbestos Personal Injury Claims by injury, and it may subcategorize Asbestos
Personal Injury Claims by occupation, medical criteria, or any other factor
related to the value of Asbestos Personal Injury Claims within each injury
category. The PI Trust shall use these categories and subcategories to resolve
Asbestos Personal Injury Claims as expeditiously and economically as possible.
For each category or subcategory, the PI Trust shall determine a limited range
of liquidated values representing average historical payments by Eagle-Picher to
resolve similar Asbestos Personal Injury Claims. Offers of payments to claimants
shall be determined by assigning to their valid Asbestos Personal Injury Claim
an appropriate value within the applicable range and multiplying that value by
the Payment Percentage. Because discounted cash payment elections are a more
cost effective means for determining the liquidated value of less serious,
non-fatal Asbestos Personal Injury Claims, the PI Trust shall reduce the range
of values for categories and subcategories of such Asbestos Personal Injury
Claims to reflect the cost for providing such review to those holders of less
serious, non-fatal Asbestos Personal Injury Claims who did not elect discounted
cash payment under either the Plan or any subsequent discounted cash payment
program made available to them by the PI Trust.
When a claimant's economic damages are exceptionally larger
than the normal range, that claimant's Asbestos Personal Injury Claim may be
classified as an extraordinary Asbestos Personal Injury Claim and such Asbestos
Personal Injury Claim may be liquidated in an amount that exceeds the
<PAGE> 266
A.1.1.13B- 5
limited range of liquidated values for any given injury category or subcategory,
but such a classification shall not increase the Payment Percentage. The
Trustees shall determine the nature of the Asbestos Personal Injury Claims that
they will classify as extraordinary Asbestos Personal Injury Claims.
(c) Processing and Liquidation. Individually reviewed claims
shall be processed and liquidated pursuant to the following schedule:
(i) substantially all the claims whose holders had
filed lawsuits against Eagle-Picher prior to January 7, 1991, shall be
processed and liquidated no later than 18 months after the Effective Date;
(ii) substantially all the claims whose holders had
not filed lawsuits against Eagle-Picher prior to January 7, 1991 but whose
holders had filed timely proofs of claim in the Chapter 11 Cases, shall be
processed and liquidated no later than 36 months after the Effective Date;
(iii) substantially all the claims whose holders had
not filed lawsuits against Eagle-Picher prior to January 7, 1991 and whose
holders had not filed timely proofs of claim in the Chapter 11 Cases, but whose
holders at any time prior to the date of the Confirmation Order (A) had filed
lawsuits in the tort system against asbestos manufacturers other than
Eagle-Picher, or (B) had filed a proof of claim with any other asbestos victims'
trust or claims processing facility, or (C) had filed a registration of any
asbestos claim on any inactive docket or similar asbestos claims registry, shall
be processed and liquidated no later than 48 months after the Effective Date;
and
(iv) claims not described in subsections (i) through
(iii) above, shall be processed and liquidated as soon as possible but not
before the claims described in subsections (i) through (iii) above.
(d) Payment. While payments to holders of valid Asbestos
Personal Injury Claims generally should be made in the same order in which
claims are liquidated, provided they act consistently with Section
524(g)(2)(B)(ii)(V) of the Bankruptcy Code, the Trustees shall have complete
discretion to determine the timing and the appropriate method for making
payments. Such methods may include, in the discretion of the Trustees, a method
for the payment on an installment basis, in which case any installment payment
shall be subject to the Payment Percentage in effect at the time such
installment payment is made.
(e) Disputes Over Individualized Review. Claimants who reject
the Trustees' offer after individualized review and who wish to dispute their
eligibility for payment, their categorization, or the amount of the Trustees'
offer under individualized review, must initiate one of the alternative dispute
resolution procedures established by the Trustees pursuant to Section 7.6. After
such alternative dispute resolution procedures have been exhausted, claimants
who still reject the PI Trust's offer must initiate arbitration pursuant to
procedures like those set forth in Section 7.8. Only after claimants have
rejected any non-binding arbitration award pursuant to procedures like those set
forth in Section 7.8, may they file suit against the PI Trust.
(f) Full Releases. Holders of Asbestos Personal Injury Claims
who receive an individualized payment shall execute and deliver to the Trustees
a general release in a form satisfactory to the Trustees and may not thereafter
file a new Asbestos Personal Injury Claim.
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A.1.1.13B- 6
5.4 Exigent Health Claims; Extreme Hardship Claims. At any time the
Trustees may individually evaluate and pay Exigent Health Claims and Extreme
Hardship Claims, as defined in this Section 5.4. These claims may be considered
separately no matter what the order of processing otherwise would have been
under this Section V.
A claim qualifies as an Exigent Health Claim if the claimant provides:
(i) documentation that a physician has diagnosed the claimant as having an
asbestos-related illness and (ii) a declaration or affidavit made under penalty
of perjury by a physician who has examined the claimant within one hundred
twenty (120) days of the date of the declaration or affidavit in which the
physician states there is substantial medical doubt that the claimant will
survive beyond six (6) months from the date of the declaration or affidavit.
A claim qualifies for payment as an Extreme Hardship Claim if the
Trustees, in their complete discretion, determine the claimant needs financial
assistance on an immediate basis based on the claimant's expenses and all
sources of available income.
5.5 Asbestos Contribution Claims. Asbestos Personal Injury Claims
asserted against the PI Trust that fall within the Trust Agreement's definition
of Asbestos or Lead Contribution Claims, and which have not been disallowed,
discharged, or otherwise resolved, shall be processed, allowed or disallowed,
liquidated, paid, and satisfied in accordance with procedures to be developed
and implemented by the Trustees, which procedures (a) shall determine the
validity and allowance of such claims consistent with Section 502(e) of the
Bankruptcy Code; (b) shall require binding arbitration for the resolution of all
disputes and thereby foreclose resort to the tort system for dispute resolution;
and (c) shall otherwise provide the same processing and payment to the holders
of such claims that are allowed as the PI Trust would have afforded the holders
of any underlying valid Asbestos Personal Injury Claims under this Section V.
SECTION VI
Claims Materials
As soon as reasonably practicable, but not later than six months
following the Effective Date, the PI Trust shall mail claims materials ("CLAIMS
MATERIALS") to each person with an Asbestos Personal Injury Claim who has filed
a proof of claim in the Bankruptcy Court or has pending a lawsuit against
Eagle-Picher or otherwise has been identified to the Trustees as holding an
Asbestos Personal Injury Claim that is neither a Prepetition Liquidated Claim
defined in Section 5.1 nor an Asbestos Personal Injury Claim for which a
discounted cash payment election has been made as set forth in Section 5.2. For
any person holding an Asbestos Personal Injury Claim who is first identified to
Eagle-Picher or the Trustees any time subsequent to the Effective Date, the PI
Trust shall mail the Claims Materials no later than six months following such
identification. The PI Trust may send Claims Materials to a claimant care of an
attorney representing the claimant.
The Claims Materials will include descriptions of these EPI Asbestos
Claims Procedures, instructions, and a claim form. If feasible, the forms used
by the PI Trust to obtain claims information shall be the same or substantially
similar to those used by other asbestos claims resolution facilities. Instead of
collecting some or all claims information from a claimant or the claimant's
attorney, the PI
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A.1.1.13B- 7
Trust may obtain such information from electronic data bases maintained by any
other asbestos claims resolution organization, provided that the PI Trust
informs the claimant that it plans to obtain information as available from such
other organizations unless the claimant objects in writing or provides such
information directly to the PI Trust.
In order to be eligible for payment under these EPI Asbestos Claims
Procedures, a claimant must return all claims' information requested by the PI
Trust within the six month period following his or her receipt of the Claims
Materials. An Asbestos Personal Injury Claim shall be disallowed automatically
if a claimant required to provide claims information fails to provide all such
information within this period, unless the claimant demonstrates to the
satisfaction of the Trustees that such a failure should be excused.
SECTION VII
General Guidelines for Liquidating and
Paying Individually Reviewed Claims
7.1 Showing Required. In order to establish a valid Asbestos Personal
Injury Claim, a claimant must (a) make a conclusive demonstration of exposure to
an Eagle-Picher asbestos-containing product and (b) submit a medical report from
a qualified physician that (i) results from a physical examination by that
physician and (ii) contains a diagnosis of an asbestos-related injury. The PI
Trust may require the submission of evidence of exposure to an Eagle-Picher
asbestos-containing product, x-rays, laboratory tests, medical examinations or
reviews, other medical evidence, or any other evidence to support such Asbestos
Personal Injury Claims and require that medical evidence submitted comply with
recognized medical standards regarding equipment, testing methods, and
procedures to assure that such evidence is reliable.
7.2 Discretion To Alter Order Of Processing Or Suspend Payments.
Provided it is consistent with Section 524(g)(2)(B)(ii)(V) of the Bankruptcy
Code, in order to reduce transaction costs the Trustees may process, liquidate,
and pay valid Asbestos Personal Injury Claims in groups of claims or otherwise
no matter what the order of processing otherwise would have been under Section
V. In the event that the Trustees determine it advisable, they may suspend their
normal order of processing or payment in favor of claimants who elect discounted
cash payment under any future discounted cash payment election programs offered
by the PI Trust. Also, in the event that the PI Trust faces temporary periods of
limited liquidity, the Trustees may temporarily limit or suspend payments
altogether.
7.3 Costs Considered. Notwithstanding any provision of these EPI
Asbestos Claims Procedures to the contrary, the Trustees shall always give
appropriate consideration to the cost of investigating and uncovering invalid
Asbestos Personal Injury Claims so that the payment of valid Asbestos Personal
Injury Claims is not further impaired by such processes. In issues related to
the validity of Asbestos Personal Injury Claims, e.g., exposure and medical
evidence of injury, the Trustees shall have the latitude to make judgments
regarding the amount of transaction costs to be expended by the PI Trust so that
valid Asbestos Personal Injury Claims are not further impaired by the costs of
additional investigation. Nothing herein shall prevent the Trustees, in
appropriate circumstances, from contesting the validity of any Asbestos Personal
Injury Claim whatever the costs.
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A.1.1.13B- 8
7.4 Discretion to Vary Payments. Consistent with the provisions hereof,
the Trustees shall proceed as quickly as possible to liquidate claims, and they
shall make payments to holders of valid Asbestos Personal Injury Claims promptly
as funds become available and as Asbestos Personal Injury Claims are liquidated,
while maintaining sufficient resources to pay future valid Asbestos Personal
Injury Claims in substantially the same manner. Because decisions about payments
must be based on estimates and cannot be done precisely, they may have to be
revised in light of experience over time, and a claimant who receives payment
early in the life of the PI Trust may receive a smaller or larger percentage of
the value of his Asbestos Personal Injury Claim than a claimant who receives
payment in the middle of or late in the life of the PI Trust. Therefore, there
can be no guarantee of any specific level of payment to claimants. However, the
Trustees shall use their best efforts to treat similar, valid Asbestos Personal
Injury Claims in substantially the same manner, consistent with their duties as
Trustees in these circumstances, the purposes of the PI Trust, and given the
practical limitations imposed by the inability to predict the future with
precision.
7.5 Punitive Damages. In determining the value of any Asbestos Personal
Injury Claim, punitive damages shall not be considered or allowed,
notwithstanding their availability in the tort system. Pre-judgment interest,
post-judgment interest, interest on deferred payments, or any other type of
interest, delay damages, or similar damages associated with Asbestos Personal
Injury Claims, shall not be paid or allowed.
7.6 Alternative Dispute Resolution. The Trustees shall establish an
appropriate alternative dispute resolution process so that the claimants and the
PI Trust shall have a full range of alternative dispute resolution devices
available for their use in the individualized review process, including reviews
by specialized panels, mediation and arbitration. If compensation of an
alternative dispute resolution provider becomes necessary, each side shall
equally share the obligation to pay such compensation and shall otherwise bear
its own costs.
7.7 Settlement Favored. Settlements shall be favored over all other
forms of Asbestos Personal Injury Claim resolution, and the lowest feasible
transaction costs for the PI Trust shall be incurred in order to conserve
resources and ensure funds to pay all valid Asbestos Personal Injury Claims.
7.8 Arbitration; Jury Trials. Holders of Asbestos Personal Injury
Claims may elect to submit their Asbestos Personal Injury Claims to binding or
non-binding arbitration only after other alternative dispute resolution
procedures established by the Trustees have been exhausted.
If arbitration becomes necessary, arbitrators shall (i) return awards
within the range of injury category value limits set by the PI Trust for the
injury category in which the Asbestos Personal Injury Claim properly falls, (ii)
determine that the Asbestos Personal Injury Claim falls in a higher or lower
category and determine an appropriate award within the range of value limits for
that category, or (iii) in cases involving an extraordinary Asbestos Personal
Injury Claim, return awards in excess of category limits. Arbitrators shall not
consider the Payment Percentage in determining the value of any Asbestos
Personal Injury Claim. If a claimant submits to binding arbitration or accepts
an award after non-binding arbitration, the award will establish the liquidated
value of the Asbestos Personal Injury Claim, which will be multiplied by the
then current Payment Percentage in order to determine the amount that the
claimant will receive. The claimant will then receive payments and execute and
deliver
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A.1.1.13B- 9
a general release in the same manner as a claimant who had accepted a valuation
of his Asbestos Personal Injury Claim by the PI Trust.
Only claimants who opt for non-binding arbitration and then reject
their arbitration awards retain the right to a jury trial to determine the
liquidated value of their Asbestos Personal Injury Claims against the PI Trust.
All other claimants shall and shall be deemed to have irrevocably waived any
right to a jury trial and any and all notices with respect to the filing or
liquidation of Asbestos Personal Injury Claims shall contain a provision that
clearly and conspicuously explains such jury trial waiver. A holder of an
Asbestos Personal Injury Claim desiring to file suit against the PI Trust may do
so only after the rejection of a non-binding arbitration award. In all cases,
the statute of limitations will be tolled as of the earlier of the date the
Asbestos Personal Injury Claim was filed with the PI Trust or the date the
claimant filed his/her complaint against Eagle-Picher, and the right to a jury
trial shall be preserved with the defendant being solely the PI Trust. To the
extent the statute of limitations has been tolled, it shall commence running 30
days after entry of a non-binding arbitration award.
The Chapter 11 Cases and the EPI Asbestos Claims Procedures shall have
no effect on trial venue or choice of laws. All claims and defenses (including,
with respect to the PI Trust, all claims and defenses which could have been
asserted by Eagle-Picher) that exist under applicable law shall be available to
both sides at trial; provided, however, that the death of claimant while his/her
Asbestos Personal Injury Claim is pending against the PI Trust shall not reduce
the value of the deceased claimant's Asbestos Personal Injury Claim,
notwithstanding applicable state law to the contrary. The PI Trust may waive any
defense or concede any issue of fact or law. The award of an arbitrator or the
recommendation of a mediator and the positions and admissions of the parties
during compliance with alternative dispute resolution procedures shall not be
admissible for any purpose at trial by any party or third party and they are
expressly determined not to be admissions by either party.
If necessary, the Trustees may obtain an order from the U.S. District
Court for the Southern District of Ohio, Western Division ("DISTRICT COURT")
incorporating an offer of judgment to liquidate the amount of the claim,
scheduling discovery and trials in such a fashion as not to create an undue
burden on the PI Trust, or containing any other provisions, in order to ensure
that the PI Trust fulfills its obligations in accordance with the principles set
forth in the Trust Agreement.
A claimant who, in accordance with the EPI Asbestos Claims Procedures,
elects to resort to the legal system and obtains a judgment for money damages
shall have an Asbestos Personal Injury Claim with a liquidated value equal to
the judgment amount, less the amount of any prejudgment interest or punitive
damages contained therein, and no post-judgment interest shall accrue on such
judgment amount. A judgment creditor with a final, nonappealable judgment in
excess of the highest amount in the range of values for his/her injury category
or subcategory as determined by the Trustees will be paid, when funds are
reasonably available, the appropriate Payment Percentage of the highest amount
in the range for that injury category or subcategory; provided, however, that a
holder of an extraordinary Asbestos Personal Injury Claim who obtains a final,
nonappealable judgment in excess of the PI Trust's last offer or the
arbitrator's award will be paid, when funds are reasonably available, the
appropriate Payment Percentage of the PI Trust's last offer or the arbitrator's
award, whichever is greater. The appropriate Payment Percentage for the excess
of the judgment above the foregoing amounts will be paid no later than five (5)
years after the date the judgment is entered in the trial court, unless the
Trustees determine that such payment will adversely affect payment to other
claimants, in
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A.1.1.13B- 10
which event such payment shall be made in five (5) equal annual installments
beginning five (5) years after the date the judgment becomes final and
nonappealable.
7.9 Releases. The Trustees shall have the discretion to determine the
form and nature of the releases given to the PI Trust in order to maximize
recovery for claimants against other tort-feasors without increasing the risk or
amount of claims for indemnification or contribution from the PI Trust. As a
condition to making any payment to a claimant, the PI Trust shall obtain a
general, partial, or limited release as appropriate in accordance with the
applicable state or other law, consistent with the payment selection by the
claimant. If allowed by state law, the endorsing of a check or draft for payment
by or on behalf of a claimant shall constitute such a release. In addition, and
as a prerequisite, the claimant shall execute any documents necessary (i) for
the PI Trust to perfect its claims, if any, against Eagle-Picher's insurers to
receive indemnity for payments, (ii) to release any Asbestos Personal Injury
Claim the claimant may have against the insurer, and (iii) for the PI Trust to
receive and keep any and all payments made by such insurer for payment of such
claim.
7.10 Auditing, Monitoring and Verifying. The Trustees shall conduct
random or other audits to verify information submitted in connection with these
EPI Asbestos Claims Procedures. In the event that an audit reveals that invalid
information has been provided to the PI Trust, the Trustees may penalize any
claimant or claimant's attorney by disallowing the Asbestos Personal Injury
Claims or seeking sanctions from the District Court including, but not limited
to, requiring the offending source to pay the costs associated with the audit
and any future audit or audits, reordering the priority of payment of the
affected claimants' Asbestos Personal Injury Claims, raising the level of
scrutiny of additional information submitted from the same source or sources, or
prosecuting the claimant or claimant's attorney for presenting a fraudulent
Asbestos Personal Injury Claim in violation of 18 U.S.C. Section 152. The PI
Trust may develop methods for auditing the reliability of medical evidence,
including independent reading of x-rays. If its audits show an unacceptable
level of reliability for medical evidence submitted by specific doctors or
medical facilities, the PI Trust may refuse to accept medical evidence from such
doctors or facilities.
7.11 Claims' Bar Date. Notwithstanding anything to the contrary
contained herein, including, without limitation, Section 5.3(c) herein, in order
to be eligible for payment under these EPI Asbestos Claims Procedures, a
claimant must have complied with any applicable claims' bar date order issued by
the Bankruptcy Court or must have been excused from such compliance by the
Trustees pursuant to their discretion under Article 3.3(d) of the Trust
Agreement.
7.12 Statute of Limitations. For purposes of determining the validity
of an Asbestos Personal Injury Claim, any applicable statute of limitations
shall be deemed to have been extended for a period of sixty (60) days beyond its
normal limit. This extension shall have no application, however, to any
applicable claims bar date set by an order of the Bankruptcy Court.
SECTION VIII
Miscellaneous
8.1 Amendments. The Trustees may amend, modify, delete, or add to any
of these EPI Asbestos Claims Procedures (including, without limitation,
amendments to conform these procedures
<PAGE> 272
A.1.1.13B- 11
to advances in scientific or medical knowledge or other changes in
circumstances) by a majority vote of the Trustees, provided they first obtain
any advice and consent of the TAC required by Article 3.2(e) of the Trust Agree-
ment. Notwithstanding anything contained herein to the contrary, these EPI
Asbestos Claims Procedures shall not be modified or amended in any way that
would jeopardize the validity or enforceability of the Asbestos and Lead PI
Permanent Channeling Injunction.
8.2 Severability. Should any provision contained in the EPI Asbestos
Claims Procedures be determined to be unenforceable, such determination shall in
no way limit or affect the enforceability and operative effect of any and all
other provisions of the EPI Asbestos Claims Procedures.
8.3 Governing Law. The EPI Asbestos Claims Procedures shall be governed
by, and construed in accordance with, the laws of the State of Ohio.
<PAGE> 273
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.16"
FORM OF ASBESTOS PD TRUST AGREEMENT
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 274
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.38"
FORM OF CONNECTICUT MUTUAL NOTE
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 275
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.56"
FORM OF DIVESTITURE NOTES
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 276
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.82"
FORM OF INTER-MARKET NOTE
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 277
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.94"
FORM OF NORTHWESTERN GROUP NOTE
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 278
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.114"
FORM OF SENIOR UNSECURED SINKING FUND DEBENTURES
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 279
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.119"
FORM OF TAX REFUND NOTES
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 280
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "5.2"
FORM OF AMENDED CLAIMS SETTLEMENT GUIDELINES
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 281
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "7.11"
FORM OF MANAGEMENT CONTRACTS
[TO BE INCLUDED
IN PLAN EXHIBIT VOLUME]
<PAGE> 282
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "7.12"
FORM OF AMENDMENTS TO SUPPLEMENTAL SEVERANCE PROGRAM
[TO BE INCLUDED IN
PLAN EXHIBIT VOLUME]
<PAGE> 283
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.1"
EXECUTORY CONTRACTS OR UNEXPIRED LEASES
TO BE ASSUMED
<PAGE> 284
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: CINCINNATI INDUSTRIAL MACHINERY
- --------------------------------------------------------------------------------------------------------------------------------
Herman Engineering Inc Sales Representative 0.00
5011 28th Street, S.E. Agreement
Grand Rapids, MI 45912
- --------------------------------------------------------------------------------------------------------------------------------
Holloway & Assoc Sales Representative 0.00
P.O. Box 100 Agreement
501 Archdale Dr., Ste. 225
Charlotte, NC 28217
- --------------------------------------------------------------------------------------------------------------------------------
Lohrer, Larry Sales Representative 0.00
260 Northland Blvd., Ste. 224 Agreement
Cincinnati, OH 45246-3651
- --------------------------------------------------------------------------------------------------------------------------------
Mechanics Laundry Service Agreement 31.66
711 E. Vermont Ave. 10/19/90
Indianapolis, IN 46202
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-1
<PAGE> 285
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: CONSTRUCTION EQUIPMENT
- --------------------------------------------------------------------------------------------------------------------------------
Caterpillar, Inc. Warranty Agreement 0.00
600 W. Washington St.
E. Peoria, IL 61630-0001
- --------------------------------------------------------------------------------------------------------------------------------
Equipos de Acuna SA de CV Intercompany Agreement undetermined
Carretera Presa La Amistad, KM 9 07/23/86
CD Acuna, Coahuila Mexico
- --------------------------------------------------------------------------------------------------------------------------------
Weaver, David Real Estate Lease 139.38
500 E. 50th Street 01/01/80
Lubbock, TX 79404-3726
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-2
<PAGE> 286
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: EAGLE-PICHER MINERALS, INC.
- --------------------------------------------------------------------------------------------------------------------------------
ACF Industries Inc. RR Hopper Car Lease 0.00
3301 Rider Trail South 08/01/79
Earth City, MO 63045-1309
- --------------------------------------------------------------------------------------------------------------------------------
ACF Industries Inc. RR Hopper Car Lease 0.00
3301 Rider Trail South 06/01/88
Earth City, MO 63045-1309
- --------------------------------------------------------------------------------------------------------------------------------
Anderson, Virginia C. Mining Lease 0.00
6861 N. Ocean Blvd. 01/01/80
Ocean Ridge, FL 33435
- --------------------------------------------------------------------------------------------------------------------------------
Bohanan, James A. Mining Lease 0.00
208 Parkview 01/01/80
PO Box 293
Luling, TX 78648
- --------------------------------------------------------------------------------------------------------------------------------
Brown, Lola K. Mining Lease 150.00
Route 1, Box 357 04/16/74
Fernely, NV 89408-9746
- --------------------------------------------------------------------------------------------------------------------------------
Brown, Lola K. Mining Lease 0.00
Route 1, Box 357 03/01/84
Fernely, NV 89408-9746
- --------------------------------------------------------------------------------------------------------------------------------
Catellus Development Corp Mining Lease 0.00
201 Mission Street, Ste. 250 12/01/71
San Francisco, CA 94105
- --------------------------------------------------------------------------------------------------------------------------------
Catellus Development Corp Commercial Lease 0.00
201 Mission Street, Ste. 250 02/01/80
San Francisco, CA 94105
- --------------------------------------------------------------------------------------------------------------------------------
Copeland, Ella Mae Mining Lease 0.00
1452 Plymouth Rock 01/01/80
Clovis, CA 93612-2444
- --------------------------------------------------------------------------------------------------------------------------------
Cowie, Elizabeth Herrmann Mining Lease 1,530.08
4 Hawk Lane, North Oaks 01/01/80
St. Paul MN 55127
- --------------------------------------------------------------------------------------------------------------------------------
Diatomite Products Co Mining Lease 0.00
5 Greenwood Ave., N.W. 07/18/79
Bend, OR 97701-2028
- --------------------------------------------------------------------------------------------------------------------------------
Eagle-Picher Industries Inc Agency Agreement undetermined
580 Walnut St. 12/01/86
Cincinnati, OH 45202
- --------------------------------------------------------------------------------------------------------------------------------
Eagle-Picher Industries Inc Export Management Agreement undetermined
580 Walnut St. 12/01/86
Cincinnati, OH 45202
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-3
<PAGE> 287
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Fischer, Dalmar Mining Lease 0.00
618 Beacon St. 01/01/80
Newton Centre, MA 02159
- --------------------------------------------------------------------------------------------------------------------------------
Fischer, Jeannette Mining Lease 0.00
618 Beacon Street 01/01/80
Newton Center, MA 02159
- --------------------------------------------------------------------------------------------------------------------------------
Fisk, Walter M. Mining Lease 400.00
P.O. Box 458 07/27/87
Lovelock, NV 89419-0458
- --------------------------------------------------------------------------------------------------------------------------------
GE Rail Car Service Corp. RR Hopper Car Lease 0.00
33 W. Monroe Street 04/01/89
Chicago, IL 60603-5302
- --------------------------------------------------------------------------------------------------------------------------------
GE Rail Car Service Corp. RR Hopper Car Lease 0.00
33 W. Monroe Street 09/01/90
Chicago, IL 60603-5302
- --------------------------------------------------------------------------------------------------------------------------------
GE Rail Car Service Corp. RR Hopper Car Lease 0.00
33 W. Monroe Street 10/01/90
Chicago, IL 60603-5302
- --------------------------------------------------------------------------------------------------------------------------------
Grove, Robert E. Farm Lease 1,331.45
2331 Loop Road 04/01/87
Vale, OR 97918-5636
- --------------------------------------------------------------------------------------------------------------------------------
Knight, James A. Mining Lease 4,131.23
135 S. Elm St. 01/01/80
Hinsdale, IL 60521
also:
- -----
c/o S. Duhl, Schwarts & Freeman
401 N. Michigan #1900
Chicago, IL 60611-4206
- --------------------------------------------------------------------------------------------------------------------------------
Moore, Leonard W. Farm Lease 0.00
Route 1, Box 451 04/01/87
Vale, OR 97918-9801
- --------------------------------------------------------------------------------------------------------------------------------
Moran, Richard T. Residential Lease 0.00
2558 Graham Blvd. 12/22/89
Vale, OR 97918-5625
- --------------------------------------------------------------------------------------------------------------------------------
Rauch, John Rental Agreement 0.00
1340 Nixon Avenue 01/29/80
Reno, NV 89509-2640
- --------------------------------------------------------------------------------------------------------------------------------
Savage, Louise Mining Lease 0.00
Savage, Thomas & Thomas Jr. 01/01/80
Trust of T. Savage
1949/T.C. Savage, Trustee
1700 1st Bank Building
St. Paul, MN 55101
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-4
<PAGE> 288
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SFP Minerals Corp. Mineral Lease 0.00
P.O. Box 27019 12/01/66
Albuquerque, NM 87125-7019
- --------------------------------------------------------------------------------------------------------------------------------
SFP Minerals Corp. Sand & Gravel Lease 4,364.32
P.O. Box 27019 11/14/85
Albuquerque, NM 87125-7019
- --------------------------------------------------------------------------------------------------------------------------------
Southern Pacific Trans Co Commercial Lease 17.28
One Market Plaza 12/01/70
San Francisco, CA 94105
- --------------------------------------------------------------------------------------------------------------------------------
Southern Pacific Trans Co. Industrial Lease 0.00
One Market Plaza 03/14/80
San Francisco, CA 94105
- --------------------------------------------------------------------------------------------------------------------------------
State of Oregon Mining Lease 0.00
Division of State Lands 09/02/82
1600 State Street
Salem, OR 97310-0302
- --------------------------------------------------------------------------------------------------------------------------------
Terminal Mini Warehouse Lease 12/15/83 61.94
2900 Vassar Street
Reno, NV 89502-3224
- --------------------------------------------------------------------------------------------------------------------------------
Terminal Mini Warehouse Rental Agreement 0.00
2900 Vassar Street 04/01/84
Reno, NV 89502-3224
- --------------------------------------------------------------------------------------------------------------------------------
Terminal Mini Warehouse Rental Agreement 0.00
2900 Vassar Street 04/01/84
Reno, NV 89502-3224
- --------------------------------------------------------------------------------------------------------------------------------
Tweedt, Andre M., Jr. Mining Lease 16.67
P.O. Box 59 03/01/84
Durham, CA 95938-0059
- --------------------------------------------------------------------------------------------------------------------------------
Tweedt, John A. Mining Lease 16.67
11895 Parey Avenue 03/01/84
Red Bluff, CA 96080-8982
- --------------------------------------------------------------------------------------------------------------------------------
Tweedt, Peter Mining Lease 16.67
424 Stanford Drive 03/01/84
Arcadia, CA 91006
- --------------------------------------------------------------------------------------------------------------------------------
Twiname, John & Carolyn A. Mining Lease 0.00
60 East End Avenue 01/01/80
New York, NY 10028-7907
- --------------------------------------------------------------------------------------------------------------------------------
US Postmaster Post Office Box Rental 0.00
2000 Vassar 03/20/80
Reno, NV 89510
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-5
<PAGE> 289
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: ELECTRONICS
- --------------------------------------------------------------------------------------------------------------------------------
Abel Lemon et al Distributor Sales Agreement 0.00
Division of La Porte Group 02/15/90
Australia, Ltd.
26 Fariola Street
Silverwater, New South Wales,
2141 Australia
- --------------------------------------------------------------------------------------------------------------------------------
Albright, Lawrence Consultant Agreement 58.06
Route 1, Box 365 10/15/84
Neosho, MO 64850-9801
- --------------------------------------------------------------------------------------------------------------------------------
Chemag Aktiengesellschaft Distributor Sales Agreement 0.00
Postfach 970167 08/21/90
Senckenbergenlage 10/12
D-6000 Frankfurt AM Main
97 Germany
- --------------------------------------------------------------------------------------------------------------------------------
City of Joplin Real Estate Lease 0.00
P.O. Box 1355 10/01/90
303 E. 3rd Street
Joplin, MO 64802-1355
- --------------------------------------------------------------------------------------------------------------------------------
Diehl & Eagle-Picher GMBH License 0.00
Bahnhofsplatz 6 06/26/89
D-8500 Nuernberg 70
Germany
- --------------------------------------------------------------------------------------------------------------------------------
Diehl & Eagle-Picher GMBH Customer Sales Contract 0.00
Bahnhofsplatz 6 06/26/90
D-8500 Nuernberg 70
Germany
- --------------------------------------------------------------------------------------------------------------------------------
Diehl & Eagle-Picher GMBH Customer Sales Contract 0.00
Bahnhofsplatz 6 08/29/90
D-8500 Nuernberg 70
Germany
- --------------------------------------------------------------------------------------------------------------------------------
Diehl GMBH & C Cooperation Agreement 0.00
Stephanstrassr 49 06/09/89
D-8500 Nuernberg 30
Germany
- --------------------------------------------------------------------------------------------------------------------------------
Dons Machine Shop Lease 0.00
1021 Moffet Street 07/07/77
Joplin, MO 64801-1024
- --------------------------------------------------------------------------------------------------------------------------------
Evode Laboratories Secrecy Agreement 0.00
Stafford St. 16 3 EH 02/10/89
United Kingdom
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-6
<PAGE> 290
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Flexibulk Ltd. Distributor Sales Agreement 0.00
Davidson House Upper St. John's 05/14/90
Street
Lichfield, Staffordshire
WS14 9DU United Kingdon
- --------------------------------------------------------------------------------------------------------------------------------
HB Fuller Co, Research & Dev. Confidentiality Agreement 0.00
Laboratory 09/07/89
1200 Wolters Blvd.
Vadnais Heights, MN 55110-5146
- --------------------------------------------------------------------------------------------------------------------------------
Le Clanche SA License 0.00
48 Avenue De Grandson
Ch 1401 Yuerdon, Switzerland
- --------------------------------------------------------------------------------------------------------------------------------
Massey Machine Shop Lease 0.00
1915 Iron Gates Road 01/01/78
Joplin, MO 64801
- --------------------------------------------------------------------------------------------------------------------------------
Meheffy, Orville A. Medical Services Agreement 0.00
2817 McClelland Blvd., Ste. 108 02/01/86
Joplin, MO 64801
- --------------------------------------------------------------------------------------------------------------------------------
Morton International Secrecy Agreement 0.00
1275 Lake Avenue 01/01/83
Woodstock, IL 60098-7415
- --------------------------------------------------------------------------------------------------------------------------------
Swiss Federal Aircraft Factory License 0.00
CH 6032 Emmen, Switzerland
- --------------------------------------------------------------------------------------------------------------------------------
Union Carbide Chemicals & Plastics License Agreement 0.00
39 Old Ridgebury Road 10/01/82
Danbury, CT 06817-0001
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-7
<PAGE> 291
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: FABRICON PRODUCTS
- --------------------------------------------------------------------------------------------------------------------------------
Davies Packing Manufacturer Representative 0.00
P.O. Box 3825 07/19/81
2901 Brixham Drive
Richmond, VA 23235-7825
- --------------------------------------------------------------------------------------------------------------------------------
Jackson & Assoc. Manufacturer Representative 0.00
5826 Castle Lane 03/26/90
Norcross, GA 30093-3801
- --------------------------------------------------------------------------------------------------------------------------------
Marks, George Manufacturer Representative 0.00
310 Bok Road 05/01/83
Wyncote, PA 19095-2004
- --------------------------------------------------------------------------------------------------------------------------------
Pierce, Earl Manufacturer Representative 0.00
7 N. Gate Road 05/01/83
West Chester, PA 19380
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-8
<PAGE> 292
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: GENERAL OFFICE
- --------------------------------------------------------------------------------------------------------------------------------
BIS Offsite Records Real Property Lease - 32.28
318 W. Third St. Storage
Cincinnati, Ohio 45202-3408
- --------------------------------------------------------------------------------------------------------------------------------
Brooks, BB Mineral Rights Interest - 0.00
1501 Mission 07/30/80
Bartlesville, OK 74003
- --------------------------------------------------------------------------------------------------------------------------------
Bunting Bearings Corp. Subordination Agreement - 0.00
P.O. Box 729 02/23/89
1001 Holland Park Blvd.
Holland, OH 43528-0729
- --------------------------------------------------------------------------------------------------------------------------------
Bunting Bearings Corp. Indemnity Agreement - 0.00
P.O. Box 729 02/23/89
1001 Holland Park Blvd.
Holland, OH 43528-0729
- --------------------------------------------------------------------------------------------------------------------------------
City of Joplin Lease & Operation Agreement 0.00
303 E. Third Street - 12/18/90
P.O. Box 1355
Joplin, MO 64802-1355
- --------------------------------------------------------------------------------------------------------------------------------
City of Joplin Lease & Operation Agreement 0.00
303 E. Third Street - 12/18/90
P.O. Box 1355
Joplin, MO 64802-1355
- --------------------------------------------------------------------------------------------------------------------------------
Cooper, Geoffrey Vernon Acquisition of Shares (GVC) 189,825.80
Green Hayes, Broad Street - 08/25/88 (British pounds
Brixworth sterling)
Northamptonshire, England, U.K.
- --------------------------------------------------------------------------------------------------------------------------------
Donlen Corporation Master Agreement 44 0.00
500 Lake Cook Road
Deerfield, IL 60015-4996
- --------------------------------------------------------------------------------------------------------------------------------
Eagle-Picher, Inc. Export Management Agreement undetermined
580 Walnut Street - 01/01/85
Suite 1300
Cincinnati, OH 45202
- --------------------------------------------------------------------------------------------------------------------------------
Eagle-Picher, Inc. Agency Agreement - 01/01/85 undetermined
580 Walnut Street
Suite 1300
Cincinnati, OH 45202
- --------------------------------------------------------------------------------------------------------------------------------
Firm Diehl Incorporation of Joint 0.00
Stephenstrasse 49 Company, amendments 1978,
8500 Nuernberg 30 1986, 1989 - 05/19/71
Federal Republic of Germany
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-9
<PAGE> 293
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Foundation Technology Ltd. License Agreement - 0.00
28 Nerang Centre 06/28/89
Price Street, Nerange,
Queensland, 4211 Australia
- --------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Group Industrial Revenue Bond 932.40
85 Broad Street (Remarketing Agent-Oregon
New York, NY 10005 IRB) - 12/01/84
- --------------------------------------------------------------------------------------------------------------------------------
Lane, Vincent G.J. Acquisition of Shares; 126,860.00
The Beeches, Burnmill Road Indemnity (GVC) - 08/25/88 (British pounds
Market Harborough sterling)
Leicestershire, England LE16 7JG
- --------------------------------------------------------------------------------------------------------------------------------
Ohio Office Machines Maintenance Agreement - 0.00
124 Burkhart Avenue 08/15/90
Cincinnati, OH 45215
- --------------------------------------------------------------------------------------------------------------------------------
Pitney Bowes Credit Corp. Equipment Lease - 06/01/88 12.77
P. O. Box 5151
Norwalk, CT 06851
- --------------------------------------------------------------------------------------------------------------------------------
Pitney Bowes Corp. Maintenance Agreement - 0.00
P.O. Box 14447 01/01/91
Cincinnati, OH 45214
- --------------------------------------------------------------------------------------------------------------------------------
Powers Energy, Inc. Mineral Rights Interest - 0.00
11930 Menaul Blvd., N.E. 07/30/80
Suite 223
Albuquerque, NM 87112-2461
- --------------------------------------------------------------------------------------------------------------------------------
Rozai Kogyo Kaisha License Agreement - 0.00
5, 1-Chome Minami 04/18/70
Horeidori Nishiku
Osaka, Japan
- --------------------------------------------------------------------------------------------------------------------------------
Security Water & Sanitation Dist. Test Well License & Land 1,431.50
231 Security Blvd. Use Agreement - 04/01/90
P.O. Box 5156
Joplin, MO 64802
- --------------------------------------------------------------------------------------------------------------------------------
Sun Refining & Marketing Co. Mineral Rights Interest - 0.00
P.O. Box 2039 07/30/80
Tulsa, OK 74102-2039
- --------------------------------------------------------------------------------------------------------------------------------
Veluwse Machine Industries BV License Agreements - 0.00
P. O. Box 161 05/30/73
816 AD EDE
The Netherlands
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-10
<PAGE> 294
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: HILLSDALE TOOL
- --------------------------------------------------------------------------------------------------------------------------------
Grede Vassar Inc. Real Estate Lease 0.00
P.O. Box 26499 06/01/89
Milwaukee, WI 53226-0499
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-11
<PAGE> 295
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: INJECTION MOLDING (PARIS)
- --------------------------------------------------------------------------------------------------------------------------------
Future Three Software Inc. Software Support Agreement 0.00
33031 Schoolcraft Rd. 03/22/90
Livonia, MI 48150-1604
- --------------------------------------------------------------------------------------------------------------------------------
Mid American Telephone Supply Telephone System Service 0.00
1628 Wabash 02/18/90
Terre Haute, IN 47807-3321
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-12
<PAGE> 296
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: MAT
- --------------------------------------------------------------------------------------------------------------------------------
Kalcor Coatings Co. Use of Land - 05/01/80 0.00
37721 Stevens Boulevard
Willoughby, OH 44094-6231
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-13
<PAGE> 297
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: MICHIGAN AUTOMOTIVE RESEARCH CORP (MARCO)
- --------------------------------------------------------------------------------------------------------------------------------
Creative Investment Assoc. Real Estate Lease 0.00
P.O. Box 7209 09/15/88
1254 N. Main Street
Ann Arbor, MI 48107-7209
- --------------------------------------------------------------------------------------------------------------------------------
Detroit Edison Co. Primary Supply Rate 13.38
2000 Second Avenue Schedule D6
Detroit, MI 48226 05/15/90
- --------------------------------------------------------------------------------------------------------------------------------
Detroit Edison Co. Parallel Operation & 0.00
2000 Second Avenue Standby Service
Detroit, MI 48226 07/23/90
- --------------------------------------------------------------------------------------------------------------------------------
Detroit Edison Co. Parallel Operation 0.00
2000 Second Avenue Interconnection Agreement
Detroit, MI 48226 08/01/90
- --------------------------------------------------------------------------------------------------------------------------------
Federal Energy Regulatory Comm Qualification as a 0.00
Security of the Commission Cogeneration Facility
825 North Capital St., N.E. 07/03/90
Washington, DC 20426
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-14
<PAGE> 298
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: ORCOMATIC
- --------------------------------------------------------------------------------------------------------------------------------
Iron Mountain Group Inc. Service Agreement 1.20
P.O. Box 1772 01/01/91
Albany, NY 12201-1772
- --------------------------------------------------------------------------------------------------------------------------------
Unifirst Corp. Rental of Uniforms & rugs 2,101.35
205 Garfield Avenue 01/02/91
Stratford, CT 06497-7103
Claim Assigned to:
- ------------------
Amroc Investments Inc.
Sonia Gardner
335 Madison Ave., 26th Floor
New York, NY 10017
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-15
<PAGE> 299
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: PLASTICS
- --------------------------------------------------------------------------------------------------------------------------------
Adams/Remco Inc. Maintenance Agreement 0.00
1109 Sherman Drive 11/03/90
Ft. Wayne, IN 46808-3430
- --------------------------------------------------------------------------------------------------------------------------------
ADT Security Systems Service Agreement 0.00
P.O. Box 6720 01/01/91
8770 Manchester
St. Louis, MO 63144
- --------------------------------------------------------------------------------------------------------------------------------
Arrow Service Inc. Service Agreement 0.00
4121 Northrup 01/01/91
Ft. Wayne, IN 46805-1034
- --------------------------------------------------------------------------------------------------------------------------------
B Safe Extinguishers Service Agreement 0.00
310 Railroad Street 01/01/91
Huntington, IN 46750-2845
- --------------------------------------------------------------------------------------------------------------------------------
Bertsch Coffee Service Agreement 6,099.79
P.O. Box 815 01/01/91
Warsaw, IN 46580
Claim Assigned to:
- ------------------
Debt Acquisition Co. of America
Kirsen Kuykendall
2120 W. Washington St.
San Diego, CA 92110
- --------------------------------------------------------------------------------------------------------------------------------
Dekalb Fire & Safety Inc Service Agreement 709.93
P.O. Box 406 10/01/90
103 Depot Street
Auburn, IN 46706-0406
- --------------------------------------------------------------------------------------------------------------------------------
GTE Telephone Operations North Utility Agreement 4,616.96
Area 08/15/90
11611 N. Meridian, Ste 600 MMI
Carmel, IN 46032
- --------------------------------------------------------------------------------------------------------------------------------
IBM Information Network Service Agreement 0.00
P.O. Box 30104 01/23/89
Tampa, FL 33630-3104
- --------------------------------------------------------------------------------------------------------------------------------
Jims Auto Care Service Agreement 0.00
P.O. Box 78 01/01/91
Grabill, IN 46741-0078
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-16
<PAGE> 300
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Medec Inc. Service Agreement 225.00
1012 LaFort 01/01/91
Ft. Wayne, IN 46805-4333
Claim Assigned to:
- ------------------
Debt Acquisition Co. of America
Kirsen Kuykendall
2120 W. Washington St.
San Diego, CA 92110
- --------------------------------------------------------------------------------------------------------------------------------
Mid City Office Systems Maintenance Agreement 489.30
P.O. Box 403 07/20/90
138 E. Seventh Street
Auburn, IN 46706-0403
Claim Assigned to:
- ------------------
Debt Acquisition Co. of America
Kirsen Kuykendall
2120 W. Washington St.
San Diego, CA 92110
- --------------------------------------------------------------------------------------------------------------------------------
National Serv All Waste Disposal Agreement 0.00
P.O. Box 2234 01/01/91
Ft. Wayne, IN 46809
- --------------------------------------------------------------------------------------------------------------------------------
Northern Indiana Trading Co. Utility Agreement 67,819.72
P.O. Box 526 10/28/88
Auburn, IN 46706-0526
- --------------------------------------------------------------------------------------------------------------------------------
Northern Indiana Trading Co. Utility Agreement 0.00
P. O. Box 526 10/28/88
Auburn, IN 46706-0526
- --------------------------------------------------------------------------------------------------------------------------------
Nowak & Williams Supply Service Agreement 0.00
302 W. Superior Street 01/01/91
Ft. Wayne, IN 46802-1112
- --------------------------------------------------------------------------------------------------------------------------------
Nowak & Williams Supply Service Agreement 0.00
302 W. Superior Street 01/01/91
Ft. Wayne, IN 46802-1112
- --------------------------------------------------------------------------------------------------------------------------------
TDJ Snow Plowing Service Agreement 0.00
7791 N. Goshen Road 01/01/91
Huntington, IN 46750-8879
- --------------------------------------------------------------------------------------------------------------------------------
VanDyne Crotty Service Agreement 0.00
3115 Independence Drive 01/01/91
Ft. Wayne, IN 46808-4502
- --------------------------------------------------------------------------------------------------------------------------------
Welding Services Inc. Service Agreement 0.00
836 Market Street 01/01/91
Huntington, IN 46750-2870
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-17
<PAGE> 301
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: ROSS ALUMINUM FOUNDRIES
- --------------------------------------------------------------------------------------------------------------------------------
Aktiengesellschaft Customer PO 80493 0.00
Kuhnle Kopp & Kausch 11/23/90
Postfach 265, 6710 Frankenthal
Pfalz, Germany
- --------------------------------------------------------------------------------------------------------------------------------
Cummins Engine Company Inc Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------------------------------------------------------
Decision Data Service Inc. Maintenance Agreement 175.91
One Progress Avenue 09/09/83
Worsham, PA 19044-3502
- --------------------------------------------------------------------------------------------------------------------------------
Gardner, Mary G., Trustee Royalty Agreement 23,481.08
2500 N. Kuther Rd., Apt. 301 02/17/89
Sidney, OH 45365
- --------------------------------------------------------------------------------------------------------------------------------
JC Sales Company Inc. Sales Representative 0.00
P.O. Box 2566, 200 East Howard St. Agreement
Des Plaines, IL 60018 09/01/82
- --------------------------------------------------------------------------------------------------------------------------------
John P Winn Assoc. Sales Representative 0.00
10164 Bear Valley Road Agreement
Jacksonville, FL 32257-5960 12/01/89
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-18
<PAGE> 302
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: SPECIALTY MATERIALS
- --------------------------------------------------------------------------------------------------------------------------------
Alco Capital Resource Inc. Copier Lease - 12/19/90 372.26
P.O. Box 9915
Macon, GA 31298-2099
- --------------------------------------------------------------------------------------------------------------------------------
Ameritech Operator Lease 4,697.63
7255 W. 98th Terrace, Ste. 200 12/04/89
Overland Park, KS 66210
- --------------------------------------------------------------------------------------------------------------------------------
Ameritech Operator Lease 0.00
7255 W. 98th Terrace, Ste. 200 12/08/89
Overland Park, KS 66210
- --------------------------------------------------------------------------------------------------------------------------------
Ameritech Operator Lease 0.00
7255 W. 98th Terrace, Ste. 200 03/01/90
Overland Park, KS 66210
- --------------------------------------------------------------------------------------------------------------------------------
Eagle Picher Indus Material GMBH Sales Commission undetermined
P.O. Box 1549, D-74605 10/01/90
Ohringen, Germany
- --------------------------------------------------------------------------------------------------------------------------------
Theresa A. Meyers Government Contract-Cost 0.00
P. O. Box 29396 Plus Fixed Fee
Brookland Station 07/18/90
Washington, D.C. 20017
- --------------------------------------------------------------------------------------------------------------------------------
National Cancer Institute Cost Plus Fixed Fee 0.00
Research Contracts Branch 03/16/87
Executive Plaza South, Room 620
Bethesda, MD 20892
- --------------------------------------------------------------------------------------------------------------------------------
National Cancer Institute DOD Cost Plus Fixed Fee 0.00
Research Contracts Branch 06/18/86
Executive Plaza South, Room 620
Bethesda, MD 20892
- --------------------------------------------------------------------------------------------------------------------------------
Pitney Bowes Operator Lease 0.00
23 Barney Place 05/01/85
Stamford, CT 06926
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-19
<PAGE> 303
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: TRANSICOIL, INC.
- --------------------------------------------------------------------------------------------------------------------------------
A Tech Instruments Ltd Sales Representative 0.00
50 Weybright Court Agreement
Unit 24 02/16/90
Scarborough, Ontario
M1S5A8 Canada
- --------------------------------------------------------------------------------------------------------------------------------
Advance Control Equip Co Sales Representative 0.00
6404 Mallory Drive Agreement
Richmond, VA 23226-2912 12/01/82
- --------------------------------------------------------------------------------------------------------------------------------
Advent Components Corp Sales Representative 0.00
3080 N. Civic Center Plaza #30 Agreement
Scottsdale, AZ 85251-7930 08/01/88
- --------------------------------------------------------------------------------------------------------------------------------
AMJ Equipment Corp Sales Representative 0.00
P.O. Box 6320 Agreement
Lakeland, FL 33807-6320 11/03/89
- --------------------------------------------------------------------------------------------------------------------------------
Douglas Lee Associates Inc. Sales Representative 0.00
249 Ayer Rd., Ste. 304 Agreement
Harvard, MA 01451-1133 04/16/90
- --------------------------------------------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc. Export Management Agreement undetermined
580 Walnut St. 10/01/87
Cincinnati, OH 45202-3159
- --------------------------------------------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc. Agency Agreement undetermined
580 Walnut St. 12/01/87
Cincinnti, OH 45202-3159
- --------------------------------------------------------------------------------------------------------------------------------
FLW Inc Sales Representative 0.00
2930 C Grace Lane Agreement
Costa Mesa, CA 92626-4194 07/01/81
- --------------------------------------------------------------------------------------------------------------------------------
FLW Southeast Inc Sales Representative 0.00
1400 Marietta Pkwy., Ste. 108 Agreement
Marietta, GA 30067-8269 10/01/85
- --------------------------------------------------------------------------------------------------------------------------------
Intl. Precision Products Sales Representative 0.00
28 Blvd. Belgique Agreement
MC 98000 12/16/88
Monaco
- --------------------------------------------------------------------------------------------------------------------------------
J&B Technical Sales Sales Representative 0.00
211 Lexsington Avenue Agreement
Pssiac, NJ 07055-6206 04/16/90
- --------------------------------------------------------------------------------------------------------------------------------
Keystone Precision Machining Lease Purchase Agreement 0.00
220 N. Center Street 05/02/90
North Wales, PA 19454-3326
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-20
<PAGE> 304
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
National Guardian Security Security System 0.00
Services Lease/Service
1816 W. Point Pike 07/01/90
West Point, PA 19486
- --------------------------------------------------------------------------------------------------------------------------------
Raddatz Aero Dynamic Vertriebs Sales Representative 0.00
GMBH Agreement
Otto-Wagner Str. 16 03/15/89
D-8034 Germering, Germany
- --------------------------------------------------------------------------------------------------------------------------------
Raeco Rep Inc. Sales Representative 0.00
253 West Joe Orr Road Agreement
Chicago Heights, IL 60411-1744 09/03/85
- --------------------------------------------------------------------------------------------------------------------------------
RDP Corp. Sales Representative 0.00
5877 Huberville Ave. Agreement
Dayton, OH 45431-1218 09/22/90
- --------------------------------------------------------------------------------------------------------------------------------
Russell Associates Inc Sales Representative 0.00
P. O. Box 6000 Agreement
Pinellas Park, FL 34664-6000 11/01/90
- --------------------------------------------------------------------------------------------------------------------------------
Synergic Engr Corp Sales Representative 0.00
7100 OHMS Lane Agreement
Edina, MN 55435 08/30/78
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.1-21
<PAGE> 305
<TABLE>
<CAPTION>
================================================================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Division: WOLVERINE GASKET
- --------------------------------------------------------------------------------------------------------------------------------
LDI Corporation Equipment Schedule No. 9, 758.16
30033 Clemens Road as replaced and renewed by
Westlake, OH 44145-1021 Equipment Schedule No. 23-
91, to Master Lease
Agreement No. 7044, dated
01/08/88
================================================================================================================================
</TABLE>
A8.1-22
<PAGE> 306
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.4"
PREVIOUSLY SCHEDULED CONTRACTS
<PAGE> 307
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Division: CINCINNATI INDUSTRIAL MACHINERY
- -------------------------------------------------------------------------------------------------------------------
Lohre & Associates Printing/Advertising 0.00
Suite 101 - 2330 Victory Parkway Agreement
Cincinnati, OH 45206-2809 06/28/90
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-1
<PAGE> 308
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Division: CONSTRUCTION EQUIPMENT
- -------------------------------------------------------------------------------------------------------------------
Caterpillar Inc. License Agreement 0.00
600 W. Washington St. 08/30/65
E. Peoria, IL 61630-0001
- -------------------------------------------------------------------------------------------------------------------
Caterpillar Inc. License Agreement 0.00
600 W. Washington St. 11/20/68
E. Peoria, IL 61630-0001
- -------------------------------------------------------------------------------------------------------------------
Caterpillar Inc. License Agreement 0.00
600 W. Washington St. 05/19/81
E. Peoria, IL 61630-0001
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-2
<PAGE> 309
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Division: EAGLE-PICHER EUROPE
- -------------------------------------------------------------------------------------------------------------------
Eagle-Picher Europe, Inc. Loan Agreement - 8/23/88 0.00
P. O. Box 779
580 Walnut St.
Cincinnati, OH 45202
- -------------------------------------------------------------------------------------------------------------------
NBD Bank N.A. - London Loan Agreement - 8/23/88 0.00
28 Finsbury Circus
London EC2M 7AU
United Kingdom
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-3
<PAGE> 310
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Division: EAGLE-PICHER MINERALS, INC.
- -------------------------------------------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement 0.00
New York Agency 11/02/88
One Liberty Plaza, 26th Floor
New York, NY 10006-1401
- -------------------------------------------------------------------------------------------------------------------
Central Trust Co. N.A. Credit & Agency Agreement 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- -------------------------------------------------------------------------------------------------------------------
Fifth-Third Bank Credit & Agency Agreement 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- -------------------------------------------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement 0.00
600 Vine Street, Suite 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202-4425
- -------------------------------------------------------------------------------------------------------------------
NBD Bank NA Credit & Agency Agreement 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- -------------------------------------------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement 0.00
Fifth Ave. & Wood Street 11/02/88
Pittsburgh, PA 15265
- -------------------------------------------------------------------------------------------------------------------
Star Bank N.A. Credit & Agency Agreement 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202-3912
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-4
<PAGE> 311
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Division: EDI
- -------------------------------------------------------------------------------------------------------------------
Chrysler Credit Installment Loan 0.00
40 Oak Hollow, Ste. 155 09/01/89
Southfield, MI 48034-7470
- -------------------------------------------------------------------------------------------------------------------
Star Bank N.A. Guarantee of Loan Agreement 0.00
425 Walnut Street 08/03/89
Mail Location 8160
Cincinnati, OH 45202-3912
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-5
<PAGE> 312
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Division: ELECTRONICS
- -------------------------------------------------------------------------------------------------------------------
IBM Boston Remarketer Lease - 05/01/90 470,000.00
404 Wyman Street (also listed under
Waltham, MA 02254 Plastics Division)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-6
<PAGE> 313
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Division: GENERAL OFFICE
- -------------------------------------------------------------------------------------------------------------------
Amvestors Investment GRP Loan Agreement, Security 0.00
415 S.W. 8th Avenue Agreement
Topeka, KS 66603-3913 03/21/89
- -------------------------------------------------------------------------------------------------------------------
Bank of New York (Trustee) 9 1/2 Sinking Fund 51,662,500.00
21 W. Street, 12th Floor Debentures
New York, NY 10286 02/24/87
- -------------------------------------------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement - 0.00
One Liberty Plaza 11/02/88
26th Floor
New York, NY 10006-1401
- -------------------------------------------------------------------------------------------------------------------
Bank of Nova Scotia Industrial Revenue Bond - 0.00
One Liberty Plaza 12/01/84
26th Floor
New York, NY 10006-1401
- -------------------------------------------------------------------------------------------------------------------
Bankers Trust (Trustee & Tender Agt) Industrial Revenue Bond being reinstated
4 Albany Street (Oregon) - under the Plan
New York, NY 10006-1592 12/01/84
- -------------------------------------------------------------------------------------------------------------------
Blue Dove Development Assn. Guarantee of Transicoil 0.00
1352 Bobarn Drive Lease
Narberth, PA 19072-1147 04/21/89
- -------------------------------------------------------------------------------------------------------------------
Central Trust Co., N.A. (Trustee) Industrial Development Bonds 0.00
201 East Fifth Street (Loudon Cty.) - 05/01/80
Cincinnati, OH 45202-4117
- -------------------------------------------------------------------------------------------------------------------
Central Trust Co., N.A. Loan 0.00
201 East Fifth Street
Cincinnati, OH 45202-4117
- -------------------------------------------------------------------------------------------------------------------
Central Trust Co., N.A. Credit & Agency Agreement - 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- -------------------------------------------------------------------------------------------------------------------
City of Mansfield Industrial Revenue Bond - 2,052,000.00
30 N. Diamond Street 10/01/80
Mansfield, OH 44902-1716
- -------------------------------------------------------------------------------------------------------------------
Connecticut Mutual Life Ins. Co. Note Agreement, Guarantee - see below
Private Placement Division 07/29/88
140 Garden Street
Hartford, CT 06154
- -------------------------------------------------------------------------------------------------------------------
Connecticut Mutual Life Ins. Co. Note Agreement, Security 927,100.60
Private Placement Division Agreement - 07/29/88
140 Garden Street
Hartford, CT 06154
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-7
<PAGE> 314
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Fifth Third Bank Credit & Agency Agreement - 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- -------------------------------------------------------------------------------------------------------------------
First Fidelity Leasing Corp. Capitalized Lease - 10/31/90 70,932.99
255 Business Center Dr. #250
Horsham, PA 19044-3473
- -------------------------------------------------------------------------------------------------------------------
Grove Industrial Development Auth. Secured Note - Mortgage - 0.00
P. O. Box 1268 08/09/89
Grove, OK 74344-1268
- -------------------------------------------------------------------------------------------------------------------
Henry County Development Auth. Industrial Development 2,630,000.00
345 Phillips Drive Revenue Bonds - 08/01/81
McDonough, GA 30253-3425
- -------------------------------------------------------------------------------------------------------------------
IBM Capitalized Lease - 05/01/89 446,230.87
1300 E. Ninth Street (also listed under
Cleveland, OH 44114-1502 Mat Division)
- -------------------------------------------------------------------------------------------------------------------
Industrial Dev. Board of Loudon Cty. Industrial Development Bonds 0.00
Loudon County Courthouse - 05/01/80
Lenoir City, TN 37771
- -------------------------------------------------------------------------------------------------------------------
JD Manly Construction Trust Mortgage - 12/01/83 0.00
P.O. Box 491611
Leesburg, FL 34749
- -------------------------------------------------------------------------------------------------------------------
LDI Corporation Capitalized Lease - 02/01/90 177,796.97
30033 Clemens Road (Equipment Schedule No. 14 (also listed under
Westlake, OH 44145-1021 to Master Lease Agreement Wolverine Gasket
No. 7044, dated 01/08/88) Division)
- -------------------------------------------------------------------------------------------------------------------
LDI Corporation Capitalized Lease - 03/01/90 70,089.19
30033 Clemens Road (Equipment Schedule No. 16- (also listed under
Westlake, OH 44145-1021 90 to Master Lease Agreement Wolverine
No. 7044, dated 01/08/88) Gasket
Division)
- -------------------------------------------------------------------------------------------------------------------
Lister, Roy D. Patent License Agreement - 0.00
457 Pine Tree 12/04/89 (also listed under
Keller, TX 76248 Orthane Division)
- -------------------------------------------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement - 0.00
600 Vine Street, Ste. 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-8
<PAGE> 315
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
National City Bank Industrial Revenue Bond 0.00
P.O. Box 5756 (Huntington) - 10/1/84
Reference Account 66688
Cleveland, OH 44101-0756
- -------------------------------------------------------------------------------------------------------------------
NBD Bank NA - London Loan Agreement - 08/23/88 0.00
28 Finsbury Circus
London EC2M 7AU
England
- -------------------------------------------------------------------------------------------------------------------
NBD Bank N.A. Credit & Agency Agreement - 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- -------------------------------------------------------------------------------------------------------------------
New England Mutual Life Ins. Co. Note Agreement - 07/07/88 891,723.30
501 Boylston Street
Boston, MA 02117
Claim Assigned to:
------------------
certain affiliates of Morgens
Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- -------------------------------------------------------------------------------------------------------------------
New England Mutual Life Ins. Co. Guarantee of E-P Note see above
501 Boylston Street Agreement - 09/14/89
Boston, MA 02117
Claim Assigned to:
------------------
certain affiliates of
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- -------------------------------------------------------------------------------------------------------------------
Northern Atlantic Life Ins. Co. Loan Agreement, Security 1,546,907.11
Robbins Lane Agreement - 03/21/89
Jericho, NY 11753
Claim Assigned to:
------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-9
<PAGE> 316
<TABLE>
<CAPTION>
=====================================================================================================================
EXHIBIT 8.4
- ---------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Northern Life Ins. Co. Loan Agreement, Security see above
1110 Third Avenue Agreement - 03/21/89
Seattle, WA 98111
Claim Assigned to:
------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- ---------------------------------------------------------------------------------------------------------------------
Northwestern Natl. Life Ins. Co. Loan Agreement, Security see above
20 Washington Avenue, South Agreement - 03/21/89
Minneapolis, MN 55401-1908
Claim Assigned to:
------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- ---------------------------------------------------------------------------------------------------------------------
Norwich Cmty. Development Corp. Community Development Loan - 0.00
One Thomas Plaza 03/01/71
Norwich, CT 06360-5314
- ---------------------------------------------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement - 0.00
Fifth & Wood Street 11/02/88
Pittsburgh, PA 15265
- ---------------------------------------------------------------------------------------------------------------------
Port Development Corp. Industrial Development 3,078,000.00
1519 Capitol Avenue Revenue Bonds - 10/01/80
Houston TX 77002-3613
- ---------------------------------------------------------------------------------------------------------------------
Societe Generale Financial Corp. Guarantee of Capitalized 0.00
50 Rockefeller Plaza Lease - 04/19/90
New York, NY 10020-1675
- ---------------------------------------------------------------------------------------------------------------------
Societe Generale Financial Corp. Capitalized Lease - 04/19/90 0.00
50 Rockefeller Plaza
New York, NY 10020-1675
- ---------------------------------------------------------------------------------------------------------------------
Star Bank, N.A. Guarantee of Loan Agreement 0.00
425 Walnut Street -08/03/89
Mail Location 8160
Cincinnati, OH 45202
- ---------------------------------------------------------------------------------------------------------------------
Star Bank, N.A. Guarantee of Loan Agreement 0.00
425 Walnut Street - 08/03/89
Cincinnati, OH 45202
- ---------------------------------------------------------------------------------------------------------------------
Star Bank, N.A. of Cinti. (Trustee) Industrial Revenue Bonds see City of
P.O. Box 1118 (Mansfield) - 10/01/80 Mansfield above
Cincinnati, OH 45202
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-10
<PAGE> 317
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Star Bank, N.A. of Cinti. (Trustee) Industrial Revenue Bonds 0.00
425 Walnut Street (Storey Cty. IRB) - 04/26/83
Cincinnati, OH 45202
- -------------------------------------------------------------------------------------------------------------------
Star Bank, N.A. Credit & Agency Agreement - 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202
- -------------------------------------------------------------------------------------------------------------------
State of Oregon Industrial Revenue Bond - see Bankers Trust
Economic Development Dept. 12/01/84 above
595 Cottage Street, NE
Salem, OR 97410
- -------------------------------------------------------------------------------------------------------------------
Storey County Industrial Revenue Bonds - 0.00
"B" Street County Courthouse 04/26/83
Virginia City, NV 89440
- -------------------------------------------------------------------------------------------------------------------
Texas Commerce Bank (Trustee) Industrial Development see Port
P. O. Box 2558 Revenue Bonds (Port Development
Attn: Corporate Trust Development) - 10/01/80 above
Houston, TX 77001
- -------------------------------------------------------------------------------------------------------------------
Trust Company Bank (Trustee) Industrial Development see Henry County
P. O. Box 4625 Revenue Bonds (Henry County) above
Atlanta, GA 30302-4625 - 08/01/81
- -------------------------------------------------------------------------------------------------------------------
U.S. Dept. of Commerce Community Development Loan 0.00
Economic Development Administration (Norwich) - 03/01/71
105 S. 7th Street, 1st Floor
Philadelphia, PA 19106-3324
- -------------------------------------------------------------------------------------------------------------------
Washington Square Capital Inc. Loan Agreement, Security see Northern
625 Marquette Ave., South Agreement - 03/21/89 Atlantic above
1500 North Star West
Minneapolis, MN 55402-1702
Claim Assigned to:
------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-11
<PAGE> 318
<TABLE>
<CAPTION>
===================================================================================================================
EXHIBIT 8.4
- -------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Division: HILLSDALE TOOL
- ---------------------------------------------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement 0.00
New York Agency 11/02/88
One Liberty Plaza, 26th Floor
New York, NY 10006-1401
- -------------------------------------------------------------------------------------------------------------------
Central Trust Co. N.A. Credit & Agency Agreement 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- -------------------------------------------------------------------------------------------------------------------
Fifth Third Bank Credit & Agency Agreement 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- -------------------------------------------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement 0.00
600 Vine Street, Ste. 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202-4425
- -------------------------------------------------------------------------------------------------------------------
NBD Bank N.A. Credit & Agency Agreement 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- -------------------------------------------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement 0.00
Fifth Ave. & Wood Streets 11/02/88
Pittsburgh, PA 15222
- -------------------------------------------------------------------------------------------------------------------
Star Bank N.A. Credit & Agency Agreement 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202-3912
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-12
<PAGE> 319
<TABLE>
<CAPTION>
=====================================================================================================================
EXHIBIT 8.4
- ---------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Division: MAT
- ---------------------------------------------------------------------------------------------------------------------
IBM Credit Corp. Lease Agreement - 05/16/89 446,230.87
18000 W. Nine Mile Road (also listed under
B/O YR6 - 14th Fl. General Office
Southfield, MI 48086 Division)
- ---------------------------------------------------------------------------------------------------------------------
Pansophic Systems Inc. License Agreement - 04/14/89 0.00
P. O. Box 95372
Chicago, IL 60694-5372
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-13
<PAGE> 320
<TABLE>
<CAPTION>
=====================================================================================================================
EXHIBIT 8.4
- ---------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Division: MICHIGAN AUTOMOTIVE RESEARCH CORP (MARCO)
- ---------------------------------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc. Unsecured Loan Agreement undetermined
580 Walnut Street 09/27/88
Cincinnati, OH 45202
- ---------------------------------------------------------------------------------------------------------------------
Fleet Credit Corp. Capitalized Equipment Lease 152,280.03
P. O. Box 37144M Agreement
Pittsburgh, PA 15251 01/28/88
- ---------------------------------------------------------------------------------------------------------------------
Fleet Credit Corp. Lease Agreement - 03/24/88 see above
111 Westminster St., 9th Fl.
Providence, RI 02903-2303
- ---------------------------------------------------------------------------------------------------------------------
Fleet Credit Corp. Lease Agreement - 05/19/88 see above
111 Westminster St., 9th Fl.
Providence, RI 02903-2303
- ---------------------------------------------------------------------------------------------------------------------
Fleet Credit Corp. Lease Agreement - 05/25/88 see above
111 Westminster St., 9th Fl.
Providence, RI 02903-2303
- ---------------------------------------------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 07/20/88 0.00
101 S. Main Street
Ann Arbor, MI 48107
- ---------------------------------------------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 04/21/89 0.00
101 S. Main Street
Ann Arbor, MI 48107
- ---------------------------------------------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 09/29/89 0.00
101 S. Main Street
Ann Arbor, MI 48017
- ---------------------------------------------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 02/20/90 0.00
101 S. Main Street
Ann Arbor, MI 48017
- ---------------------------------------------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 02/28/90 0.00
101 S. Main Street
Ann Arbor, MI 48017
- ---------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co. Equipment Loan Agreement 0.00
P. O. Box 371065 09/01/88
Pittsburgh, PA 15251-7065
- ---------------------------------------------------------------------------------------------------------------------
Star Bank, N.A. Equipment Loan Agreement 0.00
425 Walnut Street 08/03/89
Mail Location 8160
Cincinnati, OH 45202-3912
- ---------------------------------------------------------------------------------------------------------------------
Star Bank, N.A. Loan Agreement - 08/03/89 0.00
425 Walnut Street
Mail Location 8160
Cincinnati, OH 45202-3912
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-14
<PAGE> 321
<TABLE>
<CAPTION>
=====================================================================================================================
EXHIBIT 8.4
- ---------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Division: ORTHANE
- ---------------------------------------------------------------------------------------------------------------------
Lister, Roy D. License Agreement 0.00
457 Pine Tree 12/04/89 (also listed under
Keller, TX 76248-4421 General Office
Division)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-15
<PAGE> 322
<TABLE>
<CAPTION>
=====================================================================================================================
EXHIBIT 8.4
- ---------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Division: PLASTICS
- ---------------------------------------------------------------------------------------------------------------------
Future Three Software Inc. License Agreement - 10/26/88 0.00
33031 Schoolcraft Road
Livonia, MI 48150-1604
- ---------------------------------------------------------------------------------------------------------------------
GE Capital Corp. Equipment Lease - 02/07/90 0.00
P.O. Box 94916
Cleveland, OH 44101-4916
- ---------------------------------------------------------------------------------------------------------------------
IBM Credit Corp. Equipment & Software Lease 470,000.00
200 E. Main Street 11/22/88 (also listed under
Fort Wayne, IN 46801 Electronics
Division)
- ---------------------------------------------------------------------------------------------------------------------
Pansophic Systems Inc. License Agreement - 04/25/89 0.00
P. O. Box 95372
Chicago, IL 60694-5372
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-16
<PAGE> 323
<TABLE>
<CAPTION>
=====================================================================================================================
EXHIBIT 8.4
- ---------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Division: SPECIALTY MATERIALS
- ---------------------------------------------------------------------------------------------------------------------
Southwestern Bell Finance Lease - 04/01/90 5,913.92
P.O. Box 18767
St. Louis, MO 63178-0767
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-17
<PAGE> 324
<TABLE>
<CAPTION>
=====================================================================================================================
EXHIBIT 8.4
- ---------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Division: TRANSICOIL
- ---------------------------------------------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement 0.00
New York Agency 11/02/88
One Liberty Plaza - 26th Floor
New York, NY 10006-1401
- ---------------------------------------------------------------------------------------------------------------------
Bell Savings Bank Pasa Subordination Agreement 0.00
9 South 69th Street 07/28/89
Upper Darby, PA 19082-2416
- ---------------------------------------------------------------------------------------------------------------------
Blue Dove Development Assn. Subordination Agreement 0.00
c/o Ronald Bluestein 07/28/89
1352 Bobarn Drive
Narberth, PA 19072-1147
- ---------------------------------------------------------------------------------------------------------------------
Central Trust Co., N.A. Credit & Agency Agreement 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- ---------------------------------------------------------------------------------------------------------------------
Fidelcor Services Inc. Lease of Citizen- Cuncom 16,946.00
1700 Market St., 9th Floor 08/29/86
Philadelphia, PA 19103-3913
- ---------------------------------------------------------------------------------------------------------------------
Fidelcor Services Inc. Equipment Lease see above
1700 Market St., 9th Floor 02/25/87
Philadelphia, PA 19103-3913
- ---------------------------------------------------------------------------------------------------------------------
Fifth Third Bank Credit & Agency Agreement 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- ---------------------------------------------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement 0.00
600 Vine Street, Suite 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202-4425
- ---------------------------------------------------------------------------------------------------------------------
NBD Bank, N.A. Credit & Agency Agreement 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- ---------------------------------------------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement 0.00
Fifth Ave. & Wood Streets 11/02/88
Pittsburgh, PA 15222
- ---------------------------------------------------------------------------------------------------------------------
Star Bank, N.A. Credit & Agency Agreement 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202-3912
- ---------------------------------------------------------------------------------------------------------------------
Star Bank, N.A. Loan Agreement 0.00
425 Walnut Street 08/03/89
Mail Location 8160
Cincinnati, OH 45202-3912
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-18
<PAGE> 325
<TABLE>
<CAPTION>
=====================================================================================================================
EXHIBIT 8.4
- ---------------------------------------------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured Claim ($)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Division: WOLVERINE GASKET
- ---------------------------------------------------------------------------------------------------------------------
LDI Corporation Equipment Lease 177,796.97
30033 Clemens Road (Equipment Schedule No. 14 (also listed under
Westlake, OH 44145-1021 to Master Lease Agreement General Office
No. 7044, dated 01/08/88) Division)
- ---------------------------------------------------------------------------------------------------------------------
LDI Corporation Equipment Lease 70,089.19
30033 Clemens Road (Equipment Schedule No. 16- (also listed under
Westlake, OH 44145-1021 90 to Master Lease Agreement General Office
No. 7044, dated 01/08/88) Division)
- ---------------------------------------------------------------------------------------------------------------------
NBD Bank, N.A. Equipment Lease - 0.00
611 Woodward Avenue 04/01/87
Detroit, MI 48226-3408
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A8.4-19
<PAGE> 326
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.5.1"
INSURANCE POLICIES TO BE ASSUMED
All insurance policies and related agreements as to which any
insurer may still have obligations to any of the Debtors so
long as such policies and agreements are not listed on Exhibit
"8.5.2."
<PAGE> 327
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.5.2"
INSURANCE AGREEMENTS TO BE REJECTED
Liberty Mutual Insurance Company
Liberty Mutual Fire Insurance Company
Liberty Mutual Insurance Corporation
c/o William F. Cupelo, Esq.
Home Office Legal Department
175 Berkeley Street
Boston, Massachusetts 02117: All retrospective premium agreements with
respect to workers' compensation,
automobile, and comprehensive general
liability insurance policies issued by
Liberty Mutual Insurance Company, Liberty
Mutual Fire Insurance Company, and Liberty
Insurance Corporation for all years prior to
June 1, 1986.
<PAGE> 328
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
EXHIBIT "B"
ORDER OF THE BANKRUPTCY COURT, DATED AUGUST 28, 1996, APPROVING THIS
DISCLOSURE STATEMENT
<PAGE> 329
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re: )
EAGLE-PICHER INDUSTRIES, ) CONSOLIDATED CASE NO.
INC., et al., ) 1-91-00100
) Chapter 11 - Judge Perlman
Debtors. )
ORDER (A) APPROVING THE DEBTORS' JOINT DISCLOSURE
STATEMENT, (B) SCHEDULING HEARING ON CONFIRMATION OF
DEBTORS' THIRD AMENDED CONSOLIDATED PLAN OF
REORGANIZATION, AND (C) APPROVING NOTICE OF (i) LAST DAY
FOR RECEIPT OF BALLOTS WITH RESPECT TO DEBTORS' THIRD
AMENDED CONSOLIDATED PLAN OF REORGANIZATION,
(ii) LAST DAY FOR FILING OBJECTIONS TO CONFIRMATION OF
DEBTORS' THIRD AMENDED CONSOLIDATED PLAN OF
REORGANIZATION, AND (iii) HEARING ON CONFIRMATION
OF DEBTORS' THIRD AMENDED CONSOLIDATED PLAN OF
REORGANIZATION
Upon the record of the hearings held on August 12, 1996, and
August 28, 1996 (collectively, the "Disclosure Hearing"), to consider approval
of the Proposed Joint Disclosure Statement Pursuant to Section 1125 of the
Bankruptcy Code (the "Disclosure Statement") with respect to the Third Amended
Consolidated Plan of Reorganization (as such plan may be modified, the "Plan")
of Eagle-Picher Industries, Inc. and its affiliated debtors in the
above-captioned chapter 11 cases (collectively, the "Debtors"); and each of the
objections to the Disclosure Statement having been withdrawn, overruled by the
Court, or rendered moot by reason of modifications made to the Disclosure
Statement and/or the Plan; and the Debtors having revised the Disclosure
Statement to make certain technical changes thereto; and it appearing that no
further notice of the approval of the Disclosure Statement, as modified, need be
given; and upon the record of the Disclosure Hearing and all of the proceedings
had before the Court; and the Court having determined after
<PAGE> 330
due deliberation that the Disclosure Statement contains adequate information, as
such term is defined in section 1125 of title 11 of the United States Code (the
"Bankruptcy Code"); and sufficient cause appearing therefor, it is
ORDERED that, in accordance with section 1125 of the
Bankruptcy Code and Bankruptcy Rule 3017(b), the Disclosure Statement be, and it
hereby is, approved in all respects; and it is further
ORDERED that the forms of ballot (the "Ballots") filed with
the Court on August 27, 1996, be, and they hereby are, approved in all respects;
and it is further
ORDERED that compliance with Local Bankruptcy Rule 3.15(a) and
(b) be, and it hereby is, waived; and it is further
ORDERED that, pursuant to Bankruptcy Rules 3017(c) and
3018(a), the holders of Bearer Unsecured Debt Securities (as such term is
defined in the Plan), the holders of Registered Unsecured Debt Securities (as
such term is defined in the Plan) as of the date that is five (5) business days
after the entry of this Order (the "Voting Record Date"), and other holders of
claims in each of Classes, 3, 4, 10, 12, 16, 17, 18, 19, 20, and 21 of the Plan
as of the Voting Record Date may vote to accept or reject the Plan by indicating
their acceptance or rejection of the Plan on the Ballots provided therefor; and
it is further
ORDERED that, the Voting Deadline, as such term is used in the
Ballot Solicitation and Tabulation Procedures approved by an order of the Court,
dated July 23, 1996 (the "Voting Procedures"), shall be 5:00 p.m., Cincinnati,
Ohio, time on November 4, 1996; and it is further
ORDERED that a hearing (the "Confirmation Hearing") to
consider (i) confirmation of the Plan and (ii) approval of any and all
compromises and settlements embodied in or contemplated by the Plan shall be
held before the Court at the United States Bankruptcy Court, Room 817, 221 East
4th Street, Atrium Two, Cincinnati, Ohio, on November 13, 1996, at 9:30 a.m., or
as soon thereafter as counsel may be heard; and it is further
2
<PAGE> 331
ORDERED that objections, if any, to confirmation of the Plan
shall be in writing, and shall (a) state the name and address of the objecting
party and the nature of the claim or interest of such party, (b) state with
particularity the basis and nature of each objection to confirmation of the
Plan, and (c) be filed, together with proof of service, with the Court (with a
copy delivered directly to the Honorable Burton Perlman) and served so that such
objections are received no later than November 4, 1996 at 4:00 p.m., Cincinnati,
Ohio, time, by the Court, Judge Perlman, and the following parties: (i) Weil,
Gotshal & Manges LLP, Co-Attorneys for the Debtors, 767 Fifth Avenue, New York,
New York 10153, Attention: Stephen Karotkin, Esq., (ii) Frost & Jacobs,
Co-Attorneys for the Debtors, 2500 PNC Center, 201 E. Fifth Street, Cincinnati,
Ohio 45202-4183, Attention: Edmund J. Adams, Esq., (iii) Eagle-Picher
Industries, Inc., (if by courier) 580 Walnut Street, 13th Floor, Cincinnati,
Ohio 45202, Attention: James A. Ralston, Esq., or (if by mail) P.O. Box 1847,
Cincinnati, Ohio 45201, Attention: James A. Ralston, Esq.; (iv) Squire, Sanders
& Dempsey, 4900 Society Center, 127 Public Square, Cleveland, Ohio 44114-3404,
Attention: Carolyn J. Buller, Esq.; (v) Keating, Muething & Klekamp, 1800
Provident Tower, One East Fourth Street, Cincinnati, Ohio 45202, Attention:
Kevin E. Irwin, Esq.; (vi) McCarthy, Lebit, Crystal & Haiman, Co., L.P.A., 1800
Midland Building, 101 Prospect Avenue, West, Cleveland, Ohio 44115, Attention:
Robert S. Balantzow, Esq.; and (vii) the Office of the United States Trustee, 36
East 7th Street, Suite 2030, Cincinnati, Ohio 45202, Attention: Neal J. Weill,
Esq.; and it is further
ORDERED that replies, if any, to any objections to
confirmation shall be filed, together with proof of service, with the Court
(with a copy delivered directly to the Honorable Burton Perlman) and served so
that such replies are received no later than November 8, 1996 at 4:00 p.m.,
Cincinnati, Ohio, time, by the Court, Judge Perlman, and the following parties:
(i) Weil, Gotshal & Manges LLP, Co- Attorneys for the Debtors, 767 Fifth Avenue,
New York, New York 10153, Attention: Stephen Karotkin, Esq., (ii) Frost &
Jacobs, Co-Attorneys for the Debtors, 2500 PNC Center, 201 E. Fifth Street,
Cincinnati, Ohio 45202-4183,
3
<PAGE> 332
Attention: Edmund J. Adams, Esq., (iii) Eagle-Picher Industries, Inc., (if by
courier) 580 Walnut Street, 13th Floor, Cincinnati, Ohio 45202, Attention: James
A. Ralston, Esq., or (if by mail) P.O. Box 1847, Cincinnati, Ohio 45201,
Attention: James A. Ralston, Esq.; (iv) Squire, Sanders & Dempsey, 4900 Society
Center, 127 Public Square, Cleveland, Ohio 44114-3404, Attention: Carolyn J.
Buller, Esq.; (v) Keating, Muething & Klekamp, 1800 Provident Tower, One East
Fourth Street, Cincinnati, Ohio 45202, Attention: Kevin E. Irwin, Esq.; (vi)
McCarthy, Lebit, Crystal & Haiman, Co., L.P.A., 1800 Midland Building, 101
Prospect Avenue, West, Cleveland, Ohio 44115, Attention: Robert S. Balantzow,
Esq.; and (vii) the Office of the United States Trustee, 36 East 7th Street,
Suite 2030, Cincinnati, Ohio 45202, Attention: Neal J. Weill, Esq.; and it is
further
ORDERED that the Confirmation Hearing may be adjourned from
time to time without prior notice to holders of claims, holders of equity
interests, or parties in interest other than the announcement of the adjourned
hearing date at the Confirmation Hearing; and it is further
ORDERED that the Debtors be, and they hereby are, authorized
and directed to mail or cause to be mailed by first-class mail within fifteen
(15) business days after the date of entry of this Order a copy of the notice
(the "Notice") of, among other things, the Confirmation Hearing, substantially
in the form annexed hereto as Exhibit "A," and the Disclosure Statement,
including a copy of the Plan and this Order annexed as exhibits thereto, to all
entities as provided in the Ballot Tabulation and Solicitation Procedures (the
"Voting Procedures"), as approved by the order of the Court dated July 23, 1996,
and also to (i) the indenture trustees under any debt instruments of the Debtors
and (ii) the Office of the United States Trustee; and it is further
ORDERED that the Debtors be, and they hereby are, directed to
cause the Notice to be published two (2) times no less than twenty (20) days
prior to the date of the Confirmation Hearing in the national editions of The
Wall Street Journal and The New York Times; and it is further
4
<PAGE> 333
ORDERED that the provision of notice in accordance with the
procedures set forth in this Order and the Voting Procedures shall be deemed
good and sufficient notice of the Confirmation Hearing, the time fixed for
filing objections to confirmation of the Plan, and the time within which holders
of claims may vote to accept or reject the Plan; and it is further
ORDERED that the Debtors be, and they hereby are, authorized
and empowered to take such steps and perform such acts as may be necessary to
implement and effectuate this Order.
Dated: Cincinnati, Ohio
August 28, 1996
/s/ Burton Perlman
-------------------------------
United States Bankruptcy Judge
5
<PAGE> 334
EXHIBIT A
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
)
- ---------------------------------
NOTICE OF (A) SOLICITATION OF VOTES TO ACCEPT OR
REJECT THE DEBTORS' THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION AND (B) HEARING TO
CONSIDER CONFIRMATION OF DEBTORS' THIRD AMENDED
CONSOLIDATED PLAN OF REORGANIZATION
TO ALL CREDITORS, INDENTURE TRUSTEES, EQUITY
SECURITY HOLDERS, AND PARTIES IN INTEREST:
NOTICE IS HEREBY GIVEN that on August 28, 1996, the United States
Bankruptcy Court for the Southern District of Ohio (the "Court") entered an
order (the "Order") approving the disclosure statement (the "Disclosure
Statement") with respect to the Third Amended Consolidated Plan of
Reorganization dated August 28, 1996, (the "Plan") for Eagle-Picher Industries,
Inc., Daisy Parts, Inc., Transicoil Inc., Michigan Automotive Research
Corporation, EDI, Inc., Eagle-Picher Minerals, Inc., and Hillsdale Tool and
Manufacturing Co., Inc. (collectively, the "Debtors"). Pursuant to the Order,
copies of the Plan and Disclosure Statement have been mailed to all known
creditors and equity security holders of the Debtors. Ballots for voting to
accept or reject the Plan have been mailed to all known creditors entitled to
vote to accept or reject the Plan. If you are a creditor of the Debtors and have
not received a copy of the Plan, Disclosure Statement or, if applicable, a
ballot, you may obtain a copy of same by telephoning the Debtors' solicitation
agent, Hill and Knowlton, Inc., at (212) 885-0555. IF YOU HOLD DEBT SECURITIES
ISSUED BY ANY OF THE DEBTORS IN BEARER FORM, YOU MUST CALL HILL AND KNOWLTON,
INC. IN ORDER TO RECEIVE A BALLOT.
NOTICE IS FURTHER GIVEN that all ballots cast to accept or reject the
Plan must be properly completed, executed and mailed or delivered to (i) for all
ballots relating to any debt securities issued by any of the Debtors, Hill and
Knowlton, Inc., 466 Lexington Avenue, New York, New York 10017 and (ii) for all
other claims, the Federated Claims Service Group, 9111 Duke Blvd., P.O. Box
8041, Mason, Ohio 45040, so that they are RECEIVED no later than 5:00 p.m.,
Cincinnati Ohio, time, on November 4, 1996. Owners of debt securities that are
registered in "street name" or that are on deposit with a depositary should
follow the instructions on the ballot for the
<PAGE> 335
completion and return of the ballot. If your ballot is not properly completed or
received within such time, it will not be counted as a vote to accept or reject
the Plan.
NOTICE IS FURTHER GIVEN that the Court has fixed November 13, 1996, at
9:30 a.m. as the date and time for the hearing to consider confirmation of the
Plan and related matters (the "Confirmation Hearing"). The Confirmation Hearing
will be held in Room 817 of the United States Bankruptcy Court, 221 East 4th
Street, Atrium Two, Cincinnati, Ohio. The Confirmation Hearing may be adjourned
from time to time without further notice other than announcement made at the
Confirmation Hearing or any adjourned hearing.
NOTICE IS FURTHER GIVEN that objections, if any, to the confirmation of
the Plan shall be in writing, and (a) shall state the name and address of the
objecting party and the nature of the claim or interest of such party, (b) shall
state with particularity the basis and nature of each objection to confirmation
of the Plan and (c) be filed, together with proof of service, with the Court
(with a copy to the Honorable Burton Perlman) and served so that they are
received not later than 4:00 p.m., Cincinnati, Ohio, time, on November 4, 1996,
1996, by the Court, Judge Perlman, and the following parties: (i) Weil, Gotshal
& Manges LLP, Co-Attorneys for the Debtors, 767 Fifth Avenue, New York, New York
10153, Attention: Stephen Karotkin, Esq., (ii) Frost & Jacobs, Co- Attorneys for
the Debtors, 2500 PNC Center, 201 E. Fifth Street, Cincinnati, Ohio 45202-4183,
Attention: Edmund J. Adams, Esq., (iii) Eagle-Picher Industries, Inc., (if by
courier) 580 Walnut Street, 13th Floor, Cincinnati, Ohio 45202, Attention: James
A. Ralston, Esq., or (if by mail) P.O. Box 1847, Cincinnati, Ohio 45201,
Attention: James A. Ralston, Esq.; (iv) Squire, Sanders & Dempsey, 4900 Society
Center, 127 Public Square, Cleveland, Ohio 44114-3404, Attention: Carolyn J.
Buller, Esq.; (v) Keating, Muething & Klekamp, 1800 Provident Tower, One East
Fourth Street, Cincinnati, Ohio 45202, Attention: Kevin E. Irwin, Esq.; (vi)
McCarthy, Lebit, Crystal & Haiman, Co., L.P.A., 1800 Midland Building, 101
Prospect Avenue, West, Cleveland, Ohio 44115, Attention: Robert S. Balantzow,
Esq.; and (vii) the Office of the United States Trustee, 36 East 7th Street,
Suite 2030, Cincinnati, Ohio 45202, Attention: Neal J. Weill, Esq.
Dated: Cincinnati, Ohio
August 28, 1996
BY ORDER OF THE UNITED STATES
BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF OHIO
WEIL GOTSHAL & MANGES LLP FROST & JACOBS
Co-Attorneys for the Debtors Co-Attorneys for the Debtors
767 Fifth Avenue 2500 PNC Center
New York, New York 10153 201 E. Fifth Street
(212) 310-8000 Cincinnati, Ohio 45202-4183
(513) 651-6800
2
<PAGE> 336
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
EXHIBIT "C"
FINANCIAL APPENDIX
A. HISTORICAL FINANCIAL INFORMATION:
- - Report on Form 10-K for the Fiscal Year Ended November 30, 1995
- - Report on Form 10-Q for Quarter Ended May 31, 1996
B. PROJECTED FINANCIAL INFORMATION:
- Pro Forma Consolidated Balance Sheet of Reorganized
Eagle-Picher as of December 1, 1996;
- Projected Consolidated Balance Sheets of Reorganized
Eagle-Picher as of December 1, 1996, and November 30 of each
of the years from 1997 through 2001;
- Projected Consolidated Statements of Income of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 20, 2001;
- Projected Consolidated Statements of Cash Flow of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 30, 2001; and
- Projected Capital Structure of Reorganized Eagle-Picher as of
December 1, 1996.
<PAGE> 337
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1995
COMMISSION FILE NUMBER 1-1499
EAGLE-PICHER INDUSTRIES, INC.
AN OHIO CORPORATION
I.R.S. EMPLOYER IDENTIFICATION
NO. 31-0268670
580 BUILDING, 580 WALNUT STREET, P. O. BOX 779, CINCINNATI, OHIO 45201
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 513-721-7010
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF CLASS
Common Capital Stock,
Par Value $1.25 per Share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of February 23, 1996 was $1,313,029 based upon the average of
the bid and asked prices as of such date. On February 23, 1996, 11,040,932
shares of the registrant's Common Stock were outstanding. The registrant had and
has no other classes of stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Excerpts from registrant's Annual Report for the fiscal year ended November
30, 1995 -- Incorporated in Part I and Part II.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 338
NOTE
This copy of Eagle-Picher's Form 10-K for 1995 includes only Exhibits 13,
21, 23, 24(a), 24(b) and 99.
In accordance with SEC requirements, copies of the following exhibits will
be furnished upon payment of a fee of ten cents per page. Please remit the
proper amount with your request to:
James A. Ralston, Vice President,
General Counsel and Secretary
Eagle-Picher Industries, Inc.
P. O. Box 779
Cincinnati, Ohio 45201.
Exhibits not included in this Form 10-K for 1995 have the following number
of pages (see list of Exhibits in Part IV, Item 14(a)(3)):
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3. (i) -- 10 4. (a) -- 99 10. (a) -- 6
(ii) -- 12 (b)(i) -- 120 (b) -- 6
(b)(ii) -- 5 (c) -- 9
(d) -- 4
</TABLE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
- ---- ----
<C> <S> <C>
PART I
1. Business........................................................................... 3
2. Properties......................................................................... 5
3. Legal Proceedings.................................................................. 6
4. Submission of Matters to a Vote of Security Holders................................ 12
PART II
5. Market for the Registrant's Common Equity and Related Stockholder Matters.......... 13
6. Selected Financial Data............................................................ 13
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations......................................................................... 13
8. Financial Statements and Supplementary Data........................................ 13
9. Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure......................................................................... 13
PART III
10. Directors and Executive Officers of the Registrant................................. 14
11. Executive Compensation............................................................. 17
12. Security Ownership of Certain Beneficial Owners and Management..................... 20
13. Certain Relationships and Related Transactions..................................... 20
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K................... 21
Signatures............................................................................... 22
Exhibit Index............................................................................ 23
</TABLE>
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PART I
ITEM 1. BUSINESS.
General Development of Business.
Eagle-Picher Industries, Inc. (the "Company") was incorporated in 1867
under the laws of the State of Ohio as an outgrowth of a business enterprise
founded in Cincinnati in 1843. It conducts its business through unincorporated
operating divisions and separately incorporated subsidiaries, both of which are
referred to herein as divisions.
On January 7, 1991, the Company and seven of its domestic subsidiaries each
filed a voluntary petition for relief under chapter 11 of the United States
Bankruptcy Code ("chapter 11"). The chapter 11 filings were the consequence of a
cash shortfall resulting from the Company's inability to satisfy certain
immediate asbestos litigation liabilities. See Item 3.(a) below.
Financial Information About Industry Segment.
The Company's major industry segments are:
1. Industrial;
2. Machinery; and
3. Automotive.
Industry Segment Data is incorporated herein by reference to Exhibit 13, the
Company's Annual Report for the fiscal year ended November 30, 1995, pages
29-30.
Narrative Description of Business.
The Industrial Group, which is composed of three divisions and operations
in three other divisions, produces a variety of products for industrial markets,
principally manufacturers of consumer products. The Minerals Division mines and
refines diatomaceous earth products used for high purity filtration primarily by
the food and beverage industry and also for general industrial applications. The
Fabricon Products Division produces printed packaging materials for the dairy
and confectionery industries. The Specialty Materials Division refines rare
metals, such as high purity germanium and gallium compounds, and is a major
source of boron isotopes for nuclear applications. This Division also produces a
wide range of super-clean containers, which meet strict EPA protocols, for
environmental sampling. Other products manufactured in the Industrial Group
include custom designed cast plastic parts, injection molded rubber parts and
industrial chemicals.
The methods of distribution and competitive positions of the divisions of
the Industrial Group vary widely. For example, the Minerals Division is second
to the Alleghany Corporation in the sale of certain filter aid products which
are sold both directly and through distributors to many large and small
customers. By contrast, the Fabricon Products Division conducts its sales
through sales personnel and competes against many other firms in a highly
price-sensitive market. Other products are sold under competitive conditions
which vary widely from plant to plant.
The Machinery Group consists of five divisions, which are involved in
manufacturing products for various industrial markets. The Construction
Equipment Division produces earthmoving equipment for Caterpillar Inc. and a
line of heavy-duty industrial forklift trucks. The Electronics Division is a
leading supplier of sophisticated special purpose batteries for aerospace and
defense applications. The Cincinnati Industrial Machinery Division produces
specialized high-volume metal cleaning and finishing systems. The Ross Aluminum
Foundries Division manufactures complex aluminum castings in sand and plaster.
Transicoil Inc. manufactures sophisticated electronic components for aerospace,
shipboard, ground-based, and industrial applications.
The principal products manufactured by the Machinery Group are distributed
through various methods and in a variety of competitive environments. The
Electronics Division bids competitively for numerous fixed price government
contracts for special purpose batteries. The Division is a recognized leader in
this business
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and has a few competitors for some highly technological products, but many large
and small competitors for other products. The Construction Equipment Division is
the sole supplier of four lines of earthmoving equipment to its longstanding
largest customer, Caterpillar Inc. The forklift trucks are distributed through a
dealer network.
The Automotive Group consists of ten divisions, which are involved largely
in the production and sale of mechanical, structural and trim parts for
passenger cars, trucks, vans, and recreational and sport utility vehicles. The
Hillsdale Tool Division specializes in the manufacture of precision-machined
aluminum and steel parts. Typical machined products include torsional vibration
dampers and a variety of castings and forgings. The Division also produces the
entire front pump assembly for Ford Motor Co.'s electronic four-speed overdrive
transmission primarily used on one-half and three-quarter ton pick-up trucks,
vans and sport utility vehicles. The Plastics Division is a major supplier of
fiberglass reinforced molded plastic parts to automotive and other customers.
The Division also produces the fiberglass reinforced plastic roof panels for
General Motors Corporation's all-plastic body, all-purpose vehicle. The
Wolverine Gasket Division coats steel and aluminum with elastomeric compounds
and produces materials which are particularly suitable for high compression
applications. The International Operations Division includes Eagle-Picher
Industries Europe GmbH, with responsibility over three plants in Europe which
manufacture sealing and insulating products, elastomeric extrusions, and
injection molded parts for the European automotive market. The Division also
includes a sales and engineering office in Japan that serves the Asian market.
The Trim Division manufactures automotive interior trim including headliners,
rear package trays, spare tire covers and door panels. The Michigan Automotive
Research Corporation Division offers vehicle and vehicle system manufacturers a
comprehensive range of testing programs for engines, power trains and power
train components. The Rubber Molding Division manufactures small rubber
precision-molded parts. The Suspension Systems Division, which was formerly part
of the Rubber Molding Division, manufactures engineered rubber and rubber-to-
metal products. The department of the Orthane Division which produces
injection-molded plastic parts for automotive and industrial applications was
sold in January 1996. Certain assets of the Orthane Division, related to the
elastomeric extrusion process, were transferred to the new Fluid Systems
Division.
The Automotive Group distributes its products primarily to the "Big Three"
automotive manufacturers, or to other suppliers to those manufacturers, directly
through internal sales personnel. With respect to the hundreds of products
manufactured by the Automotive Group, competition varies widely as to the number
and type of competitors, the methods of competition and the Group's competitive
positions. Divisions producing precision-machined parts, such as Hillsdale Tool
Division, tend to have a few strong competitors (including among others the
automotive manufacturers themselves) and compete on the basis of quality and
price. Divisions such as Trim and Wolverine Gasket tend to have many competitors
of varying sizes and compete primarily on the basis of price. Generally,
competitive conditions for this Group are characterized by a decreasing number
of competitors, an increasing amount of foreign competition (particularly from
the Far East), an increased emphasis on quality and intense pricing pressures
from major customers.
No product accounted for more than 7%, and no customer accounted for more
than 10%, of total sales of the Company for fiscal 1993 through fiscal 1995
except Ford Motor Co., for which sales were $166.8 million in 1995, $165.3
million in 1994, and $148.0 million in 1993, and General Motors Corporation, in
1994 and 1993, when sales were $81.4 million and $73.1 million, respectively. In
addition, the Company is not dependent upon any individual raw material source
for a substantial part of its business and believes that its sources of raw
materials are adequate.
In the Machinery Group, order backlog was approximately $182.5 million as
of November 30, 1995, $190.1 million as of November 30, 1994 and $148.1 million
as of November 30, 1993. The decrease from the prior year is due primarily to
softer demand for capital equipment and heavy-duty forklift trucks and better
efficiencies in producing forklift trucks which worked off the prior year
backlog. A substantial portion of the order backlog outstanding at November 30,
1995 is expected to be filled within the current fiscal year. In no other
segment is order backlog of significance, except in the Specialty Materials
Division which had order backlogs of $34.4 million as of November 30, 1995, and
$25.1 million and $19.9 million as of November 30, 1994 and 1993, respectively.
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In fiscal 1995, the Company spent approximately $19.9 million for research
and development and related activities, primarily for the development of new
products or the improvement of existing products. Comparable costs were $21.1
million and $17.1 million for 1994 and 1993, respectively.
The Company owns or is licensed under patents relating to methods and
products in several areas of its business. Although these have been of value and
are expected to be of value in the future, the loss of any individual patent or
group of patents would not materially affect the conduct of the Company's
business.
In the fiscal years 1995, 1994, and 1993, for current operations the
Company spent approximately $10.9 million, $9.6 million and $8.6 million,
respectively, to comply with federal, state and local regulatory provisions
relating to the protection of the environment. This level of expenditures has
had no material effect on the earnings or competitive position of the Company or
its operations during the period described. The Company expects these
expenditures to be approximately $12.3 million in fiscal 1996. See Item 3.(d)
for information with respect to various other environmental proceedings.
As of November 30, 1995, the Company employed approximately 7,500 persons
in its operations, of whom approximately 1,900 were salaried employees and
approximately 5,600 were hourly employees. Approximately 20% of the Company's
hourly employees are represented by eight labor organizations under twelve
separate contracts. The thirteenth contract is currently being negotiated. The
Company believes that its relations with its employees generally are good.
Export sales totaled approximately $92.5 million, $76.9 million and $73.2
million in fiscal 1995, 1994 and 1993, respectively. The revenues generated by
foreign operations do not exceed 10% of consolidated revenues, nor do their
identifiable assets exceed 10% of consolidated total assets.
The Company's debtor-in-possession financing expires on the earlier of
December 31, 1996 or the effective date of a plan of reorganization. Should a
plan not become effective by the end of 1996, the Company would expect to have
the current facility extended as long as necessary.
ITEM 2. PROPERTIES.
Eagle-Picher Industries, Inc. manufactures at 57 locations a wide variety
of products primarily for other manufacturers. Types of manufacturing include,
among others, chemical processing, mining, metal fabricating, aluminum casting,
precision machining, electronic and electrical assembling, and rubber and
plastic molding and extruding.
The plants are fully utilized for the purposes intended and generally have
capacity for expansion of existing buildings on owned real estate. Plants range
in size from 425,000 square feet of floor area to under 50,000 square feet and
generally are located away from large urban centers.
Information on the locations of all manufacturing plants is contained in
Exhibit 99 attached hereto, which is incorporated by reference into this report.
The Company considers the following plants to be its most important
physical properties:
<TABLE>
<CAPTION>
LOCATION GENERAL CHARACTER
---------------- ---------------------
<S> <C> <C>
INDUSTRIAL GROUP
Minerals Division........................... Lovelock, NV Processing facility
MACHINERY GROUP
Electronics Division........................ Joplin, MO Manufacturing plants
(six locations)
Construction Equipment Division............. Lubbock, TX Fabrication and
assembly facility
AUTOMOTIVE GROUP
Hillsdale Tool Division..................... Hillsdale, MI Manufacturing plants
(four locations)
Plastics Division........................... Grabill, IN Manufacturing plant.
</TABLE>
All of such properties are held in fee and none of them is subject to any
major encumbrances.
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<PAGE> 342
ITEM 3. LEGAL PROCEEDINGS.
(a) Chapter 11 Proceedings.
On January 7, 1991 ("petition date"), the Company and seven of its domestic
subsidiaries each filed a voluntary petition for relief under chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of Ohio, Western Division, in Cincinnati, Ohio ("Bankruptcy
Court"). The subsidiaries that filed chapter 11 petitions are Daisy Parts, Inc.,
Transicoil Inc., Michigan Automotive Research Corporation ("MARCO"), EDI, Inc.,
Eagle-Picher Minerals, Inc., Eagle-Picher Europe, Inc., and Hillsdale Tool &
Manufacturing Co. On November 30, 1991, substantially all of the assets of EDI,
Inc. were sold pursuant to authority granted by the Bankruptcy Court. All of the
chapter 11 cases have been consolidated for procedural purposes only under the
caption: "In re Eagle-Picher Industries, Inc., et al.," Consolidated Case No.
1-91-00100, before the Honorable Burton Perlman, United States Bankruptcy Judge.
The Company and its petitioning subsidiaries, other than EDI, Inc., are
operating their businesses and managing their properties as debtors in
possession, in accordance with the provisions of the Bankruptcy Code.
The filing of a chapter 11 petition operates as an automatic stay of all
litigation against the debtor that was or could have been commenced before the
filing of the chapter 11 petition and of any act to collect or recover a claim
against the debtor that arose before the commencement of the chapter 11 case.
While claimants or the Company may petition the Bankruptcy Court for a
modification of the stay to permit such litigation or claim recovery to proceed,
the Company believes that it is unlikely that the Bankruptcy Court will grant
such permission except in certain limited instances to permit the liquidation of
a pre-petition claim, but not any payment or collection efforts with respect
thereto. Consistent with the provisions of chapter 11, the Company intends to
address all of the pre-petition claims in a plan of reorganization.
An Unsecured Creditors' Committee ("UCC"), an Injury Claimants' Committee
("ICC"), an Equity Security Holders' Committee ("ESC") and a Legal
Representative for Future Claimants ("RFC") have been appointed in the chapter
11 cases. An unofficial asbestos co-defendants' committee has also been
participating in the chapter 11 cases. In accordance with the provisions of the
Bankruptcy Code, these parties have the right to be heard with respect to
transactions outside the ordinary course of business.
At the Company's request, the Bankruptcy Court established a bar date of
October 31, 1991 for all pre-petition claims against the Company other than
those arising from the sale of asbestos-containing products and other than those
arising from any future rejection of executory contracts or unexpired leases in
the chapter 11 cases. The bar date is the date by which claimants who disagree
with the amounts recorded by the Company as owing to such claimants must file a
proof of claim against the Company in the Bankruptcy Court. The Company notified
all known or potential claimants subject to the October 31, 1991 bar date of
their possible need to file a proof of claim with the Bankruptcy Court. Of the
5,600 claims filed pursuant to this bar date, 2,675 were general claims (e.g.
vendor, note holder and other miscellaneous claims), 1,325 were
litigation-related claims and environmental claims, and 1,600 were
asbestos-related claims.
Substantially all of the general claims have been reconciled by the
Company. Such claims, as reconciled, have been allowed as pre-petition claims
against the Company's estate. The impact of these reconciliations on the
Company's financial statements was not material. The Company continues to
attempt to negotiate settlements for the remaining unreconciled general claims.
If they cannot be resolved by a negotiated settlement, the Company intends to
have them resolved by the Bankruptcy Court. The Company does not expect that the
impact of the resolution of these claims will be material. The
litigation-related and environmental claims are discussed in subsections (c) and
(d) respectively, below.
The Bankruptcy Court also established a bar date of September 30, 1992 for
all present asbestos-related claims. Approximately 161,000 asbestos-related
claims were filed with the Bankruptcy Court pursuant to the bar date.
Approximately 1,000 of these claims alleged property damage. The 1,600
asbestos-related claims referred to above filed prior to the October 31, 1991
bar date will be treated in the reorganization cases in the same manner as the
asbestos-related claims filed in connection with the September 30, 1992 bar
date. The asbestos-related claims are discussed more fully in subsection (b),
below.
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The Bankruptcy Court has approved five extensions of the periods during
which the Company has the exclusive right to file and confirm a chapter 11 plan
under section 1121(a) of the Bankruptcy Code ("Exclusive Periods"). The most
recent order of the Bankruptcy Court, entered on May 23, 1995, provides that the
Exclusive Periods are extended until further order of the Bankruptcy Court.
On June 5, 1992, a mediator was appointed by the Bankruptcy Court to assist
the Company, the ICC, the UCC, the RFC and the ESC in their efforts to negotiate
a consensual plan of reorganization. On November 9, 1993, the Company reached an
agreement ("Agreement") on the principal elements of a joint plan of
reorganization with the ICC and the RFC, the representatives of the holders of
present and future asbestos-related and other toxic tort claims in the Company's
chapter 11 case. The Agreement was reached with the assistance of the mediator
appointed by the Bankruptcy Court.
As a consequence of the Agreement, the Company recorded a provision in the
fourth quarter of 1993 of $1.135 billion to increase the asbestos liability
subject to compromise to $1.5 billion. The Company also recorded a provision of
$41.4 million in 1993 for environmental and other litigation claims.
Throughout 1994, the Company, the ICC and the RFC continued to refine the
details of a joint plan of reorganization. On February 28, 1995, the Company and
its petitioning subsidiaries filed a plan of reorganization and accompanying
disclosure statement with the Bankruptcy Court ("Original Plan"). The Original
Plan was proposed jointly with the ICC and the RFC.
The Original Plan was premised on the settlement of the Company's liability
for all present and future asbestos-related personal injury claims and certain
other tort claims contemplated by the Agreement. Pursuant to the Original Plan,
these claims were to be channeled to and resolved by an independently
administered claims trust ("Trust") and the Bankruptcy Court would issue an
injunction with respect to such claims. The injunction would forever stay,
restrain and enjoin actions against the Company for the purpose of, directly or
indirectly, collecting, recovering, or receiving payment of, on or with respect
to any personal injury claims resulting from exposure to asbestos-containing
products allegedly manufactured or sold by the Company. In 1994, the Bankruptcy
Code was amended to add, among others, new subsections 524(g) and (h), which
authorize the issuance of a permanent injunction to supplement the existing
injunctive relief afforded by section 524 of the Bankruptcy Code in
asbestos-related reorganizations under chapter 11. The new subsections provide
that, if certain specified conditions are satisfied, a court may issue a
supplemental permanent injunction barring the assertion of asbestos-related
claims or demands against the reorganized company and channeling those claims to
an independent trust. The issuance of such a channeling injunction was a
condition precedent to confirmation of the Original Plan.
The Original Plan provided for the distribution of cash, notes, debentures,
and common stock of the reorganized Company ("Plan Consideration") to the Trust
and to holders of allowed unsecured claims on a pro-rata basis proportionate to
their share of the aggregate amount of allowed pre-petition unsecured claims
against the Company and the other debtor entities. The Original Plan also
provided that claims entitled to priority in payment under the Bankruptcy Code
and convenience claims (general unsecured claims of $500 or less or claims that
will be reduced to that amount) would be paid in full, in cash. Under the
Bankruptcy Code, shareholders are not entitled to any distribution under a plan
of reorganization unless all classes of pre-petition creditors receive
satisfaction in full of their allowed claims or accept a plan which allows
shareholders to participate in the reorganized company or to receive a
distribution. The Original Plan did not provide that all classes of pre-petition
creditors would receive satisfaction in full of their allowed claims.
Consequently, the Original Plan did not provide for any distribution to
shareholders and their equity interests were to be canceled.
The Original Plan did not have the support of the UCC or the ESC because
neither the UCC or the ESC agreed with the amount of the aggregate asbestos
liability which had been negotiated and which was used in the proposed Plan to
determine the allocation of the consideration to be distributed to the unsecured
creditor and shareholder classes. As a result of the dispute, the Company was
unable to move forward with the Original Plan. In order to resolve this dispute,
the Company filed a motion in July 1995, requesting that the Bankruptcy Court
estimate the Company's aggregate liability on account of present and future
asbestos-related personal injury claims. The Bankruptcy Court ruled in December
1995 that the Company's estimated liability with
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<PAGE> 344
respect to such claims is $2.5 billion ("Estimation Ruling"). The UCC and the
ESC and two individual members of the UCC have filed notices of appeal of the
Estimation Ruling. The Company does not know whether the appellate court will
hear the appeals or, if it does, when any decision will be rendered.
Following the Estimation Ruling, the Company recorded a provision of $1.0
billion to increase the asbestos liability subject to compromise to the amount
found by the Bankruptcy Court. This resulted in negative shareholders' equity in
excess of $2.2 billion. As a result, the Company filed a motion in the
Bankruptcy Court in December 1995 seeking an order directing the United States
Trustee to disband the ESC on the basis that existing equity holders do not have
an economic interest in the chapter 11 cases. In January 1996, the Bankruptcy
Court ruled that the ongoing activities of the ESC shall be limited to pursuing
its appeal of the Estimation Ruling.
In August 1995, certain entities that had, since the petition date,
purchased claims held by certain trade creditors of Hillsdale Tool &
Manufacturing Co., filed with the Bankruptcy Court a complaint seeking to
preclude the use of substantive consolidation as an element of any plan of
reorganization of the Company and its subsidiaries. Under the principles of
substantive consolidation, the assets of all debtors are used to satisfy claims
against all debtors. In its answer, the Company requested that the Bankruptcy
Court substantively consolidate the estates of the Company and its subsidiaries.
The Company believes that substantive consolidation is warranted in the chapter
11 cases. The Bankruptcy Court has scheduled an evidentiary hearing to commence
on March 4, 1996.
The Company intends to file with the Bankruptcy Court as soon as
practicable an amended plan of reorganization ("Amended Plan") and an
accompanying proposed amended disclosure statement. It is anticipated that the
Amended Plan essentially will modify the Original Plan so as to reflect in the
allocation of the distributions of Plan Consideration the effect of the
Estimation Ruling. More specifically, based upon an aggregate amount of allowed
pre-petition unsecured claims to share in the Plan Consideration of
approximately $2.663 billion, it is anticipated that under the Amended Plan the
Trust would receive approximately 94 percent of the Plan Consideration and the
other unsecured creditors the balance.
Each class of creditors and equity security holders that is impaired under
a plan of reorganization is entitled to vote to accept or reject the plan. The
Bankruptcy Code defines acceptance of a plan by a class of creditors as
acceptance by holders of two-thirds in dollar amount and more than one-half in
number of claims of that class that have timely voted to accept or reject the
plan. The Bankruptcy Code defines acceptance of a plan by a class of equity
security holders as acceptance by holders of equity interests that hold at least
two-thirds in amount of the allowed equity interests in such class who have
timely voted to accept or reject the plan. The Bankruptcy Code further provides
that any class that does not receive a distribution under a plan is deemed to
have rejected the plan, and, accordingly, does not vote. Thus, because the
Amended Plan will not provide for any distribution to the Company's existing
shareholders, that class will not vote on the Amended Plan and will be deemed to
reject the Amended Plan. The Bankruptcy Court will confirm a plan only if all of
the requirements of section 1129 of the Bankruptcy Code are met. Among the
requirements for confirmation of a plan are that the plan is (i) accepted by all
impaired classes of claims and equity interests or, if rejected by an impaired
class, that the plan "does not discriminate unfairly" and is "fair and
equitable" as to such class, (ii) feasible, and (iii) in the "best interest" of
creditors and stockholders impaired under the plan.
Additional information concerning the Original Plan, the Amended Plan and
the chapter 11 cases can be found in Note B to the Consolidated Financial
Statements in the Company's Annual Report for the fiscal year ended November 30,
1995, which is attached as Exhibit 13 to this Form 10-K and which is
incorporated herein by reference. Additional information concerning the chapter
11 proceedings can be found in subsections (b) through (d), inclusive, of this
Item 3.
(b) Asbestos.
Prior to its chapter 11 filing, the Company had been named as a
co-defendant in a substantial number of lawsuits alleging personal injury from
exposure to asbestos-containing insulation products. As of the petition date,
there were approximately 67,800 asbestos-related claims outstanding against the
Company. The claims, which were pending in 48 states, British Columbia, Guam,
the Virgin Islands, and the District of Columbia,
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<PAGE> 345
alleged, in general, that the Company and other defendant manufacturers failed
to warn of the potential hazard to health from the inhalation of asbestos fiber
contained in their products. As a result of the chapter 11 filing by the
Company, all of such litigation was automatically stayed pursuant to section 362
of the Bankruptcy Code and additional suits were not allowed to be filed against
the Company.
Since the first asbestos case was filed in 1966, the Company has disposed
of approximately 73,500 claims through trial, dismissal or settlement. On
average, the Company spent approximately $7,800 per claim, including attorneys'
fees and other defense costs, to dispose of these claims.
All persons with a pre-petition asbestos-related claim were required to
file a proof of claim by the September 30, 1992 bar date. Approximately 160,000
proofs of claim were filed alleging personal injury. The Company believes that
approximately 11,000 of these claims are duplicates or were filed by persons
whose lawsuits were previously disposed of through trial, dismissal or
settlement. The Company expects that additional asbestos-related personal injury
claims will arise for several decades into the future. Such future claims were
not subject to the September 30, 1992 bar date.
The Company recorded a provision in the fourth quarter of 1993 of $1.135
billion to increase the asbestos liability subject to compromise on its books to
$1.5 billion, as a consequence of the proposed settlement discussed in
subsection (a), above. In July 1995, the Company filed a motion requesting that
the Bankruptcy Court estimate the Company's aggregate liability on account of
present and future asbestos-related personal injury claims. The motion was filed
because the UCC and the ESC appointed in the Company's chapter 11 cases had not
agreed with the amount of such liability previously negotiated for settlement
purposes among the Company, the ICC and the RFC. Utilizing information available
from the Company and from other sources, the Company's expert and the experts
retained by the committees and the RFC appointed in the chapter 11 cases gave
opinions as to this liability at the hearing before the Bankruptcy Court on this
matter. In December 1995, the Bankruptcy Court ruled that the Company's
estimated liability for such claims is $2,502,511,000. Specifically, the
Bankruptcy Court found the value of the asbestos-related personal injury claims
asserted prior to the petition date to be $478,000,000 and the value of future
such claims, claims which will be filed after the petition date, to be
$2,024,511,000. Appeals have been filed by certain creditors, the UCC and the
ESC, seeking to have the Bankruptcy Court's ruling overturned. The Company does
not know whether the appellate court will hear the appeals or, if it does, when
any decision may be rendered.
The Company, and numerous others, also were sued in both state and federal
courts by various entities that own or operate commercial properties and public
buildings, such as school districts, counties, cities, states, libraries and
hospitals, based on allegations that asbestos or asbestos-containing products
are or may be in the buildings. The typical demand in such suits is that the
defendants compensate the plaintiffs for any costs incurred in identifying,
repairing, encapsulating or removing the asbestos-containing products, or that
defendants perform such remedial action. Many suits seek an injunction requiring
abatement and punitive damages on the basis that the defendants allegedly knew
of the hazards and, in concert with one another, concealed and misrepresented
the dangers. Many such suits also seek indemnification from the defendants for
all claims for personal injury brought against plaintiffs resulting from the
presence of asbestos-containing products in plaintiffs' buildings. These suits
too have been stayed as against the Company as a result of the commencement of
the chapter 11 cases.
One hundred forty-nine such lawsuits were instituted against the Company
prior to the filing of its chapter 11 petition, including two which were
certified as class actions. Two of such suits were consolidated into one. One
hundred and one were disposed of through dismissals by the court following
rulings on pre-trial motions, or voluntarily by the plaintiffs. The Company
settled seven of these cases for less than $22,000 in the aggregate, prior to
filing its chapter 11 petition. Forty of such suits remain pending, but have
been stayed as a consequence of the chapter 11 filing.
The class actions that were certified pre-petition are a national school
class action consisting of all public and private elementary and secondary
school systems in the United States that have not excluded themselves from the
suit; and a Michigan school class action consisting of all public and private
elementary and secondary school systems in Michigan that have excluded
themselves from the national school class action and included themselves in the
state class action. In four lawsuits, class certification petitions were pending
pre-petition. One of these suits has since been dismissed; one suit has been
suspended; and the remaining two suits, one
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<PAGE> 346
involving a class of colleges and universities and the other a class of
buildings leased to the government, have been certified as class actions. Many
of the claimants which voluntarily dismissed their individual claims as set
forth above did so to pursue them in one of the certified class actions.
Approximately 1,000 proofs of claim alleging asbestos property damage were
filed in the chapter 11 cases pursuant to the bar date. Certain of these claims
have been withdrawn by the claimants or disallowed by the Bankruptcy Court. The
remaining, approximately 930 proofs of claim assert claims in the aggregate
amount of approximately $11.5 billion. These claims include most of those
asserted in the lawsuits described above that were pending as of the petition
date.
It is anticipated that the Amended Plan will provide for the establishment
of a second trust to resolve asbestos-related property damage claims and
alternative mechanisms relating to such trust. More specifically, if the class
of asbestos-related property damage claimants votes to accept the Amended Plan,
the Company will fund the trust with $3 million in cash, the trustees for the
trust will be selected by the representatives of the claimants, and such
trustees will develop claims resolution procedures. If such class votes to
reject the Amended Plan, but the Amended Plan is nevertheless confirmed, the
trust will be funded with its pro rata share of the Plan Consideration, based
upon an estimate of the aggregate value of asbestos-related property damage
claims by the Bankruptcy Court, and such claims will be resolved and discharged
pursuant to claims resolution procedures contained in the Amended Plan. These
procedures will require such claimants to prove by application of a scientific
protocol that the asbestos-containing insulation products for which they are
seeking damages were manufactured by the Company.
In February 1996, after the close of the fiscal year, the hospital members
of the American Hospital Association, which filed asbestos-related property
damage claims against the Company in the alleged approximate amount of $300
million ("Hospitals"), filed a motion in the Bankruptcy Court seeking an order
(a) estimating the aggregate value of all asbestos-related property damage
claims against the Company, and (b) temporarily allowing such claims for
purposes of voting on a plan of reorganization. The motion states that the
relief requested is not intended to be a determination by the Bankruptcy Court
of the Company's liability, if any, on account of such claims or to assign a
permanently fixed value for such claims, but is sought in order to determine the
appropriate distribution to creditor classes under a plan of reorganization.
Because the motion was just filed, the Company has not yet made a determination
as to how it intends to respond. On February 15, 1996, however, the Company
filed with the Bankruptcy Court an objection on various grounds to the allowance
of many asbestos-related property damage claims, including the claims filed by
the Hospitals.
Additional information concerning the asbestos litigation can be found in
Note K to the Consolidated Financial Statements in the Company's Annual Report
for the fiscal year ended November 30, 1995, which is attached as Exhibit 13 to
this Form 10-K and which is incorporated herein by reference.
(c) Other.
In June 1989, the City of New York filed suit against the Company and
others in New York state court seeking indemnity for costs New York had incurred
and would incur because residents of housing owned by the city were allegedly
injured by ingesting paint in that housing. Counts in this suit alleging
negligence and strict product liability have been dismissed. Certain other
counts are still pending. The City of New York did not file a proof of claim in
the Company's chapter 11 case with respect to the claims asserted in such
lawsuit by the 1991 bar date. In November 1993, however, it filed three proofs
of claim with respect to the litigation each seeking $50 million in damages. The
Company's objection to these claims, seeking to have them disallowed on the
basis that they were filed after the bar date, was sustained in November 1994,
and the claims were disallowed. As a result, and given the voluntary withdrawal
of three other lead-related property damage claims, the Company has disposed of
all lead-related property damage claims that were asserted in its chapter 11
case.
In addition to the foregoing, late in 1987, litigation was initiated
against the Company and numerous other defendants, which alleged claims for
personal injuries resulting from ingestion of lead-containing paint. Such suits
have been stayed as to the Company as a consequence of the filing of the chapter
11 cases.
One hundred twenty-eight (128) non-duplicative proofs of claim were timely
filed in the Bankruptcy Court asserting liability for personal injuries from
lead chemicals allegedly manufactured and sold by the
10
<PAGE> 347
Company. Four of such claims have been voluntarily withdrawn at the Company's
request. One of such claims was dismissed by the Bankruptcy Court. The Company
filed objections with the Bankruptcy Court to seven of such claims. Pursuant to
the objections, the Company sought an order of the Bankruptcy Court disallowing
such claims because the claimants' lawsuits asserting similar claims against
other defendants which were not in bankruptcy had been dismissed. Prior to the
filing of its chapter 11 case, the Company also had been a defendant in these
lawsuits. In June 1995, the Bankruptcy Court disallowed all seven of such
claims. Currently, there are 113 remaining timely-filed, lead-related personal
injury claims that have not been resolved.
The Company believes that it has valid grounds to object to the allowance
of all of the remaining lead-related personal injury claims. However, in
December 1994, the Eighth District Court of Appeals, Cleveland, Ohio, ruled that
the plaintiff in a lawsuit filed in state court in Cuyahoga County, Ohio, may
pursue certain claims against defendants, such as the Company, that manufactured
lead pigment. The trial court had dismissed the plaintiffs' enterprise
liability, market share and alternative liability theories pursuant to a defense
motion to dismiss. The Ohio Appeals Court upheld the dismissal of the enterprise
liability count, but reversed the dismissal as to the market share and
alternative liability counts and remanded the case to the trial court. The case
is currently proceeding before the trial court on the market share and
alternative liability counts. It is not possible to predict how or when the
trial court will rule on these counts or whether its rulings will be appealed.
It is currently contemplated that all lead-related personal injury claims
that were filed that are not disposed of pursuant to an objection filed by the
Company, and all such claims which may be filed in the future, will be channeled
to and resolved by the Trust that will be established under the Amended Plan for
the benefit of holders of asbestos-related and certain other personal injury
claims discussed in subsection (a), above.
On June 18, 1993, the Company, together with its wholly-owned subsidiary,
Transicoil Inc., commenced an adversary proceeding in the Bankruptcy Court
against Blue Dove Development Associates ("Blue Dove"), the landlord for
Transicoil's domestic manufacturing facility in Valley Forge, Pennsylvania, and
against K-Jem, Inc., Blue Dove's general partner. The suit seeks to recover
excess rent that the Company and Transicoil believe has been paid to the
landlord. The landlord filed a counterclaim in the adversary proceeding seeking
a determination that Transicoil has breached the lease and, therefore, the
entire rent through June 30, 2005 should be accelerated and due. The landlord
made similar claims in a suit filed against Transicoil in October 1993, in the
United States District Court for the Eastern District of Pennsylvania
("Pennsylvania Action"). Prosecution of the Pennsylvania Action which seeks
approximately $10.3 million in damages has been enjoined by the Bankruptcy
Court. The parties filed cross motions for Summary Judgment in the adversary
proceeding in the Bankruptcy Court, which the Bankruptcy Court denied in
December 1995. The Company and Transicoil are seeking leave of the United States
District Court for the Southern District of Ohio to appeal the denial of their
Motion for Summary Judgment, which sought as a matter of law and without a trial
an order requiring repayment of the excess rent that was paid, on the grounds
that the Bankruptcy Court misread the lease in denying their Motion. The Company
cannot predict when the District Court will rule on this request for leave to
appeal the Bankruptcy Court's decision. The Company believes that the
counterclaim asserted by the landlord and the claims asserted in the
Pennsylvania Action are without merit and that the resolution of the dispute
with respect to the lease will not have a materially adverse impact on the
financial condition of the Company or Transicoil Inc.
Additional information concerning such litigation claims can be found in
Note L to the Consolidated Financial Statements in the Company's Annual Report
for the fiscal year ended November 30, 1995, which is attached as Exhibit 13 to
this Form 10-K and which is incorporated herein by reference.
(d) Environmental.
The Company received 1,102 proofs of claim in its chapter 11 cases alleging
a right to payment because of environmental matters. Many of these claims were
filed in connection with environmental matters reported in Form 10-K reports for
prior fiscal years. These include claims with respect to numerous waste disposal
sites previously discussed. They also include claims with respect to the
Tri-State mining district of Kansas, Missouri and Oklahoma previously disclosed:
Ottawa County, Oklahoma; Cherokee County, Kansas; Jasper
11
<PAGE> 348
County, Missouri; and the Baxter Springs, Treece, and Galena Subsites in Kansas.
The Company has resolved the majority of these environmental claims through
negotiations with the EPA and the United States Department of Interior. Pursuant
to a negotiated agreement, the agencies and certain states will be granted
allowed pre-petition general unsecured claims in the Company's chapter 11 case
aggregating approximately $43.0 million in full satisfaction of all of the
Company's alleged liability at most of its known Superfund sites, including any
liability for any natural resource damage.
In exchange for these allowed claims, the agencies will release the Company
from liability at such Superfund sites and the Company will be protected from
contribution claims of other parties with potential liability at the sites.
Accordingly, the Company's settlement should completely resolve all claims with
respect to these sites. Further, the agreement provides a process which will
permit any liability, which may arise with respect to a small number of sites as
to which the EPA believes that it does not have sufficient information to
negotiate a meaningful settlement at this time, to be resolved in the future
when additional information is available.
During fiscal 1995, following execution of the settlement agreement by all
parties, the settlement agreement was lodged with the Bankruptcy Court and
notice of it was published in the Federal Register as required by law. In April
and September 1995, respectively, the Company and the United States filed
motions seeking approval of the settlement by the Bankruptcy Court.
Certain parties that may be liable at certain of the sites resolved by the
settlement agreement opposed Bankruptcy Court approval of the settlement. Such
opposition basically seeks increases in the amount of the allowed claims
provided in the settlement agreement attributable to the sites where the
objector may have liability. The UCC also opposed approval of the settlement,
arguing that the potential repeal of the retroactive liability provisions of the
Superfund laws could substantially reduce the Company's pre-petition liability,
and, accordingly, the allowed pre-petition claims of $43.0 million should be
reduced. The Company believes, however, that the terms and provisions of the
settlement agreement are fair and equitable and that the objections raised have
no basis. In November 1995, a hearing was held before the Bankruptcy Court on
the motions seeking the approval of the settlement agreement. The Court has not
yet ruled on the motions.
Additional information concerning the environmental claims can be found in
Note L to the Consolidated Financial Statements in the Company's Annual Report
for the fiscal year ended November 30, 1995, which is attached as Exhibit 13 to
this Form 10-K and which is incorporated herein by reference.
(e) Summary - Environmental And Other Claims.
The Company intends to defend all remaining litigation claims vigorously in
the manner permitted by the Bankruptcy Code and/or applicable law. All
pre-petition claims against the Company arising from litigation must be
liquidated or otherwise addressed in the context of the chapter 11 cases.
Further, all such claims against the Company will be addressed in a plan of
reorganization. During the pendency of the chapter 11 cases, any unresolved
litigation with respect to pre-petition claims can proceed against the Company
only with the express permission of the Bankruptcy Court.
The Company has resolved most of the litigation claims that were asserted
pursuant to the October 31, 1991 bar date, other than those claims arising from
the sale of asbestos-containing products. The Company has filed objections to
certain of the unresolved litigation-based claims seeking to reduce the amount
of such claims or eliminate them entirely. These objections have not yet been
resolved. The Company anticipates filing additional objections to other such
claims if they cannot be resolved through negotiation. These objections will be
litigated vigorously by the Company pursuant to the provisions of the Bankruptcy
Code and applicable law.
The Company expects that all such claims will be resolved without material
adverse effect on the Company, its operations or its financial condition. In
addition, the Company may have insurance coverage for certain of these claims
and may have factual and legal defenses available to it.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
12
<PAGE> 349
PART II
CROSS REFERENCE SHEET
TO ANNUAL REPORT FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 1995
MARKED AS EXHIBIT 13
EXHIBIT 13
<TABLE>
<CAPTION>
PAGES CAPTIONS
------ --------------------------------------
<S> <C> <C> <C>
ITEM 5. MARKET FOR THE REGISTRANT'S
COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) Market Information 18 -- Quarterly Data
(b) Holders of Common Stock -- 5,932 holders of record at February
23, 1996
(c) Dividends 35 -- Selected Financial Data
32-34 -- Management's Discussion and
Analysis of Results of Operations
and Financial Condition
20-21 -- Note B to the Consolidated
Financial Statements
ITEM 6. SELECTED FINANCIAL DATA 35 -- Selected Financial Data
ITEM 7. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 32-34 -- Management's Discussion and
Analysis of Results of Operations
and Financial Condition
ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA 13 -- Consolidated Statement of Income
(Loss) for the Three Years Ended
November 30, 1995
16 -- Consolidated Statement of Cash
Flows for the Three Years Ended
November 30, 1995
14-15 -- Consolidated Balance Sheet as of
November 30, 1995 and 1994
17 -- Consolidated Statement of
Shareholders' Equity (Deficit) for
the Three Years Ended November 30,
1995
19-29 -- Notes to Consolidated Financial
Statements
32 -- Report of Management
31 -- Independent Auditors' Report
18 -- Quarterly Data
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
13
<PAGE> 350
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Directors.
The name and age; the positions and offices held with the registrant;
principal occupation during the past five years and present employer; other
boards of directors on which he serves; the year in which he first became a
director of the Company and the committees on which he serves, follow for each
director:
<TABLE>
<CAPTION>
PRESENT
FIRST TERM
BECAME OF OFFICE
DIRECTOR EXPIRES
-------- ---------
<S> <C> <C>
PAUL W. CHRISTENSEN, JR., 71.............................................. 1969 1996
Retired, 1987; Chairman of the Board 1978-87, and President prior thereto,
of The Cincinnati Gear Company, Cincinnati, Ohio, a manufacturer of custom
gears and enclosed drives.
Member of Audit, Executive and Stock Option/Compensation Committees.
Chairman of Audit Committee.
MELVIN F. CHUBB, JR., 62.................................................. 1990 (1)
Senior Vice President 1988-96, of Eagle-Picher Industries, Inc.;
Lieutenant General, United States Air Force and Commander of the
Electronic Systems Division at Hanscom Air Force Base, Massachusetts,
1984-88. Director of Empire District Electric Co.
V. ANDERSON COOMBE, 69.................................................... 1974 1996
Chairman of the Board since March 1991, and President prior thereto
(through April 1991), of The Wm. Powell Company, Cincinnati, Ohio, a valve
manufacturer. Director of Star Banc Corp., The Starflo Corp., Union
Central Life Insurance Co. and The Wm. Powell Company.
Member of Audit, Executive and Stock Option/Compensation Committees.
ROGER L. HOWE, 61......................................................... 1986 (2)
Chairman of the Board of U.S. Precision Lens, Inc., Cincinnati, Ohio, a
manufacturer of optics for video projection, instrumentation, and
photographic applications.
Director of Cintas Corporation, Star Banc Corp. and Baldwin Piano & Organ
Co.
Member of Executive and Stock Option/Compensation Committees.
DANIEL W. LEBLOND, 69..................................................... 1965 (2)
Chairman of the Board of LeBlond Makino Machine Tool Company, Cincinnati,
Ohio, a manufacturer of machine tools.
Director of The Ingersoll Milling Machine Company, LeBlond Makino Machine
Tool Company and The Ohio National Life Insurance Co.
Member of Executive and Stock Option/Compensation Committees. Chairman of
Stock Option/Compensation Committee.
POWELL MCHENRY, 69........................................................ 1991 (2)
Of Counsel to Dinsmore & Shohl, a law firm, Cincinnati, Ohio, as of
October 1, 1991; Senior Vice President and General Counsel of The Procter
& Gamble Company, Cincinnati, Ohio, a manufacturer of consumer and
industrial products, 1983-91.
Member of Audit Committee.
</TABLE>
14
<PAGE> 351
<TABLE>
<CAPTION>
PRESENT
FIRST TERM
BECAME OF OFFICE
DIRECTOR EXPIRES
-------- ---------
<S> <C> <C>
THOMAS E. PETRY, 56....................................................... 1981 (2)
Chairman of the Board and Chief Executive Officer 1994, Chairman of the
Board, President, and Chief Executive Officer 1992, Chairman of the Board
and Chief Executive Officer 1989, President and Chief Executive Officer
1982, President and Chief Operating Officer 1981, Group Vice President
1978, President, Akron Standard Division 1977, Vice President and
Treasurer 1974, of Eagle-Picher Industries, Inc. Director of Cinergy
Corp., Star Banc Corp., Union Central Life Insurance Co. and Insilco Corp.
Member and Chairman of Executive Committee.
EUGENE P. RUEHLMANN, 71................................................... 1991 1996
Of Counsel to Vorys, Sater, Seymour & Pease, a law firm, Cincinnati, Ohio
as of January 1, 1996; Partner of that firm 1989-1996, Chairman, Hamilton
County (Ohio) Republican Central Committee, 1991.
Director of Western-Southern Life Insurance Company.
Member of Audit Committee.
ANDRIES RUIJSSENAARS, 53.................................................. 1994 (2)
President and Chief Operating Officer as of December 1, 1994, Senior Vice
President 1989-94, President, the Ohio Rubber Company Division 1987-89,
Executive Vice President, the Ohio Rubber Company Division 1986-87,
General Manager of the subsidiary, Eagle-Picher Industries GmbH in
Ohringen, Germany 1980-86, of Eagle-Picher Industries, Inc.
</TABLE>
- ---------------
(1) Mr. Chubb retired from the Company's Board of Directors effective February
1, 1996.
(2) Messrs. LeBlond and Petry were elected directors to hold office for terms
expiring at the annual meeting of shareholders in 1994 or when their
successors are elected and qualified. Messrs. Howe and McHenry were elected
directors to hold office for terms expiring at the annual meeting of
shareholders in 1995 or when their successors are elected and qualified. As
the Company did not hold an annual meeting of shareholders in 1994 or 1995,
these directors continue to hold office until their successors are elected
and qualified. Mr. Ruijssenaars was elected director by the incumbent
directors on November 2, 1994 to serve in the same class as Messrs. LeBlond
and Petry, and accordingly will hold office until his successor is elected
and qualified.
(b) Executive Officers.
The name and age, the positions and offices held with the registrant and
employment history with the registrant, term of office as officer and period
during which each has served as such, follow for each executive officer:
<TABLE>
<CAPTION>
YEAR ELECTED
OR ASSUMED
PRESENT
AGE DUTIES
--- ------------
<S> <C> <C> <C>
Thomas E. Petry.......... Chairman of the Board of Directors and Chief
Executive Officer 56 1982
Andries Ruijssenaars..... President and Chief Operating Officer,
Director 53 1994
Melvin F. Chubb, Jr...... Senior Vice President and Director* 62 1988
David N. Hall............ Senior Vice President-Finance 56 1987
Wayne R. Wickens......... Senior Vice President 49 1994
Carroll D. Curless....... Vice President and Controller 57 1984
James A. Ralston......... Vice President, General Counsel and Secretary 49 1982
</TABLE>
- ---------------
* Retired effective February 1, 1996.
15
<PAGE> 352
Thomas E. Petry was first employed by the Company in 1968. He was elected
Assistant Treasurer in 1971, Treasurer in 1973 and Vice President and Treasurer
in 1974. He served as President of the Akron Standard Division from 1977 to
1978. He was elected Group Vice President in 1978, a Director, President and
Chief Operating Officer in 1981, and President and Chief Executive Officer in
1982. He served as President from 1981-89 and from 1992-94. He has been serving
as Chief Executive Officer since 1982 and as Chairman of the Board since 1989.
Andries Ruijssenaars was first employed by the Company in 1980 as General
Manager of Eagle-Picher Industries GmbH in Ohringen, Germany. He served as
Executive Vice President of The Ohio Rubber Company Division from 1986 to 1987
and as President of The Ohio Rubber Company Division from 1987 to 1989. He was
elected Senior Vice President in 1989 and was appointed a Director in November,
1994. He was elected President and Chief Operating Officer effective December 1,
1994 and has been serving in those capacities since December 1, 1994.
Melvin F. Chubb, Jr., was first employed by the Company in 1988 and was
elected and served as Senior Vice President from 1988 until his retirement
effective February 1, 1996. In 1990 Mr. Chubb was elected a Director. Prior to
joining the Company, he completed a career in the United States Air Force,
having attained the rank of Lieutenant General and having served most recently
as commander of the Electronic Systems Division, Air Force Systems Command at
Hanscom Air Force Base.
David N. Hall was first employed by the Company and elected Treasurer in
1977. He was elected Vice President and Treasurer in 1979, and he was elected
and has been serving as Senior Vice President-Finance since 1987.
Wayne R. Wickens was first employed by the Company in 1976 as a management
trainee with the former Fabricon Automotive Division, was promoted to Plant
Manager in 1979, Vice President in 1981 and then President of Fabricon
Automotive in 1986. He was named President of the Wolverine Gasket Division in
1988, Vice President of the Eagle-Picher Automotive Group in 1989, and Division
President of Hillsdale Tool & Manufacturing Co. in 1990. He was elected Senior
Vice President of the Company effective December 1, 1994.
Carroll D. Curless was first employed by the Company in 1964. He was
elected Assistant Controller in 1978 and Controller in 1984. He was elected and
has been serving as Vice President and Controller since 1986.
James A. Ralston was first employed by the Company as an attorney in the
Legal Department in 1979. He was elected Assistant Secretary in 1982, General
Counsel in 1982, Vice President and General Counsel in 1984, and Secretary in
1994. He has been serving as Vice President, General Counsel and Secretary since
1994.
Executive officers serve during the pleasure of the Board, or until their
successors are elected and qualified. There are no family relationships existing
between or among the above executive officers and directors of the registrant.
16
<PAGE> 353
ITEM 11. EXECUTIVE COMPENSATION.
The following Summary Compensation Table sets forth for the last three
fiscal years the compensation provided by the Company to the Chief Executive
Officer and each of the other four most highly compensated executive officers
(collectively, "named executive officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------------
OTHER
FISCAL ANNUAL ALL OTHER
NAME AND YEAR COMPENSATION COMPENSATION
PRINCIPAL POSITION ENDED SALARY($) BONUS($) ($)(2) ($)(3)
- ----------------------------------------- --------- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Thomas E. Petry.......................... 11/30/95 575,000 244,000 255,296 285,611
Chairman and 11/30/94 575,000 216,000 150,149 169,763
Chief Executive Officer 11/30/93 575,000 100,000 149,492 178,154
Andries Ruijssenaars..................... 11/30/95 390,000 145,000 87,298 102,571
President and Chief Operating Officer 11/30/94 300,000 100,000 86,033 101,197
11/30/93 275,000 75,000 22,760 31,420
Melvin F. Chubb, Jr...................... 11/30/95 290,000 100,000 129,387 149,692
Senior Vice President(1) 11/30/94 280,000 75,000 326,853 370,313
11/30/93 275,000 45,000 0 4,497
David N. Hall............................ 11/30/95 345,000 110,000 120,284 136,415
Senior Vice President -- Finance 11/30/94 320,000 95,000 193,447 216,177
11/30/93 310,000 65,000 50,133 62,692
Wayne R. Wickens......................... 11/30/95 280,000 85,000 24,377 31,109
Senior Vice President 11/30/94 205,000 60,000 20,272 29,512
11/30/93 195,000 60,000 7,150 25,202
</TABLE>
- ---------------
(1) Mr. Chubb retired effective February 1, 1996.
(2) This column includes nothing for perquisites since in no case did they
exceed the reporting thresholds (the lesser of 10% of salary plus bonuses or
$50,000), but includes amounts for the payment of taxes on purchases of
annuities under the Supplemental Executive Retirement Plan.
(3) All Other Compensation:
<TABLE>
<CAPTION>
COST OF
ANNUITY UNDER COMPANY
NON-QUALIFIED CONTRIBUTIONS
SUPPLEMENTAL TO EAGLE-PICHER
EXECUTIVE RETIREMENT
YEAR RETIREMENT SAVINGS
ENDED PLAN($) PLAN($) TOTAL($)
--------- ------------- ---------------- --------
<S> <C> <C> <C> <C>
Thomas E. Petry.................. 11/30/95 280,991 4,620 285,611
Andries Ruijssenaars............. 11/30/95 97,951 4,620 102,571
Melvin F. Chubb, Jr.............. 11/30/95 145,072 4,620 149,692
David N. Hall.................... 11/30/95 131,795 4,620 136,415
Wayne R. Wickens................. 11/30/95 26,489 4,620 31,109
</TABLE>
17
<PAGE> 354
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
NOTE: Registrant has never granted Stock Appreciation Rights (SARs), so
there are no SARs outstanding. There were no exercises of options by, or grants
of options to, the named executive officers during fiscal 1995.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END(#) YEAR-END($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---------------------------------------- ------------------------- -------------------------
<S> <C> <C>
Thomas E. Petry......................... 0/100,000 **
Andries Ruijssenaars.................... 0/50,000 **
David N. Hall........................... 0/50,000 **
Melvin F. Chubb, Jr.*................... 0/50,000 **
Wayne R. Wickens........................ 0/10,000 **
</TABLE>
- ---------------
* Retired effective February 1, 1996.
** None of the unexercised options held by any of the named executive
officers was "In-the-Money" as of November 30, 1995. Further, the
options were exercisable only if the last selling price per share on the
New York Stock Exchange ("NYSE") or its successor prior to the date on
which the Company received written notice of the exercise was at least
20% above the option price per share. Trading in the Company's shares on
the NYSE was suspended on November 15, 1993, and the NYSE delisted the
Company's shares effective June 9, 1994. All of the unexercised options
are at a price of $2.50 per share.
PENSION BENEFITS
The following table shows the estimated total combined annual benefits to
named executive officers upon retirement at age 62 payable under Social
Security, the Eagle-Picher Salaried Plan, and the Supplemental Executive
Retirement Plan:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------------
REMUNERATION 15 20 25 30 35
---------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 250,000................... $ 90,000 $ 120,000 $ 150,000 $ 150,000 $ 150,000
300,000................... 108,000 144,000 180,000 180,000 180,000
350,000................... 126,000 168,000 210,000 210,000 210,000
400,000................... 144,000 192,000 240,000 240,000 240,000
450,000................... 162,000 216,000 270,000 270,000 270,000
500,000................... 180,000 240,000 300,000 300,000 300,000
550,000................... 198,000 264,000 330,000 330,000 330,000
600,000................... 216,000 288,000 360,000 360,000 360,000
650,000................... 234,000 312,000 390,000 390,000 390,000
700,000................... 252,000 336,000 420,000 420,000 420,000
750,000................... 270,000 360,000 450,000 450,000 450,000
800,000................... 288,000 384,000 480,000 480,000 480,000
850,000................... 306,000 408,000 510,000 510,000 510,000
900,000................... 324,000 432,000 540,000 540,000 540,000
950,000................... 342,000 456,000 570,000 570,000 570,000
1,000,000................... 360,000 480,000 600,000 600,000 600,000
</TABLE>
The Eagle-Picher Salaried Plan, a non-contributory defined benefit pension
plan in which the named executive officers are participants, provides benefits
after retirement based on the highest average monthly compensation during five
consecutive years of the last ten years preceding retirement. For purposes of
the Plan, compensation includes base salary, bonuses, commissions, and severance
payments; salary and bonus included are as reported in the Summary Compensation
Table, and commissions and severance payments, if
18
<PAGE> 355
there had been any, would have been included in that Table. The benefits shown
by the Pension Plan Table above include amounts payable under Social Security
and the Company's Supplemental Executive Retirement Plan as well as those
payable under the Eagle-Picher Salaried Plan. Benefits are computed on the basis
of straight-life annuity amounts.
The estimated credited years of service with the Company for the named
executive officers at age 62 are:
<TABLE>
<S> <C>
Thomas E. Petry............................................ 33
David N. Hall.............................................. 24
Andries Ruijssenaars....................................... 24
Melvin F. Chubb, Jr........................................ 12
Wayne R. Wickens........................................... 32
</TABLE>
SEVERANCE PLAN
On February 6, 1991, the Board of Directors adopted a Severance Plan for
certain employees, including the named executive officers, which was approved by
the Bankruptcy Court on May 13, 1991. Under the Severance Plan, a participant
whose employment is terminated by the Company other than for cause receives: a
Base Severance Benefit of one week's pay for each year of Company service,
payable under general payroll pay practices, but reduced dollar for dollar by
any compensation earned from a subsequent employer during the period such
benefits are being paid; a Supplemental Severance Benefit ranging from three
months' salary up to one year's salary, payable in a lump sum upon termination;
and continuation of certain insurance benefits for up to one week for each year
of service. Currently, the Severance Plan provides that the payment of
Supplemental Severance Benefits will terminate upon confirmation of a plan of
reorganization. It is anticipated, however, that the Amended Plan that the
Company intends to file will provide for the continuation of the Severance Plan
for a period of at least twelve months after the effective date of the Amended
Plan.
COMPENSATION OF DIRECTORS
During fiscal 1995, directors were paid a retainer of $18,000 per year, a
fee of $750 for each Board meeting attended and a fee of $750 for each Board
committee meeting attended. Effective December 1, 1995, this retainer was
increased to $24,000 per year, and the fee for attending a meeting of the Board
or a Board committee was increased to $1,000 for each meeting attended. Board
committee members, excluding committee chairmen, are paid a retainer of $3,000
per year for each committee on which they serve; the chairman of each Board
committee is paid a retainer of $5,000 per year. The Company does not pay
director retainers or attendance fees, or committee retainers or attendance
fees, to directors who are also employees of the Company.
Directors who are not also employees of the Company who retire with ten or
more years of service as members of the Board are paid an annual advisory fee
for life in an amount equal to the annual retainer paid to active directors at
the time of their retirement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, Messrs. LeBlond (Chairman), Christensen, Coombe and
Howe, directors of the Company, constituted the Stock Option/Compensation
Committee.
During fiscal 1995 and as of February 23, 1996, Mr. Petry, Chairman and
Chief Executive Officer of the Company, served as a director and as a member of
the compensation committee of The Wm. Powell Company. During fiscal 1995 and as
of February 23, 1996, Mr. Coombe was Chairman of the Board of The Wm. Powell
Company.
19
<PAGE> 356
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
As of February 23, 1996, beneficial ownership of the Company's Common Stock
by all directors; each of the named executive officers (except Mr. Chubb who
retired effective February 1, 1996); and all directors and executive officers as
a group, was:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP OF CLASS
----------- ---------
<S> <C> <C>
DIRECTORS
Paul W. Christensen, Jr....................................... 38,000(1) *
V. Anderson Coombe............................................ 3,480(1) *
Roger L. Howe................................................. 0 *
Daniel W. LeBlond............................................. 0 *
Powell McHenry................................................ 1,000 *
Thomas E. Petry............................................... 129,102(2)(3) 1.17%
Eugene P. Ruehlmann........................................... 1,000 *
Andries Ruijssenaars.......................................... 52,433(2)(3) *
NAMED EXECUTIVE OFFICERS
David N. Hall................................................. 62,482(3) *
Wayne R. Wickens.............................................. 10,000(3) *
DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (12 PERSONS)...... 369,027(4) 3.34%
</TABLE>
- ---------------
* Less than 1%.
(1) The following persons disclaim beneficial ownership as to the following
numbers of shares included herein which are beneficially owned by family
members: Mr. Christensen -- 13,000 shares; Mr. Coombe -- 1,520 shares.
(2) Messrs. Petry and Ruijssenaars are also executive officers of the Company;
their holdings of Company stock are listed here and not duplicated under the
Named Executive Officers individual listing immediately below.
(3) Includes shares subject to options to purchase within 60 days: Mr. Petry --
100,000; Mr. Ruijssenaars -- 50,000; Mr. Hall -- 50,000; Mr. Wickens --
10,000. The terms of the option grants make the options exercisable if the
last selling price per share on the New York Stock Exchange or its successor
is at least $3.00 on the day prior to the date on which the Company receives
written notice of the exercise.
(4) This figure includes 270,000 shares subject to options to purchase within 60
days on the same terms as set forth in footnote (3), above.
All shares shown above as owned were directly owned except as footnoted.
Directors and executive officers are considered control persons of the Company.
There were as of February 23, 1996 no beneficial owners of more than 5% of
the Company's Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Board of Directors has no knowledge of any significant transaction or
proposed significant transaction to which the Company or any subsidiary and any
director, officer or nominee for director, or any associate of such director,
officer, or nominee, were or are to be parties.
20
<PAGE> 357
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. All Financial Statements
<TABLE>
<C> <S>
Eagle-Picher Industries, Inc. (Incorporated by reference to the Company's Annual
Report for the fiscal year ended November 30, 1995, Exhibit 13 -- See Part II
above)
Independent Auditors' Report -- Incorporated by reference to Exhibit 13, page 36
3. Exhibits (numbers keyed to Item 601, Regulation S-K).
* 3.(i) Amended Articles of Incorporation as adopted May 1, 1985 and amended May 28,
1986. Incorporated by reference to Exhibit 1 to Form S-8 Registration Statement
No. 33-45179 for the Registrant's Stock Option Plan of 1990.
* (ii) Code of Regulations of Eagle-Picher Industries, Inc., last amended March 26,
1985. Incorporated by reference to Exhibit 3(b) to Report on Form 10-K of
Registrant for the fiscal year ended November 30, 1992.
* 4.(a) Form of Indenture relating to the $50,000,000 Eagle-Picher Industries, Inc.
9 1/2% Sinking Fund Debentures due March 1, 2017, dated as of March 1, 1987,
between Eagle-Picher Industries, Inc. and The Bank of New York. Incorporated by
reference to Report on Form 8-K of Registrant dated March 5, 1987 (on file with
the SEC; SEC File No. 1-1499).
* (b)(i) Credit and Agency Agreement (debtor-in-possession financing agreement) dated as
of November 5, 1992. Incorporated by reference to Exhibit 4(b) to Form 10-K of
Registrant for the fiscal year ended November 30, 1992.
* (ii) First Amendment to Credit Agreement dated as of August 29, 1994 incorporated by
reference to Exhibit 4(b)(ii) to Report on Form 10-K of Registrant for the
fiscal year ended November 30, 1994.
*10.(a) Eagle-Picher Industries, Inc. Stock Option Plan of 1983, as amended.
Incorporated by reference to Exhibit 28 to Post Effective Amendment No. 1 dated
April 10, 1990 and Appendix 2 dated May 30, 1991 to Registrant's Form S-8
Registration Statement No. 33-5792.
* (b) Eagle-Picher Industries, Inc. Stock Option Plan of 1990. Incorporated by
reference to Appendix A to Registrant's Proxy Statement for Annual Meeting of
Shareholders, March 27, 1990 (on file with the SEC; SEC File No. 1-1499).
* (c) Eagle-Picher Supplemental Executive Retirement Plan. Incorporated by reference
to Report on Form 10-Q of Registrant for the quarter ended May 31, 1995.
* (d) Eagle-Picher Industries, Inc. Severance Plan dated as of June 25, 1991.
Incorporated by reference to Report on Form 10-K of Registrant for the fiscal
year ended November 30, 1994.
13. Excerpts from Eagle-Picher Industries, Inc. Annual Report for the fiscal year
ended November 30, 1995.
21. Subsidiaries of the Registrant.
23. Independent Auditors' Consent.
24.(a),(b) Powers of Attorney.
27. Financial Data Schedules (submitted electronically to the SEC for its
information).
99. Plants and Locations.
</TABLE>
(b) Reports on Form 8-K.
<TABLE>
<C> <S>
* (i) December 7, 1995 - Reporting December 4, 1995 decision of the U.S. Bankruptcy
Court presiding over chapter 11 cases of the Company and seven of its domestic
subsidiaries that the Company's estimated aggregate liability on account of
present and future asbestos-related personal injury claims is $2,502,511,000.
- ----
* Incorporated by reference.
</TABLE>
21
<PAGE> 358
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Eagle-Picher Industries, Inc.
By /s/ Thomas E. Petry
----------------------------
Thomas E. Petry
Chairman of the Board
and Chief Executive Officer
Date: February 27, 1996
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C>
/s/ Thomas E. Petry Date: February 27, 1996
- -------------------------------------------
Thomas E. Petry, Chairman of the
Board and Chief Executive Officer
/s/ David N. Hall Date: February 27, 1996
- --------------------------------------------
David N. Hall, Senior Vice President-Finance
(Principal Financial Officer)
/s/ Carroll D. Curless* Date: February 27, 1996
- --------------------------------------------
Carroll D. Curless, Vice President
and Controller (Principal Accounting Officer)
/s/ Paul W. Christensen, Jr.* Date: February 27, 1996
- --------------------------------------------
Paul W. Christensen, Jr., Director
/s/ V. Anderson Coombe* Date: February 27, 1996
- --------------------------------------------
V. Anderson Coombe, Director
/s/ Roger L. Howe* Date: February 27, 1996
- --------------------------------------------
Roger L. Howe, Director
/s/ Daniel W. LeBlond* Date: February 27, 1996
- --------------------------------------------
Daniel W. LeBlond, Director
/s/ Powell McHenry* Date: February 27, 1996
- --------------------------------------------
Powell McHenry, Director
/s/ Eugene P. Ruehlmann* Date: February 27, 1996
- --------------------------------------------
Eugene P. Ruehlmann, Director
/s/ Andries Ruijssenaars* Date: February 27, 1996
- --------------------------------------------
Andries Ruijssenaars, Director
- ---------------
* By /s/ James A. Ralston
- --------------------------------------------
James A. Ralston
Attorney-in-fact
</TABLE>
22
<PAGE> 359
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- --------- ------------------------------------------------------------------------------
<C> <S>
3(i) -- Articles of Incorporation*
3(ii) -- Code of Regulations*
4(a) -- Form of Indenture, $50,000,000 9 1/2% Sinking Fund Debentures due March 1,
2017*
4(b)(i) -- Credit and Agency Agreement dated as of November 5, 1992*
4(b)(ii) -- First Amendment to Credit Agreement, dated as of August 29, 1994*
10(a),(b) -- Eagle-Picher Industries, Inc. Stock Option Plans of 1983 and 1990*
10(c) -- Eagle-Picher Supplemental Executive Retirement Plan*
10(d) -- Eagle-Picher Industries, Inc. Severance Plan dated as of June 25, 1991*
13 -- Excerpts from Annual Report for the Fiscal Year Ended November 30, 1995
21 -- Subsidiaries of the Registrant
23 -- Independent Auditors' Consent
24(a),(b) -- Powers of Attorney
27 -- Financial Data Schedules (Submitted electronically to the SEC for its
information.)
99 -- Plants and Locations
</TABLE>
- ---------------
* Incorporated by reference. See page 21 above.
23
<PAGE> 360
EXHIBIT 13
CONSOLIDATED STATEMENT OF INCOME (LOSS)
Eagle-Picher Industries, Inc.
<TABLE>
<CAPTION>
Years Ended November 30
(In thousands of dollars, except per share) 1995 1994 1993
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES $ 848,548 $756,741 $ 661,452
OPERATING COSTS AND EXPENSES
Cost of products sold 706,586 622,907 548,605
Selling and administrative 78,875 75,553 69,093
--------- -------- --------
785,461 698,460 617,698
--------- -------- --------
OPERATING INCOME 63,087 58,281 43,754
Provision for asbestos litigation (1,005,511) - (1,135,500)
Provision for environmental and other claims - - (41,436)
Interest expense (contractual
interest of $8,897 in 1995, $8,940
in 1994 and $9,369 in 1993) (1,926) (1,809) (2,070)
Gain on sale of investment 11,505 - -
Other income (expense) 199 703 (174)
--------- -------- --------
INCOME (LOSS) BEFORE REORGANIZATION
ITEMS, TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (932,646) 57,175 (1,135,426)
REORGANIZATION ITEMS (2,225) (3,426) (4,344)
--------- -------- --------
INCOME (LOSS) BEFORE TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (934,871) 53,749 (1,139,770)
INCOME TAXES 9,300 5,000 5,000
--------- -------- --------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (944,171) 48,749 (1,144,770)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
FOR POSTRETIREMENT BENEFITS - - (12,598)
--------- -------- --------
NET INCOME (LOSS) $(944,171) $ 48,749 $(1,157,368)
========= ======== =========
INCOME (LOSS) PER SHARE:
INCOME (LOSS) BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ (85.51) $ 4.42 $ (103.78)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
FOR POSTRETIREMENT BENEFITS - - (1.14)
--------- -------- --------
NET INCOME (LOSS) $ (85.51) $ 4.42 $ (104.92)
========= ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
13
<PAGE> 361
CONSOLIDATED BALANCE SHEET
Eagle-Picher Industries, Inc.
<TABLE>
<CAPTION>
ASSETS
November 30
(In thousands of dollars) 1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 93,330 $ 92,606
Receivables, less allowances of $1,860
in 1995 and $1,445 in 1994 127,044 109,130
Income tax refund receivable 4,402 2,246
Inventories 83,647 81,982
Prepaid expenses 17,695 10,295
-------- --------
TOTAL CURRENT ASSETS 326,118 296,259
-------- --------
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 12,482 11,940
Buildings 84,549 79,937
Machinery and equipment 319,987 301,518
Construction in progress 24,939 14,623
-------- --------
441,957 408,018
Less accumulated depreciation 286,139 263,369
-------- --------
NET PROPERTY, PLANT AND EQUIPMENT 155,818 144,649
-------- --------
DEFERRED INCOME TAXES 62,824 43,924
OTHER ASSETS 35,313 36,275
-------- --------
TOTAL ASSETS $580,073 $521,107
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
14
<PAGE> 362
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 40,318 $ 43,691
Compensation and employee benefits 13,759 14,005
Long-term debt - current portion 1,525 1,726
Income taxes 4,789 5,223
Taxes other than income 4,772 4,611
Other accrued liabilities 17,460 16,705
-------- --------
TOTAL CURRENT LIABILITIES 82,623 85,961
-------- --------
LIABILITIES SUBJECT TO COMPROMISE 2,662,530 1,657,265
LONG-TERM DEBT, less current portion 19,103 19,896
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 21,720 21,070
OTHER LONG-TERM LIABILITIES 5,405 3,608
-------- --------
TOTAL LIABILITIES 2,791,381 1,787,800
--------- ---------
SHAREHOLDERS' EQUITY (DEFICIT)
Preference stock - no par value.
Authorized 873,457 shares; none issued - -
Common stock - $1.25 par value per share.
Authorized 30,000,000 shares; issued
11,125,000 shares 13,906 13,906
Additional paid-in capital 36,378 36,378
Accumulated deficit (2,261,289) (1,317,118)
Unrealized gain on investments 333 -
Foreign currency translation 1,277 2,054
--------- --------
(2,209,395) (1,264,780)
Cost of 84,068 common treasury shares (1,913) (1,913)
--------- --------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (2,211,308) (1,266,693)
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $580,073 $521,107
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
15
<PAGE> 363
CONSOLIDATED STATEMENT OF CASH FLOWS
Eagle-Picher Industries, Inc.
<TABLE>
<CAPTION>
Years Ended November 30
(In thousands of dollars) 1995 1994 1993
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (944,171) $ 48,749 $(1,157,368)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Provision for asbestos litigation 1,005,511 - 1,135,500
Provision for environmental and
other claims - - 41,436
Cumulative effect of accounting change - - 12,598
Depreciation and amortization 28,708 26,143 24,955
Gain on sale of investment (11,505) - -
Changes in assets and liabilities:
Receivables (17,914) (11,544) (10,764)
Inventories (1,665) (13,676) (4,098)
Deferred income taxes (18,900) (14,000) (12,137)
Accounts payable (3,373) 11,326 5,539
Other (6,235) (1,905) 2,015
-------- -------- --------
Net cash provided by
operating activities 30,456 45,093 37,676
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment 11,505 - -
Capital expenditures (40,558) (35,887) (28,512)
Other 340 1,800 335
-------- -------- --------
Net cash used in investing
activities (28,713) (34,087) (28,177)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt 1,240 - 810
Reduction of long-term debt (2,259) (2,974) (4,007)
Issuance of common shares - - 156
-------- -------- --------
Net cash used in financing
activities (1,019) (2,974) (3,041)
-------- -------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 724 8,032 6,458
-------- -------- --------
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 92,606 84,574 78,116
-------- -------- --------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 93,330 $ 92,606 $ 84,574
======== ======== ========
See accompanying notes to consolidated financial statements.
</TABLE>
16
<PAGE> 364
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
Eagle-Picher Industries, Inc.
<TABLE>
<CAPTION>
TOTAL
ADDITIONAL UNREALIZED FOREIGN SHAREHOLDERS'
COMMON PAID-IN ACCUMULATED GAIN ON CURRENCY TREASURY EQUITY
(In thousands of dollars) STOCK CAPITAL DEFICIT INVESTMENTS TRANSLATION STOCK (DEFICIT)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE NOVEMBER 30, 1992 $13,906 $37,644 $ (208,499) $ - $1,326 $(3,335) $ (158,958)
Net loss - - (1,157,368) - - - (1,157,368)
Stock options - (1,266) - - - 1,422 156
Foreign currency translation - - - - (1,036) - (1,036)
--------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1993 13,906 36,378 (1,365,867) - 290 (1,913) (1,317,206)
Net income - - 48,749 - - - 48,749
Foreign currency translation - - - - 1,764 - 1,764
--------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1994 13,906 36,378 (1,317,118) - 2,054 (1,913) (1,266,693)
Cumulative effect of change in
accounting for marketable
securities - - - 5,377 - - 5,377
Net loss - - (944,171) - - - (944,171)
Realized gain on investment - - - (5,044) - - (5,044)
Foreign currency translation - - - - (777) - (777)
--------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1995 $13,906 $36,378 $(2,261,289) $ 333 $1,277 $(1,913) $(2,211,308)
================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
17
<PAGE> 365
QUARTERLY DATA
(Unaudited)
(In thousands of dollars, except per share)
<TABLE>
<CAPTION>
1995 FIRST SECOND THIRD FOURTH YEAR
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales $197,603 $225,378 $210,723 $214,844 $848,548
- -----------------------------------------------------------------------------------------
Operating Income 15,113 19,147 14,022 14,805 63,087
- -----------------------------------------------------------------------------------------
Net Income (Loss) 13,032 16,776 23,394(1) (997,373)(2) (944,171)
- -----------------------------------------------------------------------------------------
Net Income (Loss) Per Share 1.18 1.52 2.12 (90.33)(2) (85.51)
- -----------------------------------------------------------------------------------------
Bid Prices (3)
High 23/32 9/32 3/16 7/32 23/32
- -----------------------------------------------------------------------------------------
Low 1/16 1/32 1/16 3/32 1/32
- -----------------------------------------------------------------------------------------
Ask Prices (3)
High 1-1/32 1/2 11/32 11/32 1-1/32
- -----------------------------------------------------------------------------------------
Low 3/16 5/32 3/16 7/32 5/32
- -----------------------------------------------------------------------------------------
1994 First Second Third Fourth Year
- -----------------------------------------------------------------------------------------
Net Sales $177,754 $196,994 $186,191 $195,802 $756,741
- -----------------------------------------------------------------------------------------
Operating Income 13,781 17,537 14,226 12,737 58,281
- -----------------------------------------------------------------------------------------
Net Income 11,039 14,669 11,733 11,308 48,749
- -----------------------------------------------------------------------------------------
Net Income Per Share 1.00 1.33 1.06 1.03 4.42
- ----------------------------------------------------------------------------------------
Bid Prices (3)
High 7/8 13/16 1/2 7/16 7/8
- ------------------------------------------------------------------------------------------
Low 1/16 1/4 7/32 1/16 1/16
- -----------------------------------------------------------------------------------------
Ask Prices (3)
High 1-3/8 1-1/4 7/8 11/16 1-3/8
- -----------------------------------------------------------------------------------------
Low 5/32 9/16 15/32 1/4 5/32
- -----------------------------------------------------------------------------------------
<FN>
(1) The Company realized an $11.5 million gain on the sale of certain equity investments in June 1995.
(2) In December 1995, the Bankruptcy Court ruled that the estimated aggregate liability on account of present and future
asbestos-related personal injury claims is $2.5 billion. Accordingly, the Company recorded a provision of approximately $1.0
billion to increase its asbestos liability subject to compromise to $2.5 billion.
(3) Effective June 9, 1994, the Company's Common Stock was delisted from the New York Stock Exchange. It is now trading on
the Over-the-Counter Market (trading symbol is EPIHQ). The sources of all prices are quotations from the pink sheets and the
OTC Bulletin Board. The bid and ask quotations represent prices between dealers, do not include retail markup, markdown or
commission, and do not represent actual transactions.
</TABLE>
18
<PAGE> 366
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies used in the preparation of the consolidated
financial statements are summarized below. These policies conform to generally
accepted accounting principles and have been consistently applied.
The Company has accounted for all transactions related to the chapter 11
proceedings in accordance with Statement of Position 90-7 ("SOP 90-7"),
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code,"
issued by the American Institute of Certified Public Accountants. Accordingly,
Liabilities Subject to Compromise under the chapter 11 proceedings have been
segregated on the Consolidated Balance Sheet and are recorded at the amounts
that have been or are expected to be allowed on known claims rather than
estimates of consideration those claims may receive in a plan of
reorganization. In addition, the Consolidated Statement of Income (Loss)
separately discloses expenses related to the chapter 11 proceedings.
Principles of Consolidation
The consolidated financial statements include the accounts of all of the
Company's subsidiaries which are more than 50% owned and controlled.
Intercompany accounts and transactions have been eliminated. Investments in
nonconsolidated companies which are at least 20% owned are accounted for using
the equity method.
Separate condensed combined financial statements of the entities in chapter 11
have not been presented because they represent a substantial portion of the
Company. Additionally, entities not in chapter 11 represent identifiable
investments of those entities in chapter 11 and are therefore subject to the
chapter 11 process.
Cash and Cash Equivalents
Marketable securities with original maturities of three months or less are
considered to be cash equivalents. The carrying amount reported in the
Consolidated Balance Sheet approximates fair value.
Marketable Securities
Effective December 1, 1994, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 115 ("FAS 115"), "Accounting for Certain
Investments in Debt and Equity Securities." On November 30, 1995, these
investments have been categorized as available for sale and, as a result, are
stated at fair value, based generally on quoted market prices. Unrealized
holding gains and losses are included as a component of Shareholders' Equity
(Deficit) until realized. Realized gains and losses on sales of investments,
as determined on a specific identification basis, are included in the
Consolidated Statement of Income.
Concentrations of Credit Risk
Financial instruments which potentially expose the Company to concentrations of
credit risk consist primarily of trade accounts receivable. The Company's
customer base includes all significant automotive manufacturers and their first
tier suppliers in North America and Europe. Although the Company is directly
affected by the well-being of the automotive industry, management does not
believe significant credit risk existed at November 30, 1995.
Inventories
Inventories are valued at the lower of cost or market, which approximates
current replacement cost. A substantial portion of domestic inventories are
valued using the last-in first-out ("LIFO") method while the balance of the
Company's inventories are valued using the first-in first-out method.
Property, Plant and Equipment
The Company records investments in plant, property and equipment at cost.
The Company provides for depreciation of plant and equipment using the
straight-line method over the estimated lives of the assets which are generally
20 to 40 years for buildings and 3 to 12 years for machinery and equipment.
Improvements which extend the useful life of property are capitalized, while
repair and maintenance costs are charged to operations as incurred.
Cost in Excess of Net Assets Acquired
Amounts are being amortized using the straight-line method primarily over 40
years.
Income Taxes
Income taxes are provided based upon income for financial statement purposes.
Deferred tax assets and liabilities are established based on the difference
between the financial statement and income tax bases of assets and liabilities
using existing tax rates.
19
<PAGE> 367
Foreign Currency Translation
Assets and liabilities of foreign subsidiaries are translated at current
exchange rates, and income and expenses are translated using weighted average
exchange rates. Adjustments resulting from translation of financial statements
stated in local currencies generally are excluded from the results of
operations and accumulated in a separate component of Shareholders' Equity
(Deficit). Gains and losses from foreign currency transactions are included in
the determination of net income (loss) and were not material.
Reclassifications
Certain prior year amounts have been reclassified to conform with current year
financial statement presentation.
B. PROCEEDINGS UNDER CHAPTER 11
On January 7, 1991 ("petition date"), Eagle-Picher Industries, Inc. ("Company")
and seven of its domestic subsidiaries each filed a voluntary petition for
relief under chapter 11 of the United States Bankruptcy Code ("chapter 11")
with the United States Bankruptcy Court for the Southern District of Ohio,
Western Division, in Cincinnati, Ohio ("Bankruptcy Court"). Each filing
entity, other than EDI, Inc., currently is operating its business as a debtor
in possession in accordance with the provisions of the Bankruptcy Code.
An Unsecured Creditors' Committee ("UCC"), an Injury Claimants' Committee
("ICC"), an Equity Security Holders' Committee ("ESC") and a Legal
Representative for Future Claimants ("RFC") have been appointed in the chapter
11 cases. An unofficial asbestos co-defendants' committee has also been
participating in the chapter 11 cases. In accordance with the provisions of
the Bankruptcy Code, these parties have the right to be heard with respect to
transactions outside the ordinary course of business. The official committees
and the RFC typically are the entities with which the Company would negotiate
the terms of a plan of reorganization. In June 1992, a mediator was appointed
by the Bankruptcy Court to assist the constituencies in their negotiations.
On November 9, 1993, the Company reached an agreement on the principal elements
of a joint plan of reorganization. The agreement was with the ICC and the RFC,
the representatives of the holders of present and future asbestos-related
personal injury and other toxic tort claims in the Company's chapter 11 case,
and was reached with the assistance of the mediator. One of the principal
elements of the agreement was a negotiated settlement of the Company's
aggregate liability for such claims in the amount of $1.5 billion. As a
consequence of this agreement, the Company recorded a provision in the fourth
quarter of 1993 of $1.135 billion to increase the asbestos liability subject to
compromise to $1.5 billion. The Company also recorded a provision of $41.4
million in 1993 for environmental and other litigation claims.
Throughout 1994, the Company, the ICC and the RFC continued to refine the
details of a joint plan of reorganization ("Original Plan"). The Original Plan
was filed with the Bankruptcy Court on February 28, 1995. The Original Plan
did not have the support of the UCC or the ESC because they did not agree with
the amount of the aggregate asbestos liability which had been negotiated and
which was used in the Original Plan to determine the allocation of the
consideration to be distributed to the unsecured creditor and shareholder
classes. As a result of the dispute, the Company was unable to move forward
with the Original Plan. In order to resolve this dispute, the Company filed a
motion in July 1995 requesting that the Bankruptcy Court estimate the Company's
aggregate liability on account of present and future asbestos-related personal
injury claims. The Bankruptcy Court ruled in December 1995 that the Company's
liability is $2.5 billion ("Estimation Ruling"). The UCC, the ESC and two
individual members of the UCC have filed notices of appeal of the Estimation
Ruling. The Company does not know whether the Appellate Court will hear the
appeals or, if it does, when any decision will be rendered.
The Company intends to file a First Amended Consolidated Plan of Reorganization
("Amended Plan") which will reflect the Estimation Ruling. The Company
anticipates that the only substantive modification to the Original Plan will
relate to the allocation of the consideration to be distributed under the plan
to the various classes of unsecured claims.
The Amended Plan, like the Original Plan, contemplates a resolution of the
Company's liability for all present and future asbestos-related personal injury
claims and certain other tort claims. These claims will be channeled to and
resolved by an independently administered claims trust ("Trust"). The Amended
Plan also will provide for the distribution of cash, notes, debentures, and
common stock
20
<PAGE> 368
of the reorganized Company to the Trust and to holders of allowed unsecured
claims on a pro-rata basis proportionate to the percentage of their claims
to the total of the Liabilities Subject to Compromise. Claims entitled to
priority under the Bankruptcy Code and convenience claims (general unsecured
claims of $500 or less or claims that will be reduced to that amount) will be
paid in full, in cash. In addition, it is contemplated that the Amended Plan
will resolve and discharge all asbestos property damage claims. Under the
Bankruptcy Code, shareholders are not entitled to any distribution under a plan
of reorganization unless all classes of pre-petition creditors receive
satisfaction in full of their allowed claims or accept a plan which allows
shareholders to participate in the reorganized company or to receive a
distribution. It is anticipated that under the Amended Plan, existing
shareholders will receive no distributions and their shares will be canceled.
Following the Estimation Ruling, the Company recorded a provision of $1.0
billion to increase the asbestos liability subject to compromise to the amount
found by the Bankruptcy Court. This resulted in negative shareholders' equity
in excess of $2.2 billion. As a result, the Company filed a motion in the
Bankruptcy Court in December 1995 seeking an order to direct the United States
Trustee to disband the ESC on the basis that existing equity holders do not
have an economic interest in the chapter 11 cases. In January 1996, the
Bankruptcy Court ruled that the ongoing activities of the ESC shall be limited
to pursuing its appeal of the Estimation Ruling.
The accompanying consolidated financial statements have been prepared on a
going concern basis which contemplates continuity of operations, realization of
assets and liquidation of liabilities in the ordinary course of business. The
Liabilities Subject to Compromise have been reported on the basis of the amount
of the allowed claims even though it is expected that the distributions under a
plan of reorganization with respect to such claims will be lesser amounts.
Upon confirmation of a plan of reorganization, the Company would utilize the
"fresh-start" reporting principles contained in SOP 90-7, which would result in
adjustments relating to the amounts and classification of recorded assets and
liabilities, determined as of the plan confirmation date. Pursuant to the
Amended Plan, the ultimate consideration to be received by all unsecured
creditors will be substantially less than the amounts shown in the
accompanying Consolidated Balance Sheet. Until a plan of reorganization is
confirmed, however, the Company cannot be certain of the final terms thereof
or the ultimate amount creditors will receive.
Liabilities incurred by the Company as of the petition date and subject to
compromise under a plan of reorganization are separately classified in the
Consolidated Balance Sheet and include the following:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994
---- ----
<S> <C> <C>
Asbestos liability - Note K $ 2,502,511 $ 1,499,993
Long-term debt - Note E 62,003 62,004
Accounts payable 41,236 41,074
Accrued liabilities - Note L 56,780 54,194
--------- ---------
$ 2,662,530 $ 1,657,265
========= =========
</TABLE>
The net expense resulting from the Company's chapter 11 filings has been
segregated from expenses related to ordinary operations in the accompanying
Consolidated Statement of Income (Loss) and includes the following:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Professional fees $ 7,047 $ 6,218 $ 5,865
Debt financing costs - 200 -
Other expenses 181 296 863
Interest income (5,003) (3,288) (2,384)
------- ------- -------
$ 2,225 $ 3,426 $ 4,344
======= ======= =======
</TABLE>
Interest income is attributable to the accumulation of cash and cash
equivalents subsequent to the petition date.
C. INVENTORIES
Inventories consisted of:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994
---- ----
<S> <C> <C>
Raw materials and supplies $ 49,358 $ 52,146
Work-in-process 27,943 24,907
Finished goods 19,470 15,853
------- --------
96,771 92,906
Allowance to value inventory at
cost on the LIFO method 13,124 10,924
-------- --------
$ 83,647 $81,982
======== =======
</TABLE>
The percentage of inventories valued using the LIFO method was 75% in 1995 and
81% in 1994. The effects of liquidations of LIFO inventory quantities carried
at lower costs prevailing in prior years were not material.
21
<PAGE> 369
D. OTHER ASSETS
Other assets consisted of:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994
---- ----
<S> <C> <C>
Cost in excess of net assets acquired,
net of accumulated amortization of
$4,385 in 1995 and $3,973 in 1994 $ 12,382 $ 12,507
Notes receivable 5,137 5,778
Prepaid pension cost - Note I 7,545 7,879
Other 10,249 10,111
-------- --------
$ 35,313 $ 36,275
======== ========
</TABLE>
Notes receivable include $4,550,000 received as partial consideration for the
sale of a division. This note is payable in two equal installments in 1997 and
1998 and bears interest at 8%. Pursuant to the terms of the note, interest is
payable semiannually commencing in August 1994. The Company is receiving
interest payments in accordance with the terms of the note.
E. LONG-TERM DEBT AND SHORT-TERM BORROWINGS
The Company has a Bankruptcy Court approved debtor in possession financing
agreement which provides a $40,000,000 committed revolving credit facility
("Facility"). The entire amount of the Facility is available for both cash
borrowings and letters of credit. The Facility expires on the earlier of
December 31, 1996 or the effective date of a plan of reorganization. Letters
of credit totaling $30,205,000 and $32,941,000 were outstanding on November 30,
1995 and 1994, respectively, leaving the Company with $9,795,000 and
$7,059,000, respectively, in available borrowing capacity under the Facility.
There were no cash borrowings under the Facility at any time in 1995 or 1994.
The annual rate of interest under the Facility is the agent bank's prime rate
plus 1-1/2%. Fees for letters of credit range up to 2-1/2% per annum and a
commitment fee equal to 1/2% per annum is due on the unused portion. The
obligations are secured by accounts receivable and inventories and are afforded
administrative priority under the Bankruptcy Code. The Company has had
sufficient collateral to borrow the maximum amount under the Facility. The
Facility also contains affirmative and negative covenants which include, among
other things, limitations on capital expenditures and additional borrowings and
minimum quarterly and annual cash flow requirements. The Company has been in
compliance with these covenants throughout the term of the Facility.
The Company's foreign subsidiaries entered into agreements with various banks
which provided lines of credit in the amount of $17,100,000 that expire in
1998. At November 30, 1995, there were $1,200,000 in borrowings outstanding
leaving $15,900,000 in available borrowing capacity. The annual rates of
interest on these lines of credit range from 3/4% to 1-1/2% over the banks'
base rates. Some have no commitment fees; the fees on the others range from
.25% to .65% per annum on the unused portion. These agreements also contain
covenants which include restrictions on dividends and minimum financial
requirements. The Company is in compliance with these covenants at November
30, 1995.
Repayments of pre-petition debt obligations may be made only with the approval
of the Bankruptcy Court. The Bankruptcy Court has approved payments by the
Company with respect to certain pre-petition secured debt obligations in order
to provide the holders of such obligations with adequate protection of their
interests in their collateral security. These adequate protection payments
generally have been in the form of principal payments paid over the remaining
lives of the collateral assets in an aggregate amount equal to the determined
market value of those assets. The amount by which the original obligation and
pre-petition accrued interest exceeds the collateral value is deemed to be a
general unsecured claim. These claims are included in Liabilities Subject to
Compromise. Interest expense has not been recorded on these obligations for
the post-petition period because interest is not payable. Interest on
undersecured and other unsecured pre-petition debt obligations would have been
$6,971,000, $7,131,000 and $7,299,000 in 1995, 1994, and 1993, respectively.
Due to the chapter 11 filings and the anticipated reorganization, it is not
practicable to estimate the fair value of long-term debt which is described
below.
22
<PAGE> 370
Long-term debt consisted of:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994
---- ----
<S> <C> <C>
9-1/2% Sinking fund debentures, due
2017 $ 50,000 $ 50,000
Industrial revenue bonds 18,050 18,125
Secured notes 12,161 13,683
Debt of foreign subsidiaries 1,949 1,304
Other 471 514
------- -------
82,631 83,626
Less:
Current portion 1,525 1,726
Subject to compromise 62,003 62,004
------- -------
Long-term debt, less current portion $ 19,103 $ 19,896
======= =======
Unsecured debt included in Liabilities
Subject to Compromise consisted of:
Sinking fund debentures $ 50,000 $ 50,000
Industrial revenue bonds 7,500 7,500
Unsecured portion of secured notes 4,131 4,132
Other 372 372
------- -------
$ 62,003 $ 62,004
======= =======
</TABLE>
Interest rates averaged 5% in 1995, 4% in 1994, and 5% in 1993 on the
industrial revenue bonds, foreign and other long-term debt on which the Company
is obligated to pay interest. These long-term debt amounts are to mature at
various dates through 2004.
Long-term debt (excluding amounts subject to compromise) is scheduled to mature
as follows: $1,525,000 in 1996, $2,203,000 in 1997, $2,721,000 in 1998,
$1,179,000 in 1999, and $877,000 in 2000. The unsecured portion of long-term
debt will be resolved in a plan of reorganization.
During 1995, 1994, and 1993, the Company paid interest of $1,966,000,
$1,765,000, and $2,075,000, respectively.
F. INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("FAS 109"), in 1993. The cumulative effect of
this change in accounting for income taxes was not material and prior year
financial statements were not restated to apply the provisions of FAS 109.
Total income tax benefit for the year ended November 30, 1993 of $1,490,000
consisted of $5,000,000 expense from operations and $6,490,000 tax benefit of
the cumulative effect of the change in accounting for postretirement benefits.
The following is a summary of the components of income taxes (benefit) from
operations:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Federal - current $ 20,900 $ 15,600 $ 12,500
- deferred (18,900) (14,000) (11,800)
Foreign 3,400 900 2,700
State and local 3,900 2,500 1,600
-------- -------- --------
$ 9,300 $ 5,000 $ 5,000
======== ======== ========
</TABLE>
The sources of income (loss) before income tax expense (benefit) and cumulative
effect of accounting change are as follows:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
United States $(941,971) $ 47,670 $(1,143,312)
Foreign 7,100 6,079 3,542
--------- -------- ----------
$(934,871) $ 53,749 $(1,139,770)
========= ======== ==========
</TABLE>
The significant components of deferred income tax expense (benefit)
attributable to income from operations are as follows:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Deferred tax benefit (exclusive of the
effects of other components listed
below) $(351,800) $ (400) $(412,900)
Adjustments to deferred tax assets and
liabilities for enacted changes in
tax laws and rates - - (3,800)
Change in beginning-of-the-year balance
of the valuation allowance for
deferred tax assets 332,900 (13,600) 404,900
-------- -------- --------
$(18,900) $(14,000) $(11,800)
======== ======== ========
</TABLE>
Components of deferred tax balances as of November 30 are as follows:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994
---- ----
<S> <C> <C>
Deferred tax liabilities:
Property, plant and equipment $ (7,820) $ (6,608)
Prepaid pension (2,641) (2,758)
Other (3,338) (3,371)
-------- --------
Total deferred tax liabilities (13,799) (12,737)
-------- --------
Deferred tax assets:
Asbestos liability 877,171 524,998
Accrued liabilities (including amounts
subject to compromise) 26,246 26,223
Postretirement benefit liability 7,602 7,375
Other 4,483 4,048
-------- --------
Total deferred tax assets 915,502 562,644
-------- --------
Valuation allowance (838,879) (505,983)
-------- --------
Net deferred tax assets $ 62,824 $ 43,924
======== ========
</TABLE>
23
<PAGE> 371
Given the uncertainties surrounding the chapter 11 cases, the Company does not
believe that recognition of a significant portion of the deferred tax assets
relating to the asbestos liability and other pre-petition liabilities
is appropriate at this time. These liabilities have been recorded at the
expected amounts of the allowed claims; if the liabilities are settled for
lesser amounts, there will be a corresponding reduction in the deferred tax
assets and related valuation allowance. A significant portion of the net
deferred tax asset recognized at November 30, 1995 is expected to be recovered
through the carryback of amounts which will become deductible when the related
liabilities are paid. It is expected that the Company will realize the
benefits related to these deductions when it emerges from chapter 11. The
changes in the valuation allowance result from increased amounts provided for
asbestos litigation and other claims net of increases in the amounts
recoverable through these carrybacks.
The differences between the total income tax expense from operations and the
income tax expense (benefit) computed using the Federal income tax rate were
as follows:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Computed "expected" tax
expense (benefit) $(327,200) $ 18,800 $(398,900)
Change in valuation allowance 332,900 (13,600) 404,900
Change in Federal income tax rate - - (3,800)
Foreign tax rate differential 600 (1,500) 1,300
State and local taxes, net of
Federal benefit 2,500 1,600 1,000
Other 500 (300) 500
-------- --------- ---------
Total income tax expense $ 9,300 $ 5,000 $ 5,000
======== ========= =========
</TABLE>
The Company paid income taxes, net of refunds received, in 1995, 1994, and 1993
of $28,800,000, $18,200,000, and $16,500,000, respectively.
G. INCOME (LOSS) PER SHARE
The calculation of net income (loss) per share is based upon the average number
of common shares outstanding assuming the exercise of stock options. The
average number of shares used in the computation of net income (loss) per
share was 11,040,932 in 1995 and 1994 and 11,030,515 in 1993.
H. COMMON STOCK OPTIONS
At November 30, 1995, there were outstanding common stock options under a 1990
and a 1983 plan each authorizing 450,000 shares. The options expire at various
dates through 2000. No options could be exercised as of November 30, 1995.
Stock option transactions are summarized as follows:
<TABLE>
<CAPTION>
Shares Option Price
------ ------------
<S> <C> <C>
Outstanding at November 30, 1992 597,000 $ 2.50 to $14.25
Exercised (62,500) $ 2.50
Expired (15,000) $ 2.50
------- -------
Outstanding at November 30, 1993 519,500 $ 2.50 to $14.25
Expired (20,000) $ 2.50
------- -------
Outstanding at November 30, 1994 499,500 $ 2.50 to $14.25
Expired (5,000) $ 2.50
------- -------
Outstanding at November 30, 1995 494,500 $ 2.50 to $14.25
</TABLE>
There were 284,274 shares available for future grants at November 30, 1995.
I. RETIREMENT BENEFIT PLANS
Substantially all employees of the Company and its subsidiaries are covered by
various pension or profit sharing retirement plans. The cost of providing
retirement benefits was $1,900,000 in 1995, $998,000 in 1994, and $849,000 in
1993.
Plan benefits for salaried employees are based primarily on employees' highest
five consecutive years' earnings during the last ten years of employment. Plan
benefits for hourly employees typically are based on a dollar unit multiplied
by the number of service years.
Net periodic pension expense for the Company's defined benefit plans included
the following components:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 4,001 $ 4,684 $ 3,924
Interest cost on projected
benefit obligation 12,972 12,144 12,490
Actual gain on plan assets (40,975) (635) (20,658)
Net amortization and deferral 24,336 (17,052) 3,943
-------- -------- --------
Net periodic pension costs $ 334 $ (859) $ (301)
======== ======== ========
</TABLE>
The plans' assets consist primarily of listed equity securities and publicly
traded notes and bonds. The actual net return on plan assets was 21.2% in
1995, .3% in 1994,
24
<PAGE> 372
and 11.3% in 1993, and generally reflects the performance of the equity and
bond markets.
The following table sets forth the plans' funded status and amounts recognized
in the Company's Consolidated Balance Sheet at November 30:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994
---- ----
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation $(167,376) $(143,249)
========= =========
Accumulated benefit obligation $(174,515) $(148,243)
========= =========
Projected benefit obligation $(191,831) $(161,089)
Plan assets at fair value 208,256 178,216
--------- ---------
Projected benefit obligation
less than plan assets 16,425 17,127
Unrecognized net gain (1,942) (72)
Unrecognized prior service cost 2,244 1,192
Unrecognized net asset (9,182) (10,368)
--------- ---------
Prepaid pension cost recognized $ 7,545 $ 7,879
========= =========
</TABLE>
The discount rate and weighted average rate of increase in future compensation
levels used in determining the actuarial present value of the projected benefit
obligation were 7.0% and 4.2%, and 8.0% and 4.2%, respectively, at November 30,
1995 and 1994, respectively. The expected long-term rate of return on assets
was 9.0% in 1995 and in 1994. The Company's funding policy is to fund amounts
on an actuarial basis to provide for current and future benefits in accordance
with the funding guidelines of ERISA.
J. EMPLOYEE BENEFITS OTHER THAN PENSIONS
In addition to providing pension retirement benefits, the Company makes health
care and life insurance benefits available to certain retired employees on a
limited basis. Generally, the medical plans pay a stated percentage of medical
expenses reduced by deductibles and other coverages. Eligible employees may
elect to be covered by these health and life insurance benefits if they reach
early or normal retirement age while working for the Company. In most cases, a
retiree contribution for health insurance coverage is required. The Company
funds these benefit costs primarily on a pay-as-you-go basis.
In the fourth quarter of 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" ("FAS 106"). The Company
recognized the accumulated postretirement benefit obligation of $19,088,000
retroactively to December 1, 1992 as an accounting change. On an aftertax
basis, this charge was $12,598,000 or $1.14 per share. Previously reported
quarterly results in 1993 were restated to reflect the adoption of FAS 106 as
of December 1, 1992. The adoption of FAS 106 had no impact on consolidated
cash flows. The components of expense were as follows:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 396 $ 510 $ 467
Interest cost on accumulated
postretirement benefit obligation 1,202 1,327 1,394
Amortization of unrecognized net gain (179) - -
------- ------- -------
Net periodic postretirement benefit costs $ 1,419 $ 1,837 $ 1,861
======= ======= =======
</TABLE>
The accumulated postretirement benefit obligation at November 30 consisted of
the following components:
<TABLE>
<CAPTION>
(In thousands of dollars)
1995 1994
---- ----
<S> <C> <C>
Retirees and dependents $12,021 $13,017
Eligible active participants 1,650 1,602
Other active participants 5,862 4,823
------- -------
Accumulated postretirement
benefit obligation 19,533 19,442
Unrecognized net gain 2,187 1,628
------- -------
Accrued postretirement benefit costs $21,720 $21,070
======= =======
</TABLE>
Benefit costs were estimated assuming retiree health care costs would
initially increase at an 11% annual rate which decreases to an ultimate rate of
6% in 5 years. If this annual trend rate would increase by 1%, the accumulated
postretirement obligation as of November 30, 1995 would increase by $2,021,000
with a corresponding increase of $267,000 in the postretirement benefit expense
in 1995. The discount rates used in determining the accumulated postretirement
obligation at November 30, 1995 and 1994 were 6.5% and 7.5%, respectively.
K. ASBESTOS LITIGATION AND CLAIMS
As discussed above in Note B, the Company currently intends to file a First
Amended Consolidated Plan of Reorganization ("Amended Plan") with the ICC and
the RFC. Like the Original Plan filed in 1995, the Amended Plan will provide,
among other things, that all present and future asbestos-related personal
injury claims
25
<PAGE> 373
will be channeled to and resolved by an independently administered claims
trust. Similar plans of reorganization have been confirmed in the chapter 11
cases of certain other companies involved in asbestos litigation. It is also
currently contemplated that the Amended Plan will resolve and discharge all
asbestos property damage claims.
The asbestos-related claims, which consist of personal injury and property
damage claims, are discussed below.
Personal Injury
- ---------------
Prior to its chapter 11 filing, the Company had been named as a co-defendant in
a substantial number of lawsuits brought by present or former insulators,
shipyard workers, steel workers, tire workers and other persons alleging damage
to their health from exposure to dust from asbestos-containing industrial
insulation products. As a result of the chapter 11 filing by the Company, all
such litigation is automatically stayed pursuant to section 362 of the
Bankruptcy Code. As of the petition date, there were approximately 67,800
asbestos-related personal injury claims outstanding against the Company.
The Bankruptcy Court set September 30, 1992 as the bar date for present
asbestos-related claims. The Company implemented the Court-approved plan to
notify known and potential claimants of the bar date. All persons with a
pre-petition asbestos-related claim were required to file a proof of claim by
the bar date in order to participate in the reorganization cases.
Approximately 160,000 proofs of claim were filed alleging personal injury. The
Company believes that approximately 11,000 of these claims are duplicates or
were filed by persons whose lawsuits were previously closed.
The vast majority of persons who had filed pre-petition lawsuits against the
Company, and whose lawsuits were pending as of the petition date, filed proofs
of claim in the reorganization cases. Therefore, approximately 81,200
previously undisclosed claims were filed as a result of the bar date. The
Company believes that most of the approximately 40,000 claimants who in 1991,
pursuant to a previous Bankruptcy Court order, notified the Company of their
intent to assert a claim against the Company, also filed claims pursuant to the
bar date. The Company expects that additional asbestos-related personal injury
claims will arise for several decades into the future. Holders of these claims
were not required to file claims pursuant to the bar date.
In July 1995, the Company filed a motion requesting that the Bankruptcy Court
estimate the Company's aggregate liability on account of present and future
asbestos-related personal injury claims. The motion was filed because the UCC
and the ESC appointed in the Company's chapter 11 cases had not agreed with the
amount of such liability previously negotiated for settlement purposes among
the Company, the ICC and the RFC. In December 1995, the Bankruptcy Court ruled
that the Company's estimated liability for such claims is $2,502,511,000.
Appeals have been filed by certain creditors, the UCC and the ESC seeking to
have the Bankruptcy Court's ruling overturned. The Company does not know
whether the Appellate Court will hear the appeals or, if it does, when any
decision may be rendered.
Property Damage
- ---------------
There were forty-one lawsuits pending against the Company at the end of fiscal
1991 arising from the alleged presence of asbestos-containing products in
buildings. The pending lawsuits typically named numerous defendants, were
filed in both state and federal courts, and were brought by school districts,
cities, states, counties, universities, hospitals and commercial building
owners. The lawsuits typically demanded compensation for any costs incurred in
identifying, repairing, encapsulating or removing asbestos-containing products,
or sought to have the defendants do these things directly. Many lawsuits also
sought punitive damages. A few of the pending cases were certified as class
actions. Prior to filing its chapter 11 petition, the Company settled seven
building related cases for less than $22,000 in the aggregate.
Approximately 1,000 proofs of claim alleging such property damage claims were
filed in the chapter 11 cases pursuant to the bar date. These claims include
most of those asserted in the lawsuits described above that were pending on the
petition date. Many of the other claims also appear to be asserted by
claimants similar to those which had commenced pre-petition lawsuits.
In February 1996, after the close of the fiscal year, the hospital members of
the American Hospital Association, which filed asbestos-related property damage
claims against the Company in the alleged approximate amount of $300 million
("Hospitals"), filed a motion in the Bankruptcy Court seeking an order (a)
estimating the aggregate value of
26
<PAGE> 374
all asbestos-related property damage claims against the Company and (b)
temporarily allowing such claims for purposes of voting on a plan of
reorganization. The motion states that the relief requested is not intended
to be a determination by the Bankruptcy Court of the Company's liability, if
any, on account of such claims or to assign a permanently fixed value for such
claims, but is sought in order to determine the appropriate distribution to
creditor classes under a plan of reorganization. Because the motion was just
filed, the Company has not yet made a determination as to how it intends
to respond. The Company does, however, intend to file with the Bankruptcy
Court shortly an objection on various grounds to many asbestos-related property
damage claims, including claims filed by the hospitals.
It is anticipated that the Amended Plan will provide alternative methods for
treatment of the asbestos-related property damage claims. If the class of
asbestos-related property damage claimants votes to accept the Amended Plan, a
second trust will be established to resolve the claims and the Company will
fund the trust with $3 million in cash. If such class votes to reject the
Amended Plan, but the Amended Plan is nevertheless confirmed, such claims will
be resolved and discharged pursuant to claims resolution procedures contained
in the Amended Plan. These procedures will require such claimants to prove by
application of a scientific protocol that the asbestos-containing insulation
products for which they are seeking damages were manufactured by the Company.
If the class of asbestos-related property damage claimants rejects the Amended
Plan and has its claims resolved through the claims resolution procedures
discussed above, the eventual outcome of its claims cannot be reasonably
predicted at this time. It should also be noted that the Company may have
insurance coverage for certain of these claims.
L. ENVIRONMENTAL AND OTHER LITIGATION CLAIMS
The Bankruptcy Court established a bar date of October 31, 1991 for all
pre-petition claims against the Company other than those arising from the sale
of asbestos-containing products. Pursuant to this general claims bar date,
numerous proofs of claim were filed alleging a right to payment from the estate
due to litigation matters. Certain of such claims are discussed below.
Environmental
- -------------
The Company received 1,102 proofs of claim alleging a right to payment because
of environmental matters. These claims, relating primarily to various
Superfund sites, sought payment aggregating $27.9 billion, of which readily
identifiable duplicate claims approximated $27.5 billion. The Company has
resolved the majority of these environmental claims through negotiations with
the United States Environmental Protection Agency ("USEPA") and the United
States Department of Interior ("USDOI"). The USEPA is responsible for
resolving, among other things, claims arising from Superfund sites and the
USDOI is responsible for resolving the Company's liability for any natural
resource damage that may have occurred at the Superfund sites. Natural
resource damage is damage caused to the environment or to plants or animals by
the release of hazardous materials at Superfund sites. Pursuant to an
agreement among the Company, USEPA, USDOI, and certain states, which is subject
to the approval of the Bankruptcy Court, the agencies would be afforded allowed
pre-petition general unsecured claims aggregating approximately $43.0 million
in full satisfaction of all of the Company's alleged liability at most of its
known Superfund sites, including any liability for any natural resource damage.
This amount has been provided for and is included in Liabilities Subject to
Compromise. In exchange for these allowed claims, the agencies and such states
would release the Company from liability at these sites and grant the Company
protection from claims of other parties that may be co-liable at the sites. The
intent of the settlement agreement is to completely resolve all claims against
the Company with respect to these sites.
With respect to the small number of sites as to which the USEPA believes that
it does not have sufficient information to negotiate a meaningful settlement
with the Company, the settlement agreement provides a process which permits any
liability with respect to these sites to be resolved in the future when
additional information is available. Pursuant to this process, the Company
retains all of its rights and defenses as to these sites and may settle or
litigate its liability at such future time. The settlement agreement also
provides that any future liability of the Company, when fixed, will be
satisfied essentially with the same type and amount of consideration that
pre-petition general unsecured
27
<PAGE> 375
creditors receive pursuant to a confirmed plan of reorganization in the
Company's chapter 11 case.
In November 1995, a hearing was held before the Bankruptcy Court on the
Company's motion seeking the approval of the settlement agreement. USEPA and
USDOI joined in the motion. Certain parties that may be liable at certain of
the sites resolved by the settlement agreement opposed the Company's motion.
Such opposition basically seeks increases in the amount of the allowed claims
provided in the settlement agreement attributable to the sites where the
objectants may have liability. The Company believes, however, that the terms
and provisions of the settlement agreement are fair and equitable and that the
objections raised have no basis. The Court has not yet ruled on the motion.
Lead Chemicals
- --------------
The Bankruptcy Court received 131 timely proofs of claim asserting liability
based on personal injury or property damage from lead chemicals allegedly
manufactured and sold by the Company. Three additional claims were filed in
November 1993, after the 1991 bar date. While some of the timely filed claims
did not specify an amount, those that did sought an aggregate of $165 million.
All of the timely filed claims which specified an amount of damages have been
fully withdrawn without the allowance of any amount by the Company.
The three late filed claims referred to above were filed by the City of New York
or its agencies which had filed a pre-petition lawsuit against the Company. In
November 1994, the Bankruptcy Court sustained the Company's objection to these
claims and disallowed them because they were late filed. No appeal of this
ruling was sought by the claimants. As a result, the Company has disposed of
all filed lead-related property damage claims. The Company had also filed
objections to seven other claims that were filed against it seeking damages for
bodily injuries resulting from exposure to lead. Pursuant to the objections,
the Company sought an order of the Bankruptcy Court disallowing such claims
because the claimants' lawsuits asserting similar claims against other
defendants which were not in bankruptcy had been dismissed in the trial court.
In June 1995, the Bankruptcy Court disallowed all seven of such claims.
Currently, there are 113 remaining timely-filed lead-related personal injury
claims that have not been resolved.
The Company believes that it has valid grounds to object to the allowance of
all of the remaining lead-related personal injury claims. It is currently
contemplated that all lead-related personal injury claims that were filed that
are not disposed of pursuant to an objection filed by the Company, and all
future lead-related personal injury claims, will be channeled to and resolved
by the trust referred to in Note K above, to be established under the Amended
Plan for the benefit of holders of personal injury claims resulting from
exposure to asbestos or lead- containing products.
Other Litigation
- ----------------
The Company received, by the 1991 bar date, ninety-two claims arising out of
litigation matters other than those related to lead, asbestos or environmental
issues. These claims aggregated approximately $1.1 billion. The majority of
these claims have been resolved by disallowance, settlement pursuant to
Bankruptcy Court authority or by the allowance of a pre-petition general
unsecured claim for amounts that are not material to the Company or its
operations.
Summary
- -------
During the pendency of the chapter 11 cases, any unresolved litigation with
respect to pre-petition claims can proceed against the Company only with the
express permission of the Bankruptcy Court. The Company intends to defend all
litigation claims vigorously in the manner permitted by the Bankruptcy
Code and/or applicable law. All pre-petition claims against the Company
arising from litigation must be liquidated or otherwise addressed in the
context of the chapter 11 cases. Further, all such claims against the Company
will be treated in a plan of reorganization.
The Company has resolved most of the litigation claims that were asserted by
the October 31, 1991 bar date for claims other than those arising from the sale
of asbestos-containing products. The Company has filed objections to certain
of these litigation-based claims which have not been resolved, seeking to
reduce the amount of such claims or eliminate them entirely. The Company
anticipates filing additional objections to other such claims if they cannot be
resolved through negotiation. These objections will be vigorously litigated by
the Company pursuant to the provisions of the Bankruptcy Code and applicable
law.
28
<PAGE> 376
The eventual outcome of the environmental and other litigation claims described
herein cannot be reasonably predicted due to numerous uncertainties that are
inherent in the reorganization process. However, the Company believes that its
provision for these claims is adequate. In addition, the Company may have
insurance coverage for certain of these claims and other factual and legal
defenses available to it.
M. OTHER INCOME
The Company held certain equity investments having no cost basis, but which had
a fair value of approximately $5.4 million when FAS 115 was adopted. A
substantial portion of these investments related to shares of stock in a
Canadian mining concern that the Company received in 1990 in settlement of
certain indebtedness. The Company had previously deemed the investment to be
permanently impaired and had recorded a loss on the investment in the amount of
its full book value. The price of the stock, however, had recently increased
significantly. Substantially all of these investments were sold in June, 1995,
resulting in a realized gain of $11.5 million.
N. INDUSTRY SEGMENT INFORMATION
A general description of the products manufactured by the Company's three
industry segments is:
Industrial
Diatomaceous earth products, rubber products, rare metals, fiberglass
reinforced plastic parts and industrial chemicals.
Machinery
Earth moving machines, heavy-duty forklift trucks, aerospace and defense parts,
metal cleaning and finishing systems and aluminum castings.
Automotive
Mechanical, structural, and trim parts for passenger cars, trucks, vans and
utility vehicles for the OEM and replacement markets.
Sales between segments and foreign operations were not material.
Consolidated sales to Ford Motor Company amounted to $166,800,000 in 1995,
$165,300,000 in 1994, and $148,000,000 in 1993. No other customer accounted
for 10% or more of consolidated sales with the exception of General Motors
Corporation ("GMC") in 1994 and 1993 when consolidated sales to GMC amounted to
$81,400,000 and $73,100,000, respectively.
Consolidated export sales were $92,500,000 in 1995, $76,900,000 in 1994 and
$73,200,000 in 1993.
29
<PAGE> 377
INDUSTRY SEGMENT INFORMATION
<TABLE>
<CAPTION>
Years ended November 30
(In millions of dollars)
Industrial Machinery Automotive
1995 1994 1993 1995 1994 1993 1995 1994 1993
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $160.6 $141.4 $132.6 $254.7 $217.0 $171.7 $433.2 $398.3 $357.2
====== ====== ====== ====== ====== ====== ====== ====== ======
Operating Income 15.6 14.5 15.0 24.1 18.8 9.1 42.1 43.7 37.4
==== ==== ==== ==== ==== === ==== ==== ====
Identifiable Assets 80.6 78.2 72.7 112.0 109.8 92.8 217.1 190.6 168.2
==== ==== ==== ===== ===== ==== ===== ===== =====
Depreciation and Amortization 6.1 5.5 4.9 4.7 4.0 3.4 17.6 16.2 16.2
=== === === === === === ==== ==== ====
Capital Expenditures 4.4 7.7 5.6 7.6 6.9 7.4 28.3 21.2 15.4
=== === === === === === ==== ==== ====
Segment Total Corporate Total
1995 1994 1993 1995 1994 1993 1995 1994 1993
---- ---- ---- ---- ---- ---- ---- ---- ----
Sales $848.5 $756.7 $661.5 $ - $ - $ - $848.5 $756.7 $661.5
====== ====== ====== ====== ====== ====== ====== ====== ======
Operating Income (Loss) 81.8 77.0 61.5 (18.7) (18.7) (17.7) 63.1 58.3 43.8
==== ==== ====
Provision for Asbestos Ligitation (1,005.5) - (1,135.5) (1,005.5) - (1,135.5)
Provision for Environmental and Other Claims - - (41.4) - - (41.4)
Interest Expense (1.9) (1.8) (2.1) (1.9) (1.8) (2.1)
Other Income (Expense) 11.6 .6 (.2) 11.6 .6 (.2)
Reorganization Items (2.2) (3.4) (4.4) (2.2) (3.4) (4.4)
===== ===== ===== ----- ----- -----
Income (Loss) Before Taxes (934.9) 53.7 (1,139.8)(1)
======= ==== =========
Identifiable Assets 409.7 378.6 333.7 170.4 142.5 125.7 580.1 521.1 459.4
===== ===== ===== ===== ===== ===== ===== ===== =====
Depreciation and Amortization 28.4 25.7 24.5 .3 .4 .5 28.7 26.1 25.0
==== ==== ==== == == == ==== ==== ====
Capital Expenditures 40.3 35.8 28.4 .3 .1 .1 40.6 35.9 28.5
==== ==== ==== == == == ==== ==== ====
<FN>
(1) Before cumulative effect of accounting changes.
</TABLE>
30
<PAGE> 378
INDEPENDENT AUDITORS' REPORT
- ----------------------------
The Board of Directors
Eagle-Picher Industries, Inc.:
We have audited the accompanying consolidated balance sheet of Eagle-Picher
Industries, Inc. and subsidiaries (debtor in possession, as of January 7, 1991)
as of November 30, 1995 and 1994, and the related consolidated statements of
income (loss), shareholders' equity (deficit), and cash flows for each of the
years in the three-year period ended November 30, 1995. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Eagle-Picher
Industries, Inc. and subsidiaries as of November 30, 1995 and 1994, and the
results of their operations and their cash flows for each of the years in the
three-year period ended November 30, 1995 in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note B to
the consolidated financial statements, on January 7, 1991, Eagle-Picher
Industries, Inc. and seven of its domestic subsidiaries each filed a voluntary
petition for relief under chapter 11 of the United States Bankruptcy Code with
the United States Bankruptcy Court. Although the Company and its operating
subsidiaries, other than EDI, Inc., are currently operating their businesses as
debtors in possession under the jurisdiction of the Bankruptcy Court, the
continuation of their businesses as going concerns is contingent upon, among
other things, the ability to formulate a plan of reorganization which will gain
approval of the creditors and confirmation by the Bankruptcy Court. The filing
under chapter 11 and the continued uncertainty related to claims associated
with the Company's sale of asbestos products and certain other litigation,
raise substantial doubt about the Company's ability to continue as a going
concern. The consolidated financial statements do not include any adjustments
that may be required in connection with restructuring the Company and its
subsidiaries as they reorganize under chapter 11 of the United States
Bankruptcy Code.
As discussed in Note J, the Company adopted the provisions of the Financial
Accounting Standards Board's SFAS No. 106, Employers' Accounting for
Postretirement Benefits Other than Pensions, on December 1, 1992.
/s/KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Cincinnati, Ohio
February 14, 1996
31
<PAGE> 379
Report of Management
The Company's management is responsible for the preparation and presentation of
the consolidated financial statements and related financial data included in
this annual report. The financial information has been prepared in conformity
with generally accepted accounting principles and as such includes amounts
based on judgments and estimates made by management.
The Company's system of internal accounting controls is designed to provide
reasonable assurance at reasonable costs that assets are safeguarded from loss
or unauthorized use, and that the financial records may be relied upon for the
preparation of the consolidated financial statements.
The consolidated financial statements have been audited by our independent
auditors, KPMG Peat Marwick LLP. Their audit is conducted in accordance with
generally accepted auditing standards and provides an independent assessment as
to the fair presentation, in all material respects, of the Company's
consolidated financial statements.
The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with management and the independent auditors to
review internal accounting controls and the quality of financial reporting.
Financial management and the independent auditors have full and free access to
the Audit Committee.
/s/Thomas E. Petry
- ------------------------
Thomas E. Petry
Chairman and Chief
Executive Officer
/s/Andries Ruijssenaars
- ------------------------
Andries Ruijssenaars
President and Chief
Operating Officer
/s/David N. Hall
- ------------------------
David N. Hall
Senior Vice President -
Finance
Cincinnati, Ohio
February 14, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
RESULTS OF OPERATIONS
1995 COMPARED TO 1994
On a 12% sales increase, operating income increased 8% to $63.1 million in 1995
from $58.3 million in 1994. Comparative sales volume by industry segment
showed increases of 14% in the Industrial segment, 17% in the Machinery
segment, and 9% in the Automotive segment. Operating income increased 8% in
the Industrial segment and 28% in the Machinery segment, but decreased 4% in
the Automotive segment. The increase in operating income in the Industrial
Segment was shared by all operations within the segment. This segment tends
not to experience cyclical swings as its customers serve a range of consumer
nondurable markets. The increase in operating income in the Machinery segment
was attributable solely to the continuing improvements in both volume and
operating efficiencies in the operations making earth moving and material
handling equipment. The decrease in operating income in the Automotive segment
was due to: 1) intense pricing pressure by major customers demanding price
concessions; 2) inability to pass on raw material cost increases on a timely
basis; and 3) start-up costs associated with new business.
In December 1995, the Bankruptcy Court estimated the Company's aggregate
liability on account of present and future asbestos-related personal injury
claims to be $2.5 billion. As a result, the Company recorded a provision in
the fourth quarter of 1995 of $1.0 billion to increase the asbestos liability
subject to compromise to $2.5 billion.
Interest expense was $1.9 million in 1995 compared to $1.8 million in 1994.
A gain on sale of investments of $11.5 million resulted from the sale of
securities which the Company had received several years ago in settlement of
financing it had provided to a supplier.
Reorganization items are described in Note B.
The primary components of the income tax provision are described in Note F.
1994 COMPARED TO 1993
On a 14% sales increase, operating income increased 33% to $58.3 million in
1994 from $43.8 million in 1993.
32
<PAGE> 380
Comparative sales volume by industry segment showed increases of 7% in
the Industrial segment, 26% in the Machinery segment, and 12% in the Automotive
segment. Operating income decreased 3% in the Industrial segment, but
increased 107% in the Machinery segment and 17% in the Automotive segment. The
decrease in operating income in the Industrial segment was attributable to
pricing pressures on diatomaceous earth products. The increase in operating
income in the Machinery segment was primarily associated with improvements in
production of a line of heavy-duty forklift trucks. An increase in sales
volumes of metal cleaning and finishing equipment also contributed to the
increase in operating income in the Machinery segment. The increase in
operating income in the Automotive segment was due to: 1) an increase in export
sales and stronger performance of our operations in Great Britain and Spain; 2)
broader market penetration coupled with record domestic auto production; and 3)
favorable product mix heavily weighted toward the light truck, van, and sport
utility segment of the market for which several divisions produce components.
In November 1993, the Company reached an agreement on the principal elements of
a plan of reorganization with the Injury Claimants' Committee and the Legal
Representative for Future Claimants, the representatives of the holders of
present and future asbestos-related personal injury and other toxic tort claims
in the Company's chapter 11 case. The agreement contemplated a settlement of
the Company's liability for all present and future asbestos-related personal
injury claims. As a consequence of the proposed settlement, the Company
recorded an additional provision of $1.135 billion for all present and future
asbestos-related personal injury claims, thereby increasing the asbestos
liability subject to the compromise on the Consolidated Balance Sheet to $1.5
billion. In addition, in 1993 a provision of $41.4 million was made for
environmental and other litigation claims.
Interest expense decreased to $1.8 million from $2.1 million due primarily to
the repayment of certain foreign debt in 1994.
Reorganization items are described in Note B.
The primary components of the income tax provision are described in Note F.
INDUSTRY SEGMENT DATA
Industry segment data for 1995, 1994 and 1993 is summarized on page 30.
FINANCIAL CONDITION
The filing of the petitions for reorganization under chapter 11 on January 7,
1991 had a significant positive impact on the Company's liquidity. The filing
stayed all litigation against the Company with respect to pre-petition claims
and reduced the cash drain for asbestos litigation. In the third quarter of
1995, the Company filed a motion with the Bankruptcy Court presiding over the
Company's chapter 11 case asking the Court to estimate its aggregate liability
on account of present and future asbestos-related personal injury claims. In
December 1995, the Court ruled on the motion and estimated this liability to
be $2.5 billion. As a result, the Company recorded a provision in the fourth
quarter of 1995 of $1.0 billion to increase the asbestos liability subject to
compromise to $2.5 billion. At November 30, 1995, the balance of Liabilities
Subject to Compromise was $2.663 billion. These amounts were recorded based on
the expected amount of the allowed claims, not the amounts of consideration
that such allowed claims may receive pursuant to a plan of reorganization.
During 1995, there was a $.7 million increase in cash. Operating activities
provided $30.5 million. Items which affected cash provided by operations
include the following:
1) There was a significant increase in customer tooling costs from $15.0
million at the end of fiscal 1994, to $26.5 million at November 30, 1995. It is
common practice in the automotive industry to accumulate customer tooling costs
while the tooling is under construction and bill the customer upon its
completion. It is anticipated that customer tooling will return to a more
traditional level of $10.0 to $12.0 million by the end of 1996, which would
generate $14.5 to $16.5 million in cash in the coming fiscal year.
2) There was an increase in working capital, other than customer tooling
costs, which was in line with the 12% increase in sales volume.
3) While income tax expense for financial statement purposes was $9.3 million,
the Company paid income taxes, net of a small refund, of $28.8 million.
4) The Company incurred interest expenses of $1.9 million and reorganization
costs of $2.2 million.
33
<PAGE> 381
In addition, the Company used cash of $28.7 million, net of an $11.5 million
sale of an investment (Note M), for investing activities. The Company had near
record ($43.0 million in 1988) capital expenditures of $40.6 million in 1995.
This compares to $35.9 million spent in 1994. The capital expenditures in
1995 included $10.3 of an approved $12.0 million expansion of a new coating
line for the manufacture of gasket materials which is to be completed in early
1996.
Finally, the Company used $1.0 million of cash for financing activities which
included repayment of debt in accordance with adequate protection payments
authorized by the Bankruptcy Court, combined with the financing activities of
the foreign subsidiaries. As of November 30, 1995, the Company had $82.6
million of long-term debt compared to $83.6 million at the end of the prior
year. The disposition of unsecured debt included in liabilities subject to
compromise of $62.0 million will be treated in a plan of reorganization.
The Company has a Bankruptcy Court approved debtor in possession financing
agreement which provides a $40.0 million committed revolving credit facility.
This facility expires the earlier of December 31, 1996 or the effective date of
a plan of reorganization. Should a plan not become effective by the end of
1996, the Company would expect to have the current facility extended for as
long as necessary. At November 30, 1995, $30.2 million in letters of credit
were outstanding under the facility leaving the Company with $9.8 million in
available borrowing capacity. There were no cash borrowings in 1995 under the
facility.
While the Company is reorganizing under chapter 11, it is prohibited from
paying interest or principal on pre-petition obligations without the approval
of the Bankruptcy Court. To the extent cash generated from operations exceeds
capital expenditures, working capital requirements, approved payments of
secured debt and administrative expenses of the reorganization, the Company
will continue to accumulate cash. Consequently, the liquidity of the Company
should improve.
The Company intends to file an amended plan of reorganization with the
Bankruptcy Court as soon as practicable. It is contemplated that such plan
will provide for a discharge of the Company's pre-petition liabilities
(Liabilities Subject to Compromise) and provide the reorganized Company with a
capital structure appropriate for an industrial products company which will
enable the Company to access financing in the credit and debt markets.
RECENT FASB PRONOUNCEMENTS
During the year, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("FAS 121").
This statement requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Measurement of an impairment loss on these
assets should be based on the fair value of the assets. FAS 121 is required to
be adopted for fiscal years beginning after December 15, 1995. As such, the
Company will adopt this standard the sooner of the fiscal year ended November
30, 1997 or the effective date of a plan of reorganization. Management has not
fully assessed the impact of FAS 121; however, it is not anticipated that its
adoption will have a material impact on the financial statements.
Statement of Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("FAS 123"), was also issued in 1995. This statement establishes
a fair value method of accounting for stock-based compensation plans. Adoption
of the fair value method is encouraged; however, entities may elect to continue
to account for stock-based compensation plans according to the provisions of
Accounting principles Bulletin No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"), but provide the disclosures related to FAS 123. FAS 123
is effective for transactions entered into in fiscal years that begin after
December 15, 1995. Accordingly, the Company will adopt this standard the
sooner of the fiscal year ended November 30, 1997 or the effective date of a
plan of reorganization. As a result of the numerous uncertainties that are
inherent in the reorganization process, Management has not assessed the impact
that adoption of FAS 123 would have on the financial statements.
34
<PAGE> 382
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
(Unaudited)
(In thousands of dollars, except per share)
- -------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales $848,548 $756,741 $661,452 $611,458 $598,631
- -------------------------------------------------------------------------------------------
Operating Income 63,087 58,281 43,754 46,560 18,849
- -------------------------------------------------------------------------------------------
Income (Loss) Before
Reorganization Items
and Taxes (932,646)(1) 57,175 (1,135,426)(2) 40,924 (788)
- -------------------------------------------------------------------------------------------
Reorganization Items (3) (2,225) (3,426) (4,344) (9,038) (12,124)
- -------------------------------------------------------------------------------------------
Income (Loss) Before Taxes (934,871) 53,749 (1,139,770) 31,886 (12,912)
- -------------------------------------------------------------------------------------------
Net Income (Loss) (944,171) 48,749 (1,144,770)(4) 28,886 (15,812)
- -------------------------------------------------------------------------------------------
Net Income (Loss) Per Share (85.51) 4.42(4) (103.78)(4) 2.63 (1.44)
- -------------------------------------------------------------------------------------------
Common Dividend Per Share - - - - -
- -------------------------------------------------------------------------------------------
Total Assets 580,073 521,107 459,360 419,435 398,990
- -------------------------------------------------------------------------------------------
Long-Term Debt,
less current portion 19,103(5) 19,896(5) 21,712(5) 25,033(5) 32,001(5)
- -------------------------------------------------------------------------------------------
<FN>
(1) Includes a provision for asbestos litigation of $1.0 billion in 1995.
(2) Includes a provision for asbestos litigation of $1.135 billion and a provision
for environmental and other claims of $41.4 million in 1993.
(3) On January 7, 1991, the Company and seven of its domestic subsidiaries each
filed a petition for relief under chapter 11 of the U.S. Bankruptcy Code.
(4) Excludes cumulative adjustment for adoption of FAS 106 in 1993 which decreased
net income by $12.6 million ($1.14 per share).
(5) Long-term debt of $62.0 million in 1995, 1994 and 1993 and $61.7 million in 1992,
and 1991 has been included in liabilities subject to compromise.
</TABLE>
35
<PAGE> 383
EXHIBIT 21
EAGLE-PICHER INDUSTRIES, INC.
SUBSIDIARIES OF THE REGISTRANT
Cincinnati Industrial Machinery Sales Company [Ohio]
Daisy Parts, Inc. [Michigan]
Eagle-Picher Development Company, Inc. [Delaware]
Transicoil Inc. [Pennsylvania]
Transicoil (Malaysia) SDN. BHD. [Malaysia]
Michigan Automotive Research Corporation (MARCO) [Michigan]
EDI, Inc. [Michigan]
Eagle-Picher Espana, S.A. [Spain]
Eagle-Picher Europe, Inc. [Delaware]
Eagle-Picher Fluid Systems Ltd [England and Wales]
Eagle-Picher Far East, Inc. [Delaware]
Eagle-Picher, Inc. [Virgin Islands]
Eagle-Picher Industries of Canada Limited [Canada]
Eagle-Picher Industries GmbH [Germany]
Eagle-Picher Industries Materials GmbH [Germany]
Eagle-Picher Minerals, Inc. [Nevada]
Eagle-Picher Minerals International S.A.R.L. [France]
United Minerals Verwaltungs- und Beteiligungs GmbH [Germany]
United Minerals GmbH & Co. KG [Germany]
Equipos de Acuna, S.A. de C.V. [Mexico]
Hillsdale Tool & Manufacturing Co. [Michigan]
Eagle-Picher Industries Europe GmbH [Germany]
EPTEC, S.A. de C.V. [Mexico]
Eagle-Picher Fluid Systems, Inc. [Michigan]
- ---------------
[ ] Brackets indicate state or country of incorporation and do not form part of
corporate name.
<PAGE> 384
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Eagle-Picher Industries, Inc.:
We consent to incorporation by reference in Registration Statement Nos. 2-50595,
33-5792, 33-31975 and 33-37518 on Form S-8 of Eagle-Picher Industries, Inc. of
our report, with explanatory paragraphs, dated February 14, 1996 relating to the
consolidated balance sheet of Eagle-Picher Industries, Inc. and subsidiaries
(debtor in possession, as of January 7, 1991) as of November 30, 1995 and 1994,
and the related consolidated statements of income (loss), shareholders' equity
(deficit), and cash flows for each of the years in the three-year period ended
November 30, 1995, which reports appear in the Company's 1995 Annual Report on
Form 10-K and in the 1995 Annual Report, which is incorporated by reference in
the Company's 1995 Annual Report on Form 10-K. Our report on the consolidated
financial statements refers to a change in accounting for postretirement
benefits other than pensions in 1993.
/s/ KPMG Peat Marwick LLP
Cincinnati, Ohio
February 27, 1996
<PAGE> 385
EXHIBIT 24(a)
POWER OF ATTORNEY
Each of the undersigned officers and/or directors of Eagle-Picher Industries,
Inc. hereby consents to and appoints Thomas E. Petry and James A. Ralston, and
each of them, as his true and lawful attorneys-in-fact and agents with all power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the 1995 fiscal year of
Eagle-Picher Industries, Inc., a corporation organized and existing under the
laws of the State of Ohio, and any and all amendments thereto, and to file the
same, with all exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission pursuant to the requirements of the
Securities Exchange Act of 1934, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the same as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue thereof.
In Witness Whereof, each of the undersigned has hereunto set his hand on this
14th day of February, 1996.
/s/ Thomas E. Petry
------------------------------------------------------
Thomas E. Petry
Director, Chairman of the Board
and Chief Executive Officer
/s/ Andries Ruijssenaars
------------------------------------------------------
Andries Ruijssenaars
Director, President and Chief
Operating Officer
/s/ David N. Hall
------------------------------------------------------
David N. Hall
Senior Vice President-Finance
(Principal Financial Officer)
/s/ Paul W. Christensen, Jr.
------------------------------------------------------
Paul W. Christensen, Jr.
Director
/s/ V. Anderson Coombe
------------------------------------------------------
V. Anderson Coombe
Director
/s/ Roger L. Howe
------------------------------------------------------
Roger L. Howe
Director
/s/ Daniel W. LeBlond
------------------------------------------------------
Daniel W. LeBlond
Director
/s/ Powell McHenry
------------------------------------------------------
Powell McHenry
Director
/s/ Eugene P. Ruehlmann
------------------------------------------------------
Eugene P. Ruehlmann
Director
<PAGE> 386
EXHIBIT 24(b)
POWER OF ATTORNEY
The undersigned officer of Eagle-Picher Industries, Inc. hereby consents to and
appoints Thomas E. Petry and James A. Ralston, and each of them, as his true and
lawful attorneys-in-fact and agents with all power of substitution, for him and
in his name, place and stead, in any and all capacities, to sign the Annual
Report on Form 10-K for the 1995 fiscal year of Eagle-Picher Industries, Inc., a
corporation organized and existing under the laws of the State of Ohio, and any
and all amendments thereto, and to file the same, with all exhibits thereto, and
all documents in connection therewith, with the Securities and Exchange
Commission pursuant to the requirements of the Securities Exchange Act of 1934,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the same as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
In Witness Whereof, the undersigned has hereunto set his hand on this 20th day
of February, 1996.
/s/ Carroll D. Curless
- ------------------------------------
Carroll D. Curless
Vice President and Controller
(Principal Accounting Officer)
<PAGE> 387
EXHIBIT 99
<TABLE>
<CAPTION>
EPI OPERATIONS (DIVISIONS) PLANT LOCATIONS
- ----------------------------------------------------------------------------------------------
<S> <C>
Cincinnati Industrial Machinery Sharonville, Ohio
3280 Hageman Street
Sharonville, Ohio 45241
Construction Equipment Lubbock, Texas
1802 E. 50th Street Acuna, Coahuila, Mexico
Lubbock, Texas 79404
Eagle-Picher Fluid Systems, Inc. Brighton, Michigan*
7854 Lochlin Drive
Brighton, Michigan 48116
Electronics Joplin, Missouri (6)
"C" and Porter Streets Colorado Springs, Colorado (2)
Joplin, Missouri 64801 Galena, Kansas
Grove, Oklahoma
Seneca, Missouri
Stella, Missouri
Socorro, New Mexico**
Fabricon Products River Rouge, Michigan
1721 West Pleasant Avenue Philadelphia, Pennsylvania
River Rouge, Michigan 48218 Riverton, New Jersey
Hillsdale Tool & Manufacturing Co. Hillsdale, Michigan (4)**
135 E. South Street Hamilton, Indiana
Hillsdale, Michigan 49242 Jonesville, Michigan
Vassar, Michigan
San Luis Potosi, Mexico
Michigan Automotive Ann Arbor, Michigan
Research Corporation (MARCO)
1254 North Main Street
Ann Arbor, Michigan 48104
Minerals Clark Station, Nevada
6110 Plumas Street Lovelock, Nevada
Reno, Nevada 89509 Vale, Oregon
</TABLE>
- ---------------
* Effective approximately March 1, 1996.
** The New Mexico plant and one of the Hillsdale, Michigan plants have little,
if any, manufacturing activity at this time.
<PAGE> 388
<TABLE>
<CAPTION>
EPI OPERATIONS (DIVISIONS) PLANT LOCATIONS
- ----------------------------------------------------------------------------------------------
<S> <C>
Orthane Denton, Texas***
1500 I-35 W. (at Airport Road)
Denton, Texas 76202
Plastics Grabill, Indiana
14123 Roth Road Ashley, Indiana
Grabill, Indiana 46741 Huntington, Indiana
Ross Aluminum Foundries Sidney, Ohio (2)
815 North Oak Avenue
Sidney, Ohio 45365
Rubber Molding Norwich, Connecticut
19 Ohio Avenue Pine Bluff, Arkansas
Norwich, Connecticut 06360 Stratford, Connecticut
Specialty Materials Quapaw, Oklahoma (2)
One Mile NE of Quapaw on Hwy. 69A Miami, Oklahoma (3)
Quapaw, Oklahoma 74363 Harrisonville, Missouri
Lenexa, Kansas
Suspension Systems Paris, Illinois
Route 133 West
Paris, Illinois 61944
Transicoil Inc. Trooper, Pennsylvania
2560 General Armistead Avenue Melaka, Malaysia
Trooper, Pennsylvania 19403
Trim Kalkaska, Michigan
829 U.S. Hwy. 131 NW
Kalkaska, Michigan 49646
Wolverine Gasket Inkster, Michigan
2638 Princess Street Blacksburg, Virginia
Inkster, Michigan 48141 Leesburg, Florida
Garden City, Michigan
Eagle-Picher Industries Europe GmbH Market Harborough, England
Soria, Spain
Ohringen, Germany
</TABLE>
- ---------------
*** A substantial portion of the business of the Denton, Texas facility was sold
on January 31, 1996. The remainder will be transferred to the Brighton,
Michigan plant, listed above.
<PAGE> 389
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended May 31, 1996 Commission file number 1-1499
EAGLE-PICHER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
OHIO 31-0268670
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
580 Walnut Street, P. O. Box 779, Cincinnati, Ohio 45201
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code 513-721-7010
(Not Applicable)
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
11,040,932 shares of common capital stock, par value $1.25 per share, were
outstanding at July 12, 1996.
1
<PAGE> 390
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.................................... 3
Consolidated Statement of Income............................ 3
Consolidated Balance Sheet.................................. 4
Consolidated Statement of Cash Flows........................ 6
Notes to Consolidated Financial Statements.................. 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................... 14
Item 3. Defaults Upon Senior Securities......................... 14
Item 6. Exhibits and Reports on Form 8-K........................ 15
Signature........................................................ 16
Exhibit Index.................................................... 17
</TABLE>
2
<PAGE> 391
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
May 31 May 31
------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $ 235,126 $ 225,378 $ 443,708 $ 422,981
--------- --------- --------- ---------
Operating Costs and Expenses:
Cost of products sold 194,276 186,658 368,640 349,946
Selling and administrative 21,569 19,573 42,416 38,775
--------- --------- --------- ---------
215,845 206,231 411,056 388,721
--------- --------- --------- ---------
Operating Income 19,281 19,147 32,652 34,260
Interest expense (462) (500) (949) (987)
Other income 30 21 357 406
--------- --------- --------- ---------
Income Before Reorganization
Items and Taxes 18,849 18,668 32,060 33,679
Reorganization items 22 (331) 90 (756)
--------- --------- --------- ---------
Income Before Taxes 18,871 18,337 32,150 32,923
Income Taxes 2,115 1,561 3,886 3,115
--------- --------- --------- ---------
Net Income $ 16,756 $ 16,776 $ 28,264 $ 29,808
========= ========= ========= =========
Income per Share $ 1.52 $ 1.52 $ 2.56 $ 2.70
========= ========= ========= =========
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE> 392
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
ASSETS May 31 Nov. 30
1996 1995
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 109,719 $ 93,330
Receivables, less allowances 131,289 127,044
Income tax refund receivable 679 4,402
Inventories:
Raw materials and supplies 37,060 42,140
Work in process 30,842 23,349
Finished goods 17,069 18,158
---------- ----------
84,971 83,647
Prepaid expenses 12,057 17,695
---------- ----------
Total current assets 338,715 326,118
---------- ----------
PROPERTY, PLANT AND EQUIPMENT 452,153 441,957
Less accumulated depreciation 294,861 286,139
---------- ----------
Net property, plant and equipment 157,292 155,818
DEFERRED INCOME TAXES 70,024 62,824
OTHER ASSETS 35,493 35,313
---------- ----------
Total Assets $ 601,524 $ 580,073
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 35,026 $ 40,318
Long-term debt - current portion 2,611 1,525
Income taxes 4,836 4,789
Other current liabilities 36,666 35,991
---------- ----------
Total current liabilities 79,139 82,623
---------- ----------
LIABILITIES SUBJECT TO COMPROMISE 2,662,414 2,662,530
LONG-TERM DEBT - less current portion 17,572 19,103
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 22,278 21,720
OTHER LONG TERM LIABILITIES 4,714 5,405
---------- ----------
Total liabilities 2,786,117 2,791,381
---------- ----------
</TABLE>
4
<PAGE> 393
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
May 31 Nov. 30
1996 1995
----------- -----------
<S> <C> <C>
SHAREHOLDERS' EQUITY (DEFICIT)
Common shares - par value $1.25 per share
authorized 30,000,000 shares, issued
11,125,000 shares $ 13,906 $ 13,906
Additional paid-in capital 36,378 36,378
Accumulated deficit (2,233,025) (2,261,289)
Unrealized gain on investments 396 333
Foreign currency translation (335) 1,277
----------- -----------
(2,182,680) (2,209,395)
Cost of 84,068 common treasury shares (1,913) (1,913)
----------- -----------
Total Shareholders' Equity (Deficit) (2,184,593) (2,211,308)
----------- -----------
Total Liabilities and Shareholders' Equity
(Deficit) $ 601,524 $ 580,073
=========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements.
5
<PAGE> 394
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
May 31
-----------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 28,264 $ 29,808
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 15,299 14,572
Changes in assets and liabilities:
Receivables (4,245) (8,538)
Inventories (1,324) (5,300)
Deferred taxes (7,200) (9,500)
Accounts payable (5,292) (492)
Accrued liabilities 675 4,122
Other 8,834 (6,394)
-------- --------
Net cash provided by
operating activities 35,011 18,278
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (19,109) (13,978)
Other 687 908
-------- --------
Net cash used in
investing activities (18,422) (13,070)
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction of long-term debt (200) (980)
-------- --------
Net cash used in
financing activities (200) (980)
</TABLE>
6
<PAGE> 395
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
May 31
----------------------
1996 1995
---- ----
<S> <C> <C>
Net increase in cash and cash equivalents 16,389 4,228
Cash and cash equivalents, beginning of period 93,330 92,606
-------- --------
Cash and cash equivalents, end of period $109,719 $ 96,834
======== ========
Supplemental cash flow information:
Cash paid during the year:
Interest paid $ 842 $ 955
Income taxes paid (net of refunds received) $ 7,316 $ 10,119
Cash paid during the quarter:
Interest paid $ 432 $ 462
Income taxes paid (net of refunds received) $ 6,216 $ 9,478
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE> 396
EAGLE-PICHER INDUSTRIES, INC.
Notes to Consolidated Financial Statements
A. PROCEEDINGS UNDER CHAPTER 11
On January 7, 1991 ("petition date"), Eagle-Picher Industries, Inc.
("Company") and seven of its domestic subsidiaries each filed a voluntary
petition for relief under chapter 11 of the United States Bankruptcy Code
("chapter 11") in the United States Bankruptcy Court for the Southern District
of Ohio, Western Division, in Cincinnati, Ohio ("Bankruptcy Court"). Each filing
entity, other than EDI, Inc., is currently operating its business as a debtor in
possession in accordance with the provisions of the Bankruptcy Code.
An Unsecured Creditors' Committee ("UCC"), an Injury Claimants' Committee
("ICC"), an Equity Security Holders' Committee ("ESC"), and a Legal
Representative for Future Claimants ("RFC") have been appointed in the chapter
11 cases. An unofficial asbestos co-defendants' committee has also been
participating in the chapter 11 cases. In accordance with the provisions of the
Bankruptcy Code, these parties have the right to be heard with respect to
transactions outside the ordinary course of business. The official committees
and the RFC typically are the entities with which the Company would negotiate
the terms of a plan of reorganization. In June 1992, a mediator was appointed by
the Bankruptcy Court to assist the constituencies in their negotiations.
On November 9, 1993, the Company reached an agreement on the principal
elements of a joint plan of reorganization. The agreement was with the ICC and
the RFC, the representatives of the holders of present and future
asbestos-related personal injury and other toxic tort claims in the Company's
chapter 11 case, and was reached with the assistance of the mediator. One of the
principal elements of the agreement was a negotiated settlement of the Company's
aggregate liability for such claims in the amount of $1.5 billion. As a
consequence of this agreement, the Company recorded a provision in the fourth
quarter of 1993 of $1.135 billion to increase the asbestos liability subject to
compromise to $1.5 billion. The Company also recorded a provision of $41.4
million in 1993 for environmental and other litigation claims in anticipation of
settlement of such claims.
Throughout 1994, the Company, the ICC and the RFC continued to refine the
details of a joint plan of reorganization ("Original Plan"). The Original Plan
was filed with the Bankruptcy Court on February 28, 1995. The Original Plan did
not have the support of the UCC or the ESC because they did not agree with the
amount of the aggregate asbestos liability which had been negotiated and which
was used in the Original Plan to determine the allocation of the consideration
to be distributed to the unsecured creditor and shareholder classes. As a result
of the dispute, the Company was unable to move forward with the Original Plan.
In order to resolve this dispute, the Company filed a motion in July 1995
requesting that the Bankruptcy Court estimate the Company's aggregate liability
on account of present and future asbestos-related personal injury claims. The
Bankruptcy Court ruled in December 1995 that such estimated liability is $2.5
billion ("Estimation Ruling"). The UCC, the ESC and two individual members of
the UCC have appealed the Estimation Ruling. The U.S. District Court for the
Southern District of Ohio, Western Division heard oral argument on these
appeals in June 1996. A decision is pending.
On April 9, 1996, the Company filed a First Amended Consolidated Plan of
Reorganization ("Amended Plan") reflecting the Estimation Ruling, and a proposed
First Amended Joint Disclosure Statement ("Disclosure Statement"). The principal
substantive modification to the Original Plan relates to the allocation of the
consideration to be distributed under the plan to the various classes of
unsecured claims. A hearing before the Bankruptcy Court to consider approval of
the Disclosure Statement has been scheduled for July 22, 1996. Pursuant
8
<PAGE> 397
to the Bankruptcy Code, the acceptance or rejection of a plan of reorganization
may not be solicited from the holder of a claim unless at the time of or before
such solicitation there is transmitted to such holder the plan or a summary of
the plan and a disclosure statement approved by the Bankruptcy Court as
containing information of a kind and in sufficient detail that would enable a
hypothetical reasonable investor typical of holders of claims to make an
informed judgment about the plan.
The Amended Plan, like the Original Plan, contemplates a resolution of the
Company's liability for all present and future asbestos-related personal injury
claims and certain other tort claims. These claims will be channeled to and
resolved by an independently administered claims trust ("Trust"). The Amended
Plan provides for the distribution of cash, notes and common stock of the
reorganized Company to the Trust and to holders of allowed unsecured claims on a
pro-rata basis proportionate to the percentage of their claims to the total of
the Liabilities Subject to Compromise. Accordingly, pursuant to the Amended
Plan, it is anticipated that the Trust will be distributed approximately 94% of
such cash, notes and stock, and claimants holding environmental-related and
other pre-petition unsecured claims will be distributed approximately 6% of such
cash, notes and stock.
Pursuant to the Amended Plan, claims entitled to priority under the
Bankruptcy Code and "convenience claims" (pre-petition general unsecured claims
of $500 or less or claims that are reduced to that amount) will be paid in full,
in cash. The Amended Plan also provides for the resolution of all
asbestos-related property damage claims, as further discussed in Note B below.
Under the Bankruptcy Code, shareholders are not entitled to any distribution
under a plan of reorganization unless all classes of pre-petition creditors
receive satisfaction in full of their allowed claims or accept a plan which
allows shareholders to participate in the reorganized company or to receive a
distribution. Under the Amended Plan, existing shareholders will receive no
distributions and their shares will be canceled.
Following the Estimation Ruling, the Company recorded a provision of
approximately $1.0 billion to increase the asbestos liability subject to
compromise to the amount estimated by the Bankruptcy Court. This resulted in a
negative shareholders' equity in excess of $2.2 billion. As a result, the
Company filed a motion in the Bankruptcy Court in December 1995 seeking an order
directing the United States Trustee to disband the ESC on the basis that
existing equity holders do not have an economic interest in the chapter 11
cases. In January 1996, the Bankruptcy Court ruled that the ongoing activities
of the ESC shall be limited to pursuing its appeal of the Estimation Ruling.
The accompanying consolidated financial statements have been prepared on a
going concern basis which contemplates continuity of operations, realization of
assets and liquidation of liabilities in the ordinary course of business. The
liabilities subject to compromise listed above have been reported on the basis
of the expected amount of the allowed claims even though they may be settled for
lesser amounts. Upon confirmation of a plan of reorganization, the Company would
utilize the "fresh-start" reporting principles contained in the AICPA's
Statement of Position 90-7, which would result in adjustments relating to the
amounts and classification of recorded assets and liabilities, determined as of
the plan confirmation date. Pursuant to the Amended Plan, the ultimate
consideration to be received by unsecured creditors will be substantially less
than the amounts shown in the accompanying Consolidated Balance Sheet. Until a
plan of reorganization is confirmed, however, the Company cannot be certain of
the final terms and provisions thereof or the ultimate amount creditors will
receive.
9
<PAGE> 398
Liabilities incurred by the Company as of the petition date and subject to
compromise under a plan of reorganization are separately classified in the
Consolidated Balance Sheet and include the following (in thousands of dollars):
<TABLE>
<CAPTION>
May 31, November 30,
1996 1995
---- ----
<S> <C> <C>
Asbestos liability $2,502,511 $ 2,502,511
Long-term debt (unsecured portion) 62,003 62,003
Accounts payable 41,181 41,236
Accrued and other liabilities 56,719 56,780
--------- ---------
$2,662,414 $ 2,662,530
========= =========
</TABLE>
The net expense (income) resulting from the Company's administration of the
chapter 11 cases has been segregated from expenses related to ordinary
operations in the accompanying financial statements and includes the following
(in thousands):
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
May 31 May 31
----------------------- -----------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Professional fees and other
expenses directly related
to bankruptcy $ 1,248 $ 1,563 $ 2,401 $ 3,078
Interest income (1,270) (1,232) (2,491) (2,322)
------- ------- ------- -------
$ (22) $ 331 $ (90) $ 756
======= ======= ======= =======
</TABLE>
Interest income is attributable to the accumulation of cash and short-term
investments subsequent to the petition date.
B. LITIGATION
As discussed in Note K to the Consolidated Financial Statements included in
the Company's Annual Report and Form 10-K for the fiscal year ended November 30,
1995 and Note A above, the accompanying Consolidated Financial Statements
include an estimated liability related to personal injury claims resulting from
the Company's sale of asbestos-containing insulation products. Litigation with
respect to asbestos-related claims was stayed by reason of the chapter 11
filing.
Approximately 1,000 proofs of claim alleging asbestos-related property
damage were filed in the chapter 11 cases pursuant to the September 30, 1992 bar
date for asbestos-related claims. Under the Amended Plan, a second trust will be
established to resolve asbestos-related property damage claims. If the class of
asbestos-related property damage claims votes to accept the Amended Plan, such
trust will be funded with $3 million in cash. If such class votes to reject the
Amended Plan, but the Amended Plan is nevertheless confirmed, the trust will be
funded with the pro-rata share of plan consideration allocable to asbestos-
related property damage claims in the aggregate, based upon the Bankruptcy
Court's estimate of the aggregate value of such claims. It cannot be reasonably
predicted at this time what the Bankruptcy Court's estimate of the aggregate
value of such claims would be. The Company may have insurance coverage for
certain of these claims.
In February 1996, the hospital members of the American Hospital
Association, which had filed asbestos-related property damage claims against the
Company ("Hospitals"), filed a motion in the Bankruptcy Court seeking an order
estimating the aggregate value of all
10
<PAGE> 399
asbestos-related property damage claims against the Company and temporarily
allowing such claims for purposes of voting on a plan of reorganization. The
Company and the RFC opposed the motion on the basis that, should the class of
asbestos-related property damage claims accept the Amended Plan, an estimation
of these claims would be unnecessary. The Company also argued that voting issues
should be addressed in connection with the Company's motion for an order from
the Bankruptcy Court establishing the voting procedures with respect to the
Amended Plan. At a hearing held in May 1996, the Bankruptcy Court denied the
Hospitals' motion.
In February and May 1996, the Company filed with the Bankruptcy Court
objections to many asbestos-related property damage claims, including claims
filed by the Hospitals, because the claims are barred by the applicable time
limitations under state laws for prosecuting the claims, the claims fail to
state the requisite legal and factual bases therefor, and/or the claims fail to
provide any evidence that the Company's products were located in the claimants'
facilities. The holders of approximately 365 claims did not respond to the
objections; some of these claims have been disallowed by the Bankruptcy
Court and the Company's request for disallowance of the other such claims is
pending with the Bankruptcy Court. With respect to the remaining claims that
were objected to, the Bankruptcy Court has not yet issued a ruling.
The Company is a defendant in other litigation which was pending as of the
petition date which was discussed in Note L to the Consolidated Financial
Statements for the fiscal year ended November 30, 1995. The Company intends to
defend all litigation claims vigorously in the manner permitted by the
Bankruptcy Code and/or applicable law. All pre-petition claims against the
Company arising from litigation must be liquidated or otherwise addressed in the
context of the chapter 11 cases and will be treated in any plan of
reorganization.
The Company has resolved most of the litigation-based claims that were
asserted pursuant to the October 31, 1991 bar date for claims other than those
arising from the sale of asbestos-containing products. In June 1996, the
Bankruptcy Court approved the settlement agreement among the Company, the EPA,
the U.S. Department of Interior and certain states which resolves the majority
of the environmental claims asserted against the Company. The terms of the
settlement agreement were discussed in Note L to the Consolidated Financial
Statements included in the Company's Annual Report and Form 10-K for the fiscal
year ended November 30, 1995. Certain parties that may be liable at certain of
the sites resolved by the settlement agreement have appealed the Bankruptcy
Court's decision.
The Company has filed objections to certain of the litigation-based
claims that have not yet been resolved, seeking to reduce the amount of such
claims or eliminate them entirely. The Company anticipates filing additional
objections to other such claims if they cannot be resolved through negotiation.
These objections will be vigorously pursued by the Company. The Company
believes that its provisions for these claims is adequate, and, in addition,
the Company may have insurance coverage for certain of them.
C. BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS
The unaudited financial statements included herein have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report and Form 10-K for the fiscal year ended November 30,
1995.
The financial statements presented herewith reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary to fairly state the results of operations for the
three month and six month periods ended May 31, 1996 and 1995. Results of
operations for interim periods are not necessarily indicative of results to be
expected for an entire year.
11
<PAGE> 400
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
Sales for the second quarter ended May 31, 1996 were $235.1 million
compared with $225.4 million for the second quarter of 1995. Operating income
was $19.3 million compared with $19.1 million for the same period last year. Net
income for the second quarter of 1996 was $16.8 million or $1.52 per share which
was equal to that of the second quarter of 1995.
There was an organizational change during the second quarter of 1996. The
Electronics Division was merged with the Specialty Materials Division to form
the Eagle-Picher Technologies Division. Those operations of the Eagle-Picher
Technologies Division which are included within the Machinery Group (formerly
the operations of the Electronics Division) constitute the largest international
supplier of power systems for commercial, military and weather satellites. These
operations also produce special purpose batteries for a variety of other
purposes. Those operations of the Eagle-Picher Technologies Division which are
included within the Industrial Group (formerly the operations of the Specialty
Materials Division) produce germanium substrates for solar cells which are used
on satellites, boron isotopic components and certified clean sample containers
for environmental testing.
Sales for the Automotive Group for the second quarter of 1996 were ahead
of the levels for the second quarter of 1995, while operating income was
essentially the same as that of the second quarter of 1995. Despite a strike at
the General Motor's Delphi Division, increased production levels in the North
American market and a favorable product mix were important factors in the
improving trend during the second quarter of 1996. European operations did well
during the second quarter as these operations continue to increase market share.
Start-up costs associated with expansions, and continued delays by one customer
in meeting anticipated production schedules, placed pressure on profit margins
during the quarter.
Sales for the Machinery Group were essentially equal to those for the
second quarter of last year, while operating income declined. The primary reason
for the decline in operating income was reduced shipments of earth moving
machinery by the Construction Equipment Division. Shipments of special purpose
batteries by the Eagle-Picher Technologies Division were strong. Results for the
remaining operations in the Machinery Group were mixed.
Sales and operating income for the Industrial Group increased in the
second quarter of 1996 over the results for last year's second quarter.
Shipments of diatomaceous earth products, both to the domestic and to the
international markets, continue to be at a high level. Diatomaceous earth
products are used for high purity filtration in the food and beverage industry
and in a variety of general industrial applications. Eagle-Picher Technologies'
operations in the Industrial Group enjoyed an outstanding quarter. The increase
in cellular communications has expanded demand for satellite components.
Additionally, although the price of certain raw materials has increased over the
past year, it has had a minimal impact on margins as the raw material price
increases were absorbed by the customer. Shipments of boron isotopic compounds
were also at a high level. Recent penetration of the European nuclear market has
provided an excellent growth opportunity for boron products.
It is expected that economic activity will be at a reasonably high level
during the second half of 1996. Several operations are serving growing markets
and/or are increasing market share, while others are serving sluggish segments
of the economy. On balance, and based on forecasts from the Company's Divisions,
results for the second half of 1996 should approximate those of the second half
of 1995.
Interest expense did not change appreciably in the second quarter or the
first six months of 1996 compared to the same periods in 1995. Contractual
interest on debt outstanding was $2.2 million in the second quarters of 1996 and
1995 and $4.4 and $4.5 million in the six
12
<PAGE> 401
month periods ended May 31, 1996 and 1995, respectively.
Interest income on the cash balances accumulated as a result of the
reorganization slightly exceeded the expenses of the reorganization effort
throughout 1996.
FINANCIAL CONDITION
The cash balance of the Company increased from $93.3 million at November 30,
1995 to $109.7 million at May 31, 1996, an increase of $16.4 million. One
component of this increase was the reduction in the amount of customer tooling
carried on the balance sheet to $16.7 million at May 31, 1996 from $26.5 million
at November 30, 1995. It is custom practice in the automotive industry to
accumulate customer tooling costs while the tooling is under construction and
bill the customer upon its completion. It is anticipated that the amount of
customer tooling on the balance sheet will decline further throughout the
remainder of the year. There were increases in working capital, which are
typical in periods in which sales growth is experienced, which partially offset
the effects of the decrease in tooling.
Capital expenditures totaled $9.4 million in the second quarter of 1996 and
$19.1 million for the six months ended May 31, 1996 compared to $7.5 million and
$14.0 million in the respective periods of 1995. The Company presently expects,
however, that the total amount of capital expenditures in the 1996 fiscal year
will be comparable to that of 1995.
On April 9, 1996, the Company filed a First Amended Consolidated Plan
of Reorganization with the Bankruptcy Court. Such plan provides for the
satisfaction and discharge of the Company's pre-petition liabilities
(Liabilities Subject to Compromise) and for the reorganized Company to have a
capital structure appropriate for an industrial products company that is
intended to enable the Company to access financing in the credit and debt
markets. Decisions with respect to the appeals of the Estimation Ruling and the
hearing on the Disclosure Statement, as further discussed in Note A to the
Consolidated Financial Statements contained herein, will have a direct impact
on the reorganization process. Accordingly, at this time it is not possible to
predict when a plan of reorganization will be confirmed and become effective.
13
<PAGE> 402
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In May 1996, the Bankruptcy Court denied the motion of the Hospitals
seeking an order estimating the aggregate value of all asbestos-related
property damage claims against the Company and temporarily allowing such claims
for purposes of voting on a plan of reorganization. This motion, as well as
objections the Company has filed with the Bankruptcy Court to many of the
asbestos-related property damage claims, are discussed in Note B to the
Consolidated Financial Statements contained herein.
Following the close of the quarter, on June 6, 1996, the Bankruptcy Court
issued a judgment and decision in which it granted the motions of the Company
and the United States seeking an order approving the settlement agreement among
the Company, the EPA, the U.S. Department of Interior and certain states
relating to certain environmental claims asserted against the Company. The
settlement agreement provides, among other things, that the agencies and certain
states will be granted allowed pre-petition unsecured claims in the Company's
chapter 11 case aggregating approximately $43.0 million in full satisfaction of
all of the Company's alleged liability at 23 specified Superfund sites,
including any liability for any natural resource damage. The settlement
agreement also provides that the liability, if any, of the Company at certain
other sites will be determined in the future and be satisfied at that time in
substantially the same manner and with the same value as such claims would have
been satisfied if they had been treated under a reorganization plan. The
settlement agreement was discussed in the Company's Report on Form 10-K for the
fiscal year ended November 30, 1995. Certain parties that may be liable at
certain of the sites resolved by the settlement agreement have filed a notice of
appeal of the Bankruptcy Court's decision.
Following the close of the quarter, on June 14, 1996, the U.S. District
Court for the Southern District of Ohio heard oral argument on the appeals of
the Estimation Ruling filed by the UCC, the ESC and two individual members of
the UCC. The Estimation Ruling is further discussed in Note A to the
Consolidated Financial Statements contained herein. The parties who filed the
appeals argued, among other things, that the Bankruptcy Court lacked
jurisdiction to estimate the Company's liability with respect to
asbestos-related personal injury claims and that it erred in its determination
of the amount of such liability. The Company, the ICC and the FRC have opposed
the appeals. The District Court has not yet ruled on the appeals.
Following the close of the quarter, on June 21, 1996, the UCC withdrew the
motion it had filed with the Bankruptcy Court seeking relief from the Estimation
Ruling. In its motion, the UCC had argued that, through inadvertence or mistake,
the Bankruptcy Court overestimated the Company's liability for future
asbestos-related personal injury claims by approximately $500 million. Because
this issue was also raised in the appeal filed by the UCC to the Estimation
Ruling, the UCC withdrew it from present consideration by the Bankruptcy Court.
This motion was reported in the Company's Report on Form 10-Q for the quarter
ended February 29, 1996.
The Bankruptcy Court has scheduled a hearing for July 22, 1996 to consider
the adequacy of the Debtors' First Amended Joint Disclosure Statement, which the
Company submitted in connection with the filing of the Amended Plan, as further
discussed in Note A to the Consolidated Financial Statements contained herein.
Following the close of the quarter, at a hearing in June 1996, the Bankruptcy
Court granted the Company's Motion for an Order Establishing Procedures for
Solicitation and Tabulation of Votes to Accept or Reject the Consolidated Plan
of Reorganization, subject to such procedures being modified to provide that
individual creditors holding multiple claims shall have a separate vote for each
allowed claim they hold.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
The chapter 11 filings constituted a default under substantially all of the
14
<PAGE> 403
Company's and its 'affiliates' senior securities. The obligations under the
Company's pre-petition credit facility and other obligations owing to the
lenders who were party to the pre-petition credit facility have been addressed
in the debtor in possession financing agreement approved by the Bankruptcy Court
on May 24, 1991. At that time, certain of such obligations were repaid and the
remaining of such obligations were deemed to be post-petition.
With respect to certain other secured obligations, the Company (or its
affiliates) have been making settlements or "adequate protection" payments
approved by orders of the Bankruptcy Court.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27 - Financial Data Schedule.
(b) Reports on Form 8-K
Report on Form 8-K (File 1-1499), dated April 9, 1996, in which the
Company reported that on April 9, 1996 the Company and seven of its
domestic subsidiaries filed a First Amended Consolidated Plan of
Reorganization in their chapter 11 cases pending before the U.S.
Bankruptcy Court for the Southern District of Ohio, Western Division.
15
<PAGE> 404
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER INDUSTRIES, INC.
/s/ David N. Hall
-------------------------------
David N. Hall,
Senior Vice President - Finance and
Chief Financial Officer
DATE July 12, 1996
---------------
16
<PAGE> 405
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule (submitted
electronically to the Securities
and Exchange Commission for its
information)
</TABLE>
17
<PAGE> 406
EAGLE-PICHER INDUSTRIES, INC.
SIGNIFICANT ASSUMPTIONS FOR FINANCIAL PROJECTIONS
For purposes of developing the Plan of Reorganization (the "Plan") and
evaluating its feasibility, the following financial projections were prepared.
These financial projections reflect the Debtors' estimate of their expected
consolidated financial position, results of operations and cash flows.
Accordingly, the projections reflect Management's judgment, as of the date of
this Disclosure Statement, of expected future operating and business conditions,
which are subject to change.
All estimates and assumptions shown within the projections were developed by
Management. The assumptions disclosed herein are those that Management believes
to be significant to the projections. Although the Debtors are of the opinion
that these assumptions are reasonable in the circumstances, such assumptions are
subject to significant uncertainties, such as the cyclical nature of the
automotive industry. There will be differences between projected and actual
results because events and circumstances frequently do not occur as expected.
Further, such assumptions may be affected by other events and circumstances
outside of the Debtors' control. Consequently, actual financial results could
vary significantly from projected results.
THE PROJECTIONS SHOULD NOT BE REGARDED AS A REPRESENTATION OR WARRANTY BY THE
DEBTORS OR ANY OTHER PERSON AS TO THE ACCURACY OF THE PROJECTIONS OR THAT THE
PROJECTIONS WILL BE REALIZED.
The financial projections were prepared by the Debtors; they have not been
audited or reviewed by independent accountants. The significant assumptions used
in the preparation of the financial projections are stated below.
THE FINANCIAL PROJECTIONS, INCLUDING THE UNDERLYING ASSUMPTIONS, SHOULD BE
CAREFULLY REVIEWED IN EVALUATING THE PLAN.
It is projected that the Debtors will emerge from chapter 11 December 1, 1996
(the "Effective Date"). The reorganization will be accounted for in accordance
with the American Institute of Certified Public Accountants' Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code" ("SOP 90-7").
The projections included herein are:
1. Pro Forma Consolidated Balance Sheet of Reorganized Eagle-Picher as of
the Effective Date which reflects the projected accounting effects of
the Plan's consummation and of "fresh start" accounting as promulgated
by SOP 90-7.
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2. Projected Consolidated Balance Sheets of Reorganized Eagle-
Picher as of the Effective Date and November 30 for each of
the years from 1997 through 2001.
3. Projected Consolidated Statements of Income of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 30, 2001.
4. Projected Consolidated Statements of Cash Flow of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 30, 2001.
5. Projected Capital Structure of Reorganized Eagle-Picher as of
the Effective Date.
The projections have been prepared on the basis of generally accepted accounting
principles consistent with those currently utilized by Eagle-Picher in the
preparation of its consolidated financial statements except as noted in the
following assumptions. The projections should be read in conjunction with the
significant assumptions, qualifications and notes set forth below and with the
audited consolidated financial statements for the fiscal year ended November 30,
1995 contained in the 1995 Annual Report included in Exhibit C.
WHILE MANAGEMENT BELIEVES THE ASSUMPTIONS UNDERLYING THE PROJECTED FINANCIAL
INFORMATION, WHEN CONSIDERED ON AN OVERALL BASIS, ARE REASONABLE IN LIGHT OF
CURRENT CIRCUMSTANCES AND EXPECTATIONS, NO ASSURANCE CAN BE GIVEN THAT THE
PROJECTIONS WILL BE REALIZED.
A. GENERAL ASSUMPTIONS
The sales volumes of many of the Debtors' operations fluctuate with general
economic cycles. In the interest of presenting a balanced view of their
prospects, the Debtors have assumed that there will be an economic recession in
the years 1997 and 1998.
Other factors considered in formulating the projections are discussed below:
Automotive Segment
- ------------------
The Debtors' automotive operations serve the automotive industry worldwide as a
tier one supplier to the original equipment manufacturers or as a supplier to
other manufacturers that supply automotive manufacturers with component parts or
assemblies. Major factors considered in developing the projections for the
Automotive Segment include:
1. Automotive industry production in North America in 1995 was
approximately 15.3 million units of passenger cars, vans,
utility vehicles and light trucks. A new record of 15.7
C-2
<PAGE> 408
million units was reached in 1994, surpassing the record of 15.1
million units in 1978.
2. Projections for 1996 assume North American automotive
production levels will be down 2%.
3. The effects of the cyclical recession projected in 1997 and
1998 are comparable to those of the last two downturns of the
automotive industry.
4. Economic recovery will begin in the last few months of 1998
moving toward record automotive production worldwide by 2000.
5. The Debtors will achieve broader market penetration of their products,
particularly in the light truck, van, and sport utility vehicle segment
of the automotive market.
6. There will be increased emphasis on growth opportunities
within the European automotive market.
7. The intense pricing pressure from the automotive manufacturers will
continue and, on occasion, Eagle-Picher will be unable to recover cost
increases from customers on a timely basis.
Machinery Segment
- -----------------
The Debtors' operations in the Machinery Segment manufacture several lines of
earth moving, material handling and other industrial machinery and equipment,
components for a wide range of capital goods and systems and components for
aerospace and commercial aviation markets as well as the defense industry.
Specific factors considered in developing the projections of the Machinery
Segment include:
1. The U.S. Government will continue to cut defense spending. However,
significant operations of the Debtors are more dependent on certain
portions of the defense budget which are less subject to funding cuts
than other areas.
2. The level of worldwide commercial and industrial activity will decline
with the projected economic recession in 1997 and 1998 and will begin
recovery thereafter.
3. Government and commercial aerospace spending, particularly in
the communication satellite area, will remain healthy over the
next several years.
Industrial Segment
- ------------------
The Debtors' operations in the Industrial Segment can be characterized as
serving niche markets where they enjoy a position
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<PAGE> 409
of market leadership based on technical capabilities, proprietary advantages,
manufacturing know-how or marketing skills. These operations generally are not
impacted by fluctuations of the general economy. Specific factors considered in
developing the projections for the Industrial Segment include:
1. Recent historic trends in the performance of individual
product lines were analyzed to develop these projections.
2. Opportunities exist in certain niche markets where the Debtors
have a specific competitive advantage.
3. Since the demand for the Industrial products is not impacted
by economic fluctuations, these products are characterized as
being somewhat "recession proof."
4. In 1997, construction will be completed and production will begin at a
new $14 million facility which will process diatomaceous earth
products, primarily for export markets.
B. DISTRIBUTIONS UNDER THE PLAN
Cash, debt securities and common stock of Reorganized Eagle-Picher will be
distributed pursuant to the Plan.
Cash Distributions
- ------------------
The Debtors expect to distribute cash on the Effective Date as follows:
a) Approximately $10.3 million will be distributed with
respect to Priority Claims, Convenience Claims, certain
Secured Claims and certain Administrative Expenses;
b) Assuming the class of asbestos property damage claimants votes to
approve the Plan, $3.0 million will be used to establish a Qualified
Settlement Fund which will be responsible for satisfying asbestos
property damage claims (the "PD Trust").
c) Approximately $89.0 million will be distributed with
respect to the PI Trust and other unsecured creditors.
Debt Securities
- ---------------
It is anticipated that existing secured debt of Eagle-Picher approximating $6.0
million will be restructured. Such indebtedness will bear interest at an
appropriate market rate and, for the most part, be repaid in installments. An
existing $10 million secured industrial revenue bond financing is expected to be
reinstated. In addition, debt securities, as described below, will be issued on
the Effective Date:
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<PAGE> 410
a) Tax Refund Notes in the anticipated principal amount of $71 million.
It is assumed that these notes will mature on June 1, 1998 based on the
assumed Effective Date of December 1, 1996.
b) Divestiture Notes in the principal amount of $50 million which will
mature three years after the Effective Date. These Divestiture Notes
will be redeemed in the event the Debtors consummate major asset sales.
c) Senior Unsecured Sinking Fund Debentures ("Debentures") in the
principal amount of $250 million, which will mature 10 years after the
Effective Date. The Debentures will have a mandatory sinking fund of
$20 million per year on each of the third through ninth anniversaries
of the Effective Date with a final maturity of $110 million.
The assumed interest rates for each of the foregoing is set forth in
Section C below.
Common Stock
- ------------
Common stock of the Reorganized Eagle-Picher will also be issued pursuant to the
Plan. Based on, among other things, its analysis of the projections, the market
value of securities of other companies serving similar markets and their
capitalization rates, the Debtors' financial advisors, McDonald & Company
Securities, Inc. ("McDonald & Co."), have calculated that the residual value of
such common stock is $254.8 million.
The stockholders' existing Eagle-Picher Common Stock will not receive any
distribution under the Plan, and their equity will be canceled.
Pursuant to the Plan, the holders of Unsecured Claims and Environmental Claims
will receive 50% of their distribution value in Divestiture Notes and 50% cash.
The PI Trust will receive the balance of the cash and Divestiture Notes as
consideration, as well as the entire issues of the Tax Refund Notes and the
Debentures and all of the common stock of the Reorganized Eagle-Picher.
C. OTHER SPECIFIC ASSUMPTIONS
Cash
- ----
It is assumed interest of 6% will be earned on cash balances exceeding $15
million. It is also assumed Eagle-Picher will have a line of credit available to
it for certain letters of credit and, if necessary, working capital and
operating needs. Any borrowings on this line of credit will carry an interest
rate of 8%. For these purposes, borrowings will be made on December 1 to fund
cash
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<PAGE> 411
needs on that day and payments on those borrowings will be made the
following December 1. Interest was calculated accordingly.
Property, Plant and Equipment
- -----------------------------
To adjust net property, plant and equipment to an estimate of its fair value in
accordance with the fresh-start accounting provisions of SOP 90-7, Eagle-Picher
plans to review its property, plant and equipment and obtain appraisals to
determine what revisions, if any, should be made to individual accounts. Since
the appraisal process is not yet complete, $20 million is an estimate used for
purposes of the projections. The actual adjustment at the Effective Date could
be higher or lower. Any adjustment to this allocation would have no impact on
cash flow.
For purposes of this projection, the fair value adjustment of the property,
plant and equipment is to be amortized over eight years, which approximates the
estimated remaining useful life of the assets. However, actual amortization
periods used at the Effective Date could be shorter or longer.
Reorganization Goodwill
- -----------------------
In accordance with SOP 90-7, the reorganization value in excess of amounts
allocable to identifiable assets is an intangible asset. The amortization period
of this intangible asset is assumed for these purposes to be 7 years, but the
actual amortization period utilized at the Effective Date could be shorter or
longer. This item has no tax or cash flow implications.
Debt
- ----
The Tax Refund Notes, the Divestiture Notes and the Debentures will bear
interest at a rate these debt securities should bear in order to have a market
value of 100% of their principal amount on the Effective Date. For purposes of
these projections, it is assumed that such interest rates would be 8% for the
Tax Refund Notes, 9 1/2% for the Divestiture Notes and 10 1/2% for the
Debentures.
All payments of principal are assumed to be made on the anniversary of the
Effective Date and interest will be paid semiannually, unless otherwise
specified.
It is assumed the the Tax Refund Notes will be repaid when the majority of the
tax refunds are received, approximately June 1, 1998.
For these purposes, it was assumed the Divestiture Notes will be repaid by their
maturity date.
It is assumed that sinking fund payments on the Debentures will be made as
scheduled throughout the projections.
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Income Taxes
- ------------
It is assumed that Eagle-Picher will receive tax deductions for cash and the
value of stock distributed to the PI Trust upon such distribution. With respect
to Debt Securities distributed to the PI Trust, deductions are received as the
Debt Securities are repaid or refunded. These deductions will result in
substantial tax net operating losses.
An income tax receivable of $67.8 million will result from the carryback of tax
net operating losses to years in which income is available for carryback. An
additional refund of $3.2 million, which arose from results of prior years'
audits, is expected to be received in 1997. Assuming the Effective Date is
December 1, 1996, $55.4 million will be received approximately June 1, 1998,
$9.3 million will be received in 1999, $2.7 million will be received in 2001 and
$.4 million will be received in 2002.
A deferred income tax asset results from tax net operating losses and deferred
deductions available to offset income tax payments in future years. General
business credit carryforwards have been ignored, since it is expected that they
will expire unutilized. For purposes of these projections, it is assumed that
all other tax benefits are available upon the Effective Date and no valuation
allowance is necessary.
A statutory federal income tax rate of 35% is assumed throughout the projection
period. The differences between the statutory and the effective tax rates for
the projection period are due primarily to the amortization of the
reorganization gain, depletion deductions and foreign and state taxes. Due to
the large tax net operating loss carryforward, the Debtor's current Federal tax
liability will be limited to alternative minimum taxes. Approximately $6.6
million of alternative minimum taxes will be paid in 1999; however, of this
amount, $5.9 million will be refunded in 2002.
Liabilities Subject to Compromise
- ---------------------------------
Liabilities Subject to Compromise will be discharged at the Effective Date. This
will result in a gain for forgiveness of debt. This, along with the
establishment of the deferred taxes and reorganization gain will offset the
retained deficit.
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EAGLE-PICHER INDUSTRIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 1, 1996
(IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
BEFORE REORGANIZATION AFTER
REORGANIZATION ADJUSTMENTS REORGANIZATION
<S> <C> <C> <C>
Cash $118,237 ($102,338)(1) $15,899
Escrow cash 5,125 5,500 (2) 10,625
Accts receivable, net 129,000 (1,800)(2) 127,200
Inventories, net 82,600 11,800 (2,3) 94,400
Income tax receivable 3,200 67,800 (4) 71,000
Prepaid expenses 14,700 (50)(2) 14,650
----------------------------------------------
Total current assets 352,862 (19,088) 333,774
Property, plant &
equipment, net 164,318 18,750 (2,5) 183,068
Deferred income taxes 80,124 42,360 (4) 122,484
Reorganization goodwill -- 75,438 (6) 75,438
Other assets 34,000 (4,000)(7) 30,000
----------------------------------------------
Total assets $631,304 $113,460 $744,764
==============================================
Accounts payable $38,000 (600)(2) $37,400
Accr. liabilities 32,999 (3,049)(1,2) 29,950
Short-term debt -- 71,000 (8) 71,000
Secured debt - current 2,163 (20)(1) 2,143
New debt - current -- --
Income tax payable 5,289 5,289
----------------------------------------------
Total current liab 78,451 67,331 145,782
Secured debt 17,676 (615)(1) 17,061
New debt-10 year -- 250,000 (8) 250,000
New debt-3 year -- 50,000 (8) 50,000
Other long-term liabilities 27,125 27,125
Liabilities subject to
compromise 2,160,493 (2,160,493)(8) --
Equity (1,652,441) 1,907,237 (9) 254,796
----------------------------------------------
Total liab. & equity $631,304 $113,460 $744,764
==============================================
</TABLE>
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EAGLE-PICHER INDUSTRIES, INC.
NOTES TO PRO-FORMA CONSOLIDATED BALANCE SHEET
1. Cash projected to be paid at the Effective Date of the Plan includes
distributions with respect to Priority Claims, Convenience Claims,
certain Secured Claims and Administrative Expenses of approximately
$10.3 million, the Asbestos Property Damage Claim of $3.0 million, and
approximately $89.0 million to be distributed to the unsecured
creditors and the PI Trust.
2. To reflect the sale of the Fabricon Products Division for $5.5 million,
which approximates the book value of the assets. The proceeds will be
deposited to an Escrow Cash account, which is held for the purpose of
repaying the Divestiture Notes due December 1, 1999. The proceeds from
the sale of the Orthane Division, which took place in early 1996, are
also included in the Escrow cash account.
3. To adjust inventory to its approximated fair value through elimination
of the LIFO reserve. Inventory will continue to be calculated on the
LIFO method for tax purposes, which results in a deferred tax
liability. For purposes of this statement, this has been treated as a
reduction of deferred tax assets existing at the Effective Date.
4. Eagle-Picher will receive tax deductions for cash and the
value of equity securities contributed to the PI Trust. An
income tax receivable of $67.8 million will result from
carryback of losses to years with available income.
Additional deferred income tax assets of $57.4 million result
from net operating losses and deferred deductions available to
offset income tax payments in future years. For purposes of
these projections, it was assumed that all tax benefits, other
than general business credit carryforwards, are available upon
the Effective Date and no valuation allowance is necessary.
General business credit carryforwards were ignored because
they are expected to expire unutilized.
5. To adjust net property, plant and equipment to an estimate of its fair
value in accordance with the fresh-start accounting provisions of SOP
90-7. Since the appraisal process is not yet complete, $20 million is
an estimate used for purposes of the projections.
6. To record reorganization value in excess of amounts allocable
to identifiable assets in accordance with SOP 90-7.
7. To write off existing goodwill of approximately $12.0 million. This is
offset by a $8.0 million increase to the prepaid pension asset to the
amount by which the plan assets exceed the projected benefit
obligations.
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<PAGE> 415
8. To record the discharge of Liabilities Subject to Compromise through
the distribution pursuant to the Plan of debt securities, common stock,
and the cash previously mentioned in Note 1. This will result in a gain
for forgiveness of debt.
a) Eagle-Picher will issue Tax Refund Notes in the principal
amount of $71.0 million.
b) Eagle-Picher will issue three-year Divestiture Notes in
the principal amount of $50 million.
c) Eagle-Picher will issue Senior Unsecured Sinking Fund
Debentures in the principal amount of $250 million.
d) New Eagle-Picher Common Stock with an estimated value of
$254.8 million will be issued. Existing Eagle-Picher Common Stock
will be canceled and the holders thereof will receive no distribution.
9. To eliminate the retained deficit and record the new equity of
Eagle-Picher.
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EAGLE-PICHER INDUSTRIES, INC.
PROJECTED CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 30 UNLESS OTHERWISE NOTED
(IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
DEC. 1 REORGANIZED COMPANY
-------- ----------------------------------------------------
1996 1996 1997 1998 1999 2000 2001
<S> <C> <C> <C> <C> <C> <C> <C>
Cash $118,237 $15,899 $49,738 $46,350 $67,850 $58,046 $69,605
Escrow cash 5,125 10,625 11,225 11,875 12,575 -- --
Accts receivable, net 129,000 127,200 127,700 129,000 135,000 141,000 148,000
Inventories, net 82,600 94,400 94,200 94,600 96,100 97,600 98,600
Income tax receivable 3,200 71,000 67,800 12,400 3,100 3,100 6,300
Prepaid expenses 14,700 14,650 14,650 15,650 16,150 16,650 17,150
---------------------- ----------------------------------------------------
Total current assets 352,862 333,774 365,313 309,875 330,775 316,396 339,655
Property, plant &
equipment, net 164,318 183,068 185,568 186,668 186,368 184,668 181,568
Deferred income taxes 80,124 122,484 118,112 113,084 111,674 100,998 80,974
Reorganization goodwill -- 75,438 64,661 53,884 43,107 32,330 21,553
Other assets 34,000 30,000 28,000 26,500 27,500 28,000 28,000
---------------------- ----------------------------------------------------
Total assets $631,304 $744,764 $761,654 $690,011 $699,424 $662,392 $651,750
====================== ====================================================
Accounts payable $38,000 $37,400 $36,400 $37,400 $38,400 $39,400 $39,900
Accr. liabilities 32,999 29,950 48,140 45,300 45,800 43,675 42,725
Short-term debt -- 71,000 71,000 -- -- 20,000 10,000
Secured debt - current 2,163 2,143 2,237 1,159 856 1,490 80
New debt - current -- -- -- -- 70,000 20,000 20,000
Income tax payable 5,289 5,289 5,289 5,289 5,289 5,289 5,289
---------------------- ----------------------------------------------------
Total current liab 78,451 145,782 163,066 89,148 160,345 129,854 117,994
Secured debt 17,676 17,061 14,824 13,666 12,809 11,320 11,240
New debt-10 year -- 250,000 250,000 250,000 230,000 210,000 190,000
New debt-3 year -- 50,000 50,000 50,000 -- -- --
Other long-term liabilities 27,125 27,125 26,825 26,825 26,325 26,325 25,825
Liabilities subject to
compromise 2,160,493 -- -- -- -- -- --
Equity (1,652,441) 254,796 256,939 260,372 269,945 284,893 306,691
---------------------- ----------------------------------------------------
Total liab. & equity $631,304 $744,764 $761,654 $690,011 $699,424 $662,392 $651,750
====================== ====================================================
</TABLE>
C-11
<PAGE> 417
EAGLE-PICHER INDUSTRIES, INC.
PROJECTED CONSOLIDATED STATEMENTS OF INCOME
FISCAL YEARS ENDED NOVEMBER 30
(IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
REORGANIZED COMPANY
-------- ------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
<S> <C> <C> <C> <C> <C> <C>
Net sales $865,923 $854,000 $855,500 $912,000 $963,000 $1,017,000
Operating Costs and Expenses
Cost of products sold 724,071 711,325 713,350 762,225 805,900 849,775
Selling and administrative 80,100 81,600 82,500 83,700 86,300 88,900
-------- ------------------------------------------------------------------
804,171 792,925 795,850 845,925 892,200 938,675
-------- ------------------------------------------------------------------
Operating Income 61,752 61,075 59,650 66,075 70,800 78,325
Amortization:
Reorganization asset -- (10,777) (10,777) (10,777) (10,777) (10,777)
Property, plant and equipment
adjustment -- (2,500) (2,500) (2,500) (2,500) (2,500)
Interest expense (2,000) (39,155) (35,540) (32,525) (27,175) (24,150)
Interest income 500 2,400 2,200 2,400 1,000 1,300
Other income (expense) 502,515 -- -- -- -- --
Reorganization items (500) -- -- -- -- --
-------- ------------------------------------------------------------------
Income before income taxes
and non-recurring item 562,267 11,043 13,033 22,673 31,348 42,198
0
Income taxes 3,400 8,900 9,600 13,100 16,400 20,400
-------- ------------------------------------------------------------------
Income before non-
recurring item 558,867 2,143 3,433 9,573 14,948 21,798
Gain on discharge of debt -- 1,561,853 -- -- -- --
Fresh start adjustments -- 91,388 -- -- -- --
Administrative items related
to reorganization -- (800) -- -- -- --
-------- ------------------------------------------------------------------
Net income 558,867 1,654,584 3,433 9,573 14,948 21,798
======== ==================================================================
BY INDUSTRY SEGMENT:
Sales
Automotive 432,136 450,370 451,680 491,700 532,220 569,740
Machinery 248,481 233,140 230,110 240,050 244,990 255,930
Industrial 185,306 170,490 173,710 180,250 185,790 191,330
-------- ------------------------------------------------------------------
Total sales 865,923 854,000 855,500 912,000 963,000 1,017,000
======== ==================================================================
Operating Income
Automotive 32,462 36,785 37,560 42,835 48,095 52,895
Machinery 20,086 16,855 15,780 17,455 17,145 18,895
Industrial 12,555 12,495 13,020 14,145 15,240 16,215
Corporate items (3,351) (5,060) (6,710) (8,360) (9,680) (9,680)
-------- ------------------------------------------------------------------
Total operating income 61,752 61,075 59,650 66,075 70,800 78,325
======== ==================================================================
</TABLE>
C-12
<PAGE> 418
EAGLE-PICHER INDUSTRIES, INC.
PROJECTED CONSOLIDATED STATEMENTS OF CASH FLOWS
FISCAL YEARS ENDED NOVEMBER 30
(IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
REORGANIZED COMPANY
------- -------------------------------------------------------------
1996 1997 1998 1999 2000 2001
<S> <C> <C> <C> <C> <C> <C>
Operating Cash:
Net income 558,867 1,654,584 3,433 9,573 14,948 21,798
Reduction of asbestos liability (502,511) -- -- -- -- --
Gain on discharge of debt -- (1,561,853) -- -- -- --
Fresh start adjustments -- (91,388) -- -- -- --
Administrative items related
to reorganization -- 800 -- -- -- --
Depreciation & amortization 31,200 43,277 44,677 46,077 47,477 48,877
Deferred taxes (17,300) 4,372 5,028 1,410 10,676 20,024
Working capital (637) 18,590 (3,040) (8,000) (9,625) (9,450)
Income tax refunds 1,202 3,200 55,400 9,300 -- (3,200)
------- -------------------------------------------------------------
Operating cash 70,821 71,582 105,498 58,360 63,476 78,049
Investing Cash:
Capital expenditures (40,000) (35,000) (35,000) (35,000) (35,000) (35,000)
Financing Cash:
Escrow activity (5,125) (600) (650) (700) 12,575 --
Short-term borrowings -- -- (71,000) -- 20,000 (10,000)
Repayments (789) (2,143) (2,236) (1,160) (70,855) (21,490)
------- -------------------------------------------------------------
Financing cash (5,914) (2,743) (73,886) (1,860) (38,280) (31,490)
Cash Payments Pursuant
to the Plan -- (102,338) -- -- -- --
Increase (decrease) in cash 24,907 (68,499) (3,388) 21,500 (9,804) 11,559
Beginning cash balance 93,330 118,237 49,738 46,350 67,850 58,046
------- -------------------------------------------------------------
118,237 49,738 46,350 67,850 58,046 69,605
======= =============================================================
</TABLE>
C-13
<PAGE> 419
EAGLE-PICHER INDUSTRIES, INC.
-----------------------------
CALCULATION OF EQUITY VALUE
NOVEMBER 30 1996
<TABLE>
<S> <C> <C>
Total Value of Estate* $734.0 million
Less: Cash Distributed 89.0
Secured Debt 19.2
Tax Refund Notes 71.0
Divestiture Notes 50.0
Debentures 250.0
------
Value of Equity $254.8 million
<FN>
* Excludes Priority Claims and Remaining Expenses of Administration
</TABLE>
CAPITAL STRUCTURE OF REORGANIZED COMPANY
<TABLE>
<CAPTION>
Value Percentage
<S> <C> <C>
Secured Notes $19.2 3.0%
Tax Refund Notes 71.0 11.0
Divestiture Notes 50.0 7.8
Debentures 250.0 38.8
Common Equity 254.8 39.5
------ -----
$645.0 100.0%
</TABLE>
C-14
<PAGE> 420
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
____________________________ )
EXHIBIT "D"
BALLOT SOLICITATION AND TABULATION PROCEDURES, AS APPROVED BY
AN ORDER OF THE BANKRUPTCY COURT, DATED JULY 23, 1996
PLEASE CALL THE SOLICITATION AGENT,
HILL AND KNOWLTON, INC., AT (212) 885-0555,
IF YOU HAVE ANY QUESTIONS ABOUT THESE PROCEDURES.
<PAGE> 421
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. Definitions................................................................ D-1
2. Publication Notice......................................................... D-3
3. Distribution of Solicitation Packages by the Tabulation Agent.............. D-3
a. Scheduled Claims............................................. D-3
b. Filed Claims................................................. D-4
c. Primary Asbestos Personal Injury Claims...................... D-4
i. Proofs of Claim Signed by Individual Claimants.... D-4
ii. Proofs of Claim Signed by Disqualified
Attorneys......................................... D-4
iii. Proofs of Claim Signed by Attorneys............... D-4
d. Asbestos Property Damage Claims:............................. D-6
e. Unimpaired Claims............................................ D-6
f. Determination of Holders of Record........................... D-6
4. Distribution of Solicitation Packages by the Solicitation Agent............ D-7
a. Registered Debt Securities................................... D-7
i. List of Record Holders............................ D-7
ii. Determination of Number of Beneficial Owners...... D-7
iii. Distribution to Record Holders other than Debt
Nominees.......................................... D-7
iv. Distribution to Debt Nominees in Unimpaired
Classes........................................... D-7
v. Distribution to Debt Nominees in Impaired
Classes........................................... D-8
(1) Options for Obtaining Votes........... D-8
(2) Reimbursement of Expenses............. D-9
b. Bearer Debt Securities....................................... D-9
i. Lists of Holders of Bearer Debt Securities........ D-9
ii. Notices........................................... D-10
iii. Contents of Individual, Non-Prevalidated Ballots
for Bearer Debt Securities........................ D-10
iv. Bearer Debt Securities Held by a Depositary....... D-11
v. Reimbursement of Expenses......................... D-12
c. Equity Interests............................................. D-12
i. List of Equity Holders............................ D-12
ii. Distribution of Solicitation Packages to Holders
of Equity Interests............................... D-13
5. Return of Ballots.......................................................... D-13
a. Claimants That Are Entitled to Vote.......................... D-13
b. Place to Send Completed Ballots.............................. D-13
c. Deadline for Receiving Completed Ballots..................... D-13
i. Deadline For Receipt By Tabulation Agent.......... D-13
ii. Deadline For Receipt By Solicitation Agent........ D-14
6. Tabulation of Ballots...................................................... D-14
</TABLE>
D-i
<PAGE> 422
<TABLE>
<S> <C>
a. Determination of Amount of Claims Voted...................... D-14
i. Bearer Debt Securities............................ D-14
ii. Registered Debt Securities:....................... D-15
iii. Claims other than Debt Securities, Asbestos
Property Damage Claims, Asbestos Personal
Injury Claims, Environmental Claims, and Lead
Personal Injury Claims............................ D-16
iv. Asbestos Property Damage Claims, Asbestos
Personal Injury Claims, and Lead Personal
Injury Claims..................................... D-17
v. Environmental Claims.............................. D-17
b. Determination of Number of Claims Voted...................... D-17
i. Specific Rules Relating to Registered Debt
Securities and Bearer Debt Securities............. D-18
ii. Specific Rules Relating to Class Asbestos
Property Damage Claims:........................... D-18
c. Ballots Excluded:............................................ D-18
d. General Voting Procedures and Standard Assumptions........... D-18
</TABLE>
D-ii
<PAGE> 423
BALLOT SOLICITATION AND TABULATION PROCEDURES
The following procedures (these "Voting Procedures") are adopted with respect to
(a) the distribution of ballot solicitation materials with respect to the
chapter 11 plan jointly proposed by the Debtors, the Official Injury Claimants'
Committee, and the Future Claimants' Representative (as such plan may be amended
from time to time, the "Plan") and (b) the return and tabulation of ballots and
master ballots.
1. DEFINITIONS:
a. "ASBESTOS BAR DATE ORDER" means the order of the Bankruptcy
Court, dated June 11, 1992, which fixed the deadline for
filing proofs of claim against the Debtors' estates for all
Asbestos Property Damage Claims and Primary Asbestos Personal
Injury Claims.
b. "BANKRUPTCY COURT" means the United States Bankruptcy Court
for the Southern District of Ohio, Western Division.
c. "BEARER DEBT SECURITIES" means debt securities of the Debtors
that are not registered as to principal or are registered to
"bearer."
d. "BEARER DEBT SECURITIES TRUSTEE" means the indenture trustee
for any issue of debt securities of the Debtors as to which
some or all of such debt securities constitute Bearer Debt
Securities.
e. "CONFIRMATION HEARING" means the hearing on the confirmation
of the Plan, as such hearing may be adjourned from time to
time.
f. "DEBT NOMINEES" means institutional holders of record of
Registered Debt Securities who hold Registered Debt Securities
in "street name" on behalf of beneficial owners or otherwise
represent such beneficial holders.
g. "DEPOSITARY" means a trust company, bank, or other depositary
having trust powers recognized by the Federal Reserve System
of the United States.
h. "DISCLOSURE STATEMENT" means the disclosure statement in
connection with the Plan, as approved by the Bankruptcy Court
in the Disclosure Statement Order.
i. "DISCLOSURE STATEMENT ORDER" means the Order of the Bankruptcy
Court approving the Disclosure Statement.
j. "EQUITY NOMINEE" means an institutional holder of record that
may hold shares of common stock of Eagle-Picher in "street
name" on behalf of beneficial owners or otherwise represent
such beneficial owners.
D-1
<PAGE> 424
k. "GENERAL BAR DATE ORDER" means the order of the Bankruptcy
Court, dated July 19, 1991, which fixed the deadline for
filing proofs of claim against the Debtors' estates for all
Claims other than Asbestos Property Damage Claims and Primary
Asbestos Personal Injury Claims.
l. "MASTER BALLOT" means a ballot (a) filed on behalf of one or
more beneficial owners of Registered Debt Securities or Bearer
Debt Securities in accordance with the procedures set forth in
section 4.a.v.(1) or section 4.b.iv. respectively, of these
Voting Procedures, (b) filed on behalf of one or more holders
of Primary Asbestos Personal Injury Claims pursuant to section
of these Voting Procedures, or (c) filed by an Asbestos
Property Damage Claim class member pursuant to section 3.d of
these Voting Procedures.
m. "PRIMARY ASBESTOS PERSONAL INJURY CLAIM" means an Asbestos
Personal Injury Claim other than an Asbestos or Lead
Contribution Claim.
n. "PUBLICATION NOTICE" means a published notice of (a) the
approval of the Disclosure Statement and the scheduling of the
Confirmation Hearing and (b) the procedure for holders of
Claims and Equity Interests to obtain a Solicitation Package.
o. "RECORD AMOUNT" means the amount shown on the records of the
Registered Debt Securities Trustees and the Debt Nominees (as
confirmed by record and depositary listings) as of the Voting
Record Date.
p. "REGISTERED DEBT SECURITIES" means debt securities of the
Debtors that are either fully registered or registered as to
principal only, but excluding debt securities registered to
"bearer."
q. "REGISTERED DEBT SECURITIES TRUSTEE" means the indenture
trustee for any issue of debt securities of the Debtors as to
which all or some of such debt securities constitute
Registered Debt Securities.
r. "SCHEDULES" means the Debtors' schedules of liabilities
previously filed with the Bankruptcy Court, as amended or
reconstituted.
s. "SOLICITATION AGENT" means Hill and Knowlton, Inc., or such
other firm that may be retained by the Debtors to act as the
Solicitation Agent with respect to the Plan.
t. "SOLICITATION PACKAGE" means, and will consist of, all of the
following:
i. Disclosure Statement Order.
ii. Disclosure Statement (with the Plan attached as an
exhibit thereto).
iii. For entities entitled to vote, appropriate ballots
and voting instructions.
iv. For entities entitled to vote, pre-addressed,
postage-paid, return envelopes.
D-2
<PAGE> 425
v. Any other materials ordered by the Bankruptcy Court
to be included as part of the Solicitation Package.
u. "TABULATION AGENT" means Federated Claims Service Group, or
such other firm that may be retained by the Debtors to act as
the Tabulation Agent with respect to the Plan.
v. "TRANSFER AGENT" means Key Corp., the transfer agent for
Eagle-Picher's common stock, or such other transfer agent as
may be acting for Eagle-Picher at the relevant time.
w. "UNIMPAIRED CLASSES SOLICITATION PACKAGE" means, collectively,
(a) notice that the class in which an entity's Claim is
classified is designated in the Plan as unimpaired and that,
upon written request by such entity to the Solicitation Agent,
a copy of the Solicitation Package shall be furnished to such
entity at the Debtors' expense and (b) notice of the
Confirmation Hearing and the time fixed for filing objections
to confirmation or the Plan.
x. "VOTING DEADLINE" means the date that is established by the
Bankruptcy Court as the deadline for the return of ballots on
the Plan.
y. "VOTING RECORD DATE" means the date that is five (5) business
days after the date on which the Disclosure Statement Order is
entered by Bankruptcy Court.
Any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Plan.
2. PUBLICATION NOTICE:
The Debtors will cause the Publication Notice to be published twice in
The Wall Street Journal (all U.S. editions) and The New York Times
(national edition).
3. DISTRIBUTION OF SOLICITATION PACKAGES BY THE TABULATION AGENT:
The Tabulation Agent will cause Solicitation Packages to be served as
follows:
a. SCHEDULED CLAIMS:
Upon each holder of a Claim (in a class that is not rendered
unimpaired under the Plan) listed in the Schedules as of the
Voting Record Date as liquidated, undisputed, and not
contingent (other than holders of Registered Debt Securities
and Bearer Debt Securities).
b. FILED CLAIMS:
Upon each holder of a Claim (in a class that is not rendered
unimpaired under the Plan) represented by a proof of claim
against any of the Debtors that has not been
D-3
<PAGE> 426
disallowed by an order entered on or before the Voting Record
Date, other than a proof of claim asserting (a) Claims under,
or evidenced by, any Registered Debt Securities or Bearer Debt
Securities, (b) Primary Asbestos Personal Injury Claims, or
(c) Asbestos Property Damage Claims.
c. PRIMARY ASBESTOS PERSONAL INJURY CLAIMS:
Upon the holders of Primary Asbestos Personal Injury Claims,
as follows:
i. PROOFS OF CLAIM SIGNED BY INDIVIDUAL CLAIMANTS:
Each holder of a Primary Asbestos Personal Injury
Claim that filed a proof of claim asserting a Primary
Asbestos Personal Injury Claim against any of the
Debtors that has not been disallowed by an order
entered on or before the Voting Record Date and who
personally signed such proof of claim shall receive a
Solicitation Package.
ii. PROOFS OF CLAIM SIGNED BY DISQUALIFIED ATTORNEYS:
If a proof of claim asserting a Primary Asbestos
Personal Injury Claim against any of the Debtors was
signed and filed by an attorney purporting to
represent the holder of such Claim, and (a) the
Debtors know that such attorney has been disqualified
from representing such holder, and (b) such Primary
Asbestos Personal Injury Claim has not been
disallowed by an order entered on or before the
Voting Record Date, the Solicitation Package shall be
served directly upon the holder of such Primary
Asbestos Personal Injury Claim, if such holder's
address is known. Otherwise, the Solicitation Package
shall be served upon the last-known attorney of
record for such holder, with instructions for such
attorney to forward the Solicitation Package to the
holder of such Primary Asbestos Personal Injury Claim
within two (2) business days after receipt of the
Solicitation Package.
iii. PROOFS OF CLAIM SIGNED BY ATTORNEYS:
If any proofs of claim asserting Primary Asbestos
Personal Injury Claims against any of the Debtors
were signed and filed by an attorney purporting to
represent the holders of such Claims, and such
Primary Asbestos Personal Injury Claims have not been
disallowed by an order or orders entered on or before
the Voting Record Date, a single Solicitation Package
shall be served upon such attorney, and (except to
the extent that individual holders of such Primary
Asbestos Personal Injury Claims also signed such
proofs of claims) Solicitation Packages WILL NOT be
served upon the individual holders thereof. The
Solicitation Package will contain a separate copy of
these Voting Procedures and a Master Ballot for the
computation of votes on the Plan. The following
procedures will govern the completion and return of
such Master Ballot:
D-4
<PAGE> 427
(1) The Master Ballot to be sent to each such
attorney will contain as an exhibit thereto
a computer-generated listing of each
individual holder of a Primary Asbestos
Personal Injury Claim for whom such attorney
signed and filed a proof of claim, by name
and Claim number, with a separate box next
to each entry to note, if necessary, whether
such individual holder accepts or rejects
the Plan.
(2) The Master Ballot will contain a
certification to be completed by such
attorney pursuant to which such attorney
will certify that, except as otherwise noted
on the exhibit thereto by the striking of
the name of the holder of a Primary Asbestos
Personal Injury Claim, such attorney has the
authority to cast a ballot on the Plan on
behalf of the holders of Primary Asbestos
Personal Injury Claims listed on such
exhibit. If such attorney is unable to make
such certification with respect to any
holders of Primary Asbestos Personal Injury
Claims on whose behalf such attorney signed
and filed proofs of claim, such attorney
shall, within ten (10) business days after
the receipt of the Solicitation Package,
furnish the Tabulation Agent with the names
and addresses of such holders, on a
preprinted form to be included with the
Solicitation Package.
(3) The Master Ballot shall contain, in
substantially similar form, the following
options for voting, one of which shall be
marked by the attorney:
(a) "All claimants listed on the
exhibit accompanying this ballot
ACCEPT the Plan."
(b) "All claimants listed on the
exhibit accompanying this ballot
REJECT the Plan."
(c) "All claimants listed on the
exhibit accompanying this ballot
ACCEPT the Plan, EXCEPT as marked
on such exhibit."
(d) "All claimants listed on the
exhibit accompanying this ballot
REJECT the Plan, EXCEPT as marked
on such exhibit."
(4) If any exceptions to the certification are
noted pursuant to section 3.c.iii.(2), or if
any exceptions are noted pursuant to section
3.c.iii.(3)(c) or 3.c.iii.(3)(d), the
attorney shall note such exceptions on the
exhibit accompanying the ballot and shall
return the ENTIRE exhibit, together with the
completed Master Ballot, to the Tabulation
Agent in accordance with section of these
Voting Procedures. Otherwise, the attorney
need only return the
D-5
<PAGE> 428
completed Master Ballot, without the
exhibit, to the Tabulation Agent in
accordance with section of these Voting
Procedures.
d. ASBESTOS PROPERTY DAMAGE CLAIMS:
Upon each holder of an Asbestos Property Damage Claim that
filed a proof of claim asserting an Asbestos Property Damage
Claim that (i) does not purport to constitute a class proof of
claim and (ii) has not been disallowed by an order entered on
or before the Voting Record Date. With respect to Asbestos
Property Damage Claims filed by representatives of classes of
Asbestos Property Damage Claims that have been certified or
conditionally certified in pending federal or state court
actions, the Tabulation Agent will select 100 members of each
class at random from a list of class members provided to the
Tabulation Agent by the class representative. The class
representative shall provide such list to the Tabulation Agent
within ten (10) business days after receipt by such class
representative of a written request therefor from
Eagle-Picher. If the class representative does not timely
provide such list, Eagle-Picher shall have no obligation to
solicit the votes of such class. The Tabulation Agent will
send a Solicitation Package to each randomly selected class
member and to the class representative, and, unless individual
class members filed separate proofs of claim in accordance
with the Asbestos Bar Date Order, individual class member
shall not receive Solicitation Packages.
e. UNIMPAIRED CLAIMS:
Each entity that, as of the Voting Record Date, has a Claim
(other than a Claim pursuant to Registered Debt Securities or
Bearer Debt Securities) that is unimpaired under the Plan will
receive an Unimpaired Classes Solicitation Package.
f. DETERMINATION OF HOLDERS OF RECORD:
Except with respect to Primary Asbestos Personal Injury Claims
and Claims under, or evidenced by, any Registered Debt
Securities or Bearer Debt Securities, the Solicitation Package
or Unimpaired Solicitation Package, as the case may be, will
be served upon the entity that holds a Claim as of the Voting
Record Date, and the Debtors will have no obligation to cause
a Solicitation Package or Unimpaired Solicitation Package, as
the case may be, to be served upon any subsequent holder of
such Claim (as evidenced by any notice of assignment of such
Claim entered on the Bankruptcy Court's docket after the
Voting Record Date or otherwise).
4. DISTRIBUTION OF SOLICITATION PACKAGES BY THE SOLICITATION AGENT:
The Solicitation Agent will cause Solicitation Packages to be served as
follows:
a. REGISTERED DEBT SECURITIES:
To all holders of Registered Debt Securities, according to the
following procedures:
D-6
<PAGE> 429
i. LIST OF RECORD HOLDERS:
Pursuant to Bankruptcy Rules 1007(i) and 3017(e),
within five (5) business days after the Voting Record
Date, the Registered Debt Securities Trustee shall
provide to the Solicitation Agent (a) a copy of the
list of the names, addresses, and holdings of the
holders of Registered Debt Securities as of the
Voting Record Date, (b) a set of mailing labels for
such holders, and (c) such other information as the
Solicitation Agent deems reasonably necessary to
perform its duties hereunder. Upon request by the
Solicitation Agent, the Registered Debt Securities
Trustee shall provide additional sets of mailing
labels. The Solicitation Agent shall use such lists,
mailing labels, and other information only for
purposes consistent with these Voting Procedures.
ii. DETERMINATION OF NUMBER OF BENEFICIAL OWNERS:
As soon as practicable after the entry of the
Disclosure Statement Order, the Solicitation Agent
shall attempt to contact the institutional holders of
record of the Registered Debt Securities to determine
whether such holders hold as Debt Nominees and to
ascertain the number of beneficial owners of such
Registered Debt Securities holding through each such
Debt Nominee.
iii. DISTRIBUTION TO RECORD HOLDERS OTHER THAN DEBT
NOMINEES:
The Solicitation Agent will cause to be served upon
each record holder (other than Debt Nominees), as of
the Voting Record Date, of any Registered Debt
Securities either (a) a Solicitation Package (if the
Registered Debt Securities are in a class that is
impaired under the Plan) or (b) an Unimpaired Classes
Solicitation Package (if the Registered Debt
Securities are in a class that is not impaired under
the Plan).
iv. DISTRIBUTION TO DEBT NOMINEES IN UNIMPAIRED CLASSES:
For Registered Debt Securities that are in a class
that is not impaired under the Plan, the Solicitation
Agent will cause to be served upon each Debt Nominee
materials comprising Unimpaired Classes Solicitation
Packages, in sufficient numbers estimated to allow
dissemination of Unimpaired Classes Solicitation
Packages to each of the beneficial owners of
Registered Debt Securities for which they serve,
together with a copy of these Voting Procedures, and
with instructions to such Debt Nominee to (i) contact
the Solicitation Agent for additional sets of
Unimpaired Classes Solicitation Packages, if
necessary, and (ii) promptly (within five (5)
business days after receipt of the Unimpaired Classes
Solicitation Packages) distribute the Unimpaired
Classes Solicitation Packages to the beneficial
owners for which they serve.
D-7
<PAGE> 430
v. DISTRIBUTION TO DEBT NOMINEES IN IMPAIRED CLASSES:
For Registered Debt Securities that are in a class
that is impaired under the Plan, the Solicitation
Agent will cause to be served upon each Debt Nominee
materials comprising Solicitation Packages, in
sufficient numbers estimated to allow dissemination
of Solicitation Packages to each of the beneficial
owners of Registered Debt Securities for which they
serve, together with a copy of these Voting
Procedures, and with instructions to such Debt
Nominee to (i) contact the Solicitation Agent for
additional sets of Solicitation Packages, if
necessary, and (ii) promptly (within five (5)
business days after receipt of the Solicitation
Packages) distribute the Solicitation Packages to the
beneficial owners for which they serve. Upon request
by a Registered Debt Securities Trustee or an entity
purporting to be a Debt Nominee or a beneficial owner
of Registered Debt Securities, the Solicitation Agent
shall send any such entity a Solicitation Package.
(1) OPTIONS FOR OBTAINING VOTES:
Debt Nominees will have two options for
obtaining the votes of beneficial owners of
Registered Debt Securities in impaired
classes, consistent with customary practices
for obtaining the votes of securities held
in street name:
(a) The Debt Nominee may "prevalidate"
the individual ballot contained in
the Solicitation Package and then
forward the Solicitation Package to
the beneficial owner of the
Registered Debt Securities for
voting, with the beneficial owner
then returning the individual
ballot directly to the Solicitation
Agent in the return envelope to be
provided in the Solicitation
Package. A Debt Nominee
"prevalidates" a beneficial owner's
ballot by indicating thereon the
record holder of the Registered
Debt Securities voted, the amount
of Registered Debt Securities held
by the beneficial owner, and the
appropriate account numbers through
which the beneficial owner's
holdings are derived.
(b) The Debt Nominee may forward the
Solicitation Package to the
beneficial owner of the Registered
Debt Securities for voting along
with a return envelope provided by
and addressed to the Debt Nominee,
with the beneficial owner then
returning the individual ballot to
the Debt Nominee. In such case, the
Debt Nominee will summarize the
votes of its respective beneficial
owners on a Master Ballot that will
be provided to the Debt Nominee
separately by the Solicitation
Agent, in accordance with any
instructions set forth in the
instructions to the Master Ballot,
and then return the Master Ballot
to the Solicitation Agent. THE
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DEBT NOMINEE SHOULD ADVISE THE
BENEFICIAL OWNERS TO RETURN THEIR
INDIVIDUAL BALLOTS TO THE DEBT
NOMINEE BY A DATE CALCULATED BY THE
DEBT NOMINEE TO ALLOW IT TO PREPARE
AND RETURN THE MASTER BALLOT TO THE
SOLICITATION AGENT SO THAT THE
MASTER BALLOT IS ACTUALLY RECEIVED
BY THE SOLICITATION AGENT BY THE
VOTING DEADLINE.
(c) Debt Nominees that elect to use the
Master Ballot voting process are
required to retain the ballots cast
by their respective beneficial
owners for inspection for one (1)
year following the Voting Deadline,
unless otherwise instructed in
writing by the Debtors or ordered
by the Bankruptcy Court. Each Debt
Nominee that elects to
"prevalidate" ballots must maintain
a list of those beneficial owners
as of the Voting Record Date to
whom ballots were sent for one (1)
year following the Voting Deadline,
unless otherwise instructed in
writing by the Debtors or ordered
by the Bankruptcy Court.
(2) REIMBURSEMENT OF EXPENSES:
The Debtors will, upon written request,
reimburse Debt Nominees (or their agents)
for their reasonable, actual, and necessary
out-of-pocket expenses incurred in
performing the tasks described above.
b. BEARER DEBT SECURITIES:
To all holders of Bearer Debt Securities, according to the
following procedures:
i. LISTS OF HOLDERS OF BEARER DEBT SECURITIES:
Pursuant to Bankruptcy Rules 1007(i) and 3017(e),
within five (5) business days after the Voting Record
Date, the Bearer Debt Securities Trustee shall
provide to the Solicitation Agent (a) a copy of any
list of the last-known names, addresses, and holdings
of the holders of Bearer Debt Securities and the
identity and address of each Depositary believed to
hold Bearer Debt Securities, (b) a set of mailing
labels to such holders or Depositaries, if
practicable and appropriate, and (c) such other
information as the Solicitation Agent deems
reasonably necessary to perform its duties hereunder.
Upon request by the Solicitation Agent, the Bearer
Debt Securities Trustee shall provide additional sets
of mailing labels. The Solicitation Agent shall use
such lists, mailing labels, and other information
only for purposes consistent with these Voting
Procedures.
ii. NOTICES:
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In addition to the Publication Notice, the
Solicitation Agent will provide notice of the
approval of the Disclosure Statement and the
scheduling of the Confirmation Hearing and will
solicit votes concerning the Plan from the holders of
Bearer Debt Securities in the following manner:
(1) The Solicitation Agent shall cause to be
mailed to each last-known holder of Bearer
Debt Securities, whose name and address is
furnished by the Bearer Debt Securities
Trustee pursuant to section 4.b.i above, a
copy of the Publication Notice.
(2) The Solicitation Agent will cause to be
mailed to each Depositary whose name and
address is furnished by the Bearer Debt
Securities Trustee pursuant to section 4.b.i
above or who is otherwise believed to hold
Bearer Debt Securities on behalf of
customers a copy of the Publication Notice
and will provide Solicitation Packages to
any such Depositary, as requested in
accordance with section 4.b.ii.(2)(a) below.
(a) The Publication Notice will provide
that to obtain a Solicitation
Package, holders of Bearer Debt
Securities or Depositaries may
either (i) call the Solicitation
Agent at the number that will be
listed in the Publication Notice or
(ii) request a Solicitation Package
in writing, either addressed to the
Solicitation Agent at the address
specified in the Publication Notice
or telecopied to the Solicitation
Agent at the telecopy number
specified in the Publication
Notice. Upon being contacted by
entities purporting to be either
holders of Bearer Debt Securities
or Depositaries, the Solicitation
Agent will provide such purported
holders or Depositaries with
Solicitation Packages and will make
reasonable efforts to encourage
such purported holders or
Depositaries to return their
ballots.
iii. CONTENTS OF INDIVIDUAL, NON-PREVALIDATED BALLOTS FOR
BEARER DEBT SECURITIES:
All ballots to be completed directly by holders of
Bearer Debt Securities (i.e., other than a Master
Ballot submitted by a Depositary or an individual
ballot that is not prevalidated in accordance with
section 4.b.iv.(1)) will require the holder, inter
alia, to sign and date the ballot and to list the
aggregate amount and the individual certificate
numbers of such holder's Bearer Debt Securities.
Signature of such ballot will constitute a
certification by such holder that such holder, as of
the date thereof, holds the Bearer Debt Securities
listed on such ballot. In addition, each holder of
Bearer Debt Securities that submits a ballot directly
will be required to have a Depositary certify on the
ballot that the holder identified therein presented
the original Bearer Debt Securities bearing the
certificate numbers listed on
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such ballot to the Depositary for verification by
such Depositary as of the date of such certification.
iv. BEARER DEBT SECURITIES HELD BY A DEPOSITARY:
If a holder has deposited its Bearer Debt Securities
with a Depositary, the Depositary will have two
options for obtaining the votes of holders of Bearer
Debt Securities:
(1) The Depositary may "prevalidate" the
individual ballot contained in the
Solicitation Package and then forward the
Solicitation Package to the holder of the
Bearer Debt Securities for voting, with the
holder then returning the individual ballot
directly to the Solicitation Agent in the
return envelope to be provided in the
Solicitation Package. A Depositary
"prevalidates" a holder's ballot by dating
the ballot and (i) listing thereon the
identity of the holder and the certificate
numbers of all the Bearer Debt Securities
deposited by such holder with the
Depositary, or (ii) (A) listing thereon the
holder's account number and the certificate
numbers of all the Bearer Debt Securities
deposited by such holder and (B) stating
that the appropriate number of Bearer Debt
Securities has been "blocked" with respect
to such holder. The ballot will provide for
the certification of such information by the
Depositary.
(a) Bearer Debt Securities will only be
considered "blocked" when the
Depositary prevents the Bearer Debt
Securities from being withdrawn,
moved, or used for any purpose,
other than allowing the holder to
vote on the Plan, until after entry
of the order confirming the Plan.
(b) When requested by the Solicitation
Agent, each Depositary will be
required to provide to the
Solicitation Agent a list of the
certificate numbers of all Bearer
Debt Securities being blocked by
such Depositary.
(2) The Depositary may forward the Solicitation
Package to the holder of the Bearer Debt
Securities for voting, along with a return
envelope provided by and addressed to the
Depositary, with such holder then returning
the individual ballot to the Depositary. In
such case, the Depositary will summarize the
votes of its respective holders on a Master
Ballot that will be provided separately to
the Depositary, in accordance with the
instructions set forth in the instructions
to the Master Ballot, and then return the
Master Ballot to the Solicitation Agent.
Among other things, the instructions will
direct the Depositary to list (i) by
beneficial owner, the certificate numbers of
all Bearer Debt Securities on deposit with
the
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Depositary as of the Voting Deadline or (ii)
only if the Bearer Debt Securities are
blocked as of the Voting Deadline, by
account number, the certificate numbers of
all Bearer Debt Securities on deposit with
the Depositary as of the Voting Deadline.
Only votes with respect to Bearer Debt
Securities that are held by the Depositary
as of the date of such ballot may be listed
on the ballot. THE DEPOSITARY SHOULD ADVISE
THE INDIVIDUAL HOLDERS TO RETURN THEIR
BALLOTS TO THE DEPOSITARY BY A DATE
CALCULATED BY THE DEPOSITARY TO ALLOW IT TO
PREPARE AND RETURN THE MASTER BALLOT SO THAT
THE MASTER BALLOT IS ACTUALLY RECEIVED BY
THE SOLICITATION AGENT BY THE VOTING
DEADLINE.
Each Depositary will maintain a photocopy of each
"prevalidated" ballot and each individual ballot for
a period of one (1) year after the Confirmation Date,
unless otherwise instructed by the Debtors or ordered
by the Bankruptcy Court.
v. REIMBURSEMENT OF EXPENSES:
The Debtors will, upon written request, reimburse
Depositaries (or their agents) for their reasonable,
actual, and necessary out-of-pocket expenses incurred
in performing the tasks described above.
c. EQUITY INTERESTS:
i. LIST OF EQUITY HOLDERS:
Within five (5) business days after the Voting Record
Date, the Transfer Agent shall furnish to the
Solicitation Agent (a) a list of the names and
addresses of all holders of record of Eagle-Picher
common stock as of the Voting Record Date, (b) a set
of mailing labels for such holders, and (c) such
other information as the Solicitation Agent deems
reasonably necessary to perform its duties hereunder.
Upon request by the Solicitation Agent, the Transfer
Agent shall provide additional sets of mailing
labels. The Solicitation Agent shall use such lists,
mailing labels, and other information only for
purposes consistent with these Voting Procedures.
ii. DISTRIBUTION OF SOLICITATION PACKAGES TO HOLDERS OF
EQUITY INTERESTS:
The Solicitation Agent will cause a Solicitation
Package to be served upon each such holder of record.
In addition, the Solicitation Agent shall notify each
Equity Nominee that it may receive additional
Solicitation Packages by contacting the Solicitation
Agent. The Equity Nominees shall promptly (within
five (5) business days after receipt of the
Solicitation Packages) distribute the Solicitation
Packages to the beneficial owners for which they
serve.
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5. RETURN OF BALLOTS:
a. CLAIMANTS THAT ARE ENTITLED TO VOTE:
Each claimant that has a Claim for which a Claim amount may be
determined pursuant to section hereof and which Claim is not
treated as unimpaired under the Plan as of the Voting Deadline
is entitled to vote to accept or reject the Plan.
b. PLACE TO SEND COMPLETED BALLOTS:
i. All ballots (other than ballots with respect to
Registered Debt Securities or Bearer Debt Securities)
will be accompanied by return envelopes addressed to
the Eagle-Picher Ballot Tabulation Center c/o
Federated Claims Service Group, P.O. Box 8041, 9111
Duke Blvd., Mason, Ohio 45040.
ii. All ballots with respect to Registered Debt
Securities or Bearer Debt Securities (i.e., record
holder ballots, master ballots and prevalidated owner
ballots), except those beneficial owner ballots that
are to be returned to the Debt Nominees or
Depositaries, will be accompanied by return envelopes
addressed to Hill and Knowlton, Inc., 466 Lexington
Avenue, 3rd Floor, New York, New York 10007,
Attention: Eagle-Picher Ballot Tabulation Center.
c. DEADLINE FOR RECEIVING COMPLETED BALLOTS:
i. DEADLINE FOR RECEIPT BY TABULATION AGENT
All ballots, except ballots with respect to
Registered Debt Securities or Bearer Debt Securities
(i.e., record holder ballots, master ballots and
prevalidated owner ballots), must be ACTUALLY
RECEIVED at the Eagle-Picher Ballot Tabulation Center
by 5:00 p.m., Cincinnati, Ohio, time, by the Voting
Deadline. Such ballots may be received at the
Eagle-Picher Ballot Tabulation Center at the address
set forth on the return envelope. The Tabulation
Agent will NOT accept ballots submitted by facsimile
transmission. The Tabulation Agent will date and
time-stamp all ballots when it receives them. In
addition, the Tabulation Agent will make a
photocopy of all such ballots it receives (including
all ballots forwarded to it by the Solicitation
Agent) and will retain a copy of such ballots for a
period of one (1) year after the Effective Date of
the Plan, unless otherwise instructed by the Debtors,
in writing.
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<PAGE> 436
ii. DEADLINE FOR RECEIPT BY SOLICITATION AGENT
All ballots with respect to Registered Debt
Securities or Bearer Debt Securities (i.e., record
holder ballots, master ballots and prevalidated owner
ballots) must be ACTUALLY RECEIVED by the
Solicitation Agent by the Voting Deadline. Such
ballots may be received by the Solicitation Agent at
the address set forth on the return envelope. The
Solicitation Agent will NOT accept ballots submitted
by facsimile transmission. The Solicitation Agent
will date and time-stamp all such ballots when it
receives them. In addition, after the Voting Deadline
and after tabulation of the ballots received with
respect to Registered Debt Securities and Bearer Debt
Securities, the Solicitation Agent will forward to
the Tabulation Agent the tabulation of the ballots
relating to the Registered Debt Securities and Bearer
Debt Securities and all such ballots it receives.
6. TABULATION OF BALLOTS:
a. DETERMINATION OF AMOUNT OF CLAIMS VOTED:
i. BEARER DEBT SECURITIES:
With respect to the tabulation of ballots cast by
Depositaries and holders of Bearer Debt Securities,
the amount that will be used to tabulate acceptance
or rejection of the Plan will be the amount shown on
the ballot, except as follows:
(1) To the extent that the aggregate amount of
Bearer Debt Securities voted exceeds the
amount outstanding, the Solicitation Agent
will attempt to resolve such overvote prior
to the date of the Confirmation Hearing. In
resolving such overvote, the Solicitation
Agent may require Depositaries to provide
certificate numbers for all Bearer Debt
Securities held by the Depositaries as of
the Voting Deadline.
(2) In the event that blocked Bearer Debt
Securities are "unblocked" (i.e., withdrawn,
moved, or otherwise transferred) prior to
the Voting Deadline, the Depositary will
notify the Solicitation Agent immediately,
in writing, by providing the Solicitation
Agent with, among other things, the request
by the holder to unblock the Bearer Debt
Securities, a photocopy of the ballot
corresponding to the unblocked Bearer Debt
Securities, the account number of the
holder of such unblocked Bearer Debt
Securities, and the certificate numbers of
the unblocked Bearer Debt Securities.
(3) In the event the Solicitation Agent receives
conflicting ballots (i.e., ballots received
from different holders of Bearer Debt
Securities with respect to Bearer Debt
Securities having the same certificate
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<PAGE> 437
numbers) and in the absence of contrary
information, the holder submitting the
latest-dated ballot, as evidenced by the
Depositary's certification (whether by
separate certification, prevalidation, or
completion of a master ballot), prior to the
Voting Deadline shall be deemed to be the
holder of the Bearer Debt Securities that
are the subject of such conflict for voting
purposes. In attempting to resolve such
conflict, the Solicitation Agent may require
such holders to furnish such evidence as the
Solicitation Agent deems reasonably
necessary.
ii. REGISTERED DEBT SECURITIES:
With respect to the tabulation of ballots cast by
record holders and beneficial owners of Registered
Debt Securities, for purposes of voting, the amount
that will be used to tabulate acceptance or rejection
of the Plan will be the Record Amount. The following
additional rules will apply to the tabulation of
ballots cast by record holders and beneficial owners
of Registered Debt Securities:
(1) Votes cast by beneficial owners holding
Registered Debt Securities through a Debt
Nominee will be applied against the
positions held by such entities in the
applicable Registered Debt Securities as of
the Voting Record Date, as evidenced by the
record and depositary listings. Votes
submitted by a Debt Nominee, whether
pursuant to a Master Ballot or prevalidated
ballots, will not be counted in excess of
the Record Amount of Registered Debt
Securities held by such Debt Nominee.
(2) To the extent that conflicting votes or
"overvotes" are submitted by a Debt Nominee,
whether pursuant to a Master Ballot or
prevalidated ballots, the Solicitation Agent
will attempt to resolve the conflict or
overvote prior to the Confirmation Hearing.
(3) To the extent that overvotes on a Master
Ballot or prevalidated ballots are not
reconcilable prior to the Confirmation
Hearing, the Solicitation Agent will apply
the votes to accept and to reject the Plan
in the same proportion as the votes to
accept and reject the Plan submitted on the
Master Ballot or prevalidated ballot that
contained the overvote, but only to the
extent of the Debt Nominee's position in the
applicable Registered Debt Security.
(4) Multiple Master Ballots may be completed by
a single Debt Nominee and delivered to the
Solicitation Agent. Votes reflected by
multiple Master Ballots will be counted,
except to the extent that they are
duplicative of other Master Ballots. If two
or more Master Ballots are inconsistent, the
latest Master Ballot received prior to
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<PAGE> 438
the Voting Deadline will, to the extent of
such inconsistency, supersede and revoke any
prior Master Ballot.
(5) For purposes of tabulating votes, each
record holder or beneficial owner of a
Registered Debt Security will be deemed to
have voted the full amount of its Claim
relating to such Registered Debt Security.
iii. CLAIMS OTHER THAN DEBT SECURITIES, ASBESTOS PROPERTY
DAMAGE CLAIMS, ASBESTOS PERSONAL INJURY CLAIMS,
ENVIRONMENTAL CLAIMS, AND LEAD PERSONAL INJURY
CLAIMS:
With respect to the tabulation of ballots for all
Claims other than (a) Registered Debt Securities, (b)
Bearer Debt Securities, (c) Asbestos Property Damage
Claims, (d) Asbestos Personal Injury Claims, (e)
Environmental Claims, and (f) Lead Personal Injury
Claims, for purposes of voting, the amount to be used
to tabulate acceptance or rejection of the Plan is as
follows (in order of priority):
(1) If, prior to the Voting Deadline, (i) the
Bankruptcy Court enters an order fully or
partially allowing a Claim, whether for all
purposes or for voting purposes only, (ii) a
Claim is fully or partially allowed for all
purposes in accordance with the Claims
Settlement Guidelines, or (iii) the Debtors
and the holder of a Claim agree to fully or
partially allow such Claim for voting
purposes only and no objection to such
allowance is received by the Debtors within
seven (7) days after service by first-class
mail of notice of such agreement to the
Primary Recipients' List (as such term is
defined in the First Amended Case Management
Order, entered on November 20, 1991, as
amended from time to time), the amount
allowed thereunder.
(2) The liquidated amount specified in a proof
of claim timely filed in accordance with the
General Bar Date Order, so long as such
proof of claim has not been disallowed by
the Bankruptcy Court and is not the subject
of an objection pending as of the Voting
Record Date.
(3) The Claim amount listed in the Schedules as
unliquidated, undisputed, and not
contingent.
(4) If a proof of claim has been timely filed in
accordance with the General Bar Date Order
and such Claim is wholly contingent or
unliquidated, the Claim amount, for voting
purposes only, shall be $1.00 so long as
such proof of claim has not been disallowed
by the Court and is not the subject of an
objection pending as of the Voting Record
Date.
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iv. ASBESTOS PROPERTY DAMAGE CLAIMS, ASBESTOS PERSONAL
INJURY CLAIMS, AND LEAD PERSONAL INJURY CLAIMS:
With respect to the tabulation of ballots for all
Asbestos Property Damage Claims, Asbestos Personal
Injury Claims and Lead Personal Injury Claims, for
voting purposes only, the amount to be used to
tabulate acceptance or rejection of the Plan will be
$1.00 for each Asbestos Property Damage Claim,
Asbestos Personal Injury Claim, and Lead Personal
Injury Claim proof of which was filed in accordance
with the General Bar Date Order or, in the case of
Primary Asbestos Personal Injury Claims and Asbestos
Property Damage Claims, the Asbestos Bar Date Order,
so long as any such Claim is not the subject of an
objection that is pending as of the Voting Record
Date. With respect to Claims filed by representatives
of classes of Asbestos Property Damage Claims that
have been certified or conditionally certified in
pending federal or state court actions, each of the
class members that is selected in accordance with
section of these Voting Procedures shall have votes
in the aggregate amount of $1.00 times the number of
members in the class of Asbestos Property Damage
Claims of which such Claimant is a member divided by
100.
v. ENVIRONMENTAL CLAIMS:
With respect to the tabulation of ballots for
Environmental Claims, for voting purposes only, the
amount to be used to tabulation acceptance or
rejection of the Plan will be (i) as to each holder
of an Environmental Claim that is a party to the
Environmental Settlement Agreement, the amount of the
claim allowed to each such holder on account of the
Liquidated Sites (as such term is defined in the
Environmental Settlement Agreement) and (ii) as to
any other holder of an Environmental Claim, the
amount of any liquidated claim allowed pursuant to
the settlement agreement between any of the Debtors
and such holder plus the amount of any additional
claims that such holder, pursuant to such agreement,
may be entitled to assert in the future.
b. DETERMINATION OF NUMBER OF CLAIMS VOTED:
i. SPECIFIC RULES RELATING TO REGISTERED DEBT SECURITIES
AND BEARER DEBT SECURITIES:
Each beneficial owner of Registered Debt Securities
or Bearer Debt Securities is entitled to one (1) vote
on account of its holdings of Registered Debt
Securities and Bearer Debt Securities.
ii. SPECIFIC RULES RELATING TO CLASS ASBESTOS PROPERTY
DAMAGE CLAIMS:
With respect to Claims filed by representatives of
classes of Asbestos Property Damage Claims that have
been certified or conditionally certified
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in pending federal or state court actions, each of
the class members that is selected in accordance with
section of these Voting Procedures shall have a
number of votes equal to the number of members in the
class of Asbestos Property Damage Claims of which
such Claimant is a member divided by 100. The ballot
to be supplied to such members will allow them to
specify how many votes they are voting to accept the
plan and how many votes they are voting to reject the
Plan.
c. BALLOTS EXCLUDED:
A ballot will not be counted if any of the following applies
to such ballot:
i. The holder submitting the ballot is not entitled to
vote, pursuant to section 5.a.
ii. The ballot is not ACTUALLY RECEIVED at the
Eagle-Picher Ballot Tabulation Center or by the
Solicitation Agent, as the case may be, in the manner
set forth in section 5.b hereof by the Voting
Deadline.
iii. A ballot that is not completed - including, without
limitation, a master ballot with respect to a Primary
Asbestos Personal Injury Claim on which the attorney
fails to make the required certification - but other
than a ballot that is otherwise complete but on which
the acceptance or rejection of the Plan is not noted.
d. GENERAL VOTING PROCEDURES AND STANDARD ASSUMPTIONS:
In addition, the following voting procedures and standard
assumptions will be used in tabulating ballots:
i. Each holder of Claims will be deemed to have voted
the full amount of its Claims in each class in which
it submits a ballot.
ii. If multiple ballots are received for a holder of
Claims, the last ballot received from such holder
prior to the Voting Deadline will be the ballot that
is counted.
iii. If multiple ballots are received from different
holders purporting to hold the same Claim, in the
absence of contrary information establishing which
claimant held such Claim as of the Voting Deadline
or, in the case of Registered Debt Securities, the
Voting Record Date, the latest-dated ballot that is
received prior to the Voting Deadline will be the
ballot that is counted.
iv. If multiple ballots are received from a holder of a
Claim and someone purporting to be his, her, or its
attorney or agent, the ballot received from
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<PAGE> 441
the holder of the Claim will be the ballot that is
counted, and the vote of the purported attorney or
agent will not be counted.
v. A ballot that is completed, but on which the claimant
did not note whether to accept or reject the Plan
shall be counted as a vote to accept the Plan.
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
_____________________________)
EXHIBIT "E"
THE DEBTORS' LIQUIDATION ANALYSIS
<PAGE> 443
EAGLE-PICHER INDUSTRIES, INC.
LIQUIDATION ANALYSIS
The Liquidation Analysis reflects the Debtors' estimate of the proceeds that
would be realized if the Debtors were to be liquidated under chapter 7 of the
Bankruptcy Code. Underlying the Liquidation Analysis are a number of estimates
and assumptions that, although developed and considered reasonable by
Management, are inherently subject to significant business, economic and
competitive uncertainties and contingencies beyond the control of the Debtors
and their Management, and upon assumptions with respect to the liquidation
decisions which could be subject to change. THERE CAN BE NO ASSURANCE THAT THE
VALUES REFLECTED IN THE LIQUIDATION ANALYSIS WOULD BE REALIZED IF THE DEBTORS
WOULD UNDERGO SUCH A LIQUIDATION, AND ACTUAL RESULTS COULD VARY MATERIALLY FROM
THOSE SHOWN HERE.
For the purposes of preparing the Liquidation Analysis, the liquidation was
assumed to commence on December 1, 1996 and the sales of the Operating
Businesses (as defined below) were assumed to be completed within six months of
that date. At that point, on May 31, 1997 (the "Liquidation Distribution Date"),
distributions would be made to unsecured creditors. Any funds received
subsequent to the Liquidation Distribution Date would be applied to separate
accounts set up to fund the Debtors' liabilities for workers' compensation,
postretirement benefits and indemnification liabilities resulting from the sales
of the Operating Businesses. Depending on actual circumstances, the six-month
sale and liquidation period ("Liquidation Period") could be significantly longer
or, while the Debtors believe it highly unlikely, shorter.
The Debtors have assumed, for purposes of making distributions to the PI Trust,
in the Liquidation Analysis, that the aggregate value of Asbestos Personal
Injury Claims and Lead Personal Injury Claims that would be allowed in a chapter
7 case is equal to the $2.5 billion that was ruled to be the aggregate value by
the Bankruptcy Court. The Debtors also have assumed, in the Liquidation
Analysis, that in a chapter 7 case the value of the Environmental Claims
addressed in the Environmental Settlement Agreement would be as reflected
therein. There can be no assurance that the EPA, the DOI, and the states listed
therein would agree to the liquidated amounts of their claims set forth in the
Environmental Settlement Agreement in the context of a chapter 7 liquidation.
The following notes describe the significant assumptions used in the Liquidation
Analysis.
A. ESTIMATED LIQUIDATION PROCEEDS
The businesses of the Debtors are conducted through various subsidiaries and
divisions (the "Operating Businesses"). For
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<PAGE> 444
purposes of the Liquidation Analysis, it is assumed that the assets of the
subsidiaries and divisions would be sold on a going concern basis. It is
believed that the sales of the Operating Businesses on a going concern basis
would result in greater proceeds than liquidating the assets of the Operating
Businesses themselves. There can be no assurance, however, that any such going
concern sales could be consummated. The Debtors' financial advisors, McDonald &
Co., estimated the potential proceeds from such dispositions of the Operating
Businesses.
The following information and factors, not listed in any order of importance,
were, among others, considered by McDonald & Co. in estimating the proceeds
which might be received from the sale of the Operating Businesses:
1) The historical financial statements, relevant historical
operating information and projected financial operating
performance of the Operating Businesses;
2) Market valuations of public companies in the same or
similar businesses as the Operating Businesses;
3) The product lines, manufacturing expertise, operating
advantages and disadvantages of the Operating Businesses;
4) The limited base of potential buyers for certain Operating
Businesses;
5) The potential impact of a chapter 7 proceeding upon the
Operating Businesses themselves and upon potential buyers'
pricing strategies;
6) The relatively short period of time in which the sales of
the Operating Businesses would take place; and
7) The point in the economic cycle in which the sales of the
Operating Businesses would take place.
General economic conditions as well as current conditions in the Operating
Business' industries were also considered in estimating the liquidation
proceeds. However, significant uncertainties exist, such as the cyclical nature
of the automotive industry and the political nature of defense funding. Just as
these items could have an adverse effect on sales and operating income, they
could also adversely affect the price which could be realized in the short-term
from the dispositions of Operating Businesses depending on the timing of these
dispositions.
Transaction costs on the sales of the Operating Businesses were estimated to be
5% of the gross proceeds.
E-2
<PAGE> 445
For purposes of the Liquidation Analysis, it has been assumed that all
subsidiary and division level employees will be retained by the buyers of the
respective Operating Businesses. In the event of actual sale, it is likely that
substantial employee severance costs would reduce sale proceeds.
B. NOTES RECEIVABLE
Eagle-Picher is holding several notes receivable received as partial
consideration for the sale of assets previously consummated. Those that are due
after the Liquidation Distribution Date would be used to fund the
indemnification liability resulting from the sales of the Operating Businesses.
C. INCOME TAXES
Sale of the Operating Businesses will trigger taxable gains for Eagle-Picher,
and Eagle-Picher will receive tax deductions for cash paid to unsecured
creditors on the Liquidation Distribution Date. The resulting tax net operating
loss will be fully absorbed by carryback to years in which income is available
for carryback, resulting in income tax refunds of $70.9 million. Since these
refunds will not be available until after the Liquidation Distribution Date,
they will be assigned to the accounts for Indemnification. The present value of
such refunds is $56.7 million.
Since Eagle-Picher will cease to exist under this scenario, the tax benefit for
deferred deductions for workers' compensation, postretirement benefits and
indemnification liabilities will expire.
D. CLAIMS AND EXPENSES PAID AT THE EFFECTIVE DATE
Under the Liquidation Analysis, it has been assumed that all Administrative
Expenses (including expenses of a chapter 7 trustee and any related professional
fees) and Priority Claims aggregating $8.8 million are paid in full. It is also
assumed that Secured Claims totaling $21.8 million are repaid in full from
proceeds of the collateral securing such sums.
E. ASBESTOS PROPERTY DAMAGE CLAIMS
It has been assumed that the Court values Asbestos Property Damage Claims in the
aggregate approximate amount of $12.0 million.
F. CASHFLOW FROM OPERATIONS DURING THE LIQUIDATION PERIOD
The Debtors estimate that there will be a decrease in cash from operations of
approximately $5 million resulting from adverse effects of a chapter 7
situation. Interest income expected to be
E-3
<PAGE> 446
earned on excess cash held during the Liquidation Period is included in this
estimate.
G. OVERHEAD COSTS OF LIQUIDATION
It has been assumed that overhead costs of a liquidation, including severance
costs associated with general office personnel, will approximate $8 million.
Terminations would take place as reduction of properties permitted.
H. WORKERS' COMPENSATION OBLIGATIONS
The Debtors estimate workers' compensation obligations to be approximately $20
million. This includes existing liabilities and liabilities that will not be
assumed by buyers when the Operating Businesses are sold. The Debtors have
assumed that any buyer of an Operating Business would not assume any obligations
for workers' compensation claims for injuries occurring prior to the date a sale
of the Operating Business is consummated.
I. PENSION AND POSTRETIREMENT BENEFIT OBLIGATIONS
The Debtors currently make health care and life insurance benefits available to
certain retired employees on a limited basis. In most cases, retirees are
required to contribute to the cost of their health insurance coverage. These
benefits are funded on a pay-as-you-go basis. For purposes of this Liquidation
Analysis, it has been assumed that the Debtors' policy would be amended to
exclude current active employees from this benefit. Therefore, the Debtors would
be liable only for the portion of this liability relating to current retirees
and those eligible for retirement.
The pension plans are currently over funded. It is unlikely, however, that there
would be excess funds available to the Debtors in the event of a liquidation
after transfers of pension assets and related liabilities were made to pension
plans of buyers of the Operating Businesses.
J. CANCELLATION OF LEASE OBLIGATIONS
It has been assumed that the Debtors will be liable for claims associated with
the cancellation of certain lease obligations, primarily that of the General
Office in Cincinnati, Ohio. It has also been assumed that the leases of
operating plants would be assumed by buyers of the respective Operating
Businesses.
K. INDEMNIFICATION OF THE SALE OF THE OPERATING BUSINESSES
It has been assumed that the buyer of any Operating Business would require
certain amounts held in escrow for the indemnification of existing and potential
liabilities at the date of the sale. Potential indemnification items include
environmental liabilities
E-4
<PAGE> 447
and warranty obligations for incidents occurring prior to the date the Operating
Businesses were sold.
E-5
<PAGE> 448
EAGLE-PICHER INDUSTRIES, INC.
LIQUIDATION PROCEEDS COMPUTATION
AS OF DECEMBER 1, 1996
(IN THOUSANDS - UNAUDITED)
LIQUIDATION PROCEEDS:
<TABLE>
<S> <C> <C> <C>
Proceeds from asset sales $496,000
Less transaction costs (24,800)
--------
Net liquidation proceeds 471,200
Add: Cash and cash equivalents 118,200
Notes receivable and other investments 7,500
Present value of tax refunds receivable 56,700
--------
Cash available 653,600
Less distributions:
Priority claims 3,000
Administrative expenses 5,800
Secured debt 21,800
After-tax net decrease in cash from operations
during six-month disposition period 5,000
Corporate payroll and overhead costs of
liquidation 8,000
Worker's compensation obligation 20,000
Postretirement benefit obligation 13,700
Cancelation of lease obligations 700
Indemnification resulting from disposition
of businesses 50,000
--------
Total distributions 128,000
--------
Net estimated liquidation proceeds available
to unsecured creditors $525,600
========
PAYMENT OF PREPETITION
UNSECURED CLAIMS:
Percentage
Claims Proceeds Recovery
---------- -------- ----------
Asbestos and lead personal injury claims $2,502,511 $493,547 20%
Unsecured claims 150,521 29,686 20%
Asbestos property damage claims 12,000 2,367 20%
Equity interests 0 0 0%
</TABLE>
E-6
<PAGE> 449
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
_____________________________)
EXHIBIT "F"
THE DEBTORS' SUBSIDIARIES AND DIVISIONS
<PAGE> 450
7/15/96
<TABLE>
<CAPTION>
==================================================================================================================================
EAGLE-PICHER INDUSTRIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
WHOLLY-OWNED SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
CINCINNATI INDUSTRIAL MACHINERY SALES COMPANY EAGLE-PICHER ESPANA, S.A.
- ----------------------------------------------------------------------------------------------------------------------------------
DAISY PARTS, INC. EAGLE-PICHER FLUID SYSTEMS LTD
- ----------------------------------------------------------------------------------------------------------------------------------
EDI, INC. EAGLE-PICHER HILLSDALE LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER DEVELOPMENT COMPANY, INC. EAGLE-PICHER HOLDING B.V.
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER EUROPE, INC. EAGLE-PICHER INDUSTRIES OF CANADA LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER FAR EAST, INC. EAGLE-PICHER, INC.
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER FLUID SYSTEMS, INC. EAGLE-PICHER INDUSTRIES GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER MINERALS, INC. EAGLE-PICHER INDUSTRIES EUROPE GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
HILLSDALE TOOL & MANUFACTURING CO. EAGLE-PICHER INDUSTRIES MATERIALS GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
MICHIGAN AUTOMOTIVE RESEARCH CORPORATION EAGLE-PICHER MINERALS INTERNATIONAL S.A.R.L.
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSICOIL INC. EAGLE-PICHER UK LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
EPTEC, S.A. DE C.V.
- ----------------------------------------------------------------------------------------------------------------------------------
EQUIPOS DE ACUNA, S.A. DE C.V.
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSICOIL (MALAYSIA) SDN. BHD.
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PARTIALLY-OWNED SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
NONE DIEHL & EAGLE-PICHER GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
DONG YANG EAGLE-PICHER LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
UNITED MINERALS VERWALTUNGS- UND BETEILIGUNGS GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
UNITED MINERALS GMBH & CO. KG
- ----------------------------------------------------------------------------------------------------------------------------------
YAMANAKA EP CORPORATION
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 451
<TABLE>
<CAPTION>
==================================================================================================================================
EABLE-PICHER INDUSTRIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------------
PARTIALLY-OWNED PARTNERSHIPS
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
CREATIVE INVESTMENTS ASSOCIATES NONE
- ----------------------------------------------------------------------------------------------------------------------------------
NAMEHOLDER SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
FABRICON CORPORATION NONE
- ----------------------------------------------------------------------------------------------------------------------------------
FABRICON PRODUCTS CORPORATION OF PENNSYLVANIA
- ----------------------------------------------------------------------------------------------------------------------------------
ROSS ALUMINUM FOUNDRIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------------
WOLVERINE FABRICATING AND MANUFACTURING COMPANY
- ----------------------------------------------------------------------------------------------------------------------------------
WOLVERINE GASKET AND MANUFACTURING COMPANY
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
DIVISIONS
- ----------------------------------------------------------------------------------------------------------------------------------
CINCINNATI INDUSTRIAL MACHINERY
CONSTRUCTION EQUIPMENT
FABRICON PRODUCTS
PLASTICS
ROSS ALUMINUM FOUNDRIES
RUBBER MOLDING
SUSPENSION SYSTEMS
TECHNOLOGIES
TRIM
WOLVERINE GASKET
==================================================================================================================================
</TABLE>
<PAGE> 452
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
_____________________________)
EXHIBIT "G"
THE DIRECTORS AND OFFICERS OF THE DEBTORS (OTHER THAN EAGLE-PICHER)
<PAGE> 453
<TABLE>
<CAPTION>
EAGLE-PICHER SUBSIDIARIES WHICH FILED BANKRUPTCY-OFFICERS & DIRECTORS
NAME- DIRECTORS- PRESIDENT SR.V.P. V.P. V.P.
- --------------------------- ----------------- -------------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
DAISY PARTS, INC. WAYNE R. WICKENS MICHAEL E. ASLANIAN STEPHEN M. ROSS WAYNE R. WICKENS
JAMES A. RALSTON
HARRY A. NEELY
EAGLE-PICHER MINERALS, INC. ANDRIES RUIJSSENAARS WESLEY D. LEE JAMES A. RALSTON HARRY A. NEELY
JAMES A. RALSON
HARRY A. NEELY
EDI, INC. WAYNE R. WICKENS MICHAEL J. BOERMA TERENCE J. RHOADES HARRY A. NEELY
MICHAEL J. BOERMA
JAMES A. RALSTON
HILLSDALE TOOL & HARRY A. NEELY MICHAEL E. ASLANIAN STEPHEN M. ROSS WAYNE R. WICKENS
MANUFACTURING CO. WAYNE R. WICKENS
JAMES A. RALSTON
MICHIGAN AUTOMOTIVE WAYNE R. WICKENS MICHAEL J. BOERMA TERENCE J. RHOADES HARRY A. NEELY
RESEARCH CORPORATION MICHAEL J. BOERMA
JAMES A. RALSTON
TRANSICOIL INC. ANDRIES RUIJSSENAARS ROBERT N. CARLSON MARK M. JOHNSON HARRY A. NEELY
JAMES A. RALSTON
HARRY A. NEELY
</TABLE>
[Table restubed from above]
<TABLE>
<CAPTION>
9/9/1996
NAME- TREASURER V.P.1 SECRETARY ASST.TREAS. ASST.SEC. OTHER
- -------------------------- ------------------- --------------- ------------------- ----------- --------------- -------
<S> <C> <C> <C> <C> <C> <C>
DAISY PARTS, INC. HARRY A. NEELY HARRY A. NEELY JAMES A. RALSTON
EAGLE-PICHER MINERALS, INC. HARRY A. NEELY DAVID N. EVANS JAMES A. RALSTON
EDI, INC. TERENCE J. RHOADES TERENCE J. RHOADES JAMES A. RALSTON
HILLSDALE TOOL & HARRY A. NEELY HARRY A. NEELY JAMES A. RALSTON
MANUFACTURING CO.
MICHIGAN AUTOMOTIVE TERENCE J. RHOADES TERENCE J. RHOADES JAMES A. RALSTON
RESEARCH CORPORATION
TRANSICOIL INC. HARRY A. NEELY MARK M. JOHNSON JAMES A. RALSTON
</TABLE>
G-1
<PAGE> 454
PLEASE CALL HILL AND KNOWLTON, INC., AT (212) 885-0555, IF YOU HAVE ANY
QUESTIONS ABOUT THIS DISCLOSURE
STATEMENT, THE VOTING PROCEDURES,
OR THE PLAN.
<PAGE> 1
Exhibit 99.T3E.2
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
EAGLE-PICHER INDUSTRIES, )
INC., et al., )
Debtors. )
)
- ------------------------------------
Consolidated Case No. 1-91-00100
Chapter 11
JUDGE PERLMAN
MASTER BALLOT FOR
ACCEPTING OR REJECTING THE THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION
DATED AUGUST 28, 1996
CLASS 20 -- UNSECURED CLAIMS
9.5% SINKING FUND DEBENTURES
On July 23, 1996, the United States Bankruptcy Court for the Southern District
of Ohio signed an order that establishes certain procedures (the "Voting
Procedures") for the solicitation and tabulation of votes to accept or reject
the Third Amended Consolidated Plan of Reorganization in these chapter 11 cases
(the "Plan"). The Voting Procedures are annexed as Exhibit "D" to the Disclosure
Statement, dated August 28, 1996 (the "Disclosure Statement"), which accompanies
this Master Ballot.
This Master Ballot for the 9.5% Sinking Fund Debentures of Eagle-Picher
Industries, Inc. ("9.5% Sinking Fund Debentures") may not be used for any
purpose other than for casting votes to accept or reject the Plan. This Master
Ballot is to be used by brokers, proxy intermediaries, or other nominees for
casting votes on behalf of beneficial owners of 9.5% Sinking Fund Debentures.
PLEASE READ AND FOLLOW THE ATTACHED INSTRUCTIONS CAREFULLY. COMPLETE, SIGN, AND
DATE THIS MASTER BALLOT AND ARRANGE FOR ITS DELIVERY SO THAT IT IS RECEIVED BY
HILL AND KNOWLTON, INC., 466 LEXINGTON AVENUE, NEW YORK, NEW YORK 10017 (ATTN:
EAGLE-PICHER BALLOT SOLICITATION GROUP), BY 5:00 P.M., CINCINNATI, OHIO TIME, ON
NOVEMBER 4, 1996. OTHERWISE, THE VOTES TRANSMITTED HEREBY WILL NOT BE COUNTED.
20M-SF
<PAGE> 2
ITEM 1. TABULATION OF VOTES WITH RESPECT TO THE PLAN.
Please note that each beneficial owner of 9.5% Sinking Fund Debentures that
votes must vote its entire claim. Accordingly, for purposes of tabulating the
vote, each voting beneficial owner should be deemed to have voted the full
amount of its claim as of September 5, 1996 (the "Voting Record Date"), as shown
by your records. A ballot received from a beneficial owner that partially
accepts and partially rejects the Plan should not be counted.
The undersigned certifies that (insert the number
of different Beneficial Owners) beneficial owners of 9.5% Sinking Fund
Debentures in the aggregate principal amount of
$
as identified by the respective customer account numbers set forth below, have
delivered to the undersigned ballots casting votes to ACCEPT the Plan.
The undersigned certifies that (insert the number
of different Beneficial Owners) beneficial owners of 9.5% Sinking Fund
Debentures in the aggregate principal amount of
$
as identified by the respective customer account numbers set forth below, have
delivered to the undersigned ballots casting votes to REJECT the Plan.
ITEM 2. BENEFICIAL OWNER INFORMATION.
The undersigned certifies that attached hereto is a true and accurate schedule
of the beneficial owners of 9.5% Sinking Fund Debentures, as identified by their
respective customer account numbers and dollar amounts of 9.5% Sinking Fund
Debentures that have delivered ballots for 9.5% Sinking Fund Debentures to the
undersigned.
(Please complete Table A or attach the information requested by this Item 2 in
the format of Table A.)
20M-SF
<PAGE> 3
ITEM 3. ADDITIONAL BALLOTS SUBMITTED BY BENEFICIAL OWNERS.
The undersigned certifies that it has transcribed the information, if any,
provided in Item 3 of each ballot for 9.5% Sinking Fund Debentures received from
a beneficial owner.
(Please complete Table B or attach the information requested by this Item 3 in
the format of Table B.)
ITEM 4. CERTIFICATIONS.
By signing this Master Ballot, the undersigned certifies as follows:
(1) Each beneficial owner of 9.5% Sinking Fund Debentures whose vote is being
transmitted by this Master Ballot has been provided with a copy of the
Disclosure Statement and all related solicitation materials.
(2) A record of the ballots received from each beneficial owner will remain on
file with the undersigned (and be subject to inspection by the Court) until
one year after the confirmation of the Plan (or as modified by subsequent
Court order).
(3) The undersigned is the registered or record owner of the 9.5% Sinking Fund
Debentures set forth in Item 1 and/or has full power and authority to vote
to accept or reject the Plan.
NAME OF RECORD OR REGISTERED HOLDER:
______________________________________________________________________________
(Print or Type)
By: __________________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: ___________________________________________________________________
Title: _______________________________________________________________________
(If Appropriate)
Street Address: ______________________________________________________________
______________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) __________________________________________________
______________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed:_______________________________________________________________
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
20M-SF
<PAGE> 4
TABLE A
BENEFICIAL OWNER INFORMATION
BALLOTS VOTED TO ACCEPT THE PLAN
<TABLE>
<CAPTION>
____________________________________________________________________________________________
| | DOLLAR AMOUNT OF 9.5% |
| | SINKING FUND DEBENTURES |
| CUSTOMER ACCOUNT NO. | OWNED AS OF VOTING RECORD DATE |
|______________________________________________|_____________________________________________|
| <S> | <C> |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
</TABLE>
BALLOTS VOTED TO REJECT THE PLAN
<TABLE>
<CAPTION>
____________________________________________________________________________________________
| | DOLLAR AMOUNT OF 9.5% |
| | SINKING FUND DEBENTURES |
| CUSTOMER ACCOUNT NO. | OWNED AS OF VOTING RECORD DATE |
|______________________________________________|_____________________________________________|
| <S> | <C> |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
</TABLE>
20M-SF
<PAGE> 5
TABLE B
TRANSCRIPTION OF INFORMATION FROM ITEM 3 OF BENEFICIAL OWNER BALLOTS
(USE EXTRA SHEETS IF NECESSARY)
<TABLE>
<CAPTION>
_________________________________________________________________________________________________________________________
| | CUSTOMER | | | PORT | |
| YOUR CUSTOMER | ACCOUNT # | 9.5% SINKING FUND | HENRY COUNTY | DEVELOPMENT | MANSFIELD, OHIO |
| ACCOUNT # | OF OTHER ACCOUNT | DEBENTURES | IDRBs (SERIES 1981) | IDRBs (SERIES 1980) | IDRBs |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| <S> | <C> | <C> | <C> | <C> | <C> |
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
<CAPTION>
___________________________________________________________
| | CUSTOMER | |
| YOUR CUSTOMER | ACCOUNT # | OTHER UNSECURED |
| ACCOUNT # | OF OTHER ACCOUNT | CLAIMS |
|__________________|__________________|_____________________|
| <S> | <C> | <C> |
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
</TABLE>
20M-SF
<PAGE> 6
INSTRUCTIONS FOR MASTER BALLOT
YOU SHOULD DELIVER THE FOLLOWING TO EACH BENEFICIAL OWNER FOR WHICH YOU
HOLD 9.5% SINKING FUND DEBENTURES:
- - Class 20 -- Unsecured Claims Ballot for 9.5% Sinking Fund Debentures, Ballot
Code 20B-SF
- - Disclosure Statement
- - Postage-paid, return envelopes addressed to you (or, if the Unsecured Claims
Ballot has been "prevalidated" by you, addressed to Hill and Knowlton).
FOR UNSECURED CLAIMS BALLOTS (BALLOT CODE 20B-SF) RETURNED TO YOU, YOU MUST
DO ONE OF THE FOLLOWING:
(1) Forward completed Unsecured Claims Ballots directly to Hill and
Knowlton, indicating the appropriate authority to vote on each such ballot
submitted.
OR
(2) (a) Retain the Unsecured Claims Ballots in your files and transfer
the requested information from each such ballot onto this Master Ballot.
Keep any records of Unsecured Claims Ballots or other voting instructions
received from beneficial owners until one year after the confirmation of
the Plan (or as modified by subsequent Court order).
(b) Complete and sign this Master Ballot. A computer-generated
version of this Master Ballot containing the identical information
requested in this Master Ballot and prepared by a bank, brokerage firm, or
its agent may be signed instead of this Master Ballot.
(c) Deliver this Master Ballot to Hill and Knowlton.
ALL BALLOTS SHOULD BE DELIVERED TO HILL AND KNOWLTON, 466 LEXINGTON AVENUE, NEW
YORK, NEW YORK 10017 (ATTN: EAGLE-PICHER SOLICITATION GROUP) BY 5:00 P.M.,
CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
If you are both the registered owner and the beneficial owner of 9.5% Sinking
Fund Debentures and you wish to vote on the Plan, you may return either a ballot
(Ballot Code 20B-SF) or this Master Ballot (Ballot Code 20M-SF).
Multiple Master Ballots may be completed and delivered to Hill and Knowlton.
Duplicative votes, however, will not be counted. If two or more Master Ballots
are inconsistent, the latest Master Ballot that is received shall, to the extent
of such inconsistency, supersede and revoke any prior Master Ballot. Any later
Master Ballots that are intended to supplement rather than replace earlier
Master Ballots should be marked with the words "ADDITIONAL VOTES" or such other
language that you customarily use to indicate an additional vote that is not
meant to revoke an earlier vote.
20M-SF
<PAGE> 7
To complete the Master Ballot properly, please take the following steps:
<TABLE>
<S> <C>
ITEM 1: Provide appropriate information for both items in Item 1 of the Master Ballot.
ITEM 2: Complete this information for each voting beneficial owner for whom you hold 9.5%
Sinking Fund Debentures. To identify beneficial owners without disclosing their
names, please use the customer account number assigned by you to each such
beneficial owner.
ITEM 3: Transfer the information regarding additional votes provided in Item 3 of the
Unsecured Claims Ballots (Ballot Code 20B-SF) to Item 3 of this Master Ballot.
ITEM 4: (a) Sign and date this Master Ballot.
(b) If you are completing this Master Ballot on behalf of another entity, kindly
state your relationship with such entity.
(c) Fill in your name and mailing address.
</TABLE>
IF YOU RETURN A MASTER BALLOT, PLEASE RETAIN IN YOUR FILES ANY RECORDS OF THE
VOTING INSTRUCTIONS RECEIVED FROM THE BENEFICIAL OWNERS UNTIL ONE YEAR AFTER THE
CONFIRMATION OF THE PLAN (OR AS MODIFIED BY SUBSEQUENT COURT ORDER).
No fees or commissions or other remuneration will be payable to you for
distributing the solicitation materials to your clients. Eagle-Picher
Industries, Inc., however, upon request, will reimburse you for customary
mailing and handling expenses incurred in forwarding the ballots and other
enclosed materials to your clients.
PLEASE DELIVER THIS MASTER BALLOT PROMPTLY!
-------------------------------------------
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENT SHALL CONSTITUTE AUTHORITY
FOR YOU OR ANY OTHER PERSON TO ACT AS THE AGENT OF THE PLAN PROPONENTS OR HILL
AND KNOWLTON, OR AUTHORIZE YOU OR ANY PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE
STATEMENTS CONTAINED IN THE DOCUMENTS ENCLOSED HEREWITH.
20M-SF
<PAGE> 8
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
EAGLE-PICHER INDUSTRIES, )
INC., et al., )
Debtors. )
)
- ------------------------------------------------------
Consolidated Case No. 1-91-00100
Chapter 11
JUDGE PERLMAN
BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION
DATED AUGUST 28, 1996
CLASS 20 - UNSECURED CLAIMS
9.5% SINKING FUND DEBENTURES
This Ballot is to be completed by beneficial owners of 9.5% Sinking Fund
Debentures due March 1, 2017 issued by Eagle-Picher Industries, Inc. ("9.5%
Sinking Fund Debentures"). Please complete, sign, and date this Ballot and
promptly return it in the enclosed pre-addressed, postage-prepaid envelope. THE
VOTING DEADLINE IS NOVEMBER 4, 1996, 5:00 P.M., CINCINNATI, OHIO TIME. If the
enclosed return envelope is addressed to Hill and Knowlton, Hill and Knowlton
must receive this Ballot by the Voting Deadline. If the enclosed return envelope
is addressed to your broker or bank, you must return this Ballot before the
Voting Deadline so that your broker or bank has enough time to complete and
return a master ballot to Hill and Knowlton by the Voting Deadline. IF THIS
BALLOT IS NOT TIMELY RECEIVED, YOUR VOTE WILL NOT BE COUNTED.
DO NOT RETURN ANY SECURITIES WITH THIS BALLOT.
On July 23, 1996, the United States Bankruptcy Court for the Southern District
of Ohio signed an order that establishes certain procedures (the "Voting
Procedures") for the solicitation and tabulation of votes to accept or reject
the Third Amended Consolidated Plan of Reorganization in these chapter 11 cases
(the "Plan"). The Voting Procedures are annexed as Exhibit "D" to the Disclosure
Statement, dated August 28, 1996 (the "Disclosure Statement"), which accompanies
this Ballot.
20B-SF
<PAGE> 9
ITEM 1. AMOUNT OF 9.5% SINKING FUND DEBENTURES.
As of September 5, 1996 (the "Voting Record Date"), the undersigned is the
registered record holder or the beneficial owner of 9.5% Sinking Fund Debentures
in the following principal amount:
$
If your 9.5% Sinking Fund Debentures are held by a bank or broker on your behalf
and you do not know the amount, please contact your bank or broker immediately.
ITEM 2. YOUR VOTE ON THE PLAN.
You, as the beneficial owner of the 9.5% Sinking Fund Debentures described in
Item 1, vote on the Plan as follows (please check one box only):
[ ] ACCEPT
[ ] REJECT
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on you if it is accepted by the holders of two-thirds in amount and more than
one-half in number of claims in each class and the holders of two-thirds in
amount of equity security interests in each class voting on the Plan. In the
event the requisite acceptances are not obtained, the Bankruptcy Court may
nevertheless confirm the Plan if the Bankruptcy Court finds that the Plan
accords fair and equitable treatment to the class or classes rejecting it and
otherwise satisfies the requirements of sec. 1129(b) of the Code. THE VOTING
DEADLINE IS 5:00 P.M., CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
20B-SF
<PAGE> 10
ITEM 3. CERTIFICATION BY BENEFICIAL OWNER OF NO OTHER BALLOTS.
By completing and returning this Ballot, you, as beneficial owner of the
securities listed in Item 1, certify that you have not submitted any other
ballots relating to Class 20 under the Plan except as specified in the following
table:
<TABLE>
<CAPTION>
________________________________________________________________________________________________________________
| | | ACCOUNT NUMBERS | | NUMBER OF OTHER |
| DESCRIPTION OF DEBT | NAMES OF HOLDERS** | (IF APPLICABLE) | PRINCIPAL AMOUNT | BALLOTS SUBMITTED |
|______________________________|_____________________|__________________|___________________|____________________|
| <S> | <C> | <C> | <C> | <C> |
| 9.5% SINKING FUND DEBENTURES | | | | |
| | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| HENRY COUNTY DEVELOPMENT | | | | |
| AUTHORITY IDRBs (SERIES | | | | |
| 1981) | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| PORT DEVELOPMENT CORPORATION | | | | |
| IDRBs (SERIES 1980) | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| MANSFIELD, OHIO IDRBs | | | | |
| | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| OTHER UNSECURED | | | | |
| CLAIMS | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
<FN>
** Insert your name if the debt instrument is held by you in record name or, if
held in street name, insert the name of your broker or bank (or agent
thereof).
</TABLE>
20B-SF
<PAGE> 11
ITEM 4. CERTIFICATION BY BENEFICIAL OWNER OF RECEIPT OF DISCLOSURE STATEMENT.
By completing and returning this Ballot, you, as the beneficial owner of the
9.5% Sinking Fund Debentures described in Item 1, certify that you have been
provided with a copy of the Disclosure Statement and the exhibits thereto.
ITEM 5. CERTIFICATION BY BENEFICIAL OWNER OF AUTHORITY TO EXECUTE BALLOT.
By completing and returning this Ballot, you certify that you have full power
and authority to vote to accept or reject the Plan and that you were the
beneficial owner of the 9.5% Sinking Fund Debentures described in Item 1 on the
Voting Record Date.
ITEM 6. CERTIFICATION BY BANK OR BROKER REGARDING "PREVALIDATED" BALLOTS.
If this Ballot has been "prevalidated" by a bank or broker, such bank or broker
certifies that it held the 9.5% Sinking Fund Debentures described in Item 1 as
the registered or record owner on the Voting Record Date.
NAME OF CREDITOR:
_________________________________________________________________________
(Print or Type)
By: ______________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: _______________________________________________________________
Title: ___________________________________________________________________
(If Appropriate)
Street Address: __________________________________________________________
__________________________________________________________________________
City, State, and Zip Code
Telephone Number: ( ____ )________________________________________________
__________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed: __________________________________________________________
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
20B-SF
<PAGE> 12
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
EAGLE-PICHER INDUSTRIES, )
INC., et al., )
Debtors. )
)
- ------------------------------------
Consolidated Case No. 1-91-00100
Chapter 11
JUDGE PERLMAN
MASTER BALLOT FOR
ACCEPTING OR REJECTING THE THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION
DATED AUGUST 28, 1996
CLASS 20 -- UNSECURED CLAIMS
HENRY COUNTY DEVELOPMENT AUTHORITY
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(EAGLE-PICHER INDUSTRIES, INC.
PROJECT), SERIES 1981
On July 23, 1996, the United States Bankruptcy Court for the Southern District
of Ohio signed an order that establishes certain procedures (the "Voting
Procedures") for the solicitation and tabulation of votes to accept or reject
the Third Amended Consolidated Plan of Reorganization in these chapter 11 cases
(the "Plan"). The Voting Procedures are annexed as Exhibit "D" to the Disclosure
Statement, dated August 28, 1996 (the "Disclosure Statement"), which accompanies
this Master Ballot.
This Master Ballot for the Henry County Development Authority Industrial
Development Revenue Bonds (Eagle-Picher Industries, Inc. Project), Series 1981
("Henry County IRBs") may not be used for any purpose other than for casting
votes to accept or reject the Plan. This Master Ballot is to be used by a trust
company, bank, or other depositary having trust powers recognized by the Federal
Reserve System of the United States (a "Depositary") for casting votes on behalf
of beneficial owners of Henry County IRBs that are held by the Depositary on
behalf of beneficial owners thereof.
PLEASE READ AND FOLLOW THE ATTACHED INSTRUCTIONS CAREFULLY. COMPLETE, SIGN, AND
DATE THIS MASTER BALLOT AND ARRANGE FOR ITS DELIVERY SO THAT IT IS RECEIVED BY
HILL AND KNOWLTON, INC., 466 LEXINGTON AVENUE, NEW YORK, NEW YORK 10017 (ATTN:
EAGLE-PICHER BALLOT SOLICITATION GROUP), BY 5:00 P.M., CINCINNATI, OHIO TIME, ON
NOVEMBER 4, 1996. OTHERWISE, THE VOTES TRANSMITTED HEREBY WILL NOT BE COUNTED.
20M-HC
<PAGE> 13
ITEM 1. TABULATION OF VOTES WITH RESPECT TO THE PLAN.
Please note that each beneficial owner of Henry County IRBs that votes must vote
its entire claim. Accordingly, for purposes of tabulating the vote, each voting
beneficial owner should be deemed to have voted the full amount of its claim as
of the date on which this Master Ballot is completed, as shown by your records.
A ballot received from a beneficial owner that partially accepts and partially
rejects the Plan should not be counted.
The undersigned certifies that (insert the number
of different Beneficial Owners) beneficial owners of Henry County IRBs in the
aggregate principal amount of
$
as identified pursuant to Item 2 below, have delivered to the undersigned
ballots casting votes to ACCEPT the Plan.
The undersigned certifies that (insert the number
of different Beneficial Owners) beneficial owners of Henry County IRBs in the
aggregate principal amount of
$
as identified pursuant to Item 2 below, have delivered to the undersigned
ballots casting votes to REJECT the Plan.
ITEM 2. BENEFICIAL OWNER INFORMATION.
The undersigned certifies that attached hereto is a true and accurate
schedule of the beneficial owners of Henry County IRBs. Please follow the
instructions relating to securities that have been "blocked" and those that have
not been blocked.
(Please complete Table A or attach the information requested by this Item 2
in the format of Table A.)
ITEM 3. ADDITIONAL BALLOTS SUBMITTED BY BENEFICIAL OWNERS.
The undersigned certifies that it has transcribed the information, if any,
provided in Item 3 of each ballot for the Henry County IRBs (Ballot Code 20B-HC)
received from a beneficial owner.
(Please complete Table B or attach the information requested by this Item 3
in the format of Table B.)
20M-HC
<PAGE> 14
ITEM 4. CERTIFICATIONS.
By signing this Master Ballot, the undersigned certifies as follows:
(1) Each beneficial owner of the Henry County IRBs whose vote is being
transmitted by this Master Ballot has been provided with a copy of the
Disclosure Statement and all related solicitation materials.
(2) A record of the ballots received from each beneficial owner will remain on
file with the undersigned (and be subject to inspection by the Court) until
one year after the confirmation of the Plan (or as modified by subsequent
Court order).
(3) The undersigned has in its possession, as a Depositary, the Henry County
IRBs set forth in Item 1 and/or has full power and authority to vote to
accept or reject the Plan.
(4) The Henry County IRBs listed on Table A, the holders of which have been
identified solely by account numbers, may not be withdrawn, moved, or used
for any purpose, other than allowing the beneficial owner to vote on the
Plan, until after entry of the order confirming the Plan.
NAME OF DEPOSITARY
_________________________________________________________________________
(Print or Type)
By: _____________________________________________________________________
(Signature)
Print Name of
Signatory: ______________________________________________________________
Title: __________________________________________________________________
(If Appropriate)
Street Address: _________________________________________________________
_________________________________________________________________________
City, State, and Zip Code
Telephone Number: ( ____ )_______________________________________________
_________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed: _________________________________________________________
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
20M-HC
<PAGE> 15
TABLE A
BENEFICIAL OWNER INFORMATION
(PLEASE SEE INSTRUCTIONS FOR COMPLETING TABLE A)
BALLOTS VOTED TO ACCEPT THE PLAN
<TABLE>
<CAPTION>
__________________________________________________________________________________________________
| | | DOLLAR AMOUNT OF |
| | CUSTOMER NAME OF | HENRY COUNTY IRBs |
| CERTIFICATE | ACCOUNT NO. CUSTOMER | ON DEPOSIT AS OF |
| NUMBERS | (IF BLOCKED) OR (IF NOT BLOCKED) | DATE OF BALLOT |
|_____________________|_____________________________________________________|______________________|
| <S> | <C> <C> <C> | <C> |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
</TABLE>
20M-HC
<PAGE> 16
BALLOTS VOTED TO REJECT THE PLAN
<TABLE>
<CAPTION>
__________________________________________________________________________________________________
| | | DOLLAR AMOUNT OF |
| | CUSTOMER NAME OF | HENRY COUNTY IRBs |
| CERTIFICATE | ACCOUNT NO. CUSTOMER | ON DEPOSIT AS OF |
| NUMBERS | (IF BLOCKED) OR (IF NOT BLOCKED) | DATE OF BALLOT |
|_____________________|_____________________________________________________|______________________|
| <S> | <C> <C> <C> | <C> |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
</TABLE>
20M-HC
<PAGE> 17
TABLE B
TRANSCRIPTION OF INFORMATION FROM ITEM 3 OF BENEFICIAL OWNER BALLOTS
(USE EXTRA SHEETS IF NECESSARY)
<TABLE>
<CAPTION>
_________________________________________________________________________________________________________________________
| | CUSTOMER | | | PORT | |
| YOUR CUSTOMER | ACCOUNT # | 9.5% SINKING FUND | HENRY COUNTY | DEVELOPMENT | MANSFIELD, OHIO |
| ACCOUNT # | OF OTHER ACCOUNT | DEBENTURES | IDRBs (SERIES 1981) | IDRBs (SERIES 1980) | IDRBs |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| <S> | <C> | <C> | <C> | <C> | <C> |
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
<CAPTION>
___________________________________________________________
| | CUSTOMER | |
| YOUR CUSTOMER | ACCOUNT # | OTHER UNSECURED |
| ACCOUNT # | OF OTHER ACCOUNT | CLAIMS |
|__________________|__________________|_____________________|
| <S> | <C> | <C> |
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
</TABLE>
20M-SF
<PAGE> 18
INSTRUCTIONS FOR MASTER BALLOT
------------------------------
YOU SHOULD DELIVER THE FOLLOWING TO EACH BENEFICIAL OWNER FOR WHICH YOU
HOLD HENRY COUNTY IRBs:
- - Class 20 -- Unsecured Claims Ballot for Henry County IRBs, Ballot Code 20B-HC
- - Disclosure Statement
- - Postage-paid, return envelopes addressed to you (or, if the Unsecured Claims
Ballot has been "prevalidated" by you (i.e., by completing the Certification
of Depositary attached to the Unsecured Claims Ballot and other appropriate
information), addressed to Hill and Knowlton).
FOR UNSECURED CLAIMS BALLOTS (BALLOT CODE 20B-HC) RETURNED TO YOU, YOU MUST
DO ONE OF THE FOLLOWING:
(1) Forward the Unsecured Claims Ballots directly to Hill and
Knowlton, completing the Certification by Depositary on the last page of
the Unsecured Claims Ballots.
OR
(2) (a) Retain the Unsecured Claims Ballots in your files and transfer
the requested information from each such ballot onto this Master Ballot.
Keep any records of Unsecured Claims Ballots or other voting instructions
received from beneficial owners until one year after the confirmation of
the Plan (or as modified by subsequent Court order).
(b) Complete and sign this Master Ballot. A computer-generated
version of this Master Ballot containing the identical information
requested in this Master Ballot and prepared by a Depositary may be signed
instead of this Master Ballot.
(c) Deliver this Master Ballot to Hill and Knowlton.
ALL BALLOTS SHOULD BE DELIVERED TO HILL AND KNOWLTON, 466 LEXINGTON AVENUE, NEW
YORK, NEW YORK 10017 (ATTN: EAGLE-PICHER SOLICITATION GROUP) BY 5:00 P.M.,
CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
If you act as both the Depositary and the beneficial owner of Henry County IRBs
and you wish to vote on the Plan, you may return either a ballot (Ballot Code
20B-HC) or this Master Ballot (Ballot Code 20M-HC).
Multiple Master Ballots may be completed and delivered to Hill and Knowlton.
Duplicative votes, however, will not be counted. If two or more Master Ballots
are inconsistent, the latest Master Ballot that is received shall, to the extent
of such inconsistency, supersede and revoke any prior Master Ballot. Any later
Master Ballots that are intended to supplement rather than replace earlier
Master Ballots should be marked with the words "ADDITIONAL VOTES" or such other
language that you customarily use to indicate an additional vote that is not
meant to revoke an earlier vote.
20M-HC
<PAGE> 19
To complete the Master Ballot properly, please take the following steps:
<TABLE>
<S> <C>
ITEM 1: Provide appropriate information for both items in Item 1 of the Master
Ballot.
ITEM 2: Complete this information for each voting beneficial owner for whom you hold
Henry County IRBs in bearer form.
ITEM 3: Transfer the information regarding additional votes provided in Item 3 of the
ballots (Ballot Code 20B-HC) to Item 3 of this Master Ballot.
ITEM 4: (a) Sign and date this Master Ballot.
(b) If you are completing this Master Ballot on behalf of another entity,
kindly state your relationship with such entity.
(c) Fill in your name and mailing address.
TABLE A: If the Henry County IRBs that you hold for a customer have been "blocked"
(viz., prevented from being withdrawn, moved, or used for any purpose, other
than allowing the beneficial owner to vote on the Plan) until after entry of
the order confirming the Plan, then please complete Table A using the account
number by which you identify your customer. Otherwise, you must complete
Table A using the name of the beneficial owner of the Henry County IRBs for
which you hold such securities.
</TABLE>
IF YOU RETURN A MASTER BALLOT, PLEASE RETAIN IN YOUR FILES ANY RECORDS OF THE
VOTING INSTRUCTIONS RECEIVED FROM THE BENEFICIAL OWNERS UNTIL ONE YEAR AFTER THE
CONFIRMATION OF THE PLAN (OR AS MODIFIED BY SUBSEQUENT COURT ORDER).
No fees or commissions or other remuneration will be payable to you for
distributing the solicitation materials to your clients. Eagle-Picher
Industries, Inc., however, upon request, will reimburse you for customary
mailing and handling expenses incurred in forwarding the ballots and other
enclosed materials to your clients.
PLEASE DELIVER THIS MASTER BALLOT PROMPTLY!
-------------------------------------------
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENT SHALL CONSTITUTE AUTHORITY
FOR YOU OR ANY OTHER PERSON TO ACT AS THE AGENT OF THE PLAN PROPONENTS OR HILL
AND KNOWLTON, OR AUTHORIZE YOU OR ANY PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE
STATEMENTS CONTAINED IN THE DOCUMENTS ENCLOSED HEREWITH.
20M-HC
<PAGE> 20
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
EAGLE-PICHER INDUSTRIES, )
INC., et al., )
Debtors. )
)
- ------------------------------------
Consolidated Case No. 1-91-00100
Chapter 11
JUDGE PERLMAN
BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION
DATED AUGUST 28, 1996
CLASS 20 -- UNSECURED CLAIMS
HENRY COUNTY DEVELOPMENT AUTHORITY
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(EAGLE-PICHER INDUSTRIES, INC.
PROJECT), SERIES 1981
This Ballot is to be completed by beneficial owners of Henry County Development
Authority Industrial Development Revenue Bonds (Eagle-Picher Industries, Inc.
Project), Series 1981 ("Henry County IRBs"). YOU MUST HAVE THE CERTIFICATION OF
DEPOSITARY ON THE LAST PAGE OF THIS BALLOT COMPLETED UNLESS YOU ARE RETURNING
THIS BALLOT TO A TRUST COMPANY, BANK, OR OTHER DEPOSITARY HAVING TRUST POWERS
RECOGNIZED BY THE FEDERAL RESERVE SYSTEM OF THE UNITED STATES (A "DEPOSITARY")
WITH WHICH YOU HAVE DEPOSITED YOUR HENRY COUNTY IRBs.
Please complete, sign, and date this Ballot and promptly return it in the
enclosed pre-addressed, postage-prepaid envelope. THE VOTING DEADLINE IS
NOVEMBER 4, 1996, AT 5:00 P.M., CINCINNATI, OHIO TIME. If the enclosed return
envelope is addressed to Hill and Knowlton, Hill and Knowlton must receive this
Ballot by the Voting Deadline. If the enclosed return envelope is addressed to
your Depositary, you must return this Ballot before the Voting Deadline so that
your Depositary has enough time to complete and return a master ballot to Hill
and Knowlton by the Voting Deadline. IF THIS BALLOT IS NOT TIMELY RECEIVED, YOUR
VOTE WILL NOT BE COUNTED.
DO NOT RETURN ANY SECURITIES WITH THIS BALLOT.
On July 23, 1996, the United States Bankruptcy Court for the Southern District
of Ohio signed an order that establishes certain procedures (the "Voting
Procedures") for the solicitation and tabulation of votes to accept or reject
the Third Amended Consolidated Plan of Reorganization in these chapter 11 cases
(the "Plan"). The Voting Procedures are annexed as Exhibit "D" to the Disclosure
Statement, dated August 28, 1996 (the "Disclosure Statement"), which accompanies
this Ballot.
20B-HC
<PAGE> 21
ITEM 1. AMOUNT OF HENRY COUNTY IRBs
As of the date hereof, the undersigned is the beneficial owner of Henry County
IRBs in the following principal amount:
$
If you have deposited your Henry County IRBs with a Depositary and you do not
know the amount, please contact your Depositary immediately.
List the certificate numbers of the Henry County IRBs owned by the
undersigned beneficial owner as of the date hereof:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM 2. YOUR VOTE ON THE PLAN.
You, as the beneficial owner of the Henry County IRBs described in Item 1, vote
on the Plan as follows (please check one box only):
[ ] ACCEPT
[ ] REJECT
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on you if it is accepted by the holders of two-thirds in amount and more than
one-half in number of claims in each class and the holders of two-thirds in
amount of equity security interests in each class voting on the Plan. In the
event the requisite acceptances are not obtained, the Bankruptcy Court may
nevertheless confirm the Plan if the Bankruptcy Court finds that the Plan
accords fair and equitable treatment to the class or classes rejecting it and
otherwise satisfies the requirements of Section 1129(b) of the Code. THE VOTING
DEADLINE IS 5:00 P.M., CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
20B-HC
<PAGE> 22
ITEM 3. CERTIFICATION BY BENEFICIAL OWNER OF NO OTHER BALLOTS.
By completing and returning this Ballot, you, as beneficial owner of the Henry
County IRBs listed in Item 1, certify that you have not submitted any other
ballots relating to Class 20 under the Plan except as specified in the following
table:
<TABLE>
<CAPTION>
________________________________________________________________________________________________________________
| | | ACCOUNT NUMBERS | | NUMBER OF OTHER |
| DESCRIPTION OF DEBT | NAMES OF HOLDERS** | (IF APPLICABLE) | PRINCIPAL AMOUNT | BALLOTS SUBMITTED |
|______________________________|_____________________|__________________|___________________|____________________|
| <S> | <C> | <C> | <C> | <C> |
| 9.5% SINKING FUND DEBENTURES | | | | |
| | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| HENRY COUNTY DEVELOPMENT | | | | |
| AUTHORITY IDRBs (SERIES | | | | |
| 1981) | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| PORT DEVELOPMENT CORPORATION | | | | |
| IDRBs (SERIES 1980) | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| MANSFIELD, OHIO IDRBs | | | | |
| | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| OTHER UNSECURED | | | | |
| CLAIMS | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
<FN>
** Insert your name if the debt instrument is held by you in record name or, if
held in street name, insert the name of your broker or bank (or agent
thereof).
</TABLE>
20B-HC
<PAGE> 23
ITEM 4. CERTIFICATION BY BENEFICIAL OWNER OF RECEIPT OF DISCLOSURE STATEMENT.
By completing and returning this Ballot, you, as the beneficial owner of the
Henry County IRBs described in Item 1, certify that you have been provided with
a copy of the Disclosure Statement and the exhibits thereto.
ITEM 5. CERTIFICATION BY BENEFICIAL OWNER OF AUTHORITY TO EXECUTE BALLOT.
By completing and returning this Ballot, you certify that you have full power
and authority to vote to accept or reject the Plan and that you are the
beneficial owner of the Henry County IRBs described in Item 1 as of the date
hereof.
THE ATTACHED CERTIFICATION
BY DEPOSITARY MUST BE
COMPLETED UNLESS YOU ARE
RETURNING THIS BALLOT TO
YOUR DEPOSITARY
NAME OF CREDITOR:
______________________________________________________________________________
(Print or Type)
By: __________________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: ___________________________________________________________________
Title: _______________________________________________________________________
(If Appropriate)
Street Address: ______________________________________________________________
______________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) __________________________________________________
______________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed:_______________________________________________________________
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
20B-HC
<PAGE> 24
CERTIFICATION BY DEPOSITARY
THIS MUST BE COMPLETED UNLESS YOU ARE RETURNING THIS BALLOT TO YOUR DEPOSITARY.
CHECK BOX THAT APPLIES (ONE BOX ONLY)
-------------------------------------
COMPLETE AND CHECK BOX IF THE HENRY COUNTY IRBS ARE NOT ON DEPOSIT WITH A
DEPOSITARY:
[ ] The undersigned certifies that, on the date set forth below, the beneficial
owner listed on this Ballot presented to the undersigned the original Henry
County IRBs bearing the certificate numbers set forth in Item 1 of this
Ballot.
COMPLETE AND CHECK ONE OF THE FOLLOWING BOXES IF THE HENRY COUNTY IRBS ARE ON
DEPOSIT WITH A DEPOSITARY:
[ ] The undersigned certifies that, as of the date set forth below, the
undersigned held original Henry County IRBs bearing the certificate numbers
set forth in Item 1 of this Ballot on behalf of the beneficial owner listed
on this Ballot.
[ ] The undersigned certifies that, as of the date set forth below, the
undersigned held original Henry County IRBs bearing the certificate numbers
set forth in Item 1 of this Ballot on behalf of the beneficial owner that
maintains an account, numbered , with the
undersigned and that such securities have been "blocked" (viz., prevented
from being withdrawn, moved, or used for any purpose, other than allowing
the beneficial owner to vote on the Plan) until after entry of the order
confirming the Plan.
NAME OF DEPOSITARY:
______________________________________________________________________________
(Print or Type)
By: __________________________________________________________________________
(Signature of Depositary)
Print Name of
Signatory: ___________________________________________________________________
Title: _______________________________________________________________________
(If Appropriate)
Street Address: ______________________________________________________________
______________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) __________________________________________________
Date Completed: ______________________________________________________________
20B-HC
<PAGE> 25
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
EAGLE-PICHER INDUSTRIES, )
INC., et al., )
Debtors. )
)
- ------------------------------------
Consolidated Case No. 1-91-00100
Chapter 11
JUDGE PERLMAN
MASTER BALLOT FOR
ACCEPTING OR REJECTING THE THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION
DATED AUGUST 28, 1996
CLASS 20 -- UNSECURED CLAIMS
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(EAGLE-PICHER INDUSTRIES, INC. PROJECT)
ISSUED BY THE CITY OF MANSFIELD, OHIO
On July 23, 1996, the United States Bankruptcy Court for the Southern District
of Ohio signed an order that establishes certain procedures (the "Voting
Procedures") for the solicitation and tabulation of votes to accept or reject
the Third Amended Consolidated Plan of Reorganization in these chapter 11 cases
(the "Plan"). The Voting Procedures are annexed as Exhibit "D" to the Disclosure
Statement, dated August 28, 1996 (the "Disclosure Statement"), which accompanies
this Master Ballot.
This Master Ballot for Industrial Development Revenue Bonds (Eagle-Picher
Industries, Inc. Project) issued by the City of Mansfield, Ohio ("Mansfield
IRBs") may not be used for any purpose other than for casting votes to accept or
reject the Plan. THE MANSFIELD IRBs WERE ISSUED IN BOTH REGISTERED AND BEARER
FORM. Accordingly, this Master Ballot is to be used by (i) a broker, proxy
intermediary, or other nominee for casting votes on behalf of beneficial owners
of Mansfield IRBs that were issued in registered form and/or (ii) a trust
company, bank, or other depositary having trust powers recognized by the Federal
Reserve System of the United States (a "Depositary") for casting votes on behalf
of beneficial owners of Mansfield IRBs that were issued in bearer form and are
held by the Depositary on behalf of beneficial owners thereof.
PLEASE READ AND FOLLOW THE ATTACHED INSTRUCTIONS CAREFULLY. COMPLETE, SIGN, AND
DATE THIS MASTER BALLOT AND ARRANGE FOR ITS DELIVERY SO THAT IT IS RECEIVED BY
HILL AND KNOWLTON, INC., 466 LEXINGTON AVENUE, NEW YORK, NEW YORK 10017 (ATTN:
EAGLE-PICHER BALLOT SOLICITATION GROUP), BY 5:00 P.M., CINCINNATI, OHIO TIME, ON
NOVEMBER 4, 1996. OTHERWISE, THE VOTES TRANSMITTED HEREBY WILL NOT BE COUNTED.
20M-OH
<PAGE> 26
ITEM 1. TABULATION OF VOTES WITH RESPECT TO THE PLAN.
Please note that each beneficial owner of Mansfield IRBs that votes must vote
its entire claim. Accordingly, for purposes of tabulating the vote, (i) each
voting beneficial owner of Mansfield IRBs issued in registered form should be
deemed to have voted the full amount of its claim as of September 5, 1996 (the
"Voting Record Date"), as shown by your records, and (ii) each beneficial owner
of Mansfield IRBs issued in bearer form should be deemed to have voted the full
amount of its claim as of the date on which this Master Ballot is completed, as
shown by your records. A ballot received from a beneficial owner that partially
accepts and partially rejects the Plan should not be counted.
The undersigned certifies that (insert the number
of different Beneficial Owners) beneficial owners of Mansfield IRBs in the
aggregate principal amount of
$
as identified pursuant to Item 2 below, have delivered to the undersigned
ballots casting votes to ACCEPT the Plan.
The undersigned certifies that (insert the number
of different Beneficial Owners) beneficial owners of Mansfield IRBs in the
aggregate principal amount of
$
as identified pursuant to Item 2 below, have delivered to the undersigned
ballots casting votes to REJECT the Plan.
ITEM 2. BENEFICIAL OWNER INFORMATION.
The undersigned certifies that attached hereto is a true and accurate schedule
of the beneficial owners of Mansfield IRBs. With respect to Mansfield IRBs that
are held in bearer form, please follow the instructions relating to securities
that have been "blocked" and those that have not been blocked.
(Please complete Table A-1 for Mansfield IRBs that are held in bearer form and
Table A-2 for Mansfield IRBs that are held in registered form, or attach the
information requested by this Item 2 in the format of Table A-1 and Table A-2.)
ITEM 3. ADDITIONAL BALLOTS SUBMITTED BY BENEFICIAL OWNERS.
The undersigned certifies that it has transcribed the information, if any,
provided in Item 3 of each ballot for the Mansfield IRBs (Ballot Code
20B-OH)received from a beneficial owner.
(Please complete Table B or attach the information requested by this Item 3 in
the format of Table B.)
20M-OH
<PAGE> 27
ITEM 4. CERTIFICATIONS.
By signing this Master Ballot, the undersigned certifies as follows:
(1) Each beneficial owner of the Mansfield IRBs whose vote is being transmitted
by this Master Ballot has been provided with a copy of the Disclosure
Statement and all related solicitation materials.
(2) A record of the ballots received from each beneficial owner will remain on
file with the undersigned (and be subject to inspection by the Court) until
one year after the confirmation of the Plan (or as modified by subsequent
Court order).
(3) The undersigned has in its possession, as a Depositary, the Mansfield IRBs
set forth in Table A-1 and/or has full power and authority to vote to accept
or reject the Plan.
(4) The Mansfield IRBs listed on Table A-1, the holders of which have been
identified solely by account numbers, may not be withdrawn, moved, or used
for any purpose, other than allowing the beneficial owner to vote on the
Plan, until after entry of the order confirming the Plan.
(4) The undersigned is the registered or record owner of the Mansfield IRBs set
forth in Table A-2 and/or has the full power and authority to vote to accept
or reject the Plan.
NAME OF DEPOSITARY:
_____________________________________________________________________________
(Print or Type)
By: ________________________________________________________________________
(Signature)
Print Name of
Signatory: _________________________________________________________________
Title: _____________________________________________________________________
(If Appropriate)
Street Address: ____________________________________________________________
_____________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) _________________________________________________
_____________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed:______________________________________________________________
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
20M-OH
<PAGE> 28
TABLE A-1
BENEFICIAL OWNER INFORMATION
FOR MANSFIELD IRBS HELD IN BEARER FORM
(PLEASE SEE INSTRUCTIONS FOR ITEM 2)
BALLOTS VOTED TO ACCEPT THE PLAN
<TABLE>
<CAPTION>
__________________________________________________________________________________________________
| | | DOLLAR AMOUNT OF |
| | CUSTOMER NAME OF | HENRY COUNTY IRBs |
| CERTIFICATE | ACCOUNT NO. CUSTOMER | ON DEPOSIT AS OF |
| NUMBERS | (IF BLOCKED) OR (IF NOT BLOCKED) | DATE OF BALLOT |
|_____________________|_____________________________________________________|______________________|
| <S> | <C> <C> <C> | <C> |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
</TABLE>
20M-OH
<PAGE> 29
TABLE A-1 (CONTINUED)
BENEFICIAL OWNER INFORMATION
FOR MANSFIELD IRBS HELD IN BEARER FORM
BALLOTS VOTED TO REJECT THE PLAN
<TABLE>
<CAPTION>
__________________________________________________________________________________________________
| | | DOLLAR AMOUNT OF |
| | CUSTOMER NAME OF | HENRY COUNTY IRBs |
| CERTIFICATE | ACCOUNT NO. CUSTOMER | ON DEPOSIT AS OF |
| NUMBERS | (IF BLOCKED) OR (IF NOT BLOCKED) | DATE OF BALLOT |
|_____________________|_____________________________________________________|______________________|
| <S> | <C> <C> <C> | <C> |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
</TABLE>
20M-OH
<PAGE> 30
TABLE A-2
BENEFICIAL OWNER INFORMATION
FOR MANSFIELD IRBS HELD IN REGISTERED FORM
BALLOTS VOTED TO ACCEPT THE PLAN
<TABLE>
<CAPTION>
____________________________________________________________________________________________
| | DOLLAR AMOUNT OF MANSFIELD IRBs |
| CUSTOMER ACCOUNT NO. | OWNED AS OF VOTING RECORD DATE |
|______________________________________________|_____________________________________________|
| <S> | <C> |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
</TABLE>
BALLOTS VOTED TO REJECT THE PLAN
<TABLE>
<CAPTION>
____________________________________________________________________________________________
| | DOLLAR AMOUNT OF MANSFIELD IRBs |
| CUSTOMER ACCOUNT NO. | OWNED AS OF VOTING RECORD DATE |
|______________________________________________|_____________________________________________|
| <S> | <C> |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
</TABLE>
20M-OH
<PAGE> 31
TABLE B
TRANSCRIPTION OF INFORMATION FROM ITEM 3 OF BENEFICIAL OWNER BALLOTS
(USE EXTRA SHEETS IF NECESSARY)
<TABLE>
<CAPTION>
_________________________________________________________________________________________________________________________
| | CUSTOMER | | | PORT | |
| YOUR CUSTOMER | ACCOUNT # | 9.5% SINKING FUND | HENRY COUNTY | DEVELOPMENT | MANSFIELD, OHIO |
| ACCOUNT # | OF OTHER ACCOUNT | DEBENTURES | IDRBs (SERIES 1981) | IDRBs (SERIES 1980) | IDRBs |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| <S> | <C> | <C> | <C> | <C> | <C> |
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
<CAPTION>
___________________________________________________________
| | CUSTOMER | |
| YOUR CUSTOMER | ACCOUNT # | OTHER UNSECURED |
| ACCOUNT # | OF OTHER ACCOUNT | CLAIMS |
|__________________|__________________|_____________________|
| <S> | <C> | <C> |
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
</TABLE>
20M-OH
<PAGE> 32
INSTRUCTIONS FOR MASTER BALLOT
------------------------------
YOU SHOULD DELIVER THE FOLLOWING TO EACH BENEFICIAL OWNER FOR WHICH YOU HOLD
MANSFIELD IRBs:
- - Class 20 -- Unsecured Claims Ballot for Mansfield IRBs, Ballot Code 20B-OH
- - Disclosure Statement
- - Postage-paid, return envelopes addressed to you (or, if the Unsecured Claims
Ballot has been "prevalidated" by you, addressed to Hill and Knowlton). In
order to prevalidate an Unsecured Claims Ballot with respect to Mansfield IRBs
held in bearer form, you must complete the Certification of Depositary
attached to the Unsecured Claims Ballot and other appropriate information.
FOR UNSECURED CLAIMS BALLOTS (BALLOT CODE 20B-OH) RETURNED TO YOU, YOU MUST DO
ONE OF THE FOLLOWING:
(1) (a) (i) For Mansfield IRBs held in bearer form, complete the
Certification by Depositary on the last page of the Unsecured Claims
Ballot, or (ii) for Mansfield IRBs held in registered form, indicate the
appropriate authority to vote directly on the Unsecured Claims Ballot.
(b) Forward the completed Unsecured Claims Ballots directly to
Hill and Knowlton.
OR
(2) (a) Retain the Unsecured Claims Ballots in your files and transfer
the requested information from each such ballot onto this Master Ballot.
Keep any records of Unsecured Claims Ballots or other voting instructions
received from beneficial owners until one year after the confirmation of
the Plan (or as modified by subsequent Court order).
(b) Complete and sign this Master Ballot. A computer-generated
version of this Master Ballot containing the identical information
requested in this Master Ballot and prepared by a Depositary or a bank,
brokerage firm, or its agent may be signed instead of this Master Ballot.
(c) Deliver this Master Ballot to Hill and Knowlton.
ALL BALLOTS SHOULD BE DELIVERED TO HILL AND KNOWLTON, 466 LEXINGTON AVENUE, NEW
YORK, NEW YORK 10017 (ATTN: EAGLE-PICHER SOLICITATION GROUP) BY 5:00 P.M.,
CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
If you act as both the Depositary/registered owner and the beneficial owner of
Mansfield IRBs and you wish to vote on the Plan, you may return either a ballot
(Ballot Code 20B-OH) or this Master Ballot (Ballot Code 20M-OH).
Multiple Master Ballots may be completed and delivered to Hill and Knowlton.
Duplicative votes, however, will not be counted. If two or more Master Ballots
are inconsistent, the latest Master Ballot that is received shall, to the extent
of such inconsistency, supersede and revoke any prior Master Ballot. Any later
Master Ballots that are intended to supplement rather than replace earlier
Master Ballots should be marked with the words "ADDITIONAL VOTES" or such other
language that you customarily use to indicate an additional vote that is not
meant to revoke an earlier vote.
20M-OH
<PAGE> 33
To complete the Master Ballot properly, please take the following steps:
<TABLE>
<S> <C>
ITEM 1: Provide appropriate information for both items in Item 1 of the Master Ballot.
ITEM 2: Complete the information on Table A-1 for each voting beneficial owner for whom
you hold Mansfield IRBs in bearer form. If the Mansfield IRBs that you hold for a
customer have been "blocked" (viz., prevented from being withdrawn, moved, or used
for any purpose, other than allowing the beneficial owner to vote on the Plan)
until after entry of the order confirming the Plan, then please complete Table A-1
using the account number by which you identify your customer. Otherwise, you must
complete Table A-1 using the name of the beneficial owner of the Mansfield IRBs
for which you hold such securities.
Complete the information on Table A-2 for each beneficial owner for whom you hold
Mansfield IRBs in registered form. To identify beneficial owners without
disclosing their names, please use the customer account number assigned by you to
each such beneficial owner.
ITEM 3: Transfer the information regarding additional votes provided in Item 3 of the
Unsecured Claims Ballots (Ballot Code 20B-OH) to Item 3 of this Master Ballot.
ITEM 4: (a) Sign and date this Master Ballot.
(b) If you are completing this Master Ballot on behalf of another entity, kindly
state your relationship with such entity.
(c) Fill in your name and mailing address.
</TABLE>
IF YOU RETURN A MASTER BALLOT, PLEASE RETAIN IN YOUR FILES ANY RECORDS OF THE
VOTING INSTRUCTIONS RECEIVED FROM THE BENEFICIAL OWNERS UNTIL ONE YEAR AFTER
CONFIRMATION OF THE PLAN (OR AS MODIFIED BY SUBSEQUENT COURT ORDER).
No fees or commissions or other remuneration will be payable to you for
distributing the solicitation materials to your clients. Eagle-Picher
Industries, Inc., however, upon request, will reimburse you for customary
mailing and handling expenses incurred in forwarding the ballots and other
enclosed materials to your clients.
PLEASE DELIVER THIS MASTER BALLOT PROMPTLY!
-------------------------------------------
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENT SHALL CONSTITUTE AUTHORITY
FOR YOU OR ANY OTHER PERSON TO ACT AS THE AGENT OF THE PLAN PROPONENTS OR HILL
AND KNOWLTON, OR AUTHORIZE YOU OR ANY PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE
STATEMENTS CONTAINED IN THE DOCUMENTS ENCLOSED HEREWITH.
20M-OH
<PAGE> 34
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
EAGLE-PICHER INDUSTRIES, )
INC., et al., )
Debtors. )
)
- ------------------------------------
Consolidated Case No. 1-91-00100
Chapter 11
JUDGE PERLMAN
BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION
DATED AUGUST 28, 1996
CLASS 20 -- UNSECURED CLAIMS
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(EAGLE-PICHER INDUSTRIES, INC. PROJECT)
ISSUED BY THE CITY OF MANSFIELD, OHIO
This Ballot is to be completed by beneficial owners of Industrial Development
Revenue Bonds (Eagle-Picher Industries, Inc. Project) issued by the City of
Mansfield, Ohio ("Mansfield IRBs"). THE MANSFIELD IRBs WERE ISSUED IN BOTH
BEARER AND REGISTERED FORM. IF YOU HOLD MANSFIELD IRBs IN BEARER FORM, YOU MUST
HAVE THE CERTIFICATION OF DEPOSITARY ON THE LAST PAGE OF THIS BALLOT COMPLETED
UNLESS YOU ARE RETURNING THIS BALLOT TO A TRUST COMPANY, BANK, OR OTHER
DEPOSITARY HAVING TRUST POWERS RECOGNIZED BY THE FEDERAL RESERVE SYSTEM OF THE
UNITED STATES (A "DEPOSITARY") WITH WHICH YOU HAVE DEPOSITED YOUR MANSFIELD
IRBSs
Please complete, sign, and date this Ballot and promptly return it in the
enclosed pre-addressed, postage-prepaid envelope. THE VOTING DEADLINE IS
NOVEMBER 4, 1996, AT 5:00 P.M., CINCINNATI, OHIO TIME. If the enclosed return
envelope is addressed to Hill and Knowlton, Hill and Knowlton must receive this
Ballot by the Voting Deadline. If the enclosed return envelope is addressed to
your Depositary, broker, or bank, you must return this Ballot before the Voting
Deadline so that your Depositary, broker, or bank has enough time to complete
and return a master ballot to Hill and Knowlton by the Voting Deadline. IF THIS
BALLOT IS NOT TIMELY RECEIVED, YOUR VOTE WILL NOT BE COUNTED.
DO NOT RETURN ANY SECURITIES WITH THIS BALLOT.
On July 23, 1996, the United States Bankruptcy Court for the Southern District
of Ohio signed an order that establishes certain procedures (the "Voting
Procedures") for the solicitation and tabulation of votes to accept or reject
the Third Amended Consolidated Plan of Reorganization in these chapter 11 cases
(the "Plan"). The Voting Procedures are annexed as Exhibit "D" to the Disclosure
Statement, dated August 28, 1996 (the "Disclosure Statement"), which accompanies
this Ballot.
20B-OH
<PAGE> 35
ITEM 1. AMOUNT OF MANSFIELD IRBs
As of the date hereof, the undersigned is the registered record holder or the
beneficial owner of Mansfield IRBs in the following principal amount:
$
If your Mansfield IRBs are held by a bank or broker on your behalf, or if you
have deposited your Mansfield IRBs with a Depositary and you do not know the
amount, please contact your bank, broker, or Depositary immediately.
(TO BE COMPLETED ONLY IF MANSFIELD IRBs ARE HELD IN BEARER FORM.) List the
certificate numbers of the Mansfield IRBs owned by the undersigned beneficial
owner as of the date hereof:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM 2. YOUR VOTE ON THE PLAN.
You, as the beneficial owner of the Mansfield IRBs described in Item 1, vote on
the Plan as follows (please check one box only):
[ ] ACCEPT
[ ] REJECT
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on you if it is accepted by the holders of two-thirds in amount and more than
one-half in number of claims in each class and the holders of two-thirds in
amount of equity security interests in each class voting on the Plan. In the
event the requisite acceptances are not obtained, the Bankruptcy Court may
nevertheless confirm the Plan if the Bankruptcy Court finds that the Plan
accords fair and equitable treatment to the class or classes rejecting it and
otherwise satisfies the requirements of Section 1129(b) of the Code. THE VOTING
DEADLINE IS 5:00 P.M., CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
20B-OH
<PAGE> 36
ITEM 3. CERTIFICATION BY BENEFICIAL OWNER OF NO OTHER BALLOTS.
By completing and returning this Ballot, you, as beneficial owner of the
Mansfield IRBs listed in Item 1, certify that you have not submitted any other
ballots relating to Class 20 under the Plan except as specified in the following
table:
<TABLE>
<CAPTION>
________________________________________________________________________________________________________________
| | | ACCOUNT NUMBERS | | NUMBER OF OTHER |
| DESCRIPTION OF DEBT | NAMES OF HOLDERS** | (IF APPLICABLE) | PRINCIPAL AMOUNT | BALLOTS SUBMITTED |
|______________________________|_____________________|__________________|___________________|____________________|
| <S> | <C> | <C> | <C> | <C> |
| 9.5% SINKING FUND DEBENTURES | | | | |
| | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| HENRY COUNTY DEVELOPMENT | | | | |
| AUTHORITY IDRBs (SERIES | | | | |
| 1981) | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| PORT DEVELOPMENT CORPORATION | | | | |
| IDRBs (SERIES 1980) | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| MANSFIELD, OHIO IDRBs | | | | |
| | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| OTHER UNSECURED | | | | |
| CLAIMS | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
<FN>
** Insert your name if the debt instrument is held by you in record name or, if
held in street name, insert the name of your broker or bank (or agent
thereof).
</TABLE>
20B-OH
<PAGE> 37
ITEM 4. CERTIFICATION BY BENEFICIAL OWNER OF RECEIPT OF DISCLOSURE STATEMENT.
By completing and returning this Ballot, you, as the beneficial owner of the
Mansfield IRBs described in Item 1, certify that you have been provided with a
copy of the Disclosure Statement and the exhibits thereto.
ITEM 5. CERTIFICATION BY BENEFICIAL OWNER OF AUTHORITY TO EXECUTE BALLOT.
By completing and returning this Ballot, you certify that you have full power
and authority to vote to accept or reject the Plan and that either (i) if your
Mansfield IRBs are held in registered form, you are the beneficial owner of the
Mansfield IRBs described in Item 1 as of the Voting Record Date, or (ii) if your
Mansfield IRBs are held in bearer form, you are the beneficial owner of the
Mansfield IRBs as of the date hereof.
IF YOUR MANSFIELD IRBs ARE
IN BEARER FORM, THE
ATTACHED CERTIFICATION BY
DEPOSITARY MUST BE
COMPLETED UNLESS YOU ARE
RETURNING THIS BALLOT TO
YOUR DEPOSITARY
NAME OF CREDITOR:
______________________________________________________________________________
(Print or Type)
By: __________________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: ___________________________________________________________________
Title: _______________________________________________________________________
(If Appropriate)
Street Address: ______________________________________________________________
______________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) __________________________________________________
______________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed:_______________________________________________________________
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
20B-OH
<PAGE> 38
CERTIFICATION BY DEPOSITARY
(FOR MANSFIELD IRBs HELD IN BEARER FORM ONLY)
THIS MUST BE COMPLETED UNLESS YOU ARE RETURNING THIS BALLOT TO YOUR DEPOSITARY.
CHECK BOX THAT APPLIES (ONE BOX ONLY)
-------------------------------------
COMPLETE AND CHECK BOX IF THE MANSFIELD IRBS ARE NOT ON DEPOSIT WITH A
DEPOSITARY:
[ ] The undersigned certifies that, on the date set forth below, the beneficial
owner listed on this Ballot presented to the undersigned the original
Mansfield IRBs bearing the certificate numbers set forth in Item 1 of this
Ballot.
COMPLETE AND CHECK ONE OF THE FOLLOWING BOXES IF THE MANSFIELD IRBs ARE ON
DEPOSIT WITH A DEPOSITARY:
[ ] The undersigned certifies that, as of the date set forth below, the
undersigned held original Mansfield IRBs bearing the certificate numbers set
forth in Item 1 of this Ballot on behalf of the beneficial owner listed on
this Ballot.
[ ] The undersigned certifies that, as of the date set forth below, the
undersigned held original Mansfield IRBs bearing the certificate numbers set
forth in Item 1 of this Ballot on behalf of the beneficial owner that
maintains an account, numbered , with the
undersigned and that such securities have been "blocked" (viz., prevented
from being withdrawn, moved, or used for any purpose, other than allowing
the beneficial owner to vote on the Plan) until after entry of the order
confirming the Plan.
NAME OF DEPOSITARY:
______________________________________________________________________________
(Print or Type)
By: __________________________________________________________________________
(Signature of Depositary)
Print Name of
Signatory: ___________________________________________________________________
Title: _______________________________________________________________________
(If Appropriate)
Street Address: ______________________________________________________________
______________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) __________________________________________________
Date Completed:_______________________________________________________________
20B-OH
<PAGE> 39
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
EAGLE-PICHER INDUSTRIES, )
INC., et al., )
Debtors. )
)
- ------------------------------------
Consolidated Case No. 1-91-00100
Chapter 11
JUDGE PERLMAN
MASTER BALLOT FOR
ACCEPTING OR REJECTING THE THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION
DATED AUGUST 28, 1996
CLASS 20 -- UNSECURED CLAIMS
PORT DEVELOPMENT CORPORATION INDUSTRIAL
DEVELOPMENT REVENUE BONDS, SERIES 1980
(EAGLE-PICHER INDUSTRIES, INC. PROJECT)
On July 23, 1996, the United States Bankruptcy Court for the Southern District
of Ohio signed an order that establishes certain procedures (the "Voting
Procedures") for the solicitation and tabulation of votes to accept or reject
the Third Amended Consolidated Plan of Reorganization in these chapter 11 cases
(the "Plan"). The Voting Procedures are annexed as Exhibit "D" to the Disclosure
Statement, dated August 28, 1996 (the "Disclosure Statement"), which accompanies
this Master Ballot.
This Master Ballot for the Port Development Corporation Industrial Development
Revenue Bonds, Series 1980 (Eagle-Picher Industries, Inc. Project) ("Houston
IRBs") may not be used for any purpose other than for casting votes to accept or
reject the Plan. THE HOUSTON IRBs WERE ISSUED IN BOTH REGISTERED AND BEARER
FORM. Accordingly, this Master Ballot is to be used by (i) a broker, proxy
intermediary, or other nominee for casting votes on behalf of beneficial owners
of Houston IRBs that were issued in registered form and/or (ii) a trust company,
bank, or other depositary having trust powers recognized by the Federal Reserve
System of the United States (a "Depositary") for casting votes on behalf of
beneficial owners of Houston IRBs that were issued in bearer form and are held
by the Depositary on behalf of beneficial owners thereof.
PLEASE READ AND FOLLOW THE ATTACHED INSTRUCTIONS CAREFULLY. COMPLETE, SIGN, AND
DATE THIS MASTER BALLOT AND ARRANGE FOR ITS DELIVERY SO THAT IT IS RECEIVED BY
HILL AND KNOWLTON, INC., 466 LEXINGTON AVENUE, NEW YORK, NEW YORK 10017 (ATTN:
EAGLE-PICHER BALLOT SOLICITATION GROUP), BY 5:00 P.M., CINCINNATI, OHIO TIME, ON
NOVEMBER 4, 1996. OTHERWISE, THE VOTES TRANSMITTED HEREBY WILL NOT BE COUNTED.
20M-TX
<PAGE> 40
ITEM 1. TABULATION OF VOTES WITH RESPECT TO THE PLAN.
Please note that each beneficial owner of Houston IRBs that votes must vote its
entire claim. Accordingly, for purposes of tabulating the vote, (i) each voting
beneficial owner of Houston IRBs issued in registered form should be deemed to
have voted the full amount of its claim as of September 5, 1996 (the "Voting
Record Date"), as shown by your records, and (ii) each beneficial owner of
Houston IRBs issued in bearer form should be deemed to have voted the full
amount of its claim as of the date on which this Master Ballot is completed, as
shown by your records. A ballot received from a beneficial owner that partially
accepts and partially rejects the Plan should not be counted.
The undersigned certifies that (insert the number
of different Beneficial Owners) beneficial owners of Houston IRBs in the
aggregate principal amount of
$
as identified pursuant to Item 2 below, have delivered to the undersigned
ballots casting votes to ACCEPT the Plan.
The undersigned certifies that (insert the number
of different Beneficial Owners) beneficial owners of Houston IRBs in the
aggregate principal amount of
$
as identified pursuant to Item 2 below, have delivered to the undersigned
ballots casting votes to REJECT the Plan.
ITEM 2. BENEFICIAL OWNER INFORMATION.
The undersigned certifies that attached hereto is a true and accurate
schedule of the beneficial owners of Houston IRBs. With respect to Houston IRBs
that are held in bearer form, please follow the instructions relating to
securities that have been "blocked" and those that have not been blocked.
(Please complete Table A-1 for Houston IRBs that are held in bearer form
and Table A-2 for Houston IRBs that are held in registered form, or attach the
information requested by this Item 2 in the format of Table A-1 and Table A-2.)
ITEM 3. ADDITIONAL BALLOTS SUBMITTED BY BENEFICIAL OWNERS.
The undersigned certifies that it has transcribed the information, if any,
provided in Item 3 of each ballot for the Houston IRBs (Ballot Code 20B-TX)
received from a beneficial owner.
(Please complete Table B or attach the information requested by this Item 3
in the format of Table B.)
20M-TX
<PAGE> 41
ITEM 4. CERTIFICATIONS.
By signing this Master Ballot, the undersigned certifies as follows:
(1) Each beneficial owner of the Houston IRBs whose vote is being transmitted by
this Master Ballot has been provided with a copy of the Disclosure Statement
and all related solicitation materials.
(2) A record of the ballots received from each beneficial owner will remain on
file with the undersigned (and be subject to inspection by the Court) until
one year after the confirmation of the Plan (or as modified by subsequent
Court order).
(3) The undersigned has in its possession, as a Depositary, the Houston IRBs set
forth in Table A-1 and/or has full power and authority to vote to accept or
reject the Plan.
(4) The Houston IRBs listed on Table A-1, the holders of which have been
identified solely by account numbers, may not be withdrawn, moved, or used
for any purpose, other than allowing the beneficial owner to vote on the
Plan, until after entry of the order confirming the Plan.
(5) The undersigned is the registered or record owner of the Houston IRBs set
forth in Table A-2 and/or has the full power and authority to vote to accept
or reject the Plan.
NAME OF DEPOSITARY:
______________________________________________________________________________
(Print or Type)
By: __________________________________________________________________________
(Signature)
Print Name of
Signatory: ___________________________________________________________________
Title: _______________________________________________________________________
(If Appropriate)
Street Address: ______________________________________________________________
______________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) __________________________________________________
______________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed:_______________________________________________________________
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
20M-TX
<PAGE> 42
TABLE A-1
BENEFICIAL OWNER INFORMATION
FOR HOUSTON IRBS HELD IN BEARER FORM
(PLEASE SEE INSTRUCTIONS FOR ITEM 2)
BALLOTS VOTED TO ACCEPT THE PLAN
<TABLE>
<CAPTION>
__________________________________________________________________________________________________
| | | DOLLAR AMOUNT OF |
| | CUSTOMER NAME OF | HENRY COUNTY IRBs |
| CERTIFICATE | ACCOUNT NO. CUSTOMER | ON DEPOSIT AS OF |
| NUMBERS | (IF BLOCKED) OR (IF NOT BLOCKED) | DATE OF BALLOT |
|_____________________|_____________________________________________________|______________________|
| <S> | <C> <C> <C> | <C> |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
</TABLE>
20M-TX
<PAGE> 43
TABLE A-1 (CONTINUED)
BENEFICIAL OWNER INFORMATION
FOR HOUSTON IRBS HELD IN BEARER FORM
BALLOTS VOTED TO REJECT THE PLAN
<TABLE>
<CAPTION>
__________________________________________________________________________________________________
| | | DOLLAR AMOUNT OF |
| | CUSTOMER NAME OF | HENRY COUNTY IRBs |
| CERTIFICATE | ACCOUNT NO. CUSTOMER | ON DEPOSIT AS OF |
| NUMBERS | (IF BLOCKED) OR (IF NOT BLOCKED) | DATE OF BALLOT |
|_____________________|_____________________________________________________|______________________|
| <S> | <C> <C> <C> | <C> |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
| | | |
| | | |
| | | |
| | | |
|_____________________|_____________________________________________________|______________________|
</TABLE>
20M-TX
<PAGE> 44
TABLE A-2
BENEFICIAL OWNER INFORMATION
FOR HOUSTON IRBS HELD IN REGISTERED FORM
BALLOTS VOTED TO ACCEPT THE PLAN
<TABLE>
<CAPTION>
____________________________________________________________________________________________
| | DOLLAR AMOUNT OF HOUSTON IRBs |
| CUSTOMER ACCOUNT NO. | OWNED AS OF VOTING RECORD DATE |
|______________________________________________|_____________________________________________|
| <S> | <C> |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
</TABLE>
BALLOTS VOTED TO REJECT THE PLAN
<TABLE>
<CAPTION>
____________________________________________________________________________________________
| | DOLLAR AMOUNT OF HOUSTON IRBs |
| CUSTOMER ACCOUNT NO. | OWNED AS OF VOTING RECORD DATE |
|______________________________________________|_____________________________________________|
| <S> | <C> |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
| | |
|______________________________________________|_____________________________________________|
</TABLE>
20M-TX
<PAGE> 45
TABLE B
TRANSCRIPTION OF INFORMATION FROM ITEM 3 OF BENEFICIAL OWNER BALLOTS
(USE EXTRA SHEETS IF NECESSARY)
<TABLE>
<CAPTION>
_________________________________________________________________________________________________________________________
| | CUSTOMER | | | PORT | |
| YOUR CUSTOMER | ACCOUNT # | 9.5% SINKING FUND | HENRY COUNTY | DEVELOPMENT | MANSFIELD, OHIO |
| ACCOUNT # | OF OTHER ACCOUNT | DEBENTURES | IDRBs (SERIES 1981) | IDRBs (SERIES 1980) | IDRBs |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| <S> | <C> | <C> | <C> | <C> | <C> |
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
| | | Principal Amount: | Principal Amount: | Principal Amount: | Principal Amount: |
| | | | | | |
| | | | | | |
| | | | | | |
| | |____________________|_____________________|_____________________|____________________|
| | | Number of Ballots: | Number of Ballots: | Number of Ballots: | Number of Ballots: |
| | | | | | |
|________________|__________________|____________________|_____________________|_____________________|____________________|
<CAPTION>
___________________________________________________________
| | CUSTOMER | |
| YOUR CUSTOMER | ACCOUNT # | OTHER UNSECURED |
| ACCOUNT # | OF OTHER ACCOUNT | CLAIMS |
|__________________|__________________|_____________________|
| <S> | <C> | <C> |
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
| | | Principal Amount: |
| | | |
| | | |
| | |_____________________|
| | | Number of Ballots: |
| | | |
|__________________|__________________|_____________________|
</TABLE>
20M-TX
<PAGE> 46
INSTRUCTIONS FOR MASTER BALLOT
------------------------------
YOU SHOULD DELIVER THE FOLLOWING TO EACH BENEFICIAL OWNER FOR WHICH YOU HOLD
HOUSTON IRBs:
- - Class 20 -- Unsecured Claims Ballot for Houston IRBs, Ballot Code 20B-TX
- - Disclosure Statement
- - Postage-paid, return envelopes addressed to you (or, if the Unsecured Claims
Ballot has been "prevalidated" by you, addressed to Hill and Knowlton). In
order to prevalidate an Unsecured Claims Ballot with respect to Houston IRBs
held in bearer form, you must complete the Certification of Depositary
attached to the Unsecured Claims Ballot and other appropriate information.
FOR UNSECURED CLAIMS BALLOTS (BALLOT CODE 20B-TX) RETURNED TO YOU, YOU MUST DO
ONE OF THE FOLLOWING:
(1) (a) (i) For Houston IRBs held in bearer form, complete the
Certification by Depositary on the last page of the Unsecured Claims
Ballot, or (ii) for Houston IRBs held in registered form, indicate the
appropriate authority to vote directly on the Unsecured Claims Ballot.
(b) Forward the completed Unsecured Claims Ballots directly to
Hill and Knowlton.
OR
(2) (a) Retain the Unsecured Claims Ballots in your files and transfer
the requested information from each such ballot onto this Master Ballot.
Keep any records of Unsecured Claims Ballots or other voting instructions
received from beneficial owners until one year after the confirmation of
the Plan (or as modified by subsequent Court order).
(b) Complete and sign this Master Ballot. A computer-generated
version of this Master Ballot containing the identical information
requested in this Master Ballot and prepared by a Depositary or a bank,
brokerage firm, or its agent may be signed instead of this Master Ballot.
(c) Deliver this Master Ballot to Hill and Knowlton.
ALL BALLOTS SHOULD BE DELIVERED TO HILL AND KNOWLTON, 466 LEXINGTON AVENUE, NEW
YORK, NEW YORK 10017 (ATTN: EAGLE-PICHER SOLICITATION GROUP) BY 5:00 P.M.,
CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
If you act as both the Depositary /registered owner and the beneficial owner of
Houston IRBs and you wish to vote on the Plan, you may return either a ballot
(Ballot Code 20B-TX) or this Master Ballot (Ballot Code 20M-TX).
Multiple Master Ballots may be completed and delivered to Hill and Knowlton.
Duplicative votes, however, will not be counted. If two or more Master Ballots
are inconsistent, the latest Master Ballot that is received shall, to the extent
of such inconsistency, supersede and revoke any prior Master Ballot. Any later
Master Ballots that are intended to supplement rather than replace earlier
Master Ballots should be marked with the words "ADDITIONAL VOTES" or such other
language that you customarily use to indicate an additional vote that is not
meant to revoke an earlier vote.
20M-TX
<PAGE> 47
To complete the Master Ballot properly, please take the following steps:
<TABLE>
<S> <C>
ITEM 1: Provide appropriate information for both items in Item 1 of the Master Ballot.
ITEM 2: Complete the information on Table A-1 for each voting beneficial owner for whom
you hold Houston IRBs in bearer form. If the Houston IRBs that you hold for a
customer have been "blocked" (viz., prevented from being withdrawn, moved, or used
for any purpose, other than allowing the beneficial owner to vote on the Plan)
until after entry of the order confirming the Plan, then please complete Table A-1
using the account number by which you identify your customer. Otherwise, you must
complete Table A-1 using the name of the beneficial owner of the Houston IRBs for
which you hold such securities.
Complete the information on Table A-2 for each beneficial owner for whom you hold
Houston IRBs in registered form. To identify beneficial owners without disclosing
their names, please use the customer account number assigned by you to each such
beneficial owner.
ITEM 3: Transfer the information regarding additional votes provided in Item 3 of the
Unsecured Claims Ballots (Ballot Code 20B-TX) to Item 3 of this Master Ballot.
ITEM 4: (a) Sign and date this Master Ballot.
(b) If you are completing this Master Ballot on behalf of another entity, kindly
state your relationship with such entity.
(c) Fill in your name and mailing address.
</TABLE>
IF YOU RETURN A MASTER BALLOT, PLEASE RETAIN IN YOUR FILES ANY RECORDS OF THE
VOTING INSTRUCTIONS RECEIVED FROM THE BENEFICIAL OWNERS UNTIL ONE YEAR AFTER THE
CONFIRMATION OF THE PLAN (OR AS MODIFIED BY SUBSEQUENT COURT ORDER).
No fees or commissions or other remuneration will be payable to you for
distributing the solicitation materials to your clients. Eagle-Picher
Industries, Inc., however, upon request, will reimburse you for customary
mailing and handling expenses incurred in forwarding the ballots and other
enclosed materials to your clients.
PLEASE DELIVER THIS MASTER BALLOT PROMPTLY!
-------------------------------------------
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENT SHALL CONSTITUTE AUTHORITY
FOR YOU OR ANY OTHER PERSON TO ACT AS THE AGENT OF THE PLAN PROPONENTS OR HILL
AND KNOWLTON, OR AUTHORIZE YOU OR ANY PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE
STATEMENTS CONTAINED IN THE DOCUMENTS ENCLOSED HEREWITH.
20M-TX
<PAGE> 48
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
EAGLE-PICHER INDUSTRIES, )
INC., et al., )
Debtors. )
)
- ------------------------------------
Consolidated Case No. 1-91-00100
Chapter 11
JUDGE PERLMAN
BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION
DATED AUGUST 28, 1996
CLASS 20 -- UNSECURED CLAIMS
PORT DEVELOPMENT CORPORATION INDUSTRIAL
DEVELOPMENT REVENUE BONDS, SERIES 1980
(EAGLE-PICHER INDUSTRIES, INC. PROJECT)
This Ballot is to be completed by beneficial owners of Port Development
Corporation Industrial Development Revenue Bonds, Series 1980 (Eagle-Picher
Industries, Inc. Project) ("Houston IRBs"). THE HOUSTON IRBs WERE ISSUED IN BOTH
BEARER AND REGISTERED FORM. IF YOU HOLD HOUSTON IRBS IN BEARER FORM, YOU MUST
HAVE THE CERTIFICATION OF DEPOSITARY ON THE LAST PAGE OF THIS BALLOT COMPLETED
UNLESS YOU ARE RETURNING THIS BALLOT TO A TRUST COMPANY, BANK, OR OTHER
DEPOSITARY HAVING TRUST POWERS RECOGNIZED BY THE FEDERAL RESERVE SYSTEM OF THE
UNITED STATES (A "DEPOSITARY") WITH WHICH YOU HAVE DEPOSITED YOUR HOUSTON IRBs.
Please complete, sign, and date this Ballot and promptly return it in the
enclosed pre-addressed, postage-prepaid envelope. THE VOTING DEADLINE IS
NOVEMBER 4, 1996, AT 5:00 P.M., CINCINNATI, OHIO TIME. If the enclosed return
envelope is addressed to Hill and Knowlton, Hill and Knowlton must receive this
Ballot by the Voting Deadline. If the enclosed return envelope is addressed to
your Depositary, broker, or bank, you must return this Ballot before the Voting
Deadline so that your Depositary, broker, or bank has enough time to complete
and return a master ballot to Hill and Knowlton by the Voting Deadline. IF THIS
BALLOT IS NOT TIMELY RECEIVED, YOUR VOTE WILL NOT BE COUNTED.
DO NOT RETURN ANY SECURITIES WITH THIS BALLOT.
On July 23, 1996, the United States Bankruptcy Court for the Southern District
of Ohio signed an order that establishes certain procedures (the "Voting
Procedures") for the solicitation and tabulation of votes to accept or reject
the Third Amended Consolidated Plan of Reorganization in these chapter 11 cases
(the "Plan"). The Voting Procedures are annexed as Exhibit "D" to the Disclosure
Statement, dated August 28, 1996 (the "Disclosure Statement"), which accompanies
this Ballot.
20B-TX
<PAGE> 49
ITEM 1. AMOUNT OF HOUSTON IRBs
As of the date hereof, the undersigned is the registered record holder or the
beneficial owner of Houston IRBs in the following principal amount:
$
If your Houston IRBs are held by a bank or broker on your behalf, or if you have
deposited your Houston IRBs with a Depositary and you do not know the amount,
please contact your bank, broker, or Depositary immediately.
(TO BE COMPLETED ONLY IF HOUSTON IRBs ARE HELD IN BEARER FORM.) List the
certificate numbers of the Houston IRBs owned by the undersigned beneficial
owner as of the date hereof:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM 2. YOUR VOTE ON THE PLAN.
You, as the beneficial owner of the Houston IRBs described in Item 1, vote on
the Plan as follows (please check one box only):
[ ] ACCEPT
[ ] REJECT
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on you if it is accepted by the holders of two-thirds in amount and more than
one-half in number of claims in each class and the holders of two-thirds in
amount of equity security interests in each class voting on the Plan. In the
event the requisite acceptances are not obtained, the Bankruptcy Court may
nevertheless confirm the Plan if the Bankruptcy Court finds that the Plan
accords fair and equitable treatment to the class or classes rejecting it and
otherwise satisfies the requirements of Section 1129(b) of the Code. THE VOTING
DEADLINE IS 5:00 P.M., CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
20B-TX
<PAGE> 50
ITEM 3. CERTIFICATION BY BENEFICIAL OWNER OF NO OTHER BALLOTS.
By completing and returning this Ballot, you, as beneficial owner of the Houston
IRBs listed in Item 1, certify that you have not submitted any other ballots
relating to Class 20 under the Plan except as specified in the following table:
<TABLE>
<CAPTION>
________________________________________________________________________________________________________________
| | | ACCOUNT NUMBERS | | NUMBER OF OTHER |
| DESCRIPTION OF DEBT | NAMES OF HOLDERS** | (IF APPLICABLE) | PRINCIPAL AMOUNT | BALLOTS SUBMITTED |
|______________________________|_____________________|__________________|___________________|____________________|
| <S> | <C> | <C> | <C> | <C> |
| 9.5% SINKING FUND DEBENTURES | | | | |
| | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| HENRY COUNTY DEVELOPMENT | | | | |
| AUTHORITY IDRBs (SERIES | | | | |
| 1981) | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| PORT DEVELOPMENT CORPORATION | | | | |
| IDRBs (SERIES 1980) | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| MANSFIELD, OHIO IDRBs | | | | |
| | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
| OTHER UNSECURED | | | | |
| CLAIMS | | | | |
| | | | | |
|______________________________|_____________________|__________________|___________________|____________________|
<FN>
** Insert your name if the debt instrument is held by you in record name or, if
held in street name, insert the name of your broker or bank (or agent
thereof).
</TABLE>
20B-TX
<PAGE> 51
ITEM 4. CERTIFICATION BY BENEFICIAL OWNER OF RECEIPT OF DISCLOSURE STATEMENT.
By completing and returning this Ballot, you, as the beneficial owner of the
Houston IRBs described in Item 1, certify that you have been provided with a
copy of the Disclosure Statement and the exhibits thereto.
ITEM 5. CERTIFICATION BY BENEFICIAL OWNER OF AUTHORITY TO EXECUTE BALLOT.
By completing and returning this Ballot, you certify that you have full power
and authority to vote to accept or reject the Plan and that either (i) if your
Houston IRBs are held in registered form, you are the beneficial owner of the
Houston IRBs described in Item 1 as of the Voting Record Date, or (ii) if your
Houston IRBs are held in bearer form, you are the beneficial owner of the
Houston IRBs as of the date hereof.
IF YOUR HOUSTON IRBs ARE
IN BEARER FORM, THE
ATTACHED CERTIFICATION BY
DEPOSITARY MUST BE
COMPLETED UNLESS YOU ARE
RETURNING THIS BALLOT TO
YOUR DEPOSITARY
NAME OF CREDITOR:
______________________________________________________________________________
(Print or Type)
By: __________________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: ___________________________________________________________________
Title: _______________________________________________________________________
(If Appropriate)
Street Address: ______________________________________________________________
______________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) __________________________________________________
______________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed:_______________________________________________________________
PLEASE CALL HILL AND KNOWLTON,
AT (212) 885-0555, IF YOU HAVE ANY QUESTIONS
ABOUT THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
20B-TX
<PAGE> 52
CERTIFICATION BY DEPOSITARY
(FOR HOUSTON IRBs HELD IN BEARER FORM ONLY)
THIS MUST BE COMPLETED UNLESS YOU ARE RETURNING THIS BALLOT TO YOUR DEPOSITARY.
CHECK BOX THAT APPLIES (ONE BOX ONLY)
-------------------------------------
COMPLETE AND CHECK BOX IF THE HOUSTON IRBS ARE NOT ON DEPOSIT WITH A DEPOSITARY:
[ ] The undersigned certifies that, on the date set forth below, the beneficial
owner listed on this Ballot presented to the undersigned the original
Houston IRBs bearing the certificate numbers set forth in Item 1 of this
Ballot.
COMPLETE AND CHECK ONE OF THE FOLLOWING BOXES IF THE HOUSTON IRBS ARE ON DEPOSIT
WITH A DEPOSITARY:
[ ] The undersigned certifies that, as of the date set forth below, the
undersigned held original Houston IRBs bearing the certificate numbers set
forth in Item 1 of this Ballot on behalf of the beneficial owner listed on
this Ballot.
[ ] The undersigned certifies that, as of the date set forth below, the
undersigned held original Houston IRBs bearing the certificate numbers set
forth in Item 1 of this Ballot on behalf of the beneficial owner that
maintains an account, numbered , with the
undersigned and that such securities have been "blocked" (viz., prevented
from being withdrawn, moved, or used for any purpose, other than allowing
the beneficial owner to vote on the Plan) until after entry of the order
confirming the Plan.
NAME OF DEPOSITARY:
______________________________________________________________________________
(Print or Type)
By: __________________________________________________________________________
(Signature of Depositary)
Print Name of
Signatory: ___________________________________________________________________
Title: _______________________________________________________________________
(If Appropriate)
Street Address: ______________________________________________________________
______________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) __________________________________________________
______________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed:_______________________________________________________________
20B-TX
<PAGE> 53
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re
EAGLE-PICHER INDUSTRIES, INC., et al.,
Debtors.
CONSOLIDATED CASE NO. 1-91-00100
Chapter 11 -- Judge Perlman
CLASS 20
BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED
CONSOLIDATED PLAN OF REORGANIZATION DATED AUGUST 28, 1996
IF THIS BALLOT IS NOT RECEIVED BY
THE FEDERATED CLAIMS SERVICE
GROUP BY 5:00 P.M. CINCINNATI, OHIO,
TIME, ON NOVEMBER 4, 1996, YOUR
VOTE WILL NOT BE COUNTED.
PLEASE READ BOTH SIDES OF THIS BALLOT BEFORE COMPLETING THIS BALLOT.
THE UNDERSIGNED, A HOLDER OF A GENERAL UNSECURED CLAIM AGAINST THE DEBTORS,
VOTES (CHECK ONE BOX ONLY):
<TABLE>
<CAPTION>
<S> <C> <C>
[ ] to ACCEPT the Plan [ ] to REJECT the Plan [ ]to reduce
its General
Unsecured
Claim
against the
Debtors to
$500 and
be treated
as a
Convenience
Claim in
Class 15 of
the Plan.
</TABLE>
By signing this Ballot, the undersigned makes the certifications set forth on
the reverse side of this Ballot.
Amount of Your Claim For Voting Purposes Only:
Name of Creditor: ___________________________________________________________
(Print or Type)
By: ________________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: _________________________________________________________________
Title: _____________________________________________________________________
(If Appropriate)
Street Address: ____________________________________________________________
_____________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) _________________________________________________
_____________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed: ____________________________________________________________
<PAGE> 54
PLEASE READ THE FOLLOWING BEFORE COMPLETING YOUR BALLOT
Please complete, sign, and date this Ballot. Return this Ballot to the
Federated Claims Service Group in the enclosed, pre-addressed envelope (by mail:
P.O. Box 8041, Mason, Ohio 45040; by hand delivery or overnight courier: 9111
Duke Blvd., Mason, Ohio 45040). If your Ballot is not RECEIVED by 5:00 p.m.,
Cincinnati, Ohio, time on November 4, 1996, it will not be counted.
On July 23, 1996, the United States Bankruptcy Court for the Southern
District of Ohio (the "Bankruptcy Court") signed an order, which establishes
certain procedures (the "Voting Procedures") for the solicitation and tabulation
of votes to accept or reject the Plan. The Voting Procedures are annexed as
Exhibit "D" to the Disclosure Statement, dated August 28, 1996 (the "Disclosure
Statement"), which accompanies this Ballot.
BY SIGNING THIS BALLOT, YOU MAKE THE FOLLOWING CERTIFICATIONS:
- - "I have been provided with a copy of the Disclosure Statement and the exhibits
thereto."
- - "I understand that, if this Ballot is validly executed and returned without
checking a box to ACCEPT or REJECT, this Ballot will be counted as a vote to
ACCEPT the Plan."
- - "I have the full power and authority to vote to accept or reject the Plan on
behalf of the claimant listed on the reverse side."
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on you if it is accepted by the holders of two-thirds in amount and more than
one-half in number of claims in each class and the holders of two-thirds in
amount of equity security interests in each class voting on the Plan. In the
event the requisite acceptances are not obtained, the Bankruptcy Court may
nevertheless confirm the Plan if the Bankruptcy Court finds that the Plan
accords fair and equitable treatment to the class or classes rejecting it and
otherwise satisfies the requirements of Section 1129(b) of the Code. TO HAVE
YOUR VOTE COUNT YOU MUST COMPLETE AND RETURN THIS BALLOT BY 5:00 P.M.,
CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
CONVENIENCE CLASS ELECTION. Each holder of a General Unsecured Claim may
elect to reduce its General Unsecured Claim to $500.00 and receive $500.00 in
cash in full satisfaction of its General Unsecured Claim by marking the
Convenience Class election box on the reverse side and signing and dating this
Ballot. Because holders of General Unsecured Claims who make the Convenience
Class election are deemed to have accepted the Plan, you should not mark any
other box if you mark the Convenience Class election box.
This Ballot is for voting purposes only and does not constitute and shall
not be deemed a proof of claim or interest or an admission by the Debtors of the
validity of a claim or interest.
PLEASE CALL HILL AND KNOWLTON, INC., AT
(212) 885-0555, IF YOU HAVE ANY QUESTIONS ABOUT
THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
<PAGE> 55
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re
EAGLE-PICHER INDUSTRIES, INC., et al.,
Debtors.
CONSOLIDATED CASE NO. 1-91-00100
Chapter 11 -- Judge Perlman
CLASS 17
MASTER BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED
CONSOLIDATED PLAN OF REORGANIZATION DATED AUGUST 28, 1996
IF THIS MASTER BALLOT IS NOT RECEIVED BY THE FEDERATED CLAIMS SERVICE GROUP BY
5:00 P.M. CINCINNATI, OHIO, TIME, ON NOVEMBER 4, 1996, YOUR CLIENTS' VOTES WILL
NOT BE COUNTED.
PLEASE READ BOTH SIDES OF THIS BALLOT BEFORE COMPLETING THIS MASTER BALLOT.
The undersigned votes (check only one of four boxes):
<TABLE>
<CAPTION>
<S> <C> <C> <C>
[ ] All Claimants [ ] All Claimants [ ] All Claimants [ ] All Claimants
listed on the listed on the Exhibit listed on the Exhibit listed on the Exhibit
Exhibit accompanying this accompanying this accompanying this
accompanying this ballot REJECT the ballot ACCEPT the ballot REJECT the
ballot ACCEPT the Plan Plan, EXCEPT as Plan, EXCEPT as
Plan marked on such marked on such
Exhibit Exhibit
</TABLE>
By signing this Master Ballot, the undersigned makes the certifications set
forth on the reverse side of this Master Ballot.
- --------------------------------------------
(Print or Type Name of Attorney)
- --------------------------------------------
(Signature)
- --------------------------------------------
(Law Firm Name)
- --------------------------------------------
(Street Address)
- --------------------------------------------
(City, State, and Zip Code)
- --------------------------------------------
The amount of each Claimant's claim for voting purposes only is $1.00
<PAGE> 56
PLEASE READ THE FOLLOWING BEFORE COMPLETING YOUR BALLOT
Please complete, sign, and date this Master Ballot. Return this Master
Ballot to the Federated Claims Service Group in the enclosed, pre-addressed
envelope (by mail: P.O. Box 8041, Mason, Ohio 45040; by hand delivery or
overnight courier: 9111 Duke Blvd., Mason, Ohio 45040). If this Master Ballot is
not RECEIVED by 5:00 p.m., Cincinnati, Ohio, time on November 4, 1996, your
clients' votes will not be counted.
On July 23, 1996, the United States Bankruptcy Court for the Southern
District of Ohio (the "Bankruptcy Court") signed an order, which establishes
certain procedures (the "Voting Procedures") for the solicitation and tabulation
of votes to accept or reject the Plan. The Voting Procedures are annexed as
Exhibit "D" to the Disclosure Statement, dated August 28, 1996 (the "Disclosure
Statement"), which accompanies this Ballot. SECTION 3(a)(c)(iii) OF THE VOTING
PROCEDURES SETS FORTH THE PROCEDURES FOR MASTER BALLOTS, SUCH AS THIS ONE, THAT
ARE SIGNED BY ATTORNEYS FOR HOLDERS OF PRIMARY ASBESTOS PERSONAL INJURY CLAIMS
(EACH, A "CLAIMANT"). PLEASE READ AND FOLLOW SUCH PROCEDURES CAREFULLY.
BY SIGNING THIS MASTER BALLOT, YOU MAKE THE FOLLOWING CERTIFICATIONS:
- - "I have been provided with a copy of the Disclosure Statement and the
exhibits thereto."
- - "I have the full power and authority to vote to accept or reject the Plan on
behalf of each of the Claimants listed on the Exhibit accompanying this Master
Ballot except as otherwise noted on such Exhibit by the striking of the name
of such Claimant."
- - "I acknowledge that I am obligated to furnish the Federated Claims Service
Group, within ten (10) business days after the receipt of this Master Ballot
and the Disclosure Statement, with the names and addresses of all Claimants
whose names I have stricken pursuant to the foregoing certification and
pursuant to section 3(c)(iii)(2) of the Voting Procedures."
RETURN OF EXHIBIT. The entire Exhibit accompanying this Master Ballot must
be returned with this Ballot if (i) any Claimant wishes to make the Discounted
Payment Election provided in section 3.2.17(3) of the Plan, in which case please
note each such election on the Exhibit accompanying this Master Ballot, or (ii)
any names are stricken on this Master Ballot, or (iii) any exceptions to the
vote are noted on the Exhibit.
This Master Ballot is for voting purposes only and does not constitute and
shall not be deemed a proof of claim or interest or an admission by the Debtors
of the validity of a claim or interest.
PLEASE CALL HILL AND KNOWLTON, INC., AT
(212) 885-0555, IF YOU HAVE ANY QUESTIONS ABOUT
THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
<PAGE> 57
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re
EAGLE-PICHER INDUSTRIES, INC., et al.,
Debtors.
CONSOLIDATED CASE NO. 1-91-00100
Chapter 11 -- Judge Perlman
CLASS 19
BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED
CONSOLIDATED PLAN OF REORGANIZATION DATED AUGUST 28, 1996
IF THIS BALLOT IS NOT RECEIVED BY THE FEDERATED CLAIMS SERVICE GROUP BY 5:00
P.M. CINCINNATI, OHIO, TIME, ON NOVEMBER 4, 1996, YOUR VOTE WILL NOT BE COUNTED.
PLEASE READ BOTH SIDES OF THIS BALLOT BEFORE COMPLETING THIS BALLOT.
The undersigned, a holder of an Environmental Claim against the Debtors, votes
(check one box only):
<TABLE>
<CAPTION>
<S> <C>
[ ] to ACCEPT the Plan [ ] to REJECT the Plan
</TABLE>
By signing this Ballot, the undersigned makes the certifications set forth on
the reverse side of this Ballot.
Amount of Your Claim For Voting Purposes Only:
Name of Creditor: ___________________________________________________________
(Print or Type)
By: ________________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: _________________________________________________________________
Title: _____________________________________________________________________
(If Appropriate)
Street Address: ____________________________________________________________
_____________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) _________________________________________________
_____________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed: ____________________________________________________________
<PAGE> 58
PLEASE READ THE FOLLOWING BEFORE COMPLETING YOUR BALLOT
Please complete, sign, and date this Ballot. Return this Ballot to the
Federated Claims Service Group in the enclosed, pre-addressed envelope (by mail:
P.O. Box 8041, Mason, Ohio 45040; by hand delivery or overnight courier: 9111
Duke Blvd., Mason, Ohio 45040). If your Ballot is not RECEIVED by 5:00 p.m.,
Cincinnati, Ohio, time on November 4, 1996, it will not be counted.
On July 23, 1996, the United States Bankruptcy Court for the Southern
District of Ohio (the "Bankruptcy Court") signed an order, which establishes
certain procedures (the "Voting Procedures") for the solicitation and tabulation
of votes to accept or reject the Plan. The Voting Procedures are annexed as
Exhibit "D" to the Disclosure Statement, dated August 28, 1996 (the "Disclosure
Statement"), which accompanies this Ballot.
BY SIGNING THIS BALLOT, YOU MAKE THE FOLLOWING CERTIFICATIONS:
- - "I have been provided with a copy of the Disclosure Statement and the exhibits
thereto."
- - "I understand that, if this Ballot is validly executed and returned without
checking a box to ACCEPT or REJECT, this Ballot will be counted as a vote to
ACCEPT the Plan."
- - "I have the full power and authority to vote to accept or reject the Plan on
behalf of the claimant listed on the reverse side."
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on you if it is accepted by the holders of two-thirds in amount and more than
one-half in number of claims in each class and the holders of two-thirds in
amount of equity security interests in each class voting on the Plan. In the
event the requisite acceptances are not obtained, the Bankruptcy Court may
nevertheless confirm the Plan if the Bankruptcy Court finds that the Plan
accords fair and equitable treatment to the class or classes rejecting it and
otherwise satisfies the requirements of Section 1129(b) of the Code. TO HAVE
YOUR VOTE COUNT YOU MUST COMPLETE AND RETURN THIS BALLOT BY 5:00 P.M.,
CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
This Ballot is for voting purposes only and does not constitute and shall
not be deemed a proof of claim or interest or an admission by the Debtors of the
validity of a claim or interest.
PLEASE CALL HILL AND KNOWLTON, INC., AT
(212) 885-0555, IF YOU HAVE ANY QUESTIONS ABOUT
THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
<PAGE> 59
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re
EAGLE-PICHER INDUSTRIES, INC., et al.,
Debtors.
CONSOLIDATED CASE NO. 1-91-00100
Chapter 11 -- Judge Perlman
CLASS 17
BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED
CONSOLIDATED PLAN OF REORGANIZATION DATED AUGUST 28, 1996
IF THIS BALLOT IS NOT RECEIVED BY THE FEDERATED CLAIMS SERVICE GROUP BY 5:00
P.M. CINCINNATI, OHIO, TIME, ON NOVEMBER 4, 1996, YOUR VOTE WILL NOT BE COUNTED.
PLEASE READ BOTH SIDES OF THIS BALLOT BEFORE COMPLETING THIS BALLOT.
The undersigned, a holder of an Asbestos Personal Injury Claim against the
Debtors, votes (check one box only):
<TABLE>
<S> <C>
[ ] to ACCEPT the Plan [ ] to REJECT the Plan
</TABLE>
DISCOUNTED PAYMENT ELECTION:
[ ] By checking this box, the undersigned elects to have his or her Asbestos
Personal Injury Claim processed and paid pursuant to the discounted
payment procedure set forth in the Asbestos and Lead PI Trust Agreement
and the claim resolution procedures adopted pursuant thereto.
By signing this Ballot, the undersigned makes the certifications set forth on
the reverse side of this Ballot.
Pursuant to an order of the Bankruptcy Court, the amount of your Asbestos
Personal Injury Claim, for voting purposes only, is $1.00.
Name of Creditor: __________________________________________________________
(Print or Type)
By: ________________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: _________________________________________________________________
Title: _____________________________________________________________________
(If Appropriate)
Street Address: ____________________________________________________________
____________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) ________________________________________________
____________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed: ____________________________________________________________
<PAGE> 60
PLEASE READ THE FOLLOWING BEFORE COMPLETING YOUR BALLOT
Please complete, sign, and date this Ballot. Return this Ballot to the
Federated Claims Service Group in the enclosed, pre-addressed envelope (by mail:
P.O. Box 8041, Mason, Ohio 45040; by hand delivery or overnight courier: 9111
Duke Blvd., Mason, Ohio 45040). If this Ballot is not RECEIVED by 5:00 p.m.,
Cincinnati, Ohio, time on November 4, 1996, it will not be counted.
On July 23, 1996, the United States Bankruptcy Court for the Southern
District of Ohio (the "Bankruptcy Court") signed an order, which establishes
certain procedures (the "Voting Procedures") for the solicitation and tabulation
of votes to accept or reject the Plan. The Voting Procedures are annexed as
Exhibit "D" to the Disclosure Statement, dated August 28, 1996 (the "Disclosure
Statement"), which accompanies this Ballot.
BY SIGNING THIS BALLOT, YOU MAKE THE FOLLOWING CERTIFICATIONS:
- - "I have been provided with a copy of the Disclosure Statement and the exhibits
thereto."
- - "I understand that, if this Ballot is validly executed and returned without
checking a box to ACCEPT or REJECT, this Ballot will be counted as a vote to
ACCEPT the Plan"
- - "I have the full power and authority to vote to accept or reject the Plan on
behalf of the claimant listed on the reverse side."
This Ballot is for voting purposes only and does not constitute and shall
not be deemed a proof of claim or interest or an admission by the Debtors of the
validity of a claim or interest.
PLEASE CALL HILL AND KNOWLTON, INC., AT
(212) 885-0555, IF YOU HAVE ANY QUESTIONS ABOUT
THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
<PAGE> 61
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re
EAGLE-PICHER INDUSTRIES, INC., et al.,
Debtors.
CONSOLIDATED CASE NO. 1-91-00100
Chapter 11 -- Judge Perlman
CLASS 17
BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED
CONSOLIDATED PLAN OF REORGANIZATION DATED AUGUST 28, 1996
IF THIS BALLOT IS NOT RECEIVED BY THE FEDERATED CLAIMS SERVICE GROUP BY 5:00
P.M. CINCINNATI, OHIO, TIME, ON NOVEMBER 4, 1996 YOUR VOTE WILL NOT BE COUNTED.
PLEASE READ BOTH SIDES OF THIS BALLOT BEFORE COMPLETING THIS BALLOT.
The undersigned, a holder of a Lead Personal Injury Claim against the Debtors,
votes (check one box only):
<TABLE>
<S> <C>
[ ] to ACCEPT the Plan [ ] to REJECT the Plan
</TABLE>
By signing this Ballot, the undersigned makes the certifications set forth on
the reverse side of this Ballot.
Pursuant to an order of the Bankruptcy Court, the amount of your Lead Personal
Injury Claim, for voting purposes only, is $1.00.
Name of Creditor: _____________________________________________________________
(Print or Type)
By: ___________________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: ____________________________________________________________________
Title: ________________________________________________________________________
(If Appropriate)
Street Address: _______________________________________________________________
_______________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) ___________________________________________________
_______________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed: _______________________________________________________________
<PAGE> 62
PLEASE READ THE FOLLOWING BEFORE COMPLETING YOUR BALLOT
Please complete, sign, and date this Ballot. Return this Ballot to the
Federated Claims Service Group in the enclosed, pre-addressed envelope (by mail:
P.O. Box 8041, Mason, Ohio 45040; by hand delivery or overnight courier: 9111
Duke Blvd., Mason, Ohio 45040). If this Ballot is not RECEIVED by 5:00 p.m.,
Cincinnati, Ohio, time on November 4, 1996, it will not be counted.
On July 23, 1996, the United States Bankruptcy Court for the Southern
District of Ohio (the "Bankruptcy Court") signed an order, which establishes
certain procedures (the "Voting Procedures") for the solicitation and tabulation
of votes to accept or reject the Plan. The Voting Procedures are annexed as
Exhibit "D" to the Disclosure Statement, dated August 28, 1996 (the "Disclosure
Statement"), which accompanies this Ballot.
BY SIGNING THIS BALLOT, YOU MAKE THE FOLLOWING CERTIFICATIONS:
- - "I have been provided with a copy of the Disclosure Statement and the exhibits
thereto."
- - "I understand that, if this Ballot is validly executed and returned without
checking a box to ACCEPT or REJECT, this Ballot will be counted as a vote to
ACCEPT the Plan"
- - "I have the full power and authority to vote to accept or reject the Plan on
behalf of the claimant listed on the reverse side."
This Ballot is for voting purposes only and does not constitute and shall
not be deemed a proof of claim or interest or an admission by the Debtors of the
validity of a claim or interest.
PLEASE CALL HILL AND KNOWLTON, INC., AT
(212) 885-0555, IF YOU HAVE ANY QUESTIONS ABOUT
THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
<PAGE> 63
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re
EAGLE-PICHER INDUSTRIES, INC., et al.,
Debtors.
CONSOLIDATED CASE NO. 1-91-00100
Chapter 11 -- Judge Perlman
CLASS 21
BALLOT FOR ACCEPTING OR REJECTING THE THIRD AMENDED
CONSOLIDATED PLAN OF REORGANIZATION DATED AUGUST 28, 1996
IF THIS BALLOT IS NOT RECEIVED BY
THE FEDERATED CLAIMS SERVICE
GROUP BY 5:00 P.M. CINCINNATI, OHIO,
TIME, ON NOVEMBER 4, 1996, YOUR
VOTE WILL NOT BE COUNTED.
PLEASE READ BOTH SIDES OF THIS BALLOT BEFORE COMPLETING THIS BALLOT.
The undersigned, a holder of a Specified Treatment Claim against the Debtors,
votes (check one box only):
<TABLE>
<S> <C>
[ ] to ACCEPT the Plan [ ] to REJECT the Plan
</TABLE>
By signing this Ballot, the undersigned makes the certifications set forth on
the reverse side of this Ballot.
Amount of Your Claim For Voting Purposes Only:
Name of Creditor: ___________________________________________________________
(Print or Type)
By: _________________________________________________________________________
(Signature of Creditor or Authorized Agent)
Print Name of
Signatory: __________________________________________________________________
Title: ______________________________________________________________________
(If Appropriate)
Street Address: _____________________________________________________________
_____________________________________________________________________________
City, State, and Zip Code
Telephone Number: (______) _________________________________________________
_____________________________________________________________________________
Social Security or Federal Tax I.D. No. (Optional)
Date Completed: ____________________________________________________________
<PAGE> 64
PLEASE READ THE FOLLOWING BEFORE COMPLETING YOUR BALLOT
Please complete, sign, and date this Ballot. Return this Ballot to the
Federated Claims Service Group in the enclosed, pre-addressed envelope (by mail:
P.O. Box 8041, Mason, Ohio 45040; by hand delivery or overnight courier: 9111
Duke Blvd., Mason, Ohio 45040). If your Ballot is not RECEIVED by 5:00 p.m.,
Cincinnati, Ohio, time on November 4, 1996, it will not be counted.
On July 23, 1996, the United States Bankruptcy Court for the Southern
District of Ohio (the "Bankruptcy Court") signed an order, which establishes
certain procedures (the "Voting Procedures") for the solicitation and tabulation
of votes to accept or reject the Plan. The Voting Procedures are annexed as
Exhibit "D" to the Disclosure Statement, dated August 28, 1996 (the "Disclosure
Statement"), which accompanies this Ballot.
BY SIGNING THIS BALLOT, YOU MAKE THE FOLLOWING CERTIFICATIONS:
- - "I have been provided with a copy of the Disclosure Statement and the exhibits
thereto."
- - "I understand that, if this Ballot is validly executed and returned without
checking a box to ACCEPT or REJECT, this Ballot will be counted as a vote to
ACCEPT the Plan."
- - "I have the full power and authority to vote to accept or reject the Plan on
behalf of the claimant listed on the reverse side."
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on you if it is accepted by the holders of two-thirds in amount and more than
one-half in number of claims in each class and the holders of two-thirds in
amount of equity security interests in each class voting on the Plan. In the
event the requisite acceptances are not obtained, the Bankruptcy Court may
nevertheless confirm the Plan if the Bankruptcy Court finds that the Plan
accords fair and equitable treatment to the class or classes rejecting it and
otherwise satisfies the requirements of Section 1129(b) of the Code. TO HAVE
YOUR VOTE COUNT YOU MUST COMPLETE AND RETURN THIS BALLOT BY 5:00 P.M.,
CINCINNATI, OHIO, TIME ON NOVEMBER 4, 1996.
This Ballot is for voting purposes only and does not constitute and shall
not be deemed a proof of claim or interest or an admission by the Debtors of the
validity of a claim or interest.
PLEASE CALL HILL AND KNOWLTON, INC., AT
(212) 885-0555, IF YOU HAVE ANY QUESTIONS ABOUT
THIS BALLOT, THE VOTING PROCEDURES, OR THE PLAN
